The US health care system is a complete mess, our % of GDP spending on health care isn’t that surprising given that health care is a super-normal good–meaning roughly that our consumption of health care rises more rapidly than our incomes–and the US is extremely wealthy, and yet it works decently well on some margins. Nationalizing health care, especially in a country that is as politically explosive as the US, will probably shut off even the things American health care does well.
I developed a blocked salivary gland over the last few days that resulted in swelling and excruciating pain earlier today. I used The Google to explore treatment options, and then sought medical attention at a local Doc-in-a-Box when the pain became difficult to bear. I was treated promptly, even after I had to call my wife to get our insurance information. The treatment consisted of a steroid shot (close your eyes and think of Jose Canseco) for the swelling, a recommendation to see an Ear/Nose/Throat specialist to have the blockage imaged, and a prescription for pain meds. The swelling is way down, I’m much more comfortable now than I was just a few long hours ago, and I haven’t even started the pain meds (I took some ibuprofen before I left for the doctor’s office).
My guess is that in a socialized system I wouldn’t have access to this kind of treatment. In a system in which health services are rationed by something other than price, I would be bumped way down the priority list and would have to wait. It wouldn’t be the end of the world, but as of a few hours ago I had a very high willingness to pay for relief. I have a lot of work to do over the next few weeks and the pain would have been a most inconvenient distraction.
My experience also illustrates an important point about the health care debate. You’ve probably heard the well-worn trope about the US spending a higher percentage of GDP on health care and having lower life expectancy/higher infant mortality/etc. Laying aside the statistical problems with these claims (and there are many), we are poorly-served if we don’t count basic pain relief as part of our set of health outcomes that are important. My trip to the doctor today is probably going to have a trivial effect on my lifespan and almost certainly won’t do much for infant mortality and life expectancy (though there is probably going to be a teeny-tiny effect: econ students, can you explain it?). Nonetheless, I and the people around me are much better off as a result of the fact that I was able to secure some fairly mundane pain relief.
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You really hit on the ironic part of the “Single Payer”/”Government Rationed” health care systems. It isn’t that these systems don’t focus on what is important to you. It is that they do not focus on YOU PERSONALLY. It is not that doctors change or anything else, it is that many (Especially new) personal relationships between employers (Patients) and employees (Providers) get lost in this process. I employ my doctor and other providers. They have every incentive to help me as best as they can to get my money. Now it is they help me and others like me as best as they can to get insurance money. Soon it will be the they really have no incentive to help and treat me like an employer and instead treat me like I am in line at the Post Office, TSA Airport Security, ICE Passport Processing, etc.
I think the issue is that people think that their doctor who is probably their friend will treat them the same with different incentives. The short term prospects of this are fair to good. THe long term prospects are crappy.
How are preexisting condition exclusions, deductibles and co-pays NOT “rationing”? Price exclusion is rationing.
We are also dealing with a mandatory treatment system financed by a voluntary payment system. Considering the political landscape, how do you plan on getting from where we are to where you believe we should be? Any change is going to be met with extraordinary resistance, as we have already seen.
Exclusivity in medical treatment could alleviate the effect of the free riders. Good luck running on that platform. It is a much more complex issue than just economics.
I can’t imagine that the healthcare industry as a whole would favor a direct pay system, where the market price is not influenced by a third party. There are a lot of people that like this mess just the way it is. Removing governemnt creates problems along with solving some. Since they helped create the problem, they should help clean-up.
Yeah. Trusting the state to “help clean up” sounds like an excellent idea. I wonder how that could possibly go wrong…
It’s supposed to be our government. We pat ourselves on the back when 50% of the population votes and wonder why the government is so corrupt and incompetent? Maybe because America is corrupt and incompetent?
Considering that free market insurers (the Blues) and the government essentially collaborated from the beginning, I don’t understand the blind faith in the trusty market.
