Our Health Care System, Compared

By James Kwak

I was looking at OECD health care data for something else I’ve been working on and wanted to share some of it. It’s well known that the United States spends a lot more per person on health care than comparable countries and that our actual health outcomes are anywhere from average to bad. See, for example, this chart from a 2008 paper by Gerard Anderson and Bianca Frogner.

That chart shows how each country’s spending and life expectancy differ from what you would expect based solely on how rich they are (per capita GDP). As you can see, we spend a lot more and live a lot less. (That paper also considers a number of other outcome measures; we do well on some, poorly on others.)

Besides where we are today, though, the other thing we should be interested in is where we are going. Our health care system is the product of a number of historical factors that we can’t make go away with a snap of our fingers. So even if we have a bad, expensive health care system, maybe it is getting relatively better and relatively less expensive.

Nope.

This chart, from the OECD data, shows the change in each country’s per capita spending and life expectancy relative to all other countries. The data are standardized: you’re looking at the number of standard deviations each country was away from the mean in 1992 and in 2007.*

You can see that not only is the United States the outlier when it comes to spending, but we are moving in the wrong direction: we are becoming more of a spending outlier, and we are drifting down from the average life expectancy into the lower group (currently surpassing only Turkey, Hungary, Mexico, Poland, and Czech Republic).

I labeled a few of the other outliers. Basically the lower left is relatively poor countries, Japan is at the top, and that big cluster is Western Europe and the Commonwealth countries.

Another way to look at the situation is to look at actual values rather than standard deviations, as in the following chart. This one shows you actual increases in life expectancy and percentage increases in nominal per capita health care spending. The axes are located at the averages of these countries: the average spending increase was 132 percent and the average life expectancy gain was 3.7 years.

One thing you can see is that, in percentage terms, health care costs have not been growing in the United States much faster than in other comparable countries.** If you exclude countries starting with a small 1992 base (Korea, Turkey, Ireland, etc.), our rate of health care cost growth has been above average, but it’s not an outlier. So the reasons why our health care costs are growing rapidly are probably at least somewhat different from the reasons why they are high to begin with.

The other thing you see is that our life expectancy gain was the absolute lowest of the whole group (and we weren’t starting from a particularly high level, as you can see in the previous chart).

Ordinarily, you would think there should be convergence across countries. Since other countries spend less and live longer, you would think that we would learn from them—global competition, you know. But instead we’re moving the wrong way on both dimensions.

* I picked all OECD countries for which there was data, except Belgium (which has a different methodology for counting spending), which meant dropping Chile, Estonia, Israel, Luxembourg, Slovak Republic, and Slovenia. I only went back to 1992 because Germany has a gap in 1991 and I initially planned to use all the intervening years. I stopped in 2007 because Canada and Greece are missing data for later years.

** We had below-average growth in percentage terms, yet the number of standard deviations separating us from the mean increased, because the poorer countries increased spending rapidly; this convergence caused the standard deviation to fall as a proportion of the mean.

99 responses to “Our Health Care System, Compared

  1. Great graphics.

    The problem I have is that I don’t believe the US can implement European-style health care and realize savings. I think our government will be a lot more shy about gatekeeping expenditures, as it will be politically unacceptable to deny care under any circumstances. We will also always look at the outlier stories and get upset about centralized policies which hurt an individual, even if they result in improvement to average results.

    In this country, to get improvement, we really need to let the markets do the dirty work for us. We really need help from those who care about this issue to get away from single (government) payer models and help focus on how to get a really competitive health insurance market out there. I’m not saying we need a completely free market (which right now we’re incredibly far from) but we do need to get real competition in play among insurers, get patients more involved in making decisions related to cost, and pay providers based on outcomes and managed care, rather than on fee-for-services.

    (Fee for services could still exist. But it should be extraneous to at least the most basic level of insurance – it’s for people who can afford it and want to spend money on things that are harder to justify spending money on.)

  2. Why is our healthcare so expensive: is it providers and hospitals fees; the cost of providing healthcare by the providers and hospitals; insurance company (commercial and government) overhead; the expense of the consumables for providing healthcare e.g. syringes, drugs, instruments; defensive medicine; cost of doing ‘everything’ even in cases when ‘everything is most likely a waste.
    Is there data that shows where every cent goes to give more clarity to this situation we find ourselves.

  3. where is all the money going?
    what is the cost of managing healthcare cost i.e. insurance company overhead.
    Is there data on where all the money is going?

  4. The first commenter treats health care as a commodity that can be best exchanged in a competitive market. I wonder what existing market he sees as serving as the best model for that?

  5. Joe, do you mean what existing health care / health insurance market, or are you inviting me to wax rhapsodic on the miracle of competition more generally?

    If the former, I don’t have a good model in existence. America requires a uniquely American system, both because of our diversity and because of our exceptional insistence on the sanctity of the individual.

    I think insurers should compete to a greater extent than they do, based on both cost and performance. One great role for government in enhancing the quality of health care would be to serve as a clearinghouse for comparing cost, coverage, and outcomes for different insurers – which information is presently unavailable or deliberately muddied – a function not too different from what the FDA generates for us in monitoring foods and emplacing nutritional facts labeling. I’m sure we can think of many positive roles for government in improving the competitiveness of health insurers that would be more effective for the American consumer than a government-rationed system.

  6. I think we have to stop using life expectancy as a comparative measure, it is pretty much meaningless. Diet, exercise, community factors like feeling connected, strong family life, etc all can have a big influence on life expectancy.

  7. WOw! All the comments accept your statements as a good place to start a conversation from. How about we take a vote on which country most people would like to be taken to when they have a serious medical problem? As far as cost…….subsidies tend to raise prices. Stop govt subsidies of healthcare……..and education for that matter and those services will become available to those of lesser means.

  8. My take is that the most significant cost drivers are from insurance overhead, inflated drug costs and a medical fee for service culture. Personally, I’d like to see a single payer system whereby the govt collects a health tax, sets a cost structure and the industry side finds ways to survive in that cost structure through competition. Insurance companies would be cut out of the health care business. But, lets face it, the big money stakeholders will never let that happen!

  9. It is a little perplexing why it is so costly here compared to eslewher. I have to think that part of the problem is higher salaries for medical professionals. I wonder if they are market based or due to rent seeking government regs.

    I also think we have Mercedes level health care, with the technology and all the tests and etc. You either buy a Mercedes or have nothing at all in America. There doesn’t seem to be any competitively priced middle ground here.

  10. In my state unions are in essence banned because even the whispering of the word “union” will get you automatic termination. We have major hospitals in the largest city of the state (flying under the Catholic banner) which require their full-time nurses to work 12 hour shifts. Of course the reason they require the 12 hour shifts is it cuts off a large number of people they would otherwise have to pay benefits to—-The hospital saves thousands or millions in benefits that would be paid under the more traditional “8 hour shift” system (which was never 8 hours anyway). One might ask how wise it is to ask nurses (when I say nurses I mean very well trained RNs, nothing less) to perform complex tasks which a patient’s health or life might depend on when they are extremely fatigued at the end of their 12 hour shift. The Catholic hospital does not ask this question. The Catholics have more “important things” to worry about—wine, art, maintenance of architecture at the Vatican—-and, lastly but certainly most importantly reserve funds to defend sexual abuse by pedo.phile priests (if the transient life of moving the pedo priest from parish to parish to parish to parish to parish by their Bishop wasn’t enough to keep the proud Catholic parents of the abused children quiet).

    You see it’s not “entirely uncommon” for Catholics (and I’m not making any reference to the Catholics’ very warm, open-armed welcome to the 3 times married and past philandering Mr. Newt Gingrich into the Catholic church) to be hypocritical on issues relating to health and morality.
    http://www.nytimes.com/2009/12/26/health/policy/26abort.html?pagewanted=all

    One might even argue they specialize in hypocrisy. I leave it to the observer to decide.

  11. I bet Israel’s number’s look good in both life expectancy and costs (although probably fairing better in life expectancy).

    Mr. Kwak!!!!!, any chance of a link to a graph of “actual values” of Israel and other countries left out???? (You know BaselineScenario readers have enquiring minds)

    Pleasy weasy??? With sugar on top???

  12. ”If the former, I don’t have a good model in existence. America requires a uniquely American system, both because of our diversity and because of our exceptional insistence on the sanctity of the individual.”

    Americans are different, but health care needs are universal.

    Yes, for wellness care – people can shop around to the extent that there exists multiple providers in a given market. More often than not, there are at most two and frequently only one. However, for sickness/injury care – the type that costs the most and that is given exactly when the user is NOT in a position to comparison shop – the “informed consumer” argument collapses. There are many areas in which the government CAN act as a fair arbitrator – a clearinghouse, if you will – but there is only so much that the individual consumer can do to shut down or reform underperforming service providers through market action. There has to be an entity with more economic or legal clout to establish efficient and fair practices, just as there was supposed to be one that kept the financial markets transparent. The sancity of the individual is preserved in many alternative approaches to health care delivery out there; America’s health care system is the result of a piecemeal approach to health care delivery and dealmaking approach to regulation that has resulted in an disjointed delivery system in which the major components have become largely impervious to reform or regulation. In any case, market based reforms cannot take place until a functional marketplace can be created.

