|July 31st, 2009||#61|
Healthcare in America: Some Free-Market Solutions
by J. L. Bryan
With healthcare costs spiraling ever higher, and millions of Americans without health insurance, many have turned to the state for answers. We can have socialized medicine, with its attendant shortages and rationing, for the low cost of several hundred billion tax dollars per year. To the student of Austrian economics, it is obvious that state control of medicine – as with state control of anything – can only lead to higher costs and shrinking quality. It is the free market that provides lower cost and higher quality, as providers compete for customers.
If we see growing costs and shrinking quality now, this indicates there is not a free market in healthcare. Free-market solutions could greatly reduce the cost and increase the supply of healthcare, at zero cost to the taxpayer. The key is to find existing state constraints on supply and remove them.
Here are just a few solutions to America’s costly healthcare situation (lawmakers out there, please feel free to swipe these ideas!):
1) A free market in drugs.
a. Allow the free importing of drugs from foreign countries. Some senior citizens have become drug smugglers, sneaking to Canada and back for the prescription drugs they need.
b. Make all drugs available over the counter. Not only would this reduce costly, time-consuming doctor visits, but it would eliminate the "War on Drugs" mindset that causes unnecessary patient suffering. If you’ve ever been in an emergency room or hospital, begging for pain medicine while the staff sneers and treats you like some kind of junkie, you know what I mean.
c. Abolish the FDA. The most common complaints about the FDA are that it either approves a drug with minimal testing or drags out the approval process for several years. Generally, we expect that drugs produced by large, politically-connected pharmaceutical firms will be quickly approved, while less-connected and foreign firms will have to wait a long time. This monopoly should be eliminated. Multiple, competing drug-certifying companies could take its place on the market, and they would need to rely entirely on their reputation for good testing, since they would not be backed by state power. Individual doctors, patients and insurers could decide which certifying agencies they trust and which they do not – the internet and medical journals will help them stay informed.
d. End the War on Drugs. This would reduce the amount of addiction and health problems associated with recreational drugs. During alcohol prohibition, the softer versions of alcohol – beer and wine – vanished from the market, since producers and smugglers only wanted to deal in the highest-profit product, liquor. In 19th-century America, when there was a free market in drugs, there were no epidemics of drug addiction. People drank small amounts of cocaine in soft drinks, rather than smoking crack; they smoked opium rather than injecting heroin. With softer version of recreational drugs available, experimenters are less likely to develop a deep addiction, and addicts are less likely to develop a high tolerance that drives them to take ever-larger quantities of the most dangerous version of their drugs. Additionally, if drug use is not criminal, addicts will be much more willing to admit to their problems and seek treatment, without fear of law enforcement issues.
2) Remove the state monopoly on medical licensing. Allow competing businesses or nonprofits to provide certification, so that doctors unhappy with the current system can break out and form their own organizations. Monopoly licensing can restrain doctors from giving what they know to be the best advice.
Consider basic but widespread problems, like stress, anxiety and depression. A regular practice of meditation, ten minutes a day, can go a long way towards reducing these problems, as well as the behaviors they drive, such as overeating, smoking, and excessive drinking – which themselves lead to numerous medical problems. Meditation costs nothing and can be done by anyone, without any health risk at all. How many doctors recommend meditation first, rather than Valium or Zoloft? How many might prefer to try some milder herbal or vitamin remedies before breaking out the Big Pharma? How far are they restrained by the threat of the state monopoly pulling their license to practice?
A free market in medical certification would allow doctors to try many different approaches to solving problems, not just the monopoly-approved practices. It would also make it easier for immigrant medical professionals to work in the United States, as well as clear the way for the next couple of improvements…
3) Allow independent nursing practices. An experienced nurse knows how to perform basic check-ups, treat typical ailments such as the common cold, and likely has other areas of expertise and experience. Consumers may at times decide that a nurse is sufficient for their needs, and thereby save money over seeing the doctor. (I picked this idea up at LRC or Mises.org, but now can’t find the source.)
4) Reduce the requirements for becoming a doctor. Does a general practitioner really need ten or twelve years of schooling? Of course, they must study anatomy and biology – but why all the calculus and physics requirements for a pre-med degree? Just in case doctors want to design rocket ships in their spare time? Advanced specialties, such as neurosurgery, certainly require additional education. In general, however, it would seem that the amount of required schooling could be reduced in favor of more apprenticeship, continuing education, and greater focus on the doctor’s particular specialty. Education should center on what the doctor is actually going to do in the course of a medical practice. This would reduce the cost of a medical education, and so increase the supply of doctors.
5) Shorten patent terms on drugs and medical technology. This would allow producers to learn from each other’s research much faster, allowing a greater supply of needed drugs and devices while accelerating the overall pace of research. Greater supply and rapid technological advances mean lower price and better products.
6) Deregulate health insurance and HMO’s. Heavy regulation restricts supply. Through the typical Iron Triangle process, the most politically influential companies will get to choose the rules and the regulators for their own industry – using state power to protect themselves while attacking competitors. As with medical licensing, independent third parties could rate the quality of different insurers, but without the arbitrary state power to create monopoly or oligopoly conditions in the industry. With the internet, it easier than ever for consumers to find and share important information when choosing an insurer – including complaints or recommendations from the insurer’s existing clients.
All of these reforms would cost the government (and therefore taxpayers) no money – just the kind of solutions needed in a recession. By simply removing constraints on supply, we can open up the floodgates to cheap medical care.
These are just a few obvious suggestions. If anyone has more (and I know from correspondence that a lot of medical professionals read LRC!), please let me know. If there are enough new suggestions, and Lew permitting, I’ll post a follow-up with more ways we can improve healthcare in America.
July 31, 2009
J. L. Bryan [send him mail] lives in Atlanta. His novel Dominion is free at his website.
|July 31st, 2009||#62|
Join Date: Jul 2007
|July 31st, 2009||#63|
The point, to me, is, this can all sort itself out. There's no need for government intervention. The patient decides what insurance he wants. He decides what doctor he wants. He uses whatever sources he deems appropriate to judge the ability of the doctor. He picks the treatment he wants. If the doctor charges too much, he finds a different doctor or chooses a different treatment.
We do this in every other area of life. There's no reason it wouldn't work in body repair too.
