Universal Healthcare

My friend has a blog and he just posted a blog about Healthcare.  I was wondering if you all had advice for this kid seeing as how he won't listen to me....Thanks for helping out.  Links are enouraged to other resources as well.

The post is as follows...

There is a problem with the healthcare system in the United States.  There are an estimated 45-50 million uninsured and even more that have substandard insurance.  We are facing rising costs of medical procedures, equipment and prescription drugs and it would be great if we could throw more money at the problem, but we already spend the most per capita on healthcare than any other country in the world. “In 2007, health care spending in the United States reached $2.3 trillion, and was projected to reach $3 trillion in 2011. Health care spending is projected to reach $4.2 trillion by 2016”.

The problem seems to be a problem of mismanagement and lack of bureaucratic efficiency. “In 2005, the United States spent 16 percent of its gross domestic product (GDP) on health care. It is projected that the percentage will reach 20 percent by 2016”.  The US spends more money on healthcare than any other country but yet it has almost 1/6^th of its population without health insurance.  Even those without insurance will receive medical care when they need it, but the price of medical care is so outrageous that it often leads to bankruptcy.  This will just continue the horrible cycle of poverty that has crippled so many working people in the United States.

The rising costs of maintaining our healthcare system is increasingly burdening employers, hospitals and the people who have the policies. “Premiums for employer-based health insurance rose by 6.1 percent in 2007. Small employers saw their premiums, on average, increase 5.5 percent. Firms with less than 24 workers experienced an increase of 6.8 percent”.   The employers are burdened and they pass the expenses on to their employers by finding cheaper policies, canceling insurance or simply making the employees pay for the difference.  Since 2000 the costs employees pay for their health insurance rose 143%, rising at an estimated four time faster than the wages of these employees.

Workers who have to support families are asked to contribute even more.  An average annual premium for a family of four is $12,200, significantly more than the $10,712 made by a fulltime worker earning a minimum wage salary.

The system of healthcare that is seen in the United States can be described as inefficient, unresponsive and difficult for average people to manage.  The current system is a confederation of various Health Maintenance Organizations (HMOs) who control prices and quality of care and manipulate legislation to prevent state run healthcare.  HMOs are the service providers of a healthcare plan, they coordinate through regional alliances between clinics, specialists, doctors and hospitals, to get you care.  The biggest flaws concerning the practice of HMOs is that they restrict where one can get their care to facilities that are incorporated within the regional network.  This makes it so if one wants to see a specialist, or have the freedom to choose between a wide range of doctors they cannot.

There is a lot of news regarding the quality of care received by HMOs, most if it regards them as not fulfilling their quality of care standards.  However, studies have shown that patients tend to prefer the care received from an HMO when compared to a fee-for-service or uninsured experience.  HMOs operated within the system to provide the best service that they can for the least amount of money.  They negotiate, often times with hardball tactics, to lower prices so that they can net a larger profit.  A plan for universal healthcare would either eliminate the need for HMOs or it would drastically reduce their influence, profit margins while forcing a number of them out of business.

The US single-payer system known as Medicare is often criticized for not utilizing its strength more properly. I like to think of a single-payer system as being similar to Wal-Mart.  Wal-Mart negotiates with its vendors to provide their supplies for a much lower rate then they would to other companies. This is due to the fact that Wal-Mart is the largest company in the United States and is capable of selling massive amounts of merchandise.  Wal-Mart has a philosophy that if they are not getting a reasonable price then they are not going to sell that product, which will hurt that company a lot more than it will hurt Wal-Mart.

The US single-payer system increases competition amongst the companiesIf the U.S. or Minnesota (for example) were to operate on a single-payer system they would receive the best rates and high quality products. If pharmaceutical companies refused to negotiate or lower prices then the single-payer system could find other sources, such as Canada, to find the necessary prescriptions and supplies.

Since the days of FDR universal health care has been one of the programs that we need the most, but yet it always seems to fail.  In the year 2008 the United States is the only developed nation to not offer universal health care.  China, Cuba, Costa Rica, Serbia, Russia and many other countries offer health coverage for all of their citizens.  Why is the world’s leading democracy refusing to provide health care for all of its citizens?