    Perhaps the new book, “Remedy and Reaction”, by the noted health care historian Paul Starr, can provide some needed data to cut through the dogma that pervades this discussion. It is quite educational, and quite depressing;

  13. The general public would probably be amazed and a little alarmed if it learned how much we do in medicine depends on revenue decisions and how little depends, at least when it comes to surgery, on actual evidence-based outcomes research. Virtually all the incentives are for increasing revenue and therefore health care costs.

    Randy MD FACS

  14. CEO of United Health Care gave himself a 1.8 BILLION dollar package in 2005 – got a paper copy of the newspaper since the internet was scrubbed of the bragging headline…

    Kwak doesn’t seem to be able to do anything other than keep sticking the probe up any individual – always *personal* and no normal human emotion towards the person – very creepy.

    http://www.businessweek.com/bios/amanda-mitchell-122.html

    Well, looks like corporations can *suffer* even after inducing maximum suffering on human beings by denying them basic body maintenance to give themselves a BIG package for being clever enough to fetishize *health care costs*….

  15. This comment directed at “Annie” commenter above

    Annie, I hope this isn’t our BaselineScenario commenter “Annie” out of Chicago. If so, your posts have definitely dilapidated over time.

    The CEO of United Healthcare in 2005 was William McGuire, and he earned 124.8 million (with an M) in 2005. McGuire left the job in Oct 2006 under some disgrace in a backdating of options scandal.

    The CEO of United Healthcare in 2010 was Stephen Helmsley who made 102 million (that’s with an M and that’s including bonuses) for the year 2010. http://www.forbes.com/2011/04/12/compensation-chief-executive-salary-leadership-ceo-compensation-11-intro.html

    Being the net income of United Healthcare in 2010 was $4.6 billion, I am wondering where (newspaper, link or otherwise) you “pulled” this $1.8 billion salary “package” (circa 2005) number from???

    While these CEO salaries are no doubt outrageous and I do not defend them, making up imaginary numbers doesn’t do much to further one’s argument other than make your side of the argument look like a group of nutjobs.

    As far as Mr. Kwak’s style of argument is concerned, using numbers, facts, statistical methods, and a reasoned/rational approach seems the best way to most. It generally tends to get you farther than emotional blathering with false facts. While your intentions may be good, you can ask Pat Schroeder where the more personal type exchange to make your case gets you.

  16. James – Nice graphical depiction of the outlier status of US!! It is worth encouraging readers to share their international experiences. Australia ,Japan, Switzerland and France evoke lots of positive feedback. Switzerland is perhaps within the easiest reach of US transformation: Mandatory purchase required, privately administered, no selective cherry-picking allowed in the insured pool; no refusal of pre-existing conditions; sensible usual & customary reimbursements to provide; premiums set basis the entire insured pool; ability to pay shortfalls made up by the Cantons. The result: health insurers are low-margin TPA business that compete on service – not price. Read more….

    http://nihoncassandra.blogspot.com/2011/07/price-isummmerrrr-wrong-part-2.html

  17. There is way too little discussion and analysis of the outsize costs of US health service providers, particularly hospitals. Take a couple of examples of procedures that are not very technology-intensive and compare our costs with international peers, ie US vs. Western Europe and Canada (data from IFHP) – In-patient appendectomy: Medicare $10k, US private $12-26k, C&WE $2.5-3k; Hip replacement: Medicare $17.5k, US private $32k-68k, C&WE $8-10k. With around 430,000 hip replacements annually in the US that’s a lot of extra cost on just one procedure. The system is failing dramatically to produce cost efficient care even for standard procedures. It’s ironic that costs of just about everything else are higher in C&WE than in the US. Unless the policy solutions address the underlying inefficiency of the health care system, we’ll continue to struggle with a grossly over-expensive and poor value for money system. Without reforms of the way we contract for services from providers, more competition among insurers is unlikely to help much.

  18. A single payer system, an improved Medicare for All that is a health care system not a health insurance system, will operate as Medicare now does at about 3% overhead. Taiwan looked at it and adopted it in the ninties because it was the most efficient. The California Nurses Association had an econometric study done showing the huge savings if we implemented this type system, which is publicly financed and privately run.

    Foreget all the scare tactics the Right uses to keep the insurance industry ensconsced in our system.

    We presently have a system thats overhead is over 30%. Why? Because doctors have to hire a bunch of workers to wade through the bureaucracy and the over 1500 insurance plans in needless paper pushing. Our system is not designed to improve health outcomes, so costs down the road are inevitable. CEO’s and the corporate elites in the industry make millions syphoning costs out of the system. That and more, and co-pays and deductibles rise, and we have over 50 million unisured and more who are underinsured who are a health crisis away from banlruptcy.

    If we have a uniquely American system, it is Medicare. The one those on the Right want to protect is uniquely stupid and is meant for one thing and one thing only–to maximize profit. We need to take profit out of health care andput health at the center. It can be so much cheaper, as all other industrialized nations in the world have found out by implementing some type of national care, all a bit different and all with some problems, but none with problems as bad as ours. All we seem to be is uniquely stupid.

  19. The United Healthcare golden parachute was a ‘total package’ that included cash AND stock options, bonuses, retirement, and other valuable assets. my recollection is $1.2 Billion.

    I got out of the stock market and stopped investing in ‘the system’ when I learned Michael Eisner made a cool $750 million in one year the mid 90′s when Disney had a great year– and his line workers at disneyland — maintaining the face of the company on the ground for the plebes-were getting $8.00 an hour.

    On healthcare: we are truly dunces in the US– supposedly pro business, and business minded.

    We need to pay attention to words, and their meaning, and lose the alarmist ‘socialism’ rhetoric.

    Insurance is not care. Health cannot be insured.

    The concept of cost shifting from the individual to the broader population is a moral one we have not as a society generally agreed to, in health care, retirement, medicine, unemployment, etc. We are even starting to finally wrestle with it in the bank bailout and military over-expenditures…

    We need single payor, and one administrative system. It does NOT have to be managed by the government, or even regulated by the government; put it out to bid to Blue Cross, United Health, etc etc…let them know they get the ENTIRE pie, but they get to earn a 2% net profit, max. See who bids.

    You still can choose where to get your services, if you are Steve jobs, you can buy whatever you want wherever you want whenever you want. For the other 99%, you still get CARE… all americans eligible.

    HOWEVER, you are mandated to pay in, and the first $1,800. of medical expenses per individual each year are paid by the individual out of pocket. No co-pay, no reimbursement. Hard dusty dollars pryed from your OWN wallet, not everyone else’s pocket.

    Madatory annual dental visit/teeth clean exam, mandatory annual physical with baseline blood work, at minimum– and YOU buy it. Re-incentivize a personal stake and personal responsibility for ones own health -that is the starting point.

    And yes, diet, exercise, love, family, and a smile go a long way to a relatively healthy life. So do genes.

    And lest we forget, every life, healthy or not, DOES end for each of us. Stunning how much familial wealth is shifted away to the medical community in the last 6 months of a life… ( full circle to my dunce salvo)

    The ‘death panel’ is every family and individual- for the universal life experience that is death.

    Where is the discussion and the love?

    I LOVE Kwak’s work: once again, We’re Number One!!

  20. @Moses – take your own advice – from another thread you threw up this *intelligence*:

    “Honest to God, read the crap this dumb c*nt Peggy Noonan writes and try not to bust out laughing, just try not to bust out laughing. Some samples picked out by Ken Layne at Wonkette (Ken how could you bear it??):”

    All Kwak does is paw through the financial records of people – one person at a time – to figure out how fast and how much there is left to steal.

    I made my case for the discussion about *wasted* $$$$ in the health care *system*.

    Every day I figure out more and more ways to *seal* the details of my financial life, certainly my genes and the good health I’ve enjoyed over time, and using cash to buy whatever….all because this blog reminds me of the predators who are the worst kind of sell outs to the *man*….economic hooligans.

    The graph sucks, imo. NO REAL TIME, REAL LIFE INFORMATION ON WHICH TO MAKE A DECISION ABOUT THE FUTURE.

  21. @Jef – the basic problem with asking people to pay for preventative care is that ~80% actually will (which is great), but the 20% that can’t or won’t end up sucking up the all the money on emergency care. Given that we, as a society, will not let people die on the streets (cheers to the contrary in GOP debates…) we still need to find a way to control costs. The only real difference between our system and the rest of the industrialized world is that our system isn’t single payer (or at least not heavily regulated). All that happens with de-regulated systems is monetary extraction or fraud. This is the basic history of finance and industry in the US and it’s no different in the medical industry. (Enron, Worldcom, recent TBTF banks, MF Global, etc.)

    I think that Mark is close to a hit. (insurance overhead, inflated drug costs and a medical fee for service culture). There are too many people in the payment system that want their 10% profit. There are statutory limits on the ability of US governments to negotiate drug costs – which isn’t the case internationally. IIRC, one of the most profitable industries are big Pharma. Big Pharma sounds an awful lot like the banks whining about profit margins, which is the apex of chutzpah. There are companies that manage to side step the fee for service model. Mayo and Cleveland Clinic to name two. Doing this on a national level is more or less what the EU countries do and do successfully.

    As a society we do need to re-evaluate the cost no object concept. If you are 85 and get cancer, you get hospice. If you are 18 and get cancer, you get the full monte care.