I believe I posed a relevant question regarding “rationing”. I have been questioning the idea of competition and allowing insurers to “cross state lines” as well. Correct me if I’m wrong, but I believe insurance is only profitable and therefore useful if there is a large enough base to spread the financial risk. I imagine that even if we did allow interstate coverage, monopolies would naturally emerge anyway. Government is the ultimate monopoly, so yes, I think it MAY be sound reasoning to allow a single-payer system. A well regulated private monopoly may suffice as a single payer also.
Private insurers are already dealing with medical treatment as a public good. Some things are better suited to private markets and some public. Private insurers are paying for “free riders”. You don’t need medicaid or Aetna to get treatment in an ER. It’s mandatory to discharge patients in a stable condition, regardless of ability to pay. There seems to be two choices given the current situation with healthcare and the public/private mix: Give private corporations the power that we fear from government (making life and death decisions for us) or allow the government to subsidize the profits of the healthcare industry.
I like Bogart’s analogy of waiting in line at the Post Office, etc. The question I have: Is it really that different at Wendy’s or Wal-mart? I think THAT is the problem. Nobody gives a shit anymore. The free market ain’t gun solve dat!
The last thing you/we want is to depend on the government to fully operate health, because the reality is they can even run the postal service without losing 100′s of millions of dollars, and you don’t see UPS or FedEx losing the battle do you.
Marla
Marla, I tend to agree with you, but I have also talked to others who are from other countries that have government run health care and they loved it. I just wonder how well our system would convert to that, and can our government run it efficiently?
The trouble with American health care debate is that very few people have actually experienced socialized healthcare in countries like UK or eastern Europe. Most people are just guessing.
Jake, that statement cannot be made loudly enough, or often enough.
No, but I have actually experienced capitalist health care in the Cayman Islands and in China (at least it is capitalist in China if you are a foreigner). And believe me. It would be great if we actually had that in the US.
The usual claim that US healthcare costs more and delivers less comes from statistics by the UN World Health Organization. The WHO health statistics are biased. The WHO itself ranks the US #1 in health care delivery that is important to patients. It issues another ranking of 37th because this quality of care costs more and is not delivered by government in a “fair” way! Critics of US health care always refer to the ranking at 37th. That is a pure political judgement by the WHO.
The offered arguments against the quality of US health care are based on flawed infant mortality and life expectancy comparisons.
USA Healthcare is First – Infant Mortality is Low
William A. Jacobson at Legal Insurrection has looked at the health care bill language at random points. It is eye opening for the complexity and multiple questions at every part of the bill that is examined. The following link is to the last examination, and there are six others there.
Day 7 – Don’t Wish Too Hard
It’s definitly an advantage to have options, especially if you can afford it (pay a higher price, or cover the MD visit out of pocket). The pain(or other ailments) is not only inconvenient but has a negative effect on the productivity level of a person(society).
In an ideal socialized system, people would have to wait, however the acute health problems encountered are much less in frequency due to the health prevention measures that are in place. Not sure that health would be a normal good at then(not counting cosmetic/plastic surgeries); people would go to the MD more frequently but for check ups which is way less costly than the emergency room visits or hospitalization.
But to start a socialized health care in the US would be extremely expensive, with a population of such a high life expectancy and other factors such as illegal immigrants that are granted treatments at emergency rooms, etc.
The point is well taken: in a political “health care system” the priorities are rather different than in health care provided on the market.
The system that the US elite has decided to impose on us (but not on themselves… shades of the not-to-be lamented, happily extinct Soviet “Department D” special hospital sections for Party Members) is meant not to prevent or heal, but to CONTROL.
We don’t know how that system will work out in practice, but among the more dangerous possibilities are that “what is not forbidden is mandatory” — you may not be allowed to receive, for example, ER services unless all your recommended vaccines are up to date.
Health care will certainly be rationed to help the “useless” elderly to a quicker grave. Other political tests will develop over time. If you were an elitist, would you want Tea Party people to have access to expensive medical services?
We think the answer to these dire political possibilities is educating decision makers that We the People will not submit to their line-up-and-keep-quiet plans.