The big problem in the 'health care' 'system' debate is that the problems are caused by the government that the morons and the manipulators push on us as the solution. The body repair industry is already run by government. As one of the articles above points out, the feds have already driven 90%+ for-profit hospitals out of business.
The problems with 'health care' all come back to its not being run for profit.
|July 31st, 2009||#64|
Join Date: Jun 2009
ASPE ISSUE BRIEF
Long-Term Growth of Medical Expenditures — Public and Private
Printer Friendly Version in PDF Format
This Issue Brief is available on the Internet at:
* Historical Perspective
* The Significance of Public Funding of The Nation’s Health Care
* The Importance of Governmental Sources in Financing Medical Care for the Aged
* Future Perspective
As the population of the United States ages, it will consume more health care. Older people suffer diseases and other medical problems to a greater extent than younger people. And with health care prices continuing to rise much faster than other goods and services, the use and societal cost of health care is expected to soar in the future. Since public programs finance much of the aged’s health care, over time there will be growing pressure on federal and state budgets, and long-term strains on public funds will put upward pressure on tax rates. That, in turn, could cause lawmakers to re-examine the coverage commitments they have made through federal and state health care programs.Whatever the outcome of those competing pressures, steps to moderate the growth of health care prices and increase efficiency and effectiveness of health care delivery are essential to moderating the economic burden that future health care costs are likely to impose.
National Health Expenditures
1960 1985 2003
(in billions of current dollars)
Aggregate spending 27 427 1,679
Per capita 143 1,765 5,670
(in billions of constant 2003 dollars)*
Aggregate spending 166 730 1,679
Per capita 891 3,019 5,670
Share of GDP 5.1% 10.1% 15.3%
Source: National Health Expenditures, Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis; and U.S. Bureau of the Census
* Adjusted for changes in the Consumer Price Index for all-Urban Consumers, “all items”
The nation’s spending on medical care has been on an unrelenting upward path for a number of decades. In 1960, aggregate health expenditures in the U.S. totaled $27 billion; in 2003, the figure stood at nearly $1.7 trillion — a 63-fold rise. In contrast, the U.S. population grew by only 51 percent. Health expenditures per capita (or per person) rose from $143 in 1960 to $5,670 in 2003 — a 40-fold rise. General inflation pushed up prices of goods and services in the economy by 5-fold. In contrast, the recorded rise in prices for medical care was 12-fold, driven mostly by increases in hospital charges and doctors’ fees. The overall economic dimensions of the growth have been equally impressive, with the share of the economy devoted to health care tripling over the period, rising from approximately 5 percent of gross domestic product (GDP) in 1960 to over 15 percent in 2003.
Inflation and the Rise in Health Care Prices
(Percent increase in prices)
Medical care overall 1,232% 82%
Medical care services 1,469% 88%
Source: Consumer Price Index for All-Urban Consumers, loc. cit.
Consumption of health care by the elderly is larger than for the rest of the population. In 1999, per capita health care spending for the U.S. population as a whole, it was $3,834. For the population under age 65, it was $2,793. For the population age 65 or older, it was $11,089, or nearly four times as high. Even within the aged population, the divergence was significant. For those ages 65 to 74, it was only $8,167 compared to $20,001 for those persons age 85 or older. Medicare enrollees, 87 percent of whom were age 65 or older, comprised 14.5 percent of the total population that year, but they accounted for 37 percent of the nation’s personal health care expenditures. For two million recipients residing in nursing homes full-time (three quarters of whom were age 75 and older), the per capita costs were $44,520. Among recipients age 85 and older, 22 percent resided in nursing homes. Persons age 85 and older comprised 1.6 percent of the population in 1999, but they accounted for more than 8 percent of the nation’s personal health care spending.
Per-Capita Health Care Spending by the Aged Compared to that of the Rest of the Population, 1999
Age grouping Per Capita Personal Health Care Spending
All ages $3,834
Under 65 2,793
65 and older 11,089
85 and older 20,001
Source: Age Estimates in the National Health Accounts, Sean P. Keehan, Helen C. Lazenby, Mark A. Zezza, and Aaron C. Catlin, Health Care Financing Review, December 2, 2004.
Health Care Spending By Medicare Population Age 65 Or Older, By Level Of Expenditures, 1999
Share of health care expenditures incurred by:
Top 1 percent of users Top 5 percent of users Top 10 percent of users
12.8% 35.9% 53.8%
Source: Medicare Current Beneficiary Survey, loc. cit.
While average expenditures by age group illustrate the effects of higher age on the consumption of health care, they don’t show the concentration of use of health care within the elderly population. In any given year, the bulk of medical care expenses tend to be incurred by a relatively small group of people. In 1999, 1 percent of Medicare enrollees age 65 or older incurred 13 percent of that group’s health care expenditures. The top 10 percent with the highest expenditures incurred 54 percent.
The significance of that concentration is not only that the nation’s health care costs will rise as the aged grow in numbers, those costs will be amplified as those in the population with the highest incidence of health care expenses grow as a share of the population. In the 8-year period alone, 1992 to 2000, the percent of the Medicare population made up of persons age 85 and older grew from 9.7 percent to 10.9 percent.
[ Go to Contents ]
The Significance of Public Funding of The Nation’s Health Care
In 2003, public funding sources — Federal and State and local governments combined — directly financed nearly half of the nation’s health expenditures. This encompasses personal health care, research, construction, supplies and other related costs. They covered 44 percent of the spending done for personal health care including care of the active military and veterans. Over the past half century, government entities have assumed an increasingly greater role in meeting the nation’s health care needs. In 1960, they funded 25 percent of aggregate national health expenditures. With the advent of Medicare and Medicaid in 1965, the governmental share rose quickly to 38 percent in 1970, and continued to rise thereafter, reaching 46 percent in 2003.
Changing Public (Federal And State) And Private Financing of
National Health Expenditures
1960 1970 1980 1990 2003
Public funds 25 38 43 41 46
Private funds 75 62 57 59 54
Source: National Health Expenditures, loc. cit.
The largest source of personal health care financing today comes from private insurance, which furnished 36 percent of the funding for those expenditures in 2003. Out-of-pocket spending accounted for 16 percent, making it the next largest private source. Medicare and the federal share of Medicaid comprise the bulk of the federal government’s support. The States’ share of Medicaid is the largest component furnished by State and local governments.