  22. Steve from Cranbury

    I’m actually in the hospital right now and recently have been to another for a serious health issue. So I get to observe what’s going on up front and personal. There are a myriad of reasons why our health care system is so expensive. I’m add another, not a primary cause, but a huge opportunity for cost management. I’m a retired executive and have been trained in and used modern business process management tools. It is readily apparent to me the two hospitals I’ve been in have very poor management process, which not only affects health care quality but also costs.

    I’m finding very poor inter and intra hospital communications and sharing of patient data, lots of people doing relatively simply but high specialized tasks (probably because each is an independent billing center, and a lot of what seems to me to be “let’s do a lot of procedures so we can make money on the pay for procedure compensation system”. The whole system is incapable of delivering effective and efficient treatment because the management process works against it.

    Some hospitals are investigating how improved management process using six sigma/continuous improvement management processes can deliver improved treatment more cost effectively. The Federal government ought to become a clearinghouse for sharing this information throughout the industry as well as doing its own pilot studies on “how can we use modern management techniques to deliver better health care at lower cost”. A summary of lessons learned from other countries that deliver better care at lower cost is an obvious need.

    Last, and I say this because part of my work was in database analysis and management, there would be tremendous benefit from standardizing all patient health records across Medicare and all other health insurance companies. From this, we could create a huge, anonymous random sample database that tracks patient health issues against various treatments and medications. This would provide necessary measures of what works and what doesn’t. Additionally, such a database would uncover unsafe procedures and medications much more quickly than our current system. Which in itself would cut way down on unnecessary costs do to poor medical practices.

  23. It seems obvious to me.

    A for-profit healthcare system has a goal to sell as much as it can to those who can afford.

    Consumer culture. You buy what they sell even if you don’t need it. It’s called marketing to a demographic I guess.

    That’s probably why costs are so high in the United States.

  24. @ Jef

    Someone else made a similar comment to me recently: ‘we need single payer, but it needn’t be government, etc.’.

    This is an even worse idea than having the government do it, which I think would fail us all badly. Pick a winner, eliminate all competition, and fix their profit in stone? Where is their motive to provide better health care? (You can threaten to cut them out – but you just eliminated their competition – you’ve got no one else to turn to).

  25. My wife works PRN as a PT in the local hospital – which is for profit BTW. Yes, process management sucks. Hospitals seam to be more like a building that houses dozens of independent business people (who aren’t very good at the business side). I don’t think you can blame the individual doctors and others that work in that system. Every time I’ve interfaced with a hospital I’m still shocked at how complicated the billing system is. Any other business would have drowned in the red tape. But I don’t think that a totally free market solution is the answer – it hasn’t worked anywhere else in the world. Likely due to information asymmetry and how the profit motive slews things to short term solutions not longer term health.

  26. @ Oregano, I disagree that the ‘informed consumer’ model falls apart in event of injury/sickness. The insurance buyer chooses their insurer, whose expertise in terms of balancing cost and outcomes would normally exceed the patient’s.

    You hit the nail on the head, the problem is there are too few products to choose and not enough ability to compare them. This is partly our own creation, and can be remedied.

    Can you imagine choosing from a menu of insurance programs, the same way you choose mutual funds in your 401-k? Plan A: high-deductible catastrophic coverage. Plan B: this plan indexes the British NHS, utilizing the same rules to approve or deny procedures and offering the same or better wait times for appointments. Plan C: etc….

    You do need really good analysis of outcomes for different insurers and plans. Perhaps this could be done by non-profits but I think the government should step to the plate. Certainly if the government can’t do this well, it has no business actually administering the health care itself.

    Critical point about insurers: they need to be mutualized, by law. That means, the insured are the owners. This removes the incentive to profit at the expense of the insured, and enhances the incentive to provide better outcomes at lower cost. This is one of a handful of reforms that could make a tremendous difference to our system.

  27. Is there any health insurance company in the US that does not own numbers of highly expensive buildings and have headquarters set in extensive, highly-landscaped estates?

  28. tippygoldenpress:
    It is the structure of for-profit health insurers which makes health care expensive.
    First of all, they must continue to get new entrants, for the old customers tend to stay on for 3-5 years.
    So, a lot of money must be spent on advertising and marketing.
    Secondly, most of their products are dependent on low deductible plans.
    Where can you find today a plan with a $25,000-$50,000 deductible?
    One might say that the average person could not afford such exposure.
    That is why I am submitting this month a business methods patent to provide the underlying $25,000-$50,000 of coverage in 2-4 years, depending on contributions made.
    At that point, if a person has $50,000 of coverage, he no longer makes contributions – it is paid-up (actually, it was paid-up with the first contribution although coverage is minimal).
    The only costs the insured would have would be for catastrophic coverage, if he chooses, which is 30% of the cost of a traditional policy.
    This product can be designed by not-for-profit insurers, such as a 501(c)(4), for to earn their tax advantage they must provide affordable products for the community which are not available in the commercial market.
    Don Levit

  29. frozeninthenorth

    Gutsy to “attack” the U.S. health care system, especially with hard facts — they get in the way of government philosophy. Going back on the data to 1986, something important changed, because up to that point American health care costs were similar to the rest of the OECD. 1986 marked an explosion in American health care costs.

    Fundamentally, the European model will not work in the U.S. because there are too many vested interests that have huge incentive to keep the status quo. There is really no point in having this conversation until America is ready for a revolution.

    health care workers like the system, rich American (opinion makers) like the system. Last weekend in Miami (i’m from Canada) saw a signpost over a hospital that stated that wait time was 5 minutes — here in Canada wait time in an Emergency room can be many hours (if not days). Those who can afford the system have no reason to change it — it works for them!

    Finally, Minnesota that has a population equal to that of Saskatchewan has health care twice that of the Canadian province (with a 1/4 of the population not having access to health care). Minnesota’s (Republican) Governor is looking at the Saskatchewan model as a solution… maybe there is hope (but I would bet against Minnesota’s governor)

  30. Asking the obvious rhetorical question – so why were none of the REAL fixes given consideration when the latest Health Care Bill was being writ into law?

    Highest paid *executioners*, er, executives after the banksters are the for-profit health insurance gang of bona-fide sadists.

    I’m not backing off the righteous indignation directed at the *abstraction* calculations for UNEARNED PROFIT that is, admittedly, the most convoluted and ingenious *math* ever devised

    to put in place institutions whose BUSINESS it is to make sure no one gets the mano et mano health care they really need when they need it.

    This area of LIFE – health maintenance – and how it is being handled as a *business* is what makes it kinda hard NOT to believe that there is *being* of some kind – something along the lines of that eye from Lord of the Rings – that focalizes and channels pure hatred fro human beings. No one is more fragile than a person needing someone to close the bleeding from an artery.

    Every time *health care* comes up on this blog – I see that *eye* ruling over all minds infected with the sickness of *cost* fetish….

    $1,800 out of pocket to a person earning minimum wage and paying 35% of that in taxes – sure, just how *educated* of a consumer would you have to be to make that *cash transaction* possible?

  31. Health care is not a competitive item that should be in the hands of Wall Street profit manipulators and takers of large bonuses. That type of system exists nowhere but in the US. Medicare is a system that is efficient and cost effective. It should be expanded to everyone making it stronger financially.
    Recently I had a sciatic inflammation. Each item covered by medicare was $30 so that by the end I had paid $500 in addition to my $100 monthly fee for my choice of “gap insurance” and $100 monthly taken from my social security check. I have a choice to use a “fee-for-service” system or an organized HMO type system. I also have a choice to not, for example, go to physical therapy due to my limited income. The important point is that I no longer am at risk of bankruptcy and loss of home due to high medical bills and high cost of insurance. Before going on medicare I was close to dropping health care as premiums rose with my age to far exceed my mortgage payment. My HMO is computerized. My Mother’s care was fragmented with ER treating symptoms, Oncology MD never leaving his office and no one ever getting the big picture. The US is failing because we allowed the profit seekers to take over the health care business for their personal benefit at the expense of the patient and sometimes at the cost of lives. The “public option” was an opening to go to a medicare-for-all system, but the White House and Max Baucus made sure the industry made the final decision.

  32. Pretty sure if everyone paying for their own healthcare would be the best way to reduce costs. No insurance, No government.

  33. Poor Poor Ignorant Annie—quoting incorrect numbers and facts from 2005 (Annie was only $1 billion+ off in that $1.8Billion number which wasn’t a 2005 “package” as Ignorant Annie called it. Annie probably considers that $1billion dollar plus misstatement a “rounding error”?? It was amassed over a period of eight years. As Ignorant Annie criticizes the blog host for using the most recent numbers available, as they are not “real time”, Annie can’t even get 6 years dated numbers correct.

    Poor Poor Ignorant Annie must not ever have done research in her life, or she would know how difficult it is to acquire, tabulate, and account for inconsistencies (making certain to compare apples to apples) in “real time” data.

  34. This is the #1 example of how Americans are taxed more than their European counterparts. Just because the government isn’t the recipient doesn’t make it any less a tax.

  35. The problem with getting any real reform into the health care system is that both sides of the issue are somewhat correct. We do need a nationalized system of some kind so nobody gets left out in the cold and everyone has access to health care. Perhaps the new health care bill will do that once it’s fully implemented, perhaps not. But we also need more consumer awareness and cost comparison. Certainly nobody can compare costs when being rushed to the hospital for a heart attack or a car accident, but the majority of health care usage and the majority of waste in my opinion, doesn’t fall into that category. I recently had to have an MRI on my leg and I have a fairly high deductible. I was given a choice of several MRI providers from my Orthopedist, but none of them provide the cost of their procedures. I made my decision based on location not cost – and have a bill for $600 (and my insurance did pick up almost $400 of it) sitting in my in box at home. For that matter, when I was referred to the Orthopedist, I was given a list of doctors I could see and made my decision based on speaking to others in the area with experience with various doctors. That’s a legitimate way to make a decision – but there was no cost comparison in the equation. If I knew that my first choice charged $125 a visit and $100 per x-ray and my second choice charged $90 and $75, that might have affected my decision – but there was no disclosure of that one way or the other.