END

If any of you are interested in getting into his face about it, his lobg is at politablog.com .

Mises.org to the rescue!

46 million uninsureds is a huge lie. Actual figures for chronically uninsured is probably less than 15M (still a lot of people) but this market distortion could be traced back to the bad incentives that prevent individuals from buying health care on the same terms as corporations, as a result, health care is inextricably linked to employment, or more precisely, employment at a mid- to large-sized corporation.

Single-payer advocates neglect the fact that a government still has to ration health care.

Nationalizing healthcare will help cement a corporate oligopoly.

Other oft-cited lies suggest that the US has a comparatively high infant mortality rate, and lower life expectancy.

Here's some facts for your friend to chew on.

1. Half of all US dollars spent on healthcare come from Medicare (government health program).

2. Medical schools whether by intention or accident restrict the total number of graduates per year (or semester).

3. The pharmaceutical industry derives most of its profits in the US (and not worldwide).

4. State license boards also restrict the number of doctors allowed to practice medicine (whether as a total population or per year license review/acceptance).

5. The HMO Act of '76 had restricted the means of litigation when a given HMO failed to comply with its obligations [per contract]. (Note: I'm not sure if the so-called Healthcare Bill of Rights law actually removed this particular restriction or not, so I'm assuming it has.)

6. The FDA restricts many medicines that have been proven safe in other countries, and in other trials, especially those related to cancer [tumor] treatment.

Well, that's about the six I can think of off the top of my head in terms of factors that add to the costs of healthcare in the US. Number 1 has to be the most important because Medicare is a bitch to deal with as a doctor as certain doctors will not accept Medicare covered patients as such (unless they offer cash or private insurance instead). Numbers 2 and 4 are important as when you restrict the supply of anything you automatically can assume a higher price for it (even if it seems nominally unimportant or unvaluable). Number 3 is important because what people don't grasp is that because most other nations have socialized medicine, they also have restricted the price ranges on medicines. So, in essence, the US market on medicines is paying for the rest of the world's 'cheap' medicine. Numbers 4 and 6 are important too because it shows further supply restrictions (of two distinct kinds). Number 4 in particular restricts the supply of competent HMOs by virtue of the fact that there's little [civil] legal fear when a given HMO has failed to fulfill its [contractual] obligations. Thus, the flipside of the market where negative feedback leads to better services [through direct change in the failing firm itself or from a competitor] is nonexistent. Number 6 is very important in terms of restrict the supply of the kinds of medicines one can receive. There are many cancer fighting drugs that are accepted worldwide, even in European nations, which are quite effective and cost effective to produce, yet the FDA has categorically restricted their use or prohibited use entirely.

All in all, if your friend has any background in healthcare, he wouldn't be so naive as to assume it has to be the evils of so-called big business as the primary culprit of the US healthcare's high costs. Rather, it's in itself a perfect text book example of cartelization meets government intervention. And just like with oil, you will pay the piper his due as he owns the bureaucrats and the doctors too.

A word about buying in bulk and being large. First, how is Target or Aldi in business? There are things other than price that matter when making a decision to purchase goods (including healthcare). Second, if size was what mattered insurance companies would have already lobbied for being able to cross state lines. Maybe the stupid laws that restrict selling insurance should be lifted. Then the insurance companies can grow nice and big like Walmart. A little less government intervention rather than more. On another note, remember Walmart didn't even offer health insurance for a wile. The thing is, people still went to work there knowing there was no health insurance. If people refused to work for companies that did not offer health insurance, they would go out of business. It is apparent that some people do not value health insurance like others do. A value should not be assigned by the government.

Why did he list Cuba?

joeheitz22:

and lack of bureaucratic efficiency

Now that made me laugh.

Well, thank you Joe. I appreciate the posting of my article. I am the friend that wrote this.

[note: giant socialist spamspew removed--a simple link to the article will suffice]

 First off, it should be noted the first article was written about two months ago and the second one about a month ago or so. So, the first article is referencing the idea of universal healthcare in general while the second is referring to HR 3200.