That’s why over three million email messages went to state and national legislators last year, refusing the fake “swine flu pandemic” vaccines. And that is why the govt had to abandon its $6.4 billion dollar flu vax program, wherein the central govt purchased the vax, approved the vax, recommended the vax and then distributed it… pure Obamacare in action.
Followed by the currently-in-progress cover-up of the over 200 miscarriages associated with the swine flu vax (there are not usually more than 7 in a “normal” flu season).
How was that done? Through People Power at http://www.HealthFreedomUSA.org.
We strongly support decentralized, market-oriented, natural solutions to consumer health care needs. Please join our op-in email list, the Health Freedom Action eAlert and assert your right to control your own body!
Yes,that is the scary part. In many other government controlled areas of life, totally unrelated behavior is slowly but surely brought under government control. An example would be the steady increase in behaviors controlled by driver’s licenses in my state. Don’t pay your child support and you lose your driver’s license. If you lose your driver’s license your real estate license is suspended, etc. With the healthcare scam, cooperate or you are punished by being fined by the IRS. Penalties immediately mount to all of your possessions if you don’t pay up. As everything becomes a mandatory prerequisite for life, control is greatly increased – cooperate or die. Eating too much junk food? Quit or be denied health care. Of course that would only be the beginning. Refuse to attend public school? Be denied health care. Spend too much on that SUV? Be denied healthcare. Etc. The power of basically a death sentence – denial of health care – that can conveniently be attached to any behavior will be irresistible to government.
Excellent post.
Many Americans are on their guard against socialized medicine, but probably very few of them are even aware of how socialized their system already is. Likewise they are mostly unaware that the for the exact same reasons that socialized medicine is lousy, socialized police, courts, schools, food inspection, environmental regulation, banking and national defense are also lousy.
This is a good opportunity to educate your fellow citizens. Socialized medicine doesn’t work because it is a coercive monopoly placed in the hands of bureaucrats and politicians, whose natural human instinct for self-interest causes them to abuse the monopoly for their own gain and not for the benefit of the public. The identical – repeat IDENTICAL – problem exists for every single function which is either given to government by the people, or (more often) is taken over from the people by the government at gunpoint.
Any concerted attempt to block socialized medicine will be a failure, unless the people resisting the takeover are honest enough to acknowledge the even greater problems that exist in every sphere of government activity.
Simply put, you have lost the argument against socialized medicine if you concede even one role to government. If you admit that “Nanny Knows Best” how to run your life in one area, from regulation to self defense to dispute resolution to teaching children, then you have confessed to inferior intelligence and you should stand aside and let Obama and friends do whatever to you and your family that they deem wisest.
Honestly, we aren’t spending that much privately. We really should separate out all the spending on Medicare and Medicaid out from private spending THEN compare the two. A rough estimate:
Government care is responsible for 55% of the estimated $2.3 trillion spent on medical care last year. Only 29% of the population is eligible for government care. The dollars and population are split almost 50/50. So, if we assume a population of 300 million, that means 87 million qualified people consumed $1.3 trillion in medical care (I’m not breaking it down any further to who actually got care or not). This means those who qualify for Medicare consume nearly $15,000 per year on average in medical services and those under Medicaid consume about the same per year. This is important to note as the poor consume just as much medical care as the elderly, so claiming being older means you’ll likely use more medical services gets thrown out the window.
Now, what remains of the $2.3 trillion pie in private spending is a cool $1 trillion. However, neither government system fully pays any bills, leaving the overage being picked up by the private market, either through patient deductibles or simply skipping out on payments that get placed into operational overhead and distributed to the rest of the patients. So that $1 trillion is going to be divided out by the full 300 million in estimated population. What this leaves is around $3,000 in spending per person by the private market, which is unsurprisingly one of the lowest in the entire post-industrial world.
