Correcting some misinformation on medical care for the penniless

[samclem]

Originally Posted by samclem

Originally Posted by kyounge1956
Only one of these countries (Switzerland) has higher GDP per capita than the US, and if adjusted for relative purchasing power, we're richer per head than the Swiss too.

I wonder how that happened.

Here we have 5 countries where there is greater government intrusion ("involvement") in all aspects of the economy, social life, and health care than is the case in the US. All of them have lower GDP per capita than the US. Cause/effect/coincidence? It's just possible that greater government involvement in health care and other issues is inconsistent with maintaining the GDP per capita we have today. That lower GDP is more than a number--it translates into better quality of life, more individual choices, better options for our kids, and even better health and medical care. There's a lot more to life than medical care. Having a higher GDP per capita doesn't guarantee good medical care for all (witness our current situation), but it certainly establishes a better foundation for it than does a lower GDP.

 

[haha]

In some cases, it sounds like you are confusing "health insurance" with gov't operated health care systems. Quite different things. Which are you proposing?

Did the documentary compare these five health care systems with "Obama-Care?" Was any mention made of how the health care systems in those countries are funded? Focused, specific taxes? Premiums? From the general tax generated gov't funds with no identification of funds focused on health care?

Of the five countries only the UK has government provided health care The other four have only a degree of very reasonable regulation.

This is a giant difference, and IMO these other 4 are preferable to the UK, and to the US.

Governments are reasonably good at regulating, but they are generally horrible at operating systems.

Ha

 

[samclem]

True but I think many of us view it sort of like some in the GOP viewed tax cuts - the "starve the beast" view that without money programs would have to be cut. The health care version is "with no pre-existing conditions the system will have to enforce mandatory coverage or single payer," and "as costs go up efficiency changes (e.g. rationing of some sort) will eventually be forced on the overall system al la "starve the beast."

That's a realistic approach and I understand it (though I disagree with important features of the present attempt). But, we both know how the "starve the beast" tactic has worked for the cause of fiscal conservatives. Maybe it will work better in a system where the "offender" can't continually print money.

 

[Purron]

There are other, less apparent, costs to our current employer based system. How many people on this very forum hung on to a job they didn't like just long enough to qualify for retiree heath insurance, all the while scrimping, saving and dreaming of retirement?

Imagine a system where you're not bound to your job with a mega corp or government entity just to get covered. I believe this could be very good for our economy as many more people would be inclined to start their own businesses. Small business is the core of our economy, but many don't want to leave the safety and security associated with being in a big pool for insurance purposes.

I agree with ERD50 that, whatever changes come, much more needs to be done to contain costs.

 

[M Paquette]

Here we have 5 countries where there is greater government intrusion ("involvement") in all aspects of the economy, social life, and health care than is the case in the US. All of them have lower GDP per capita than the US. Cause/effect/coincidence? It's just possible that greater government involvement in health care and other issues is inconsistent with maintaining the GDP per capita we have today. That lower GDP is more than a number--it translates into better quality of life, more individual choices, better options for our kids, and even better health and medical care. There's a lot more to life than medical care. Having a higher GDP per capita doesn't guarantee good medical care for all (witness our current situation), but it certainly establishes a better foundation for it than does a lower GDP.

Exercise: Identify the countries with the lowest level of government intrusion or involvement in the economy, social life, and health care.

What is the GDP per capita in each, compared to the US?

 

[FIRE'd@51]

There are other, less apparent, costs to our current employer based system. How many people on this very forum hung on to a job they didn't like just long enough to qualify for retiree heath insurance, all the while scrimping, saving and dreaming of retirement?

Imagine a system where you're not bound to your job with a mega corp or government entity just to get covered. I believe this could be very good for our economy as many more people would be inclined to start their own businesses. Small business is the core of our economy, but many don't want to leave the safety and security associated with being in a big pool for insurance purposes.

I agree with ERD50 that, whatever changes come, much more needs to be done to contain costs.

Frankly, I think this argument, which you keep making is a bit of hyperbole. Most people are tied to their jobs because they have a family and have to make mortgage payments. Health insurance aside, they can't leave their jpbs to become entrepeneurs because they need the steady paycheck to house and feed their families.

Having said that, I agree with your advocation of abolishing the employer-based health insurance system, but for different reasons, the main one being that if someone loses their job, they lose their health insurance.