Sources of Financing of Personal Health Care, 1960 and 2003
Percent funded by:
Private insurance 21 36
Out of pocket 55 16
Medicare --- 19
Medicaid* --- 17
Other private 2 4
Other Federal 9 4
Other State and local 13 3
Source: National Health Expenditures, loc. cit
* Consists of both federal and state funding.
Among those sources, the federal component grew the most over the past four decades, rising from 9 percent of personal health care spending in 1960 to 33 percent in 2003. Although Medicaid’s emergence in 1966 significantly raised the federal government’s spending on medical care for the poor, the share of personal health care spending on medical care for the poor financed by state and local governments (which includes their matching funds for Medicaid) actually slipped a little over the four-decade period, with their share dropping from *13 percent in 1960 to 11 percent in 2002.
Federal and State Government Financing of
Personal Health Care Spending, 1960 and 2003
Percent funded by:
Federal government 9 33
State and local governments 13 11
Source: National Health Expenditures, loc. cit.
It is important to note that while private sources still appear to be financing the majority of the nation’s health expenditures — at 54 percent in 2003 — the figure masks the indirect support that the federal and state and local governments provide through tax preferences for health care. More than $100 billion in so-called tax expenditures for health care were incurred by the federal government alone in 2003. Those tax expenditures represent income taxes that are foregone because employers and individuals are allowed to exclude from taxable income that portion of their income used for health insurance premiums and/or related expenses. If those foregone tax receipts are taken into account, the majority of the nation’s health spending — more than 60 percent — was either directly financed by federal and state and local governments in 2003 or indirectly supported through the tax provisions.
With growth of public programs and private insurance during the past four decades, the role of direct payments between individuals and health care providers changed substantially. In 1960, individuals paid directly for more than half of all their personal health care needs — paying 55 percent of their medical costs out-of-pocket. In 2003, only 16 percent of personal health care spending was covered out-of-pocket, making third parties the predominant means of financing medical care in the U.S. Although a large number of factors are thought to have contributed to the escalation of medical costs, the expansion of third-party payers (whether governmental or private) may have lessened incentives for individuals to be cost conscious about their consumption of medical services.
[ Go to Contents ]
The Importance of Governmental Sources in
Financing Medical Care for the Aged
Sources Of Personal Health Care Financing
For Medicare And Non–Medicare Populations, 2000
Medicare Population Non-Medicare Population
Percent funded by:
Medicare 52.3 ---
Medicaid 12.2 19.2
Source: Medicare Current Beneficiary Survey, loc. cit.
* Consists of a mix of governmental and private sources
Comparisons of the funding sources for medical care of the Medicare and non-Medicare populations reflect how important public funding has become for the aged. Public funds directly financed less than half of the nation’s health expenditures in 2000, but it was the aged who received the bulk of this support. Approximately two-thirds of their health care costs were financed by public programs, and more than half came from Medicare.
The reliance of the aged on public health care programs has changed very substantially over the past half century, notably because Medicare coverage didn’t exist prior to 1966. But even since the advent of Medicare, the public role has grown. As described by the Medicare program’s chief actuary —
"For the population age 65 or over, Medicare paid for about 42 percent of total personal health care expenditures in fiscal year 1968. By calendar year 1997, this percentage had increased to 55 percent, with most of the balance covered by Medicaid, private health insurance, and the beneficiaries' own out-of-pocket payments… Medicare's increased share is in part attributable to the Part B deductible, which was $50 in 1968 and has been increased only three times since then, to $100 currently. Because covered costs increased far more rapidly, a greater proportion of covered costs is in excess of the deductible and is therefore reimbursable by Medicare. In 1968, only 38 percent of beneficiaries had Part B costs in excess of the deductible, but by 1997, this proportion had risen to 87 percent… Medicare's increasing share has also reflected rapid growth in the prices, utilization, and intensity of such covered services as physician, skilled nursing, and home health care. On the other hand, in some years, certain non-covered costs—such as for prescription drugs and long-term nursing home care—increased more rapidly than health costs generally, thereby adding to the portion funded by non-Medicare sources. Overall, the trend has been toward a greater Medicare share of the total personal health care costs of the aged"
The chief actuary also noted —
"…the relatively small decline in Medicaid outlays as a percentage of total personal health care expenditures for beneficiaries over age 65. The proportion of older persons with incomes below the poverty thresholds (who are the most likely to be eligible for Medicaid) fell from roughly 16 percent in 1966 to 11 percent in 1997… The impact of this trend on Medicaid expenditures was largely offset, however, by expansions in coverage, including the creation of Qualified Medicare Beneficiaries (QMBs) and Specified Low-Income Medicare Beneficiaries (SLMBs). (Medicaid pays the Medicare premium[s] on behalf of QMBs and SLMBs and also the beneficiary cost-sharing liabilities for QMBs.) In addition, during this period, Medicaid absorbed a substantial portion of the rapidly increasing expenditures for nursing home care.
The proportion of health care service costs paid directly by beneficiaries has declined significantly since the beginning of the program, from about 28 percent in 1968 to 20 percent currently. This change is attributable primarily to the increased shares covered by Medicare and private health insurance…" 
Sources of Funding for Personal Health Care Expenditures for Persons 65 or Over, 1968 and 1997
Fiscal Year 1968 Fiscal Year 1997
Out of Pocket
Private Health Insurance
Source: Trends in Medicare Expenditures and Financial Status, 1966-2000, Richard S. Foster, Health Care Financing Review, Fall 2000.
In 2003, the Congressional Budget Office reported that the growth in national health expenditures over the 1970 to 2001 period exceeded the growth in gross domestic product by 2.5 percentage points annually. Medicare, however, grew at a rate that was 3 percentage points greater over a roughly comparable period. Medicaid grew at a rate 2.7 percentage points greater. On an annual basis, these differences may seem small, but when compounded over decades, they help explain how Medicare’s and Medicaid’s combined share of the personal health care expenditures grew from 19 percent in 1970 to 37 percent in 2002. In effect, over a 32-year period, these two major public programs nearly doubled their role in financing the nation’s health care expenditures.