Basically, the clear reason why our national medical spending is so high is precisely BECAUSE government is paying for a portion of the population. It has nothing to do with enjoying advanced technology, the newest boutique prescription medications, or insurers refusing to pay bills. It’s the simple, basic, fact that, when a service is offered for free, it will be overused. In this case, overused to the tune of 5 times over since the individuals on Medicaid aren’t statistically more likely to get sick and require care than the general population.
So, don’t worry about it, Art. Even with you heading off to the Doc-in-a-Box and getting those steroid shots, you likely still stayed under that $3,000 average mark and are a personal example of not only why our medical system is the most effective, it’s also the cheapest. This just shows how powerful markets are that it can still operate as efficiently and cost effectively as it does despite the heavy government intervention.
What about the VA, Military Health, and Indian Health?
Actually those health budgets are in their respective administration, but do they count towards the 2.3 Trillion? If so the $3000 would be lower.
I meant does their spending count against the 1.3 trillion.
Actually, no, I didn’t count that spending, so unless military and VA spending is not included in health care spending nationally (I have a suspicion it isn’t), then I’ve grossly inflated the private spending on health care.
I checked your #s and they are roughly correct. Where did you find the 55% ? I found 45.8% from the WHO for 2006, and that was a main source of our difference. I also used 2008/2007/2006 #s where I could find them and it is likely that your 55% is more accurate now.
The 55% I picked up out of a WSJ article back in February or so for 2009 expenditures. I have an encyclopedic knowledge base, but the downside is I almost never remember where I got the information from.
Here are some basic numbers in this grab from wikipedia.
http://en.wikipedia.org/wiki/Health_care_system#United_States
I assume all VA, IHC, DOD, and individual State costs are included in those Health Care costs. Wikepedia states “tax-financed programs cover 27.8% of the population” and references the US Census. Thus if Gov’t is 50% (Avg of WHO stat for 2006 I found and your WSJ stat) of the costs and covers 27.8% of the population, then it is clear they are paying so much more. 300 Mil * 27.8% = 83 Mil. 16% of GDP * 14 Trillion = 2.245 T. 50% spending is Gov’t = 1.12 T. Thus 1.12 T / 83 M = $13,429. !!!
I will then assume 217 M people are covered by private costs (although yes some of the people in the public pool above also can put their $ into private expenditures). 1.12 T / 217 M = $5,171 .
Gov’t spends 2.6 times as much then!!!! Is my line of reasoning accurate?
Hello,
Here in Poland, where I live, we have so called “free healthcare system”. It is not free of course, we pay taxes to maintain it. And the system always lacks of money. Art Carden is right, when he says about waiting. It usually takes one month to visit “first contact” doctor. Then, this doctor directs you to “specialist” and it takes another month to visit him. So it takes two months to diagnose and start healing when you are ill.
The very same doctor will see you in a few days in his private cabinet. So when you are in a hurry (really strong pain) you pay double. First time for system you won’t use because you can’t wait, and second time you pay private sector (funny thing, you pay twice the same doctor).
Latest news from healthcare battleground in my country is that doctors demand minimum wage. This minimum wage must be two or three times higher than average wage in my country.
They say we have capitalism and free market here. They lie.
“They say we have capitalism and free market here. They lie.” They say the same thing here in America. They lie too.
What a mess we are heading for.
It is about the same in Canada, except (a) many people do not have a family physician so instead of waiting a month for an appointment with a general practitioner they go to a walk-in clinic or hospital emergency room where they wait many hours for what is often routine care. Meanwhile they spread diseases around the packed waiting rooms and delay treatment for those in serious need. And (b) if they are referred to a specialist the minimum wait is one month, often it is several months to as long as a year, even for potentially dangerous conditions. If the specialist prescribes further treatment such as radiation therapy or surgery there is usually another wait of a minimum of one month to a year, even for deadly conditions.
A few years ago most Canadians went around saying, “We have the best system in the world, it’s just that the government needs to put more money into it,” and, “Thank God we don’t have a system like in the USA where anyone who isn’t rich dies in the street.”