The President and heavily Democrat-controlled Congress had an opportunity to go down the road you advocate. It was the Wyden Plan (later renamed the Wyden/Bennett plan when it gained significant bipartisan support) in the Senate. For whatever reason, the powers that be chose not to go down that road, IMO, to the country's detriment, and instead we wound up with this "Trojan Horse" called Obamacare.

 

[Purron]

Frankly, I think this argument, which you keep making is a bit of hyperbole. Most people are tied to their jobs because they have a family and have to make mortgage payments. Health insurance aside, they can't leave their jpbs to become entrepeneurs because they need the steady paycheck to house and feed their families.

I see your point. I'll admit to being fixated on this argument because it reflects my own personal experience and may not be the sitution most people find themselves in.

The President and heavily Democrat-controlled Congress had an opportunity to go down the road you advocate. It was the Wyden Plan (later renamed the Wyden/Bennett plan when it gained significant bipartisan support) in the Senate. For whatever reason, the powers that be chose not to go down that road, IMO, to the country's detriment, and instead we wound up with this "Trojan Horse" called Obamacare.

I remember that plan and it made a lot of sense to me at the time. I doubt it will be considered if "Obamacare" ends up scrapped since, if I remember correctly, it too required everyone to pay into the plan.

 

[Westernskies]

Ok, I'll take another whack at this one...

Consider that for years, the US was a society that encouraged and rewarded work-anyone who wanted to work hard for what they aspired for (house, car, kid's education, luxury goods, etc) could do so, there were plenty of job openings and opportunities for advancement. We had a healthy industrial economic base and an expanding economy. Employers wanted to hire the best and the brightest, and offered health benefits as one way to attract and retain talent. Strong union presence in the manufacturing sector also bolstered this practice. The feds encouraged this private health insurance through tax breaks, and since nearly everyone was working, we didn't really need a public solution. On the political side, serving in Congress was still "Mr. Smith goes to Washington" not the lifetime quasi-civil service appointment it has morphed into.

Fast forward forty-fifty years. Our expanding employment base has been reversed by our trade imbalance, our strong industrial core has been replaced by the lower-wage service sector, our largest unions are now public-sector employees, and private employers, unable to compete with lower-cost offshore labor are shedding employees and dumping or reducing the "free" health benefits we were all so accustomed to. The traditional American model for predominantly employer-provided health care has changed, and is "suddenly" (no one saw it coming...) on a collision course with an aging population base and a declining job market. And as always, the poor suffer the most; they are the least-equipped to deal with these changes.

To make matters worse, we have devolved to a highly partisan Congress (both parties) that want to buy votes at any cost, and is using this issue to polarize and divide the electorate instead of actually trying to solve the problem. Ramming through legislation that no one has even read and then having the next Congress immediately try to repeal it is a perfect example of why people have lost confidence in the government's ability to come up with a successful health care program. People all know we are in dire financial straits, , but no one wants to give up their programs to pay the bills, after all they were promised these programs in exchange for their votes. As a society we have legislated a fundamental shift from people being expected to make their way in life on the basis of their own hard work to expecting the government to provide for (or subsidize) many of their basic requirements. It used to be that if you needed health insurance you went out and got a job that offered it. Now you just pull a lever for the candidate who promises to give it to you on a plate.

Ha said it best, the government is good at regulating, but poor at running these types of programs. I'm not confident that we are going to see this issue solved anytime soon.

 

[ERD50]

Exercise: Identify the countries with the lowest level of government intrusion or involvement in the economy, social life, and health care.

What is the GDP per capita in each, compared to the US?

How about a single, clear example (also proves it doesn't have to be either/or):

Nathan Lewis: Does Hong Kong Have the World's Best Health Care System?

Hong Kong. Over the last fifty years, it has evolved from a tiny exporter of cheap consumer junk to one of the wealthiest and most prosperous places in the world.

.... The top income tax rate in Hong Kong is 17% for individuals, and 17.5% for corporations. There is no sales tax, VAT, payroll tax, capital gains tax, inheritance tax, tax on dividends or interest income. There is also not much of anything in the way of a government pension system, like our Social Security.

...

Hong Kong's 6 million people are one of the healthiest populations in the world. The life expectancy is 84 for women and 78 for men, the second-highest worldwide.