[ Go to Contents ]
The Social Security and Medicare trustees project a major rise in the aged’s share of the population in the coming decades. Where people age 65 and older represent 12 percent of the overall population today, they will represent 18 percent in 2025. Moreover, the rise is not solely the result of the post-World War II baby boom generation reaching its advanced years. Major improvements in longevity and a decline in the nation’s birth rate over the past 30 years are projected to lead to further increases in the aged’s share of the population after the passing of the baby boomers.
Projected Rise in Aged Population
2005 2025 2045 2065 2080
Number of aged 37 million 62 million 79 million 89 million 96 million
Share of total population 12% 18% 21% 22% 23%
Source:The 2005 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Washington, D.C., March 23, 2005
For Medicare, these looming demographics mean a growing number of people will become eligible for coverage each year, and each successive group of new enrollees will receive benefits for a longer period of their lives. For Medicaid, they mean a growing number of people will need and become eligible for nursing home and related institutional care. For both programs and the federal government generally, they mean a declining proportion of the population will be in the primary working age band of 20 to 65, from which much of the government’s tax base emanates.
Compounding the growth from demographic trends is the uncertain but still resilient rise in prices and use of medical care. To what extent they can continue to grow at these rates is uncertain.
Drop in Birth Rates and Rising Life Expectancy, 1965-2080(actual and projected)
1965 2005 2045 2080
Births per woman in her lifetime 2.88 2.02 1.95 1.95
Life expectancy at age 65:
--Average age of death for men 78.5 82.0 84.4 86.1
--Average age of death for women 83.0 84.7 87.0 88.7
Source: 2005 Social Security trustees’ report, loc. cit.
Comparison of Per Person Growth of Medicare, Medicaid, and Gross Domestic Product, 1970-2003
Average annual per person growth in percent
GDP Medicare Medicaid
1970-2003 6.3 9.4 8.8*
1980-2003 5.0 7.4 7.1
1990-2003 3.8 5.6 6.0
The Long Term Budget Outlook, CBO, loc. cit.
*For the 1975-2003 period.
The higher per person growth in national health expenditures and Medicare and Medicaid narrowed in the latter portion of the 1970-2003 period (Medicaid less so than Medicare), but nonetheless it still grew considerably faster than the overall economy. Recognizing this trend, the Medicare trustees in their central long-range forecast — the so-called “intermediate” projections — have assumed that per enrollee costs for Medicare will grow at an ultimate rate 1 percentage point faster than gross domestic product. This is lower than experienced during the 1990-2003 period, but still greater than experienced by the economy generally.
Narrowing Difference Between Growth of National Health Expenditures and Growth of Gross Domestic Product
Amount by which national health expenditures exceeding growth in GDP (in percent)
Source:The Long-Term budget Outlook, CBO, loc. cit.
Combining this assumption with their demographic outlook, the Medicare trustees project that Medicare expenditures could rise from 2.7 percent of gross domestic product today to 9.6 percent in 2050 and reach 13.9 percent in 2080. Under a scenario with similar assumptions, the Congressional Budget Office projects that Medicare and Medicaid combined could rise to 11.5 percent of gross domestic product in 2050. Expenditures of that magnitude today would represent more than half of the entire federal budget. While recognizing the great uncertainty surrounding their forecast, the Medicare trustees state that their projections —
"continue to demonstrate the need for timely and effective action to address Medicare’s financial challenges — both the long range financial imbalance facing the HI [Hospital Insurance] trust fund and the heightened problem of rapid growth of expenditures…. The sooner the solutions are enacted, the more flexible and gradual they can be…"
What can be said about future private expenditures is uncertain but equally problematic. Health insurance premiums have been rising rapidly. By one report, in 2002 health insurance premiums “rose at a rate eight times faster than general inflation; experiencing the largest one-year surge in premiums in more than a decade.” A survey by the Kaiser Family Foundation found that "premiums charged for job-based health insurance rose by 11.2 percent in 2003, exceeding previous rates of growth. All types of health plans — including HMOs, PPOs, and POSs — demonstrated double-digit increases in cost." Kaiser reported that the premiums paid by employers for employees’ family coverage rose from an average of $6,438 in 2000 to $9,086 in 2003, and that the average amount workers paid toward those premiums rose nearly 50 percent, from an average of $1,619 in 2000 to $2,412 in 2003. 
As premiums rise, it is reasonable to assume that employers will attempt to constrain their costs. Workers could be expected to shoulder more of their medical expenses directly either by being required to pay a greater share of the employer’s premiums or by having increased cost-sharing requirements. Premium hikes for Medicare benefits (i.e. now required for non-hospital services and drug coverage) and for health insurance policies supplementing Medicare (i.e., Medigap policies) would likely have a similar effect on the aged. Large premium increases may cause policymakers to impose higher medical deductibles or coinsurance and may cause recipients to seek less expensive supplemental coverage with higher cost-sharing requirements. When such out-of-pocket expenses would have a restraining impact on medical prices is uncertain. Moreover, as they emerge, policymakers could step in and require governments to assume an even greater share of the burden. The tension, however, between further governmental absorption of out-of-pocket costs and governmental budgets will only grow stronger as costs already imbedded in public programs rise.
The continuing rise in medical costs has promoted calls for fundamental change of the nation’s health care systems. Some advocate greater governmental intervention to directly or indirectly control prices and utilization. Others believe greater free market competition in insuring those costs offers the most promising route. Still others believe that medical technology and innovation, greater advocacy of healthier lifestyles, promoting increased case management practices, and making further applications of information technology to the dissemination of effective medical advances and the paperwork “maze” for treatment and services will make the health care system considerably less costly.
Thus far, there appears to be no consensus about what the best solution to the rising price tag for health care might be. Given that uncertainty, it is likely that some combination of the various major policy prescriptions will evolve and be implemented as the cost pressures, both public and private, magnify in the years to come.
[ Go to Contents ]
 As measured by the Consumer Price Index for All-Urban Consumers, Bureau of Labor Statistics, U.S. Department of Labor.
Trends in the MCBS, 1992-2000, Center for Medicare and Medicaid Services.
SeeMedicare Current Beneficiary Survey, Center for Medicare and Medicaid Services, and Older Americans 2000: Key Indicators of Well-being, Federal Interagency Forum on Aging-Related Statistics.