    Now for more cost issues, my leg issue is now mostly resolved but I’m going to physical therapy. I’ve met my deductible for the year so there is no more cost to these visits. The PT office told me I’m allowed 12 visits under my insurance plan – so they and the orthopedist have me scheduled for 12 visits. I have now had 5 and I’m feeling much better. I’m not a doctor and I know just feeling better doesn’t mean I don’t need more PT -but do I need 12 visits, or do I need 8 or 16? -doesn’t seem to matter. My insurance company will pay out $1,500 to the PT office for my 12 visits whether I need them or not, and since I’ve met my deductible I don’t care – free leg massage twice a week for six weeks.

    So here’s what I propose. $2,000 per person, $5,000 per family deductible per year with some kind of lifetime out of pocket cap – maybe $100,000, that equates to turning 65, or 70. Everything over that is Medicare. There is means tested assistance for those who can’t pay, maybe a debit card like food stamps are done now. All doctors, hospitals, pharmacies, labs etc. must publish a price list and you either have to opt out of the Medicare system all together as a heath care provider or fully embrace it and take the reimbursement rates etc. This brings in the free market for most health care spending, but protects everybody above a certain level. Medicare reimbursements should be based on totality of care, not per procedure and one annual check-up per year should be free for everyone -and that should include the labs necessary for that check-up. Its bull-hockey that my annual physical is only$20 co-pay under my insurance but the blood and urine test (which is probably more important than the rest of the check-up ) costs me $80 out of pocket.

    Details would need to be filled in, but this type of system would work. Except it gets rid of the insurance companies all together, which is why it will never happen. Oh, America – can’t even get rid of the penny how are we going to solve the real problems?

  36. @josh, I agree that there needs to be more outcomes-based ranking of health care delivery systems. A properly funded government body would work here – think the CDC as an example. I question a purely insurance-based health care funding mechanism.

    I think that a large part of the problem lies in the demand curve for health care; excluding traumatic incidents, most individuals hardly see nor need health care services other than the usual wellness/maintenance checkups. Most families, on the other hand, are constantly seeing health care providers as their children grow. Nevertheless, the amount that individuals are willing to pay for their health care insurance premiums is directly related to their sense of need TODAY. However, the viability of a health care delivery system and an insurance program needs for those low-demand consumers to subside those needing traumatic care, disability care, or the aged and end-of-lifers (even if by some miracle we come to embrace death as an essential and noble part of life and stop trying to evade its clutches). And it needs a large base of low-demand consumers – hence the need for a mandate a la Massachusetts or Obamacare. There is no direct incentive in a non-demand system for consumers to think beyond TODAY’s needs.

    Having been a member of one of the best health-care delivery systems in the country – Kaiser – I can see the benefits it has brought to its members and to its (salary-based) care providers. Patient wellness is the care providers focus – not on their next dollar earned. They can tap into the system’s various clinics when needed, have the benefit of coordinated data systems with outcome-based data that they can share with and encourage their patients to use, and stress levels are lower. The member needs to be an active partner in their health care – sometimes advocating when needed – but this should be the future of delivery.

    Unfortunately, even a well run organization such as Kaiser can’t escape the economics of health care delivery; it really would prefer that its members select the traditional co-pay HMO model that trades higher premiums for access and guaranteed major medical cost containment over deductible models that minimize premiums. Having been a part of such systems over several life phases now – individual, family, and empty nest – I wonder how we can move forward without some way of formalizing the need for a longer-term and community based outlook in in health care valuation.

    It is very much like the complaints I’ve heard from childless/empty nester folks – we don’t have kids, so why should we pay for schools? It’s because you’re paying the last generation back for your OWN education and the benefits it brought you. In health care, it’s somewhat the same idea – though the person you’re paying for in your youth and vigor is to a large part yourself – older and less immortal.

  37. Pedro D
    We live in the Caribbean and like many others here need from time to time to come to the US for treatment. We’ve learnt now not to say we’re insured (even though we are) and to self pay. The price is less than half the price that the insurer/the co-payer would have to pay. We don’t want to stick our insurer with higher costs because that just gives them an excuse to raise our premiums. The whole thing insurance/healthcare industry is a racket. God knows what we’ll do when we get older.We just have to make enough money so we can afford to pay to die.

  38. I am an elderly physician, now in his seventies. James’ presentation is good; I disagree with many of the comments. There are several factors driving US healthcare costs ever higher
    1. Fee for service medicine is #1, the more I do, the more I can charge – healthcare competition is a joke that relies on selective enrollment.
    2. Often overlooked is the factor that most young doctors owe hundreds of thousands of dollars when they start practice. Of course they concentrate on making money- it’s hard not to. My wife worked when I was a student, resident & intern- I had no debts, so I can be “noble”. The fact that non-physicians graduate from college with big debts and can’t get jobs is a ticking time bomb that will destroy this country.
    3. Many Americans believe that positive thinking and a good diet will cure anything. Overtreatment is a big problem, but people often demand it for themselves or their relatives.
    4. There is a good “coach class healthcare system” in some states- I’m talking about Kaiser Permanente. When I went from full time to half time work, I lost my healthcare and signed up via Medicare, with Kaiser. I’m very happy with Kaiser, I got a robotic prostatectomy for prostatic cancer, I know that Kaiser won’t grab the latest fad and that once in a while those fads pan out. I don’t want to be kept alive in a nursing home.
    5. Life expectancy is an imperfect measure but it’s less corruptible than things like cancer survival rates. Years of independent survival would be better but is not available. American MDs detect lots of low grade breast and prostate cancers, operate on them and get better survival rates than Europeans, but have worse health care, because operation was not indicated.

  39. Felipe Manteiga

    There are few incentives to save on costs, or to gain efficiency–for example, in cutting down hospital induced infections affecting close to one in three patients. During a recent hospital sojourn I had to battle everyone to cut very inexpensive and unproven treatments (response: but you have a lot of insurance, it would not cost you anything).

    Our soaring child mortality is particularly shameful. the U.S. has fallen behind many areas (e.g., stem cell treatment) other than elective surgery. My international friends frequently choose other countries on medical tourism. The list is long, but most efforts will collapse around Pharma and the Medical Industry business model: maintenance medicines and not curative protocols. Take a pill a day for the rest of your life and your problem will be contained, but never cured. These dominating interest groups work in insidious ways. For example epidemiological surveys and analyses have had their funding cut because they were showing pricey medicines were worse than less expensive older ones. Telephone calls were made, and funding disappeared.

    Our health industry chaos and future collapse should be taken seriously and the issues should be debated clearly, while, miracle of miracles, the contestants avoid making political points. Will civil society get organized to the point where they can call these shots, or because there is too much money on the game, everything will get worse? Do we as a nation, have the will to bell the cat, and do what must be done?

    Better national competing systems (Switzerland, the land of bankers and unbounded greed, has a good model, as previously noted) were not created from thin air, they emerged from a lot of pain, dialogue, compromise and commitment at all levels. In the not so distant past, Americans have shown the world we got what it takes to overcome nation-destroying challenges (ask the Great Generation). Do those Americans who inherited the mantle from previous generations have what it takes?

    And, someone said Americans would not tolerate to be told they could not receive a given expensive treatment. First, those with the money will always be able to pay for whatever they want. Second, most Americans, already, are being told treatments are not available–ask any old man or poor mother around your downtown area or your rural churches.

    As a concerned American, appreciate this analysis, and the sober comments it elicited.

  40. We have been blogging since 2004 about how problems with health care leadership and governance contribute to the problems on Health Care Renewal (http://hcrenewal.blogspot.com) . Leadership is too often ill-informed, incompetent, self-interested, conflicted, or outright corrupt. Health care governance lacks transparency, integrity, accountability and ethics. Health care is dominated by ever larger, ever more badly run organizations. These organizations use tactics including deception, disinformation, perverse incentives, including deliberate generation of conflicts of interests, and intimidation to increase their leaders’ power and riches. Almost no one in health care will talk about this, because of their own conflicts of interest, or because they fear offending friends, colleagues, or supervisors. But until we at least start to talk about these problems , there will be no solutions.

  41. Part of our problem is that we conflate the problem of healthcare costs with healthcare access. We can use free market pressures to control costs even in a system in which the government subsidizes costs for the poor. The two are not mutually exclusive and do not need to be address together.

    Currently, hospitals and doctors groups band together to negotiate reimbursement schedules with insurance companies. Naturally, they negotiate for maximum reimbursements. This eliminates price competition; it does not matter which doctor I go to, I will pay the same co-pay. Health car providers (HCPs) don’t compete on prices, so they compete to attract customers by having nicer waiting rooms & examination rooms, by providing more services in-house, by having better equipment; all factors which drive up price, not reduce it.