... This system of government-operated hospitals, open to all citizens, costs the Hong Kong government about 3% of GDP. Three percent! Private hospitals, used mainly by the wealthy, and all other health care services bring Hong Kong's total health care spending to about 6% of GDP. Compare that to about 16% in the U.S. today, and rising.

A 200 page tax code (I thought I read 15 pages somewhere else) says a lot, IMO. And yet, they are able to provide coverage for all, and spend far less than we do in the US.

Frankly, I think this argument, which you keep making is a bit of hyperbole. Most people are tied to their jobs because they have a family and have to make mortgage payments. Health insurance aside, they can't leave their jpbs to become entrepeneurs because they need the steady paycheck to house and feed their families.

I don't think it's hyperbole. Most people would not become entrepreneurs anyhow, so it's irrelevant. They are a small minority, so to the extent that people get tied to their jobs, I think one can certainly make the case that entrepreneurs are being held back. So what is more important is what % of entrepreneurs are held back. Let's just say 30% for yucks. That means 30% fewer entrepreneurs. Makes no difference if they are only 1/1000 workers or 1 out of every 2 workers. It still hurts our ability to have startups, and that is big, I'm sure.

-ERD50

 

[samclem]

Frankly, I think this argument, which you keep making is a bit of hyperbole. Most people are tied to their jobs because they have a family and have to make mortgage payments. Health insurance aside, they can't leave their jobs to become entrepeneurs because they need the steady paycheck to house and feed their families.

I think it's a very important factor. It's not just that people can't become entrepreneurs. If they or their family has a medical condition they can't realistically even go to work for small employers that don't offer insurance. Small companies might be willing to match the pay of larger companies, but due to pool size and other factors they can't effectively compete for employees due to health care costs. Is that tipped playing field likely to result in the optimum utilization of talent?

The more efficient the labor market is, the more productive the economy is. When people can get the best compensation for their talents and effort, everybody wins. But, when the labor market is made less efficient (because people can't change jobs without putting their family's health care at risk, or when the tax code lets employers buy insurance for a lower price than employees), it's a significant negative factor for the economy.

In today's environment, the US doesn't need any more handicaps in the global marketplace. The linkage of health care to employment makes no sense regardless of whether one supports single-payer, govt-facilitated private insurance, or complete dog-eat-dog govt noninvolvement.

 

[Purron]

How about a single, clear example (also proves it doesn't have to be either/or):

Nathan Lewis: Does Hong Kong Have the World's Best Health Care System?

A 200 page tax code (I thought I read 15 pages somewhere else) says a lot, IMO. And yet, they are able to provide coverage for all, and spend far less than we do in the US.
-ERD50

I was thinking Hong Kong too. It's also listed at the top of the Heritage Foundation's Index of Economic Freedom:

Country rankings for trade, business, fiscal, monetary, financial, labor and investment freedoms

 

[donheff]

That's a realistic approach and I understand it (though I disagree with important features of the present attempt). But, we both know how the "starve the beast" tactic has worked for the cause of fiscal conservatives. Maybe it will work better in a system where the "offender" can't continually print money.

Yes, my biggest fear is that we will just keep getting worse financially (albeit with broader coverage). Just like the tax cutters never could muster the courage or support to cut spending. I still hold out a vague hope that common sense will eventually prevail.

 

[dex]

Will Medicare or Medicade be around much longer?

Peter Ferrara and Larry Hunter: How ObamaCare Guts Medicare - WSJ.com
Altogether, ObamaCare cuts $818 billion from Medicare Part A (hospital insurance) from 2014-2023, the first 10 years of its full implementation, and $3.2 trillion over the first 20 years, 2014-2033. Adding in ObamaCare cuts for Medicare Part B (physicians fees and other services) brings the total cut to $1.05 trillion over the first 10 years and $4.95 trillion over the first 20 years.
These draconian cuts in Medicare payments to doctors, hospitals and other health-care providers that serve America's seniors were the basis for the Congressional Budget Office's official "score"—repeatedly cited by the president—that the health-reform legislation would actually reduce the federal deficit. But Mr. Obama never disclosed how that deficit reduction would actually be achieved.


Medicaid - latimes.com

Thursday, Health and Human Services Secretary Kathleen Sebelius sent a letter to the nation's 50 governors suggesting a range of cuts they can make to Medicaid, including dropping some people from the program.