Now, they seem to have an intuition that something isn’t quite right and that either the government just doesn’t have enough money to “fix” communist-style medical care, or else maybe socialist medicine doesn’t work at all. But they are too cowardly or intellectually comatose to address the problem and think it through – probably because deep down they know that the ultimate solution is freedom and personal responsibility, which they fear more than death.
One month? Haha are you kidding me? I had to wait 6 months for a neurologist appointment, who happened to be the only specialist in a residential area of over 500 000. Once there, I sat nearly 4 hours in the waiting room for a 15 minute diagnosis to the effect of “we haven’t the slightest clue what’s wrong with you, but here, why don’t you have a mint and be off”.
The Canadian socialized health care is in dire straits. The overwhelming majority of new med school graduate flock to more lucrative positions in the US and elsewhere. There is a severe shortage of medical professionals and equipment. And this is in a country where even I’d think such a system would work. High incomes, healthy living habits, relatively low population – how can it possibly fail, one might ask? Well, for the same reasons it fails everywhere else.
But Canadians are a notoriously stubborn people, as they would rather see their proud commie fantasy driven into the ground than accept any alternative involving dreaded “privatization”. Of course until one of them gets sick, when they promptly fly over the border into a nice New York hospital.
It already bothers me that I am forced to pay a doctor and a pharmacist plus spend half a day off work waiting for antibiotic pills if I get, for example, a sinus infection… I sincerely doubt that this situation will improve under the new health care laws. (It is not like I am going to go sell my prescriptions for such drugs to kids in the school yard).
The article is well written and has many valid points. But I wanted to share my own experience with the U.S health care system to give the readers another perspective. It certainly may or may not be economically better off for a country as a whole but I take this stand personally at a humane level. My family is a well to do family and we live in a rich neighborhood, we certainly shouldn’t be in this neighborhood as it way above what we can afford but we are here in this area because my dad values education and society too much. He believes that he could lose everything and work as hard as he has to but his children should have a good society and a good schools for good education. So therefore in order to stay at such a place we certainly have to make our choices of what to have or what not to have. so in return we do not have health insurance but we do everything to stay healthy so we can avoid hospital all together. This has been very successful for many years as we are healthy and we save some money that we would be paying to health insurance companies. But unfortunately one day my brother broke his arm at a small accident at the park and tore up his chin. I took him to the doctor and they charged me $1200 for just his stitches and x rays and then sent me off to another hospital where they did nothing as we did not have insurance. And yes, I am aware of the law that hospitals can not reject a patient in an emergency regardless if they have insurance or not . But they certainly have their ways to get around them. They took my brother in put a small temp. band aid and told us to come in the morning. This way the emergency was over and when we show up the next morning, either we pay 30,000 dollars for the surgery or we go some where else. so how would you feel if you did everything to stay healthy and saved every dollar to make your children go to school and one day, you pay all that for a small accident. my brother suffered a week with his broken arm before we could come up with the solution for the surgery.I do not support either universal health care or private sector health care but I do support that people should have some limited coverage for cases like my brother. this affected our education, our faith and our future and in economic terms a future bright educated labor.
Let me get this straight, your family chose to live above its means and you think that the rest of society should make up for that decision? That seems to be where you’re going. You get to live in the house above your means, live the socialite life, and enjoy a quality of education many of the rest of us don’t, yet still think we should somehow pick up the tab or create laws so you don’t have to be inconvenienced between chosing your lifestyle over the medical bill?
I agree with your point. Moreover, I think AP’s family still has the choice of trying to get his rich community involved on his brother’s behalf. They may not pay the entire cost but I’d probably try if I really thought it was horrible.
Boo Hoo. Get your priorities in order you moron. Don’t come around here giving us your sob story.
Australia can beat all of you. An example from the State of Victoria, from the mouth of one of the policy makers, where government policy was designed to do the following:
- limit the number of graduates
- limit the number of graduates entering general practice
- shift doctors from areas of oversupply to areas of undersupply
- distract doctors from seeing patients, and
- hamper doctors who see a lot of patients.
