What’s wrong with American health care?

What was wrong with health care before Obamacare? Plenty. There are many processes that drive up health care costs : Some we can’t control are:

  • ever-improving technology (which requires expensive new equipment);

  • the aging and expanding population, and consequent increase of chronic disease;

  • the continuing development of new prescription drugs. There are others – see the two links which immediately follow.

A good reference on health care costs: http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx

And another by Doctor Lundberg: http://www.kevinmd.com/blog/2010/08/8-reasons-healthcare-costs-rising.html

There are other processes we can possibly change:

  • Medicare/Medicaid. These programs drive up medical costs by creating a game between the federal government and the health care providers. The government will allow the minimum possible fee for medical services. To make what they think is a fair profit, the providers charge more, trying to raise the basis on which the government sets fees. The hospitals and doctors also bill for every charge they can conceivably think of. Patients don’t protest, because the government – a 3rd party – adjudicates and pays, except for moderate costs to the patient. Taxpayers are on the hook for it all.

  • Free care of necessity: America may be the only country in the world where very few are ever turned away from a hospital due to inability to pay. Doctors and hospitals (in effect) give a lot of free care away, and customers pay much more to support it. The hospitals and doctors try to collect later, but write off large sums as uncollectable.

  • Malpractice litigation and insurance costs. Juries award huge sums to patients. Doctors have to buy increasing amounts of insurance to protect themselves, and most order expensive and possibly unneeded tests to document that they’ve covered all the bases.

  • Federal laws that prohibit health insurance companies from crossing state lines restrict competition.

  • The long-term decline of the dollar. Inflation is a big contributor to rising costs.

Now, some points made by Doctor Lundberg (see 2nd link above) – from his list of factors that drive up costs:

–Patients with insurance who consider medical care a “freebie” with no cost consequences.

– Physicians who neither practice evidence-based medicine nor include costs in their decisions. Decisions are often driven by the pervasive mystique of “defensive medicine,” which now dictates hugely expensive (and lucrative) “defensive practice standards.”

– Hospitals want to fill beds, especially ICU beds, and aggressively market the newest and most expensive technology, beautifully performing tests, and treatments that patients often do not need.

– Drug companies successfully push use of their most expensive drugs. (TV broadcasts are now swamped with drug commercials.)

A new health care plan would need to address as many of these points as possible. The two extremes of howthe federal government could deal with it:

  • Don’t deal with it. This was the approach for most of our nation’s history.

  • A pay-all federal system, funded by taxpayers. That’s tough, because one estimate of average lifetime health care costs is $316,600.00 (higher for women than men because women live longer – women $361,200, men $268,700.) Much of that is due to aging and chronic illnesses. These may not be valid estimates, but who knows? The breakdown: a third of that in middle age, half of it as a senior, and only a sixth before middle age, seems right. These are staggering costs. How can the taxpayers come up with enough money to pay for 313 million Americans? The answer is, they can’t, because 313,000,000 * 316,200 is approximately 99 trillion dollars. That number might even impress politicians.

If sustained by the Supreme Court as constitutional, or repealed before going into effect, Obamacare intends to reduce federal costs by making everyone buy insurance, either private or federal. It will be very expensive, for the reasons given above.

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