Trends in the MCBS, 1992-2000, loc. cit.
The Long Term Budget Outlook, Congressional Budget Office, December 2003.
Trends in Medicare Expenditures and Financial Status, loc. cit. It should be noted that recent legislation raised the Part B deductible to $110 in 2005, and larger premiums for high-income enrollees will be phased in over a five-year period beginning in 2007.
 The Long Term Budget Outlook, CBO, loc. cit.
 See The 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, Washington, D.C., March 23, 2004.
 The Long-Term Budget Outlook, loc. cit.
The 2004 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, loc. cit. Hospital Insurance (HI) is Part A of Medicare; Supplementary Medical Insurance (SMI) is made up of the traditional Part B and the new Part D prescription drug benefit.
Health Care Costs, National Coalition on Health Care, 2004.
 Cost of Health Insurance, Employer Health Benefits: 2004 Annual Survey,Kaiser Family Foundation.
 A study by the Washington Business Group on Health, representing nearly 200 major employers, found that 80 percent of employers offering employee health insurance planned to increase co-payments or cost sharing in 2003, compared with 65 percent who answered that way in 2001. In a more recent study, the group found that 57 percent planned to increase cost sharing for 2004. (Martinez, As Health Costs Increase, Workers Must Pay More," Wall Street Journal , June 16, 2003.) A New York Times article reported that "After corporate income taxes, employee benefits are the second largest structural cost for American manufacturers, adding 5.8 percent to costs." (Daniel Gross, Whose Problem is Health Care, The New York Times, February 8, 2004.)
Health Policy (HP)
Assistant Secretary for Planning and Evaluation ASPE)
U.S. Department of Health and Human Services (HHS)
Last Revised: 04/27/06
|August 1st, 2009||#66|
[Jewess Mercer with a good anecdotal evocation of the fate of all patients under socialist medicine.]
by Ilana Mercer on August 01, 2009
How CanadaCare Almost Killed My Kid!
“Code Blue Intensive Care Unit,” “Code Blue Intensive Care Unit”:
When the Code-Blue alarm sounded over the hospital’s loudspeaker system, my husband and I knew it sounded for our daughter. It was 11:00 at night. The hallways of the British Columbia hospital were dark. Only one emergency operating theater was in use. She was in it. The skeletal staff came running. Resuscitation carts were rushed toward the theater.
My own heart nearly stopped, because she is my heart.
To follow Dr. David Gratzer’s plainspoken definition (the good doctor is a Canada-care whistle blower), Code Blue is “the term used when a patient’s heart stops and hospital staff must leap into action to save him.” My then 12-year-old had stopped breathing on the operating table and was being revived.
Earlier that day she had broken her arm sliding down an embankment with friends. She arrived home, coat draped awkwardly over her disfigured limb, and stood in the doorway sheepishly. Sheepish because she feared I’d be angry. You see, she had fibbed about her whereabouts and was supposed to be studying.
Sheepish, but heroic, as we would soon discover.
“Oh those bones, oh those bones,” goes the old song. My familiarity with the structure of the human arm until then extended to, “The finger bone is connected to the hand bone, and the hand bone is connected to the arm bone, and the arm bone is connected to the shoulder bone, Oh mercy how they scare!”
A subsequent X-ray of Nicky’s arm many hours on would reveal that nothing much was connected any longer. Hers was not just any old fracture. The humerus and the ulna were completely severed. The free-floating bones were pushing out against the skin. Yet the child never so much as whimpered.
We rushed her to the hospital where we imagined she’d get care right away. Recent immigrants to Canada, this was our first encounter with the single-payer health-care system. Back in the “old country,” South Africa, we had benefited from a thriving, profitable, private sector in medicine, where relatively unrestricted entry into the profession, and the prospects of a lucrative, prestigious career, attracted the country’s crème de la crème, and ensured a steady stream of graduates from excellent medical schools. (These once venerated institutions have since succumbed to the malignant effects of affirmative action that privileges the majority population. Consequently, South Africa’s medical schools are no longer internationally recognized.)
The old-fashioned family physician had pride of place in this market and still made house calls. Emergency calls were answered by an “on call” partner in a practice, and not an answering machine. If you had no insurance, you’d contract directly with your medic, and pay him off, little by little, if necessary.
Commensurate with job satisfaction, voluntarism was high among the doctors I patronized. Once a month, my daughter’s pediatrician, bless him, would venture into the “bush,” to treat underprivileged children, gratis. Another specialist repaired cleft palates, also for free.
These superb practitioners had done stints in Britain’s government-run National Health Service. Obama would call them racists, but, as they told it, the NHS was staffed mainly by graduates of Pakistan’s medical schools. Oxford and Cambridge-bound students were less likely to be enticed by the prospects of capped physician fees and squalid working conditions.
My daughter was born in a private, spiffy, state-of-the-art South African clinic, entirely within the financial reach of a middle-class young family. Now she was writhing in excruciating pain, on a hard bench, in full view of her unforgiving “caregivers,” in the dilapidated corridors of a state-run Canadian hospital.
In retrospect, the admissions process was devoid of any medical prioritizing. A woman who complained of a migraine was being interviewed at length ahead of us. She took her time, as did her interviewer. A few sullen sorts were being checked out for mild sniffles, as we waited.
It was abundantly clear that the service, perceived as free by the freeloading public, was being overused. Yet separating urgent from trivial cases did not seem to form part of the protocol. This was compounded by the cruel indifference of the gatekeepers─the receptionists and emergency nurses.
So we sat and we sat. Every now and then I’d rise to plead for a palliative for my agonized child and her detached limb. Cold stares and stern admonitions were all I got. Two hours into the wait, my daughter finally began sobbing quietly. Still, the staff stared. When we were eventually summoned, a bureaucrat began filling in a lengthy questionnaire. I realized where she was going with her probes. Before the medical abuse would cease, child abuse had to be ruled out. The woman was investigating us for breaking our daughter’s arm!
Next in store was a protracted stretch on a gurney, unattended. Another eternity passed before the mangled arm was X-rayed with great difficulty. A tired looking young surgeon explained the severity of the fracture. This was not a case for a cast. Nicky would require surgery sometime that night. When, he could not say. An inept nurse began poking the child’s arm for a vein. I swooned at the sight of the punctured, bleeding little appendage. My husband kept vigil as I recovered outdoors. After another nurse was called in, a morphine IV was finally inserted. It stayed in until she was operated on. Hours later.