    To introduce price competition, we first need to eliminate the antitrust exemptions of doctors and hospitals. Next, we pass a law that requires HCPs to charge all patients the same price regardless of insurance coverage (none, BCBS, medicare, etc). Third, HCPs must post their prices on the internet and in their waiting rooms for all to see. Finally, insurance companies must post their reimbursement rates. Then, knowing my insurance would reimburse $50 for a checkup, I could decide if I wanted to go to the doc that charges $60, or the one that charges $90.

    Not only would this make doctors more price conscious, it would greatly simplify their billing, which I understand is a big cost of any doctor’s office. The issue of how and to what extent the government became involved in subsidizing the cost of people’s healthcare could be dealt with independently of these reforms.

  42. Washington spends about zero effort on determining why health care costs are so high or how to reduce them. The healthcare industry is largely responsible for this situation. The fundamental question is whether healthcare should be an industry or a service available to all at reasonable cost. We know where our politicians stand on this question, Obama included. Despite some very articulate arguments on this blog to the contrary, I am convinced that the healthcare delivery and private insurance models now in place are incompatible with affordable, high quality healthcare for all. There is corruption, waste and profiteering from top to bottom that cannot (or will not) be remedied by money-beholden politicians and underpaid regulators. Better we start over and keep it simple.

  43. @Moses – you really do need some kind of self-awareness – and you need someone outside your own monkey brain to help you develop it or make it official that you lack certain social capacities and are a danger to all if not locked up. I have a copy of the newspaper – what part don’t you understand? The part that newspapers have GRABBER HEADLINES – ever visit Huff and Post….? The font is half the screen sometimes.

    The bragdaggio (sp? :-)) screamed like only PSYCHOS do (I keep saying *package* – I know what a package is) – was 1.8 BILLION. If it was WRONG, I am not the one who wrote it. You want the reporters name or shall I deliver your diatribe about my ignorance for you? May the merciful lord keep you from ever serving on a jury – but then again, you have no *peers* other than other chosen ones….man would I love to separate *Judeo* from *Christian* in the courtrooms – ditto for every other empire-brand *ism* justice on planet earth today.

    @Jim Coffman – Something as malevolent and entrenched as what has been contrived as a *health care* system (especially with MY focus on being stripped of economic power to live beneath those who sell weapons, crack and heroin, trade out sex slaves, and even copper thieves stripping out abandoned buildings – they all have a better economic future than I do thanks to the TAX LAWS and stuff like health insurance premiums. Based on previous comments about how grateful certain women have been observed to be to have 5 bucks *saved* money to spend on something pretty for her daughter who is sad because Mom is always working – hell, I’ve supported the basic health needs of a village of about 100,000 people.

    And there’s the rub – the *middle class* DID provide *health care* as both the service and commodity that it is. For crying out loud, if LIFE-maintenance is so malevolent, economically, in the global economy – we’ve got something WORSE than a new *ism* on our tail – don’t we.

    Let’s hope the headline reads “99% of American People will all kill you for the same thing….so don’t do that thing.” You decide how big you want the font…

  44. For those of you watching the healthcare debate from the bleachers, here’s a tip: Anyone who uses life expectancy as a measure of healthcare quality across different countries is either grossly uninformed or has a political ax to grind. You be the judge whether JK is the former or the latter.

    Life expectancy is influenced by many non-healthcare factors–diet, genetics, environment, etc. Some of the major contributors to excess mortality and lower overall life expectancy in the US are traffic fatalities and murder–hardly the fault of the American healthcare enterprise.

    The vast majority of things we want from our healthcare system have absolutely zero impact on population-based life expectancy statistics. Think about joint replacement, organ transplant, viagra, dialysis, pediatric heart surgery, breast reconstruction after mastectomy…and on and on and on. None of these rather miraculous inovations has any statistical impact on life expectancy for the overall population.

    I’ll be the first to agree that American healthcare is overpriced, and I’m willing to accept that we might come up short on quality in some areas. However, this sort of post represents ill-informed political grandstanding, and is not a helpful contribution to the debate.

  45. @gasgangrene – “Life expectancy is influenced by many non-healthcare factors–diet, genetics, environment, etc. Some of the major contributors to excess mortality and lower overall life expectancy in the US are traffic fatalities and murder–hardly the fault of the American healthcare enterprise.”

    Excellent point. BASIC health care for LIFE maintenance that, politically, we the stupid also no longer have access to in economic purchasing power is clean air and clean water and safe, modern housing.

  46. An Alternative to Capitalism (if the people knew about it, they would demand it)

    Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.

    I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to an essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:

    http://evans-experientialism.freewebspace.com/steinsvold.htm

    John Steinsvold

    Perhaps in time the so-called dark ages will be thought of as including our own.
    –Georg C. Lichtenberg

  47. Felipe Manteiga

    JOHN: THE THOUGHT PROVOKING NOTE STRIK A SENSITIVE CHORD. I WAS BORN IN CUBA AND HAVE VISITED CENTRAL AND EASTERN EUROPE, FORMER COMMUNIST AFRICAN COUNTRIES, AND LIVED IN ASIA. THE FREE ENTERPRISE SYSTEM, A CONTAINED PUBLIC SECTOR SPHERE OF ACTION AND AN IMPERFECT DEMOCRATIC PROCESS MAY BE THE BEST WE CAN ASPIRE TO, AT LEAST AT OUR CURRENT LEVEL OF TECHNOLOGICAL AND EMOTIONAL MATURITY. MANY CITED PROBLEMS CAN BE ADDRESSED BY FAIR TAXATION, PROPER REGULATION AND OVERSIGHT, AND CLEAR MANDATES TO INVEST OF PUBLIC GOODS. OF COURSE, WHEN THE WEALTHY REFUSE TO PAY THEIR PAIR SHARE, THE DEMOCRATIC PROCESS MUST COME INTO PLAY. BUT IF THE PEOPLE, THE PUMMELED MIDDLE CLASS, APPLAUDS THE WEALTHY FOR THEIR REFUSAL TO PAY TAXES, THEN THEY HAVE THE GOVERNMENT THEY DESERVE. IF THEY DO NOT WANT TO SHAPE RATIONALLY OUR HEALTH SYSTEM, THEN OUR POOR AND OLD PEOPLE WILL DIE. AND THAT WOULD BE THE GOVERNMENT WE DESERVE.

  48. People on this board are seriously discussing insurance reform, like it could ever happen here.

    Proof: this latest monstrosity requiring americans to purchase insurance from private insurers….these guys completely control the politicians, the courts, the media shills, the whole ball of wax.

    They’re laughing reading this stuff.

    Medicare works for old people like my 84 year old mom, and it’s likely the only thing that will provide adequate health insurance for Americans.

    We already have the *markets* doing the dirty work, but what the commenter didn’t see, is the “market” is a protection racket, or a criminal syndicate, so, you’re dreaming.

  49. Steve from Cranbury

    Steve from Cranbury: When we talk about a free market in health care, let’s remember the actual costs. It is common for hospitals and other health care providers to have different rates for 1) persons who don’t have health insurance. They pay the highest rate. For example, my recent 3 day stay in a Philadelphia hospital was $23,000. The stay involved a CAT scan, a bunch of blood tests and routine measures of temperature, blood pressure and oxygen saturation about 6 times a day. That’s it. $23,000 if I don’t have insurance.

    2. Private insurers and Medicare get much lower rates,of course. But if have no insurance, it seems to be industry practice o charge a rate several times higher than they do to insurance/medicare.

    I also was hospitalized in Colorado for a lung problem. CAT scan, x ray, whole bunch of blood tests and 8 days in the hospital. Cost if I didn’t have insurance, $28,000.

    Given the practice of charging enormous rates to non insurer persons, who in America can afford to pay some $50,000 within 18 months for unexpected health care treatment that involves no surgery or other invasive treatments? Just a CAT scan, some blood tests and time in hospital for routine monitoring? I think any responsible and sensible discussion health care must start with the actual costs of typical treatments a person might expect over a lifetime IF THEY ARE CHARGED AS IF THEY WERE NOT INSURED. Over 90 percent of Americans would simply not be able to afford anything but the most rudimentary treatment by their local doctor. Colonoscopy — $8000. Etc etc

    The simple reality is almost no Americans can afford to pay the “rack price” for health care. The market would not solve this problem because it would simply create a race to the bottom for the lowest cost treatment for everything, regardless of whether the treatment was effective or not. And there would be no way for patients to have enough information up front to intelligently choose a provider that is actually providing an effective treatment at a reasonable price.

    Buying health care is not like buying a typical consumer good. If it doesn’t work, don’t buy that brand again. The market will punish businesses who sell shoddy consumer goods. But that process doesn’t work when you’re having a heart attack. You’re dead if you choose the wrong vendor. Now let’s get real. The relationship between vendor and customer in health care is in no way like how the market works when you’re buying a tv or can of baked beans.

  50. Steve, I don’t see any reason the same principles which help a multitude of television choices to thrive in the market should not apply to choosing insurance, especially if you got help evaluating an insurer’s cost vs. performance.

    But that aside – please never call what we have now in health insurance a ‘free market’ It’s about the farthest things from a real market we have in the US. Most of us don’t even choose our insurer (our employer does that for us) and those who do are forced to subsidize those who don’t, and none of the above actually get real options to choose among.

    Supporters of ‘free markets’ usually do not mean ‘anarchy’, but rather a situation in which everyone trades voluntarily, without distortionary regulation and with ‘externalities’ embodied. But it is hard to think of our current health insurance scheme as a market of any kind, let alone one approaching the free-marketer’s ideal.