 

[plex]

From 2014 and onwards, the poor will become eligible, as a body, for Medicaid. But, I think Medicaid's coverage will very likely become even worse than it already is now. There will likely be much more coverage available (gold plans for $400-$600/year) on the very low end of the subsidized health care insurance exchanges. The gap in coverage would likely amount to many thousands ($$$$), if not tens of thousands ($$$$$) of dollars in additional benefits.

Just like there is a huge drop off between when the subsidies end, I think there is also a huge bump up where the subsidies begin. This is a very important issue for anyone who will not have much income in a particular year for whatever reason, you cannot let yourself fall into Medicaid range.

 

[NW-Bound]

Same as many people here, I believe we can improve our current system, but costs must be addressed. Put aside the possible limitation of personal choices, which can be important to many people and likely to me too if I know what I would be missing, it is clear that the US spends way more than other countries on health care. However, the result of our system, if one measures in something tangible like longevity, looks dismal compared to other countries.

On why our current system costs so much, another poster shot down the few possible reasons that I read about. Well, then where does our money go? One has to explain the higher cost. I will throw out some phenomena that a layman and somewhat disinterested citizen like myself can still spot. Why are drugs more expensive in the US than in foreign countries? Many countries, European ones too and not just 3rd world countries, allow their pharmacists to dispense drugs, but we require a visit to a doctor first. Do they have a higher statistics of drug abuses or misdiagnosis of diseases compared to ours?

What about the propensity for American patients to sue their doctors that have driven up the doctors' liability insurance premium, which they simply pass back to us?

And may I suggest another contentious cause? How about Americans not knowing how to take good care of ourselves? I wonder how much Jack Lalanne lifelong health care cost was. It was probably very low. Was it all because of his lucky good gene? If not, how do we promote better lifestyles? How do we get our citizens to have some "skin in the game"? It's their own health, for crying out loud.

In order for us to get more people to support health care reform, they need to be convinced that the new system will provide the same if not better health care for themselves, at roughly the same cost. Although most people have a bit of altruism in them, their charity is limited by their own selfish needs, for their very own survival. I thought that the fact that the US system costs more than those of foreign countries is actually a silver lining. It means that by squeezing more efficiency out of our system, we can get more without paying more. Would that not be great?

By the way, it is good that ERD50 brought up HK as an example. I knew HK prospers despite having a flatter tax system than ours, but I was going to look on the Web to see how their health care system fares, and ERD50 beat me to it. It bothers me that when there is a problem, some people just want to throw more money at it by levying more taxes.

It is not always about money, it is about knowing what you are doing! I gave up on working full-time for idiots at megacorps because I could not convince anybody that we needed to work smarter, and not by spending more time in meetings. Give these idiots more budget, they would just extend their meetings to more hours, simply because they know of nothing else to do but talk about work. Sigh...

 

[M Paquette]

Exercise: Identify the countries with the lowest level of government intrusion or involvement in the economy, social life, and health care.

What is the GDP per capita in each, compared to the US?

That was a bit of a trick question. Sorry about that.

Hong Kong as a choice is an interesting one. The HK government represents about 17% of GDP (2008 estimate), a good bit less than the US at 34.6% (2008, aggregate of federal, state, and local budgets), but they don't have much in the way of a Department of Defense budget for some reason... GDP per capita is $45,600 (CIA World Book 2010), compared to the US at $47,400 (CIA World Book 2010). Hong Kong has the second highest health care costs in the world, after the United States (We're #1, We're #1...) They have the same mashup of employer-provided and individual health plans. They do provide some welfare services.

A couple of other data points might have been interesting. The correlation turns out to be nonlinear.

The kicker for ERD50's hypothesis that smaller government as a fraction of GDP helps the overall GDP per capita is the lower end limit case, of essentially no government economic activity. That case suppresses economic growth because the mechanisms to enforce contracts, protect property, and develop a common infrastructure are missing or inoperative.

There has to be some government spending for the successful operation of rule of law. Relying on the population and other businesses to be good Objectivists that still respect the freedoms of others in the absence of government is a path to failure.

There's something in economics called the Rahn Curve, which says that there is a level of government spending which maximizes economic growth. The curve suggests that there is an optimal level of government spending very roughly around 20% of GDP.