A cursory investigation into why Nicky coded that night was conducted. The findings were, conveniently, inconclusive. The custodians of Canada care had tried to convince me that my daughter had reacted to a compound in the chemical cocktail that was the anesthetic.
A decade on, the same precious person required wisdom teeth extraction, this time in the United States. She had forgotten how close she had once come to dying, but the thought of another such procedure terrified her mother.
Nicky’s American oral and maxillofacial surgeon, however, had no qualms whatsoever about putting her under in his well-appointed rooms. (Yes, we paid him ourselves: ever heard of saving for a procedure instead of going on holiday?) For after hearing all the facts of the case, he was in a position to explain what had happened ten years back.
It took a free American practitioner, in private practice, to deconstruct for me what had transpired on that fateful day.
The subpar care Nicky had received entailed the ongoing administration of morphine. Morphine, especially in a young child, depresses the respiratory system. Administered following hours on a powerful opiate, the general anesthetic acted cumulatively to stop her breathing.
Why is this episode typical of a day in the life of a patient interned in a state-run healthcare system?
As one wag warned: “Power will intoxicate the best hearts, as wine the strongest heads. No man is wise enough, nor good enough to be trusted with unlimited power.” [Except for Obama, naturally.]
The license to exercise near-unlimited power goes hand-in-glove with an indifferent, cruel, and invasive bureaucracy. In the U.S., an overly litigious society has led to the practice of defensive medicine. But in the “public option’s” sphere of influence, responsibility is collectivized. The culprits of a Code Blue or the odd slip of the scalpel have no out-of-pocket payments to fear. Had I sued the hospital, the comatose Canadian taxpayer would have been forced to pony up for the malpracticing parties.
In defense of the medics who ministered to Nicky let me say this: Most were good. All were hopelessly locked into a professional gulag in which wages are tied to a negotiated deal with labor, rather than─as is the case in a competitive market─to the individual physician’s performance.
For his considerable skill, the surgeon who pinned Nicky’s shattered bones together is rewarded with an increased workload but no extra pay. Medical men and women like him must watch as mediocre practitioners are elevated beyond their capabilities, and as underperforming hospitals are “fixed” with infusions of funds. For such are the perverse, inverse incentives in all government departments─failure is rewarded with more resources. Coupled with capped fees and overflowing waiting rooms, these medical conscripts must contend with antiquated equipment and obsolete drugs.
Doctors are all corralled into this one and only “company.” There is no other option, private or public. Should their instinct for freedom get the better of them, they must defect to America
And soon that option will die too.
|August 1st, 2009||#67|
Join Date: Dec 2003
According to the World Health Organization the U.S. spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance.
That same report ranks France first in health care for it's citizens. Why? This quote from link explains it. Or at least explains it the way they see it. Main point being that the French have a lot of choice in choosing doctors and health care. But it's expensive, the frogs pay 21 percent of their income into the national health care system but it's still half of what Americans pay for a broken health care system.
|August 5th, 2009||#68|
Join Date: Jul 2007
OPINION AUGUST 5, 2009
How to Fix the Health-Care ‘Wedge’
By ARTHUR B. LAFFER
President Barack Obama is correct when he says that “soaring health-care costs make our current course unsustainable.” Many Americans agree: 55% of respondents to a recent CNN poll think the U.S. health-care system needs a great deal of reform. Yet 70% of Americans are satisfied with their current health-care arrangements, and for good reason—they work.
Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. But ill-advised reforms can make things much worse.
An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs: the health-care wedge.
The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase. Mr. Obama’s health-care plan does nothing to address the gap between the price paid and the price received. Instead, it’s like a negative tax: Costs rise and people demand more than they need.
To pay for the subsidy that the administration and Congress propose, revenues have to come from somewhere. The Obama team has come to the conclusion that we should tax small businesses, large employers and the rich. That won’t work because the health-care recipients will lose their jobs as businesses can no longer afford their employees and the wealthy flee.
The bottom line is that when the government spends money on health care, the patient does not. The patient is then separated from the transaction in the sense that costs are no longer his concern. And when the patient doesn’t care about costs, only those who want higher costs—like doctors and drug companies—care.
Thus, health-care reform should be based on policies that diminish the health-care wedge rather than increase it. Mr. Obama’s reform principles—a public health-insurance option, mandated minimum coverage, mandated coverage of pre-existing conditions, and required purchase of health insurance—only increase the size of the wedge and thus health-care costs.
According to research I performed for the Texas Public Policy Foundation, a $1 trillion increase in federal government health subsidies will accelerate health-care inflation, lead to continued growth in health-care expenditures, and diminish our economic growth even further. Despite these costs, some 30 million people will remain uninsured.
Implementing Mr. Obama’s reforms would literally be worse than doing nothing.
The president’s camp is quick to claim that his critics have not offered a viable alternative and would prefer to do nothing. But that argument couldn’t be further from the truth.
Rather than expanding the role of government in the health-care market, Congress should implement a patient-centered approach to health-care reform. A patient-centered approach focuses on the patient-doctor relationship and empowers the patient and the doctor to make effective and economical choices.
A patient-centered health-care reform begins with individual ownership of insurance policies and leverages Health Savings Accounts, a low-premium, high-deductible alternative to traditional insurance that includes a tax-advantaged savings account. It allows people to purchase insurance policies across state lines and reduces the number of mandated benefits insurers are required to cover. It reallocates the majority of Medicaid spending into a simple voucher for low-income individuals to purchase their own insurance. And it reduces the cost of medical procedures by reforming tort liability laws.
By empowering patients and doctors to manage health-care decisions, a patient-centered health-care reform will control costs, improve health outcomes, and improve the overall efficiency of the health-care system.
Congress needs to focus on reform that promotes what Americans want most: immediate, measurable ways to make health care more accessible and affordable without jeopardizing quality, individual choice, or personalized care.
Because Mr. Obama has incorrectly diagnosed the problems with our health-care system, any reform based on his priorities would worsen the current inefficiencies. Americans would pay even more for lower quality and less access to care. This doesn’t sound like reform we can believe in.