See the article below for full details. Its a MASSIVE problem all over Australia though. The state and federal governments keep screwing around with the whole system, from the Universities, to the immigration system for doctors, to licensing and hospitals…and we always seem to be paying more for less, always the same as the years go on. There has got to be a better way than this.
http://www.amavic.com.au/page/Protect_General_Practice/Key_issues/The_doctor_shortage_-_an_historical_perspective/
the ama proves that unionists don’t always wear overalls and chant with megaphones whilst marching down the street. no one dares cross them.
Absolutely true newson. And it is amazing how much power they have. No government, wether State or Federal can say boo to them.
Spain has state of the art clinics if you need transplant, great research facilities too. It has free (tax payed) healthcare for everyone. It also has private insurance and clinics if you want to pay for it. Private clinics are even better then public ones. There are only a few drawbacks:
* you have to pay public one even if you decide to pay private insurance
* you have to visit your GP to send you to any specialist
* there is a waiting list of one week for GP
* there is a waiting list of 3 to 6 month for specialist
* one is NOT allowed to go to ER if his GP is available, you are supposed to beg GP to accept you out of waiting list based on your condition – GP is not payed for this extra work
* people would normaly wait for GP to go home and then they will go to ER. Causing crowded waiting room and no time for actual emergiency.
* GP is paid by state based on number of patients per day – an average of 5 min per patient is considered optimal by regulators
* there is no attention in public hospital outside of medical. Nurse will bring you your medicine, but will not help you to get up. Family members taking days off and sleeping in hospital corridors (bed is for patient only) so they can help their loved-ones are common sight.
The positive is:
* in a public hospital they let you watch TV for a reasonable fee
* private care is always and immediatelly available
* if you are member of some special group government will pay your PRIVATE insurance. For example policemen, judges or members of parlament.
The three reasons why health care costs are rising faster than any other sector of the economy:
1) We have to have it. We can’t elect to not purchase health, if we have any possible means of paying for it. So with a captive market the industry is like the kidnapper. The client is unlikely to say no to him. (Note to Walter Block: write Defending the Kidnapper.)
2) No effective regulatory restraints placed on the industry to curb the upward cost trend.
3) Once prices rose beyond the affordable range, government stepped in to pay for it. In fact the HC industry helped government by writing the rules. Their lobbyists wrote the prescription drug benefit and the latest giveaway bill. So we still pay, but now it’s taxes and not the medical bill directly.
That said,
Defending the HC System:
The tremendous duplication of effort involved in creating tens of dozens of different plans on the part of dozens of insurors in every state creates jobs for innumerable clerical personnel, including at least one full-time billing specialist in every medical practise in the country. Simplifying all this by creating a single-payer plan would cause the structural unemployment of possibly a million people. And it would force down administrative costs of all those plans from the current 31 cents of every HC dollar down below five cents.
But that’s never going to happen. Instead we’ll use the current model until one day it breaks the budget. On this, both I and the Austrians agree.
Actually, douchebag, I don’t think any Austrian would agree with any of what you’ve written, demonstrating again your utter failure to come to terms with the basic principles of what makes up the Austrian perspective.
Maybe state run healthcare is simply paying for the free lunch given to you by low wage workers, asshole.
I believe a major part of the health care crisis can be put on our own shoulders as Americans searching for the all elusive magic pill that cures everything. By doing this we have allowed major medical associations, and the drug companies take our dollars, make us lazier, treat only symptoms and not the cause of illness, and manopalize our economy.
-Dr. Pozarnsky
Balance Chiropractic, Fargo, ND
“An once of cure is worth a pound of prevention. We need to start investing in ourselves and be more responsible for our own health.
Dr. Pozarnsky, do you believe medical insurance is a factor contributing to higher cost?
I believe the government is just a reflection of the people, unfortunately. So, this midterm election is very important. We will see if the people still believe that the government should control everything.
It’s better to use insurance than do not avail at all.
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