    One other point – your perception of health insurance in this country varies greatly depending on where you live. Different states have radically different regulations, something we tend to forget. I’d be very curious to see these same graphs James put up by state! Maybe we could do a little policy comparison shopping.

  51. It’s simple isn’t it? The solution I mean is of course single-payer, but medicare for all would mean huge improvements. An American solution.

    But fraud keeps it going, in the manner of billing, reporting, electing; massive corporate welfare to healthcare, fraud stacked on fraud from lying healthcare providers to criminal insurance companies to the bought politicians that enable it all. All fraud.

    It has to stop, but when?

  52. And josh is a troll propagandist for the corrupt health insurance industry.

  53. We do not have Healthcare. Our system is based of the concept of “for-profit sickcare”.

    Like the corrupt relationship between banking and government, we have a similar dysfunctional system between big medicine and big government.

    The system only works when money flows and people are dependent on too many drugs, too many unneeded procedures and a negative cost/benefit profile.

    Welcome to the machine.

  54. Mark V Anderson

    As several have indicated here, we don’t have a free market for medicine in the USA, so Kwak’s statistics with poor USA indications hardly show the disadvantage of a free market health care system. In my opinion, there are three deregulatory actions we could take that would vastly decrease medical costs, and also give the medical consumer more choices:

    1) Remove the tax exemption to employees for health insurance paid for by their employers. This is the most important step, because it is this tax exemption that has caused most people in this country to have employer-paid health insurance. That in turn has resulted in the insurance companies running the health care system. We can only get health care costs under control if patients decide what care they will get and also pay for this care.
    2) Remove all government designations of medical professionals, such as doctors, RNs, etc. Naturally private designations would immediately arise as doctors, etc. tout their expertise to patients. But the patients would have the right to choose which designations are important to them. The AMA would thus lose their monopoly on medical care and doctors’ salaries would drop dramatically.
    3) End the prescription system, and allow patients to take whatever medicines they deem fit. Let pharmacists actually do their job and advise patients what drugs are dangerous. Sure doctors will need to advise patients on the drugs to take in many cases, but the majority of drug usage is simply repeat usage and the patients know what is best. Doctors spend a lot of their time just writing prescriptions, and this will reduce that burden, and more importantly, give the patients more control of their own bodies.

    Realistically, I don’t expect any of these changes to happen (well the first might be politically feasible). But these are the changes that need to happen before we could call our system a free market.

  55. I don’t know if the above twelve links (past responses to Annie) will clear the filters, but here’s hoping. Sorry, I’m getting verklempt now. Music inspired by Annie.

  56. Well we do not want Mitt’s version of Healthcare that is for sure. This is how to defeat Mitt:

    http://americaspeaksink.com/2011/11/there-is-a-way-to-stop-romney-from-getting-the-nomination/

  57. Just to clarify, erl is mistaken, I’m no propagandist and the couple of actual policy points I have made here, however reasonable, would be fought with every last lobbying dollar by the health insurers we have today. They don’t want to compete for your business, and they don’t want to be responsible for outcomes.

    I don’t like to respond to ad hominems but just thought I’d better clarify in case someone should think erl ‘knows something’.

    @ Mark, I agree, ending the employer-selected health insurance is critical.

  58. @erl, – “It’s simple isn’t it? The solution I mean is of course single-payer, but medicare for all would mean huge improvements. An American solution.

    But fraud keeps it going, in the manner of billing, reporting, electing; massive corporate welfare to healthcare, fraud stacked on fraud from lying healthcare providers to criminal insurance companies to the bought politicians that enable it all. All fraud.

    It has to stop, but when?”

    Dunno. The Supreme Court just upheld the *legality* of the newly minted Health Care Bill. How could they not? The IRS is going to slap fines on people who do NOT purchase for-profit health insurance – talk about a new revenue stream from the *poor* to pump up the war booty coffers!

    So we have yet another innovative and creative way to force people into instant poverty (besides bad luck like a car accident or toxic exposure) – the IRS can FINE you for not buying a for-profit product. RIght up there in sanity with *corporation is a person, my friend*…

    So what for-profit *product* is next…? C’mon, be creative…

    I don’t think we need to worry about the future of health care based on the suggestions from Mark V Anderson – anyone will be able to hang up a shingle “Brain Surgery Sale – Today Only” – snake oil salesmen rule….

  59. Annie:
    You are right about for-profit insurers.
    Their design inherently is skewed toward profiting the shareholders, first and foremost.
    Are you aware that Blue Cross and Blue Shield lost its rax exempt status in 1986, with the passage of IRC section 501(m), for it had evolved int its for-profit competitors.
    In order to qualify as a 501(c)(4), an insurer must offer products affordable to the majority of the community and must not be available commercially.
    There is a lot of room for improvement and innovation, don’t you think?
    Don Levit

  60. We Canadians know, and wrestle with the obvious problem: USA has poor outcomes/dollar across its whole population and worse for the poorest 40% or so of the, but the fortunate fully-insured imajority has arguably the best health care in the world, to the verge of misspent excess. The democratic problem is the problem of the voting majority thinking, not unreasonably, that “I’m all right, Jack.”

  61. Mark V Anderson

    Albin –

    Most of the developed world’s (including Canada) response to the problem of some being unable to afford health care has been to put the entire population on welfare. I would hope that the USA would take the more rational approach of just subsidizing the health care of the few that can’t pay, and deregulating the health care system for the rest of us. But it does appear that our country has instead decided to edge over into the rest of the world approach. I think everyone knows that ObamaCare has major defects and that it won’t be long until there is a major push for single payer plan. This push will likely succeed because everyone will be sick and tired of ObamaCare in a few years. But I wish we’d all step back and look at the big picture, and just try the solve the problem of those who can’t pay, instead of foisting this unwieldy system on all of us.

    BTW, where did you get your 40% figure? I believe that those who need to be on medical welfare is much lower than that, although absent deregulation the costs are high for all of us.

  62. Daniel Barkalow

    I think the US’s position on that chart can be explained by these obvious facts: (1) there are diminishing returns to health care spending (if you spend 100 times as much on it, you don’t live 100 times as long); (2) there’s a wide spread of spending on health care by Americans. This means that comparing the average spending to the average lifespan is going to look a lot worse than in countries where everybody gets about the same level of care, even if an American spending a particular amount of money does at least as well as someone spending that amount of money in another country.

    Which is not to say that the US system actually provides as good health care as other systems for the money on an individual basis (which I don’t think is true), but if it were true, a chart of this form wouldn’t show it.

  63. Felipe Manteiga

    Do not despair…slavery is over, indentured servitude is over, suffragettes won, deposits are insured by the Feds, the voting majority support for social security has allowed it to endure multi-prong schemes to morph our savings into a Wall St. appendage, a la Chile; our tax code still has lingering progressivity to it, our people elected an Afro-American to the most powerful position in the world; in spite of blanket saturation bombing in Vietnam and Iraq, after Japan, the U.S. has not dropped nukes on anyone; and American families will fight for the quality of their children´s education (specially, beyond the deep South).

    As income distribution worsens (U.S. Gini continues to climb above levels found in every other major industrialized nation) our major threat remains the metastasis of political prostitution spreading through anti-democratic campaign financing regulations. Expensive and ineffective health system, weakening education institutions, unequal tax treatment, collapsing infrastructure, dwindling global influence, rising money laundering in our money centers and drug consumption, permeating organized crime influence, specially Russian, Ukrainian, Jewish and Mexican syndicates; high unemployment, strategic misalignment of our national defense, mounting deficits, and corrupt banking all stem from this rotten root. That, we should set aright sooner rather than later….or no citizen would have to worry about the democratic burden anymore.

  64. I don’t buy the premise that a for-profit healthcare system is automatically bad and doesn’t work. We certainly don’ thave that in the US with medicare and medicaide. A program run by the government is socialistic and will increase cost and fraud as we have seen in medicare and medicaide programs. Giving something to everyone doesn’t give more to all, we all end up with less and at a higher cost (look at education for example).

  65. The search for unearned wealth is the *big picture* problem.

    While I’m thinking about it, I hope the spiffy graph excluded all cosmetic medical costs…? It’s not LIFE-maintenance to get botox injections…

    If you’re going to have single payer, then the *single* paying into the pooled resources should also have an account balance for them, personally. For the majority of my life, I have been purchasing health insurance as an individual. I calculated the amount payed over all those years, and had the funds been in an account in my name, I would have enough to cover old age tune ups and catastrophic events like a helicopter crash, or something like that, for when I need it. But that’s not where it’s at – there is no account FOR ME. If I can no longer afford paying the INCREASED (30%) monthly premium, that’s it, it’s over – die, bitch, in the waiting room.

    There is no record of how much I paid in over a lifetime other than the *packages* the CEOs are giving themselves.

    And anyone want to get started on care for Veterans…?

  66. Annie:
    What you needed all these years, was a program in which the majoriity part of your contributions went to an investment account, thus providing a growing cash value.
    In essence, each monthly contribution you made accrued a cash value and a substantially higher medical benefits value AND represented paid-up coverage.
    If you never made another payment, you would have this coverage until a claim was made (al;beit the coverage was minimal).
    However, over a 2-4 year period, you could have accumulated $25,000-$50,000 of paid-up benefits.