—Mr. Laffer is the chairman of Laffer Associates and co-author of “The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let It Happen” (Threshold, 2008). His research on health care can be viewed at www.lafferhealthcarereport.org.
|August 5th, 2009||#69|
What medical advances has France come up with? I can't think of one.
The entire 'health care' 'debate' is designed to fool the marginal American into supporting a vast new entitlement that will do nothing for the average person but reduce his power and income and turn it over to government. The media always side with raised taxes and reduced freedom. Always.
|August 5th, 2009||#70|
Make health care a government responsibility, make it "free" (free = 21% tax on your income), all you do is penalize responsible people -- middle-class whites -- and reward the shiftless - stupid, incompetent, lazy niggers and illegal aliens.
Government is a criminal gang. It's only professional ability lies in killing anyone who threatens its power. In every other sphere it is utterly incompetent. The last thing we need is it taking over yet another sector of the economy, one it already controls at least 50% and has made, through its regulations, significantly more complicated, more expensive and complex, than it ought to be. The solution is to get government out of health care.
|August 5th, 2009||#71|
Join Date: Dec 2003
I haven't read through this entire thread. A lot of info here but has anyone mentioned the fact that if fedgov does take over the health care system they will have access every ones medical records?
It's enough to make a guy paranoid.
|August 5th, 2009||#72|
It's not even an open debate. It's a matter of fact. But the public is too dumbed down to understand that all you get out of single-payer, ie free and universal medical care, as they advertise it, is a seat at the local DMV-HC, and a hope that they cover your problem, and that they decide to approve your treatment. Which they have no incentive to do. Government health care means a budget is set, and it's not set in relation to needs, as the government has no way of knowing what the needs will be in advance, it can't know this, so it's only incentive is to dish out whatever care it care it can provide according to its political criteria -- more for queers, aliens, wimmin, niggers, less for heterosexual whites -- and refuse care in order to stay within its budget.
All you get with Zogcare is a huge new chunk of missing paycheck, a seat in a waiting room, and the knowledge that all your private data will be used against you, the moment ZOG finds it convenient.
|August 5th, 2009||#73|
Join Date: Jul 2007
I understand and do not understand.
|August 5th, 2009||#74|
|August 5th, 2009||#75|
Join Date: Dec 2004
Buchanan on Obamacare
|August 6th, 2009||#76|
Join Date: Jul 2007
|August 11th, 2009||#78|
My Canadian Healthcare Horror Stories
A Message for Americans
by Cathy LeBoeuf-Schouten
I was born in the same year that my government adopted socialized healthcare in Canada. I am an educated, middle-class woman and I have never known any kind of healthcare but the kind that is provided by our government-run system. It has been a nightmare for my family and me. The following stories, told in second person and based on my personal experiences with socialized healthcare in Canada, constitute my personal warning to Americans.
Imagine that you and your spouse, and three children under the age of six move to a new city and must find a family doctor. You are told at the local clinic that the doctors there are not accepting any new patients. (Canadian price controls have created shortages of everything when it comes to healthcare). The receptionist suggests that you go through the yellow pages and try to find a physician whose practice is not "full." You spend days, and weeks, doing this, and are repeatedly told "Sorry, we are not accepting new patients." You put your name on several waiting lists and persist in calling doctors’ offices.
Finally, a receptionist tells you that, while the doctor is still accepting new patients, he requires a full medical history and an interview with each family member before you can be added to his roster of patients. Based on the questions asked during the interviews, you come to understand that he is screening out sick or potentially sick people. You are all healthy, fortunately, so he takes you on as patients. Others are just out of luck.
There is a chronic shortage of doctors in Canada because price controls on doctors’ salaries have resulted in a "brain drain" where the best and brightest practice medicine in the U.S. and elsewhere, after being educated in Canada. In addition, the Canadian government cut medical school enrollment in half in the 1990s as a "cost-cutting measure," making the problem of doctor shortages much worse.
Next, imagine that all of a sudden your six-year-old begins showing what seems to be signs of an appendicitis attack, shortly after recuperating from chicken pox. You take him to a hospital emergency room and carry him in because he is unable to walk. There is no one to help you as you enter the building, so you must lumber along to the reception area. A nurse interviews you for a couple of minutes, asks you for the reason for your visit, and then takes your son’s government health card and asks you to fill out paperwork while your son writhes in pain in your lap.
You tell the nurse that your son must be seen by a doctor immediately – it’s an emergency! – as his condition is worsening by the minute. The nurse tells you, stone-faced, to go and sit in the waiting room to wait for a triage nurse. Having no choice, you do what you are told and join twenty or so others in line in front of you. You are given nothing to help make your son more comfortable – no damp facecloth, no bedpan for the vomit, nothing.
When a triage nurse finally strolls in a half hour later your son is too weak to respond to her and you begin to panic. Finally, a doctor appears and says it’s just a "bug" and that you should not be playing "armchair doctor" by "diagnosing" appendicitis. He orders some time-consuming tests anyway, because you have shown him that you are very, very angry. Six hours later the test results come back positive for appendicitis.
Your son is whisked away for an emergency appendectomy, after which the surgeon tells you that, had the surgery been delayed by another few minutes, he would probably have died. Your son’s appendix was gangrenous and on the verge of bursting. It reminds you of reading in the local news of three other people who were sent home from the emergency room, only to have their appendices burst and die. You are grateful that you were much more persistent and ornery than they apparently were.
Our Soviet-style emergency rooms have waiting rooms equipped with hard metal chairs, vending machines that sell junk food, and maybe a television in one corner. There is no access to any medical equipment, beds, or even stretchers. In the emergency room everyone passes through triage and is given a code based on a nurse’s cursory evaluation of their affliction. If you are not satisfied with the "care" that is provided there is nowhere else to go, except to an American hospital if you are close enough to the border and can afford to pay cash. Canadians know that if you call an ambulance you can bypass the 10–12 hour wait in the emergency room, but this drives up the costs of healthcare even further.
If there ever was a good fight, Americans, this is it. As we say in Canada, "Youse guys just gotta give ’er, eh!