 

[ERD50]

Hong Kong as a choice is an interesting one. .... Hong Kong has the second highest health care costs in the world, after the United States...

Do you have a link for that? It isn't adding up with my source (after converting from GDP to per capita) and I'm having trouble finding data since HK is not an OECD.

My source was saying HK total spending on HC as % of GDP was less than half the US (6% vs 16% of GDP). And your numbers indicate GDP per capita to be pretty close. So that doesn't seem to match.

The HK government represents about 17% of GDP (2008 estimate), a good bit less than the US at 34.6% (2008, aggregate of federal, state, and local budgets), but they don't have much in the way of a Department of Defense budget for some reason... GDP per capita is $45,600 (CIA World Book 2010), compared to the US at $47,400 (CIA World Book 2010).

OK, but US Defense is about ( corrected: [-]20%[/-]) 4.7% of GDP, so even if we compensated for the whole thing HK would spend 4.7% more than they do now, so the 17% of GDP would go to (corrected: ) 17.8% ( third edit... arghhh - or do we add now, so 17% plus 4.7% = 21.7%), still far less than 34.6% of the US.

The kicker for ERD50's hypothesis that smaller government as a fraction of GDP helps the overall GDP per capita is the lower end limit case, of essentially no government economic activity. That case suppresses economic growth because the mechanisms to enforce contracts, protect property, and develop a common infrastructure are missing or inoperative.

...

There's something in economics called the Rahn Curve, which says that there is a level of government spending which maximizes economic growth. The curve suggests that there is an optimal level of government spending very roughly around 20% of GDP.

I'm not sure what you are trying to say here. I wouldn't think you would claim that I think govt spending should be near zero (but that's what I'm getting). I certainly agree we need govt to provide infrastructure and law and order.

I can't say whether 20% spending is any kind of appropriate benchmark - all of us LBYMers know that there is spending and there is spending. Do all companies with a 10% R&D budget have similar success?

-ERD50

 

[samclem]

OK, but US Defense is about 20% of GDP, so even if we compensated for the whole thing HK would spend 20% more than they do now, so the 17% of GDP would go to 20.4%, still far less than 34.6% of the US.

In 2010, all the spending by DoD accounted for 4.7% of GDP. If we add in veterans pensions AND the VA it comes to about 5.5% of GDP. And, remember that a big chunk of the "defense" spending is actually . . health care (active duty personnel, their families, retirees and families, VA spending largely on service-connected disabilities and indigent veterans, etc).

And, if total government spending of 20% of GDP is about right, then we've got some real cutting to do since we're above 40% now (federal>20%, state and local >20%).

 

[ERD50]

In 2010, all the spending by DoD accounted for 4.7% of GDP.

Thanks, my mistake. I was looking at % of Federal spending. Good point that a portion of that would be health care. - ERD50

 

[NW-Bound]

In 2010, all the spending by DoD accounted for 4.7% of GDP. If we add in veterans pensions AND the VA it comes to about 5.5% of GDP. And, remember that a big chunk of the "defense" spending is actually . . health care (active duty personnel, their families, retirees and families, VA spending largely on service-connected disabilities and indigent veterans, etc).

And we read all the time about some defense projects went way over-cost and got cancelled with nothing to show for it after billions being spent. And these are billion dollar projects, not little programs for a few hundred Ks.

DoD spending is no model of efficiency, yet it is still a small percentage of GDP. Makes one shudder to think of the other 95.3%.

 

[samclem]

DoD spending is no model of efficiency, yet it is still a small percentage of Fed spending.

Yep, the DoD budget, VA, retiree benefits, plus the "Overseas contingency funds" to fight the wars in AFG and Iraq amounts to about 1/4th of what the US government spends.

 

[M Paquette]

Do you have a link for that? It isn't adding up with my source (after converting from GDP to per capita) and I'm having trouble finding data since HK is not an OECD.

My source was saying HK total spending on HC as % of GDP was less than half the US (6% vs 16% of GDP). And your numbers indicate GDP per capita to be pretty close. So that doesn't seem to match.

Hong Kong isn't an OECD member and doesn't choose to publish much data. I got my information from an Allianze Global document that covered their results from providing coverage in various locations. Hong Kong uses a Beveridge model, where many of the clinics and hospitals are owned by the government, as a leftover from British rule, with a newer layer of private care. The two tiers may be leading to your discrepancy, depending on exactly what the data set you are looking at is trying to examine.