  67. Qualified to Represent...

    Wow the free market trolls really came out on this one. Kenneth Arrow proved long ago nothing like an unregulated “free market” could ever exist for something like heath care due to information assymmetry. There is a reason why doctors go to the best schools in the world for 8 years and then have a long period of post-education training in their chosen profession. There is an incredible amount of knowledge that has to be acquired, which then has to be honed with practical experience under more experienced colleagues. All of those proposing “free market” solutions to the U.S. healthcare problem would be advised to consider healthcare in a place such as Somalia, where the libertarian dream has come true- no government, no regulations, anyone can claim to do anything. Pray tell us how the statistics for medical efficacy are in a place where there is no regulation…

  68. Please try not to be silly. If it’s true that we are only and always at the mercy of asymmetrically-informed doctors to tell us how much we need to pay them and when, then quibbling over single payer vs. competitive market is rearranging deck chairs on the Titanic.

    Of course we can avail ourselves of expert analysis, including from qualified medical professionals, whose efforts should be combined with those of highly qualified actuaries/statisticians.

  69. tigger nitro: I am an Australian living in the US with good health insurance, so I’ve had some experience of two of these systems. If I was really sick, I’d fly back to Australia.

  70. @Don “What you needed all these years, was a program in which the majoriity part of your contributions went to an investment account, thus providing a growing cash value.
    In essence, each monthly contribution you made accrued a cash value and a substantially higher medical benefits value AND represented paid-up coverage.
    If you never made another payment, you would have this coverage until a claim was made (al;beit the coverage was minimal).
    However, over a 2-4 year period, you could have accumulated $25,000-$50,000 of paid-up benefits.”

    Well that’s the whole discussion, isn’t it? I wasn’t the one who was allowed BY LAW to do it as you say to do it. Or was I just lied to by some “highly qualified actuaries/statisticians” and BY LAW I could do that?

    @pde – I hear you…it is shocking get-rich-quick malevolence, isn’t it? So nasty PERSONAL – one penny from every person one at a time and insult them every step of the way as *stupid*.

    Boy, I really hope that this revelation about the *soul* of the – ahem – glo-ball money lenders is not new to y’all…shoot, sorry for the scary news but it’s “just the facts, ma’am”….

  71. Attention, attention, Walmart shoppers…..Walmart wants to be your MD.

    http://www.msnbc.msn.com/id/45223959/ns/business-retail/#.Trr3GGD5no0

    Imagine, BIG SIS on the BIG SCREEN, while getting your annual prostrate check up in aisle 11.

  72. @pde I am an American living in the Australia with good health insurance, so I’ve had some experience of two of these systems. If I was really sick, I’d fly back to The United States.

  73. Felipe Manteiga

    Thank you, this is valuable information. Looking at points to expand medical tourism, many Asians had suggested Australia over the U.S. But you know both systems, good intel….appreciated.

  74. James,

    I think your overall thesis is a reasonable one, but I take issue with some of your supporting data; specifically the first chart. The U.S. has a much more inhomogeneous population. I would be much more inclined to believe the relationships between GDP, health care costs, and life expectancy if the regressions controlled for socio-economic stratification, demography, and even regional climate/geography in comparing the U.S. to these other countries.

  75. Mark V Anderson

    Qualified — Who is the troll is a matter of perspective.

    Almost every time I go to the store, I am subjected to assymmetric information. Best Buy knows more than me about electronics, car dealers know about cars, the supermarket knows more about food. But if I go to the internet, and I go to competitive providers of these service providers, I can get a pretty good idea of what is the highest quality and the best value. Thank goodness government doesn’t regulate electronics and cars and food too much, or we’d have fewer resources to make these decisions, and have to depend on a central agency to tell us what’s the best alternative. Our regulated environment has made people into drones when it comes to medicine, accepting whatever one’s doctor says about the topic. Deregulation would result in more folks taking charge of their own healthcare.

    A couple of people have made fun of my proposal that the government no longer control our access to medical personnel. Apparently it would create unseemly merchandising of medical services. They are behind the times, because we already have such merchandising, even under our highly regulated system. Lazik operators constantly advertise. Target has a Minute Clinic, where a nurse practitioner sees walk in patients. We’ve used the Minute Clinic a couple of times, and they provide good medicine and are reasonably priced. It appears that Lazik is usually pretty good medicine also (at least as good as non-advertised medicine). Deregulation would be more of the same, and would work darn well, in my estimation.

  76. @ Attention, attention, Walmart shoppers…..Walmart wants to be your MD.

    They also wanted to become your middle class bank, they did’nt have enough money to complete the transaction though.

  77. For those interested, the New York Review of Books article “Health Care: The Disquieting Truth” (Sept 30/2010 by Arnold Relman) is a must read for Americans. At this current period the political parties are not proposing solutions to the cost equation and new ideas that will doom the system to take care of the minority with ability to pay. One commenter wanted the cost to administer private insurance and there is studies in the range of $275 to $350 billion annually. Same author A. Relman (NYRB Oct 27/2011) has an article entitled How Doctors Could Rescue Health Care that is a MUST READ.

  78. M. Anderson states that it is welfare to provide health care to every person in the country. Let me tell him that Canada provides a single payer system that is financed mainly by the income tax revenues collected at federal and provincial levels. People do pay. However the administrative cost is less than your private for profit insurance companies by a factor of 4.

  79. America needs to have the government bulk buy the drugs like Australia’s Pharmaceutical Benefits Scheme, if they stop letting the large companies that abuse the system price fix and sell needed drugs at extortion rates then the government wont have to pay so much money in rebates.

  80. Comparing the cost/effectiveness of health care systems of different countries is meaningless if you don’t factor in the food environment of the different populations. For example, if one country allows $-driven corporate food producers to pollute food with saturated fats, chemical preservatives, genetic distortions and bloated growth s (USA) and the other has laws to keep food more healthy (France etc), then this will affect the health statistics. Another factor affecting the statistics would be the general sanitation standards of the different health institutions. I think the USA fares poorly on both issues.

  81. @Jeremy – I’m still waiting for clarification on the data used, also – ie. liposuction included?

    Meanwhile the malevolent snake oil salesman have taken over, as usual.

    There is no doubt about it, you have to be a CERTAIN kind of sociopath to work inside a health insurance corp….

    Even if you are born with good genes and a normal capacity for decent relationships with other people based on respect, you will be tortured with *detailitis* until you become a sociopath yourself.

    That’s basically what the *resistance* is all about. Challenging the *authoritarians* who insist on making you believe (and sign oaths) that you do NOT have permission to be a good soul because it hurts shareholder profits….

    Gee, how did leveraging 50, 60, 70 ,80, 90 100 to one NOT hurt *shareholder* profit?

    And a decade of war in messupotamia?

    Fortunately, more than a handful of people can still remain on topic and not let the boil on their ass from too much sitting get in the way of

    UNDERSTANDING

    that they WANT to make sure you die after they extract all the $$$$ you have – that’s the health plan.

    How else are they going to cover their leverage….?

    The IRS is going to FINE people who do not buy for-profit health insurance – ’nuff said….

  82. Bruce E. Woych

    http://video.google.com/videoplay?docid=-430943131005128104
    Infinite Vision – Dr. Govindappa Venkataswamy

    (2) Five fascinating facts of his model

    http://bklists.blogspot.com/2011/10/five-things-you-didnt-know-about.html

  83. Regulation is a touchy subject. In India, during the privatization of their energy sector, regulation was light, ENRON happened there. My experience in many countries overseas where one can buy whatever is needed, makes me wary of unregulated medicine. The massive use of antibiotics and analgesics, for instance, increase health risks significantly. In the U.S. we have an unregulated drug sector, illegal drugs, its effects are not pretty. Actually, many of us advocate their decriminalization, so they could be regulated (and taxed) and the overall cost of our health system reduced. Idem on advertisement for cigarrettes and fat foods. My will power might be exceptionally weak, but the ban on cigarrette advertisement definitely help me quit. Measures to inhibit young adults from buying this drug over the counter seem to have worked well.

    Too much regulation also harms. The current obsolete treatment of patents, with their long lives, fence off competition too long and raises health care costs. Overall tort underpinnings require a more deregulated framework; the present system provides significant income to insurance companies, while failing to encourage practicioners honor more the Hipocratic oath.

    One must be aware of, and oppose, spurious regulations, targeted to protect a given interest group or groups, specially by keeping their competitors at bay. But generalizations are always dangerous and usually cloud analysis. Regulations are needed. Shouldn´t Americans be currently concerned with the drastic cuts expected on the USDA and FDA budgets limiting their oversight over food and drugs? Many markets open their doors to our products because they trust the quality enforcement of our regulations. And of course, the extreme right alternative, that when people begin to die in sufficient numbers the consumer will stop consuming the culprit brand, useful as it might have been during our initial agribusiness takeoff in the city of the broad shoulders, may not fit current American values. We should not dismantle regulations wantonly. The lessons learned from such an action in the savings and loans mega financial crisis should be heeded.

  84. @Woych – Of course we could have an entire country of interlocking decent health care (like your India example). Not only have we gotten downright squirrel-ey about gaming a fraudulent system – skimming for as long as possible from as many as possible as a way to puff up what turned out to be a delusional haul of war booty,

    but we also do not have an interlocking and functioning R&D that is actually doing REAL medical research!