August 11, 2009
Cathy LeBoeuf-Shouten lives in Hudson, Quebec, Canada.
|August 11th, 2009||#79|
Join Date: Jul 2007
by Richard Spencer on August 10, 2009
Though it’s been said that a “liberal” is someone willing to argue against his own position in a dispute, a characteristic quality of the contemporary American variety is that he thinks anyone who disagrees with him is either obstructing democracy or else racist and insane (at any rate, he should probably be apprehended by the authorities.) Take, for instance, this from one Steven Pearlstein, the Washington Post’s “business columnist”:
The recent attacks by Republican leaders and their ideological fellow-travelers on the effort to reform the health-care system have been so misleading, so disingenuous, that they could only spring from a cynical effort to gain partisan political advantage. By poisoning the political well, they’ve given up any pretense of being the loyal opposition. They’ve become political terrorists, willing to say or do anything to prevent the country from reaching a consensus on one of its most serious domestic problems.
The public “reaching a consensus” means, of course, everyone agreeing to do exactly what Barack Obama and the WaPo editorial board want. Anyone who could possibly stand in the way of Washington “solving the problems faced by working families” (or some other phraseology) is a spoilsport, if he’s not guided by more sinister motives. Indeed, Americans who form groups for right-wing causes (even rather mild, unfocused ones like the opposition to healthcare reform and the “taxed enough already” TEA Parties) are considered, if not subliminally racist, then blazers-and-khakis corporate stooges (“Astroturf”), paid off by the boys upstairs. This interpretation is put forward by the ALF-CIO’s Secretary Treasurer Richard Trumka in his official response to the voicing of any dissent at townhall meetings:
Mob rule is not democracy. People have a democratic right to express themselves and our elected leaders have a right to hear from their constituents—not organized thugs whose sole purpose is to shut down the conversation and attempt to scare our leaders into inaction.
We call on the insurance companies, the lobbyists and the Republican leaders who are cheering them on to halt these ‘Brooks Brothers Riot’ tactics. Health care is a crucial issue and everyone—on all sides of the issue—deserves to be heard.
It’s so good to see labor unions speaking out against “organized thugs”! And much as with Pearlstein, everyone’s voice being heard means that some people need to just shut up.
Anyway, Trumka has the whole thing backwards. Those Brooks Brothers-attired executives in the medical industrial complex will soon be as pleased as ammunition manufacturers to see their industries go on the permanent public dole. Even insurance companies, which could expect to be pushed out of the low-end and middle-class markets by the new “public option,” might actually benefit by transforming themselves into high-monthly-premium “luxury care” providers. The worse the public option is, the more they can charge.
And just as the Beltway Left, as evidenced by Steven Pearlstein and Paul Krugman, is taking up Bush-era tactics and claiming that opponents are metaphoric “terrorists”—if they’re not actually “betraying the planet”—many have also learned well from the previous admin about how to get massive, budget-busting things done in DC.
First, you trump up a problem (2003: Terror/WMD/Saddam!; 2009: Healthcare costs! (which, granted, are outrageously high, though not for the reasons Obama, Krugman, & Co. say they are)). Next, you declare loudly that something just must be done, and you offer your gargantuan program (which you’ve wanted to enact for decades) as the one solution forced upon us all by the terrible predicament we’re in (We must invade Iraq!; We must have universal healthcare coverage!). Thirdly, you lament that the other side “offers no solutions” and is preventing a “consensus,” and you might have to also express chagrin at long-time allies who are reluctant to jump on board (“unpatriotic conservatives”; Blue Dog Democrats). You finally agree to “compromise” and perhaps whittle down some of your more outlandish proposals (Send Colin Powell to the UN; lower the proposed taxes on small businesses.) No matter what, you win in the end because you started the whole process off demanding something really big, forcing people to “compromise” towards your position, so to speak. (For another example of this technique, see the “debate” last January over Obama’s “stimulus” package, which was deemed too costly at $1 trillion and thus reduced to the paltry sum of $700,000,000,000.00.)
Unfortunately, the mainstream Republican opposition isn’t arguing effectively against Obama’s healthcare reform at all (Peter Schiff and the Drs. Paul, père et fils, are exceptions, of course). And in this instance, one of the Beltway Left’s stereotypes of Republicans is actually fairly accurate: they are simply “defending the status quo” (with some overdone warnings against mass euthanasia and “death panels” thrown in for good measure.)
As alluded to above, while prices in other technology-driven industries are falling, healthcare costs have become utterly bizarre: American’s spent $2.3 trillion on medical expenses in 2007, $30,000 per family! And even the most rudimentary health insurance plan (like the one I have) costs around $150 per month. Sad to say, mainstream Republicans are intellectually unequipped to talk about the fact that costs are so high specifically because the federal government is already subsidizing too much medical insurance, thus giving providers few incentives to cut costs. (If your company’s granting you free healthcare (and getting a tax break to do it), then why would you care how many unnecessary procedures and tests you have done, or how much it all might cost? You’re not the one paying for it.) This or else the GOP is afraid of being called wicked, heartless Scrooges for actually saying out loud that it’d be better if there were less medical insurance coverage for routine procedures, more “uninsured American families,” as costs would soon plummet across the board.
As the GOP remains the Stupid (and Cowardly) Party, grassroots conservatives standing up at townhall meetings shouting “NO!” is about as good as it gets.
Last edited by Mike Parker; August 11th, 2009 at 06:04 AM.
|August 12th, 2009||#80|
Where the Police State and Socialized Medicine Meet
Posted by William Grigg on August 12, 2009 08:55 AM
ABC News reports that in the joint LAPD-DEA probe of Michael Jackson’s death, the California Department of “Justice” has “offered technical support in terms of its powerful searchable database of patient information that includes drugs, doses, the doctors that administered them and the patients that received them.”
Does anybody else remember the earnest and repeated assurances from advocates of various government-operated health care programs — ObamaCare among them — that those concerned about invasions of patient confidentiality and potential abuse of personal health information have nothing to worry about?
As LRC reader Graham Dugas points out, this facet of the Michael Jackson investigation illustrates how centralized collection of personal health data creates abundant material for use in what the Russians call compromat, or political blackmail:
“Ahem…. Psst, Councilman, we know that you got treated for gonorrhea last fall and it would be a real shame if your wife and constituents found out. You really want to vote for that union pork barrel funding project now, don’t you?”
|#1, health, health care, medicine|