It's not cheap for a foreigner. Matilda, Canossa, and Sanatorium are three private hospitals, here compared with the US data:
GP Consultation

• Matilda: $64 - $102

• Canossa: $115

• Sanatorium: $153

• USA Federal Average: $100

Private Room / 1 day

• Matilda: $761

• Canossa: $328

• Sanatorium: $682

• USA Federal Average: $400

Maternity - Routine 3 day delivery

• Matilda: $8,500

• Canossa: $7,794

• Sanatorium: $7,179

• USA Federal Average: $7,600

I'm still not sure why Hong Kong is of such interest. Indigent locals there are pretty much in a system like the British NHS. I can't imagine any of the more cost-conscious posters in this topic actually wanting an NHS style system inside US borders. It does have the advantage of simply providing care, without all the odd carve-outs that the several states and Federal government put into Medicaid. However, it is of course Socialism, and likely to kill Grandma.

 

[Bestwifeever]

And we read all the time about some defense projects went way over-cost and got cancelled with nothing to show for it after billions being spent. And these are billion dollar projects, not little programs for a few hundred Ks.

DoD spending is no model of efficiency, yet it is still a small percentage of Fed spending. Makes one shudder to think of the other 95.3%.

Am I interpreting the figures wrong? The DOD budget is 4.7 percent of the GDP, not 4.7 percent of total Fed spending. (From previous posts, it looks like total Fed spending including DOD is 20 percent of the GDP, so the DOD is about 1/4 of total Fed spending).

 

[NW-Bound]

Yes, I spotted my error and corrected it at the same time you made the post to point that out.

By the way, being no economist, I still suspect that in the civilian side, there is much of the GDP that is also "wasted". I don't know how economic activities and outputs are measured, but all those empty or unfinished construction projects due to the housing bubble burst couldn't be all that good. Do all those get subtracted out of the past GDP at all if they revised the numbers?

And all those guys I encountered at megacorps who acted just like the characters in Dilbert cartoons could not have contributed to the "real" GDP either.

But I digress... What I was thinking is that contrary to my libertarian personal friends who believe in a total laissez-faire political system, I do not trust the commercial or civilian side to be able to do all the "good stuff". The problem is of course how and where we draw the balance.

 

[M Paquette]

It's interesting looking at the different health care systems around the world, and how they do or don't handle the indigent.

There are the Beveridge model tax-funded government run systems like the British National Health Service, found in Great Britain, Spain, Scandinavia, New Zealand, as one tier in Hong Kong, and Cuba.

There's the Bismarck Model, with an insurance system that has to cover everybody, paid by employees, employers, and premiums from the self-employed, run as a non-profit, and used to pay expenses in private facilities. There are usually a bunch of insurers, offering add-ons to the basic mandated coverage. Think of it as Obamacare, only applied to everyone, replacing Medicare/Medicaid/Tricare, etc. Places using the Bismarck model include parts of Latin America, France, Belgium, Switzerland, the Netherlands, Japan, and Germany.

There's the National Health Insurance Model, which uses a Beveridge model single insurer collecting premiums or taxes, but where the medical providers are private, rather than government owned. This setup, a 'single payer' model, gives the insurer considerable power to negotiate pricing, as well as cost control by limiting services. Yes, this is obviously the Canadian system. Taiwan and South Korea, among others, also have similar systems.

Much of the world uses the Out-of-Pocket model, wherein one directly negotiates with the medical provider for care in exchange for money, poultry, goat's milk, child care, or whatever else they may have to offer. Persons with nothing to offer simply do not receive medical care. Under this system, in general the rich get medical care, and the poor stay sick without cluttering up the waiting room.

The United States is unique, from what I can tell, in that we routinely see all four models in use within our country.

• Veteran's care is provided on the Beveridge Model

• Medicare/Medicaid patients are on the National Health Insurance Model, eh?

• Working Americans with job related insurance are on the Bismarck Model

• The rest of us are on the Out-of-Pocket Model, with the wealthy buying insurance or self-insuring, and and the others scratching to trade for medical care

If you're on the Out-of-Pocket Model, be glad to have some wealth tucked away, or you could be living that Burkina Faso lifestyle.