    It’s a national tragedy to have let it get this far….malevolent snake oil salesmen laundering their cash in with big pharma. Disgusting. Viagra and meth…BIG TIME for GenX in NJ…

    Go Ohio!

  85. Bruce E. Woych

    @but Annie…there is more behind the curtain…
    http://www.cdobs.com/archive/featured/who-else-from-health-care-will-be-thrown-under-the-obama-bus/

    “But, wait, aren’t the President and First Lady all about caring for the people and creating a better health plan – Obamacare – to serve all of America? Isn’t curing the health crisis and providing good health care for all a key promise of this administration? Not if you look at the plan Michelle Obama, Valerie Jarrett and David Axlerod hatched and promoted in Chicago.” (Read it and Weep):

    http://www.cdobs.com/archive/featured/who-else-from-health-care-will-be-thrown-under-the-obama-bus/

  86. @Woych – I think that it’s a done deal that Michele Obama, Valerie Jarrett, and David Axel-rod have no business drafting up a health care plan. Where’s their collective expertise? Michele doing billing time management in a hospital?

    Didn’t Rick Perry receive some kind of stem cell transfusion after back surgery as a participant in a experimental clinical trial? I think we saw an adverse event that COULD be related to foreign cells taking over body management from the original management that built the body…

    “If you’re not making it, you’re taking it” – an accurate new yorker bottom line coming from The Street…

    I think we’re finally all getting serious about the reality of the situation.

    Here’s some more from the Obama grab bag of people – much closer to Jonestown cult control than anyone wants to admit to based on the data:

    “Marianne Williamson believes that A Course in Miracles can, and does generate real and lasting peace. Many have rightly pointed out that she will most likely be a key decision-maker in our Government’s “U.S. Department of Peace” if she is successful in getting it established. She is the founder of The Peace Alliance, a grassroots campaign group whose goal is to install in our Government, this “Department of Peace”, as “a compliment”, they say, to our Department of Defense. This group’s numbers are growing daily, nationwide, thanks in part, to Oprah’s longstanding and enthusiastic promotion of Marianne Williamson.

    Marianne has said that the head of the Department of Peace will be VERY influential in our Government’s policy making, “having the ear of the President” as it dispenses advice on the art and science of “Peace keeping”. Knowing that Marianne Williamson is a world renowned devotee of A Course in Miracles and the channeled spirit who authored it, and knowing full well what the Course teaches, I find myself thinking of a certain passage in Scripture: “And Jesus wept, for they knew not the ways of peace”. —- Luke 19:41 (paraphrase, and emphasis mine) ””

    And here’s one of the *beliefs* that those people reach for when making it all up, speculating, gossiping, pulling machievellian stunts that even the Count would say go too far and are no longer politics, just assassinations:

    Lesson #14 – “The world you see has nothing to do with reality. It is of our own making, and it does not exist.”

    Well, there go politicians and statesman tasked with representing an ETHICAL and truthful scientific community, no place for them in the inner circle – Oprah should be proud.

  87. Bruce E. Woych

    apolitical International coalition groups need a formal model to follow; a co-op in participatory democracy and a new constellation of integrated local markets will emerge. The inner circle is burning out and the outer circles will re-establish subsistence based sustainability.
    see:

  88. Another University of Penn faculty *BIG TIME* dude, also part of the Obama *TeaM*:

    http://www.msnbc.msn.com/id/3036789/#45254744

    Not sure WHY the data they are going to analyze is 10 years in the future….?!

    Big pharma has spent billions in technology investment collecting *data* that – now – they keep saying is not good enough to analyze because of the way *adverse events* are reported,

    and the 1.2 BILLION $$$$ packages for health insurance company’s CEOs

    all that was done with the past decade of collected FINANCIAL *data* by both institutions and not health needs data…

    Have to keep repeating it, don’t we?

    The IRS is going to fine people for not buying for-profit health care.

    Media is a JOKE…

  89. CAREFUL…WE ARE BLESSED WITH GOOD PEOPLE IN ALL WALKS OF LIFE. TRUE, THE MEDICAL PROFESSION AND BIG PHARMA HAVE MANAGED TO CORRUPT OUR CORE HEALTH VALUES, BUT MANY DOCTORS, NURSES AND ADMINISTRATORS CARE ABOUT THEIR PATIENTS AND DO THEIR BEST TO HELP US. WE URGENTLY NEED TO CHANGE OUR CHAOTIC, INEFFICIENT AND EXTREMELY COSTLY HEALTH SYSTEM…BUT THAT CHANGE WILL BE MADE POSSIBLE BY THE INCREDIBLY LARGE NUMBER OF DECENT PEOPLE TOILING IN IT.

  90. the decent people must unite – and that means getting really tough – they physically picked up and threw out MDs who were at the *talks* – look up Dr. Flowers story from the old Bill Moyers show…

    Meanwhile, back in psycho heaven:

    http://www.pharmalot.com/2011/11/merck-ceo-to-head-penn-state-sex-abuse-probe/

    Zeke Emanuel called in Frazier…? wtf? What *probe*…? Don’t they know what is in the transcripts from the Grand Jury?

    This is more depravity – including the staged *riots* to protest the firing of the coach at U of Penn…

    http://www.msnbc.msn.com/id/3036789/#45237729

    Or is Frazier just going to open up a new market for Gardasil – young boys? Men are the carriers of the HPV virus, never made any SCIENTIFIC sense why both sexes should not receive the vaccine…

  91. Bruce E. Woych

    Professor Warren Debunks A Few Healthcare Myths
    buddha28

  92. Thanks for this. Warren is a national treasure.

  93. that was a sobering video, my goodness.

  94. I think doctors and health organizations need incentives based on the health outcomes of their patients rather than the dollars a procedure or therapy will bring. The results can be normalized by age, existing conditions, gender, etc. of the patients so doctors aren’t penalized for taking unhealthy patients. But that requires some sort of systematic monitoring and reporting. Don’t laugh, but the best example I can think of is the detailed statistics that are kept for baseball. But implementing something like that requires clear definitions of what a “hit”, an “error”, and a “win” are, and careful monitoring to determine when they happen. We need professional health “umpires” that watch and judge what is happening, and the results should be recorded and compiled in a way that everyone can easily comprehend. And in my opinion a “free market” approach would tend to undermine this, since the doctors, being human, would go to great lengths to undermine the statistics in order to make more money. Better to just pay them all the same within any speciality, perhaps with some adjustments for local costs of living. Let their only incentive be the health outcome of their patients.

  95. Lots of people posting on the internet, at least to may anecdotal frame of reference, seem to score Kaiser Permanente as being pretty decent in delivering health care.

    This piece at Huffin Puffin seems to be saying something else.

    http://www.huffingtonpost.com/2011/11/14/kaiser-permanente-overburden_n_1092694.html

    Pssst: Woop Consultancy says: you’ve got the dough, HIRE more mental health care providers…..do be cheap, these are human beings, not widgets.

  96. I have Kaiser. The patient needs to be aware and assertive because the Doctors have so many patients. The system is computerized and coordinated. That is an improvement over the disjointed care my Mother received in her last days with each system constantly changing my Mother’s medicine without consulting each other. Kaiser dominates where I live to the point that “fee-for-service” has trouble surviving. While raising my Kaiser premiums double-digits for years, they increased co-pays and made a large profit. They may have over-built. I am making a difficult decision within a health care system I distrust and can’t afford. Also I tend to diagnose myself with my friends because there is no follow-up within the Kaiser system unless I generate the visit myself.

  97. Government can actually do this well. I work for a state Medicaid agency. We manage over $5 billion a year, taking care of many of the highest need, highest cost patients, as well as a large percentage of our state’s kids, and we do it for just under 4% overhead. 10 or 11% overhead would be modest for a private insurance company. Imagine if we had a chance to vote out a CEO every few years?

  98. Bruce E. Woych

    http://topdocumentaryfilms.com/sicko/

    Sicko | Watch Free Documentary Online
    Aug 15, 2009 … activist filmmaker Michael Moore turns his attentions toward the topic of health care in the United States in this documentary that weighs the plight of the uninsured (and the insured who must deal with abuse from insurance companies) against the record-breaking profits of the pharmaceutical industry.
    topdocumentaryfilms.com/sicko/

    http://topdocumentaryfilms.com/sicko/

  99. Bruce E. Woych

    http://www.truth-out.org/occupy-colleges-now-students-new-public-intellectuals/1321891418
    Published on Truthout (http://www.truth-out.org)

    Occupy Colleges Now: Students as the New Public Intellectuals
    Monday 21 November 2011
    by: Henry A. Giroux, Truthout | News Analysis
    (excerpt)
    “The police violence that has taken place at the University of California campuses at Berkeley and Davis does more than border on pure thuggery; it also reveals a display of force that is as unnecessary as it is brutal, and it is impossible to justify. These young people are being beaten on their campuses for simply displaying the courage to protest a system that has robbed them of both a quality education and a viable future.

    Finding our way to a more humane future demands a new politics, a new set of values, and a renewed sense of the fragile nature of democracy. In part, this means educating a new generation of intellectuals who not only defend higher education as a democratic public sphere, but also frame their own agency as intellectuals willing to connect their research, teaching, knowledge, and service with broader democratic concerns over equality, justice, and an alternative vision of what the university might be and what society could become.”
    (Read it ALL)
    http://www.truth-out.org/occupy-colleges-now-students-new-public-intellectuals/1321891418
    Published on Truthout (http://www.truth-out.org)