Healthcare: Just the facts, m'am.

This is a response to the appropriately-titled “The Uninsured Healthcare Myth”, parts 1 and 2.

The Senate testimony from the Kaiser Commission on Medicaid and the Uninsured put it rather bluntly:

"Medicare was enacted because the private health insurance market did not work for the elderly."

Where the private market does "work", it suffers from

"high administrative costs, unaffordable premiums, exclusion based on health status, and complexity and lack of comparability across plans".

But that can't be true, because it would contradict the infallible dogma that free markets are a cure-all for everything. Reading on, we find that the current Medicare and Medicaid programs are not exactly free rides:

"Medicaid’s strict eligibility rules require people who need long-term care to spend-down all of their assets and contribute nearly all of their income to the cost of care ... [they must] contribute their entire income, including pension and social security payments (except for a small personal needs allowance) to the cost of care. Others with modest savings above Medicaid’s resource thresholds must spend down their available assets before they can qualify for assistance."

In other words, Medicaid doesn't even try to prevent you from being financially ruined by health misfortune. Medicaid just helps you survive, after you're ruined.

There are 45.7 million people without health insurance in the U.S. (2007 Census ). That's about 15% of our population. In all other wealthy nations, it's zero. Of those uninsured, 79% are U.S. citizens. The other 21% are immigrants, both legal and illegal. Furthermore:

"Non-citizens have less access to employer coverage because they are more likely to have low-wage jobs and work for firms that do not offer coverage. At the same time, they are often restricted from public coverage." (Kaiser Family Foundation key facts, and FactChek.org )

According to FactChek.org, citing the Kaiser study:

"What else can we say about the uninsured? More than 80 percent are from families in which at least one person works ... two thirds are near or below the poverty line ... nearly half are below the age of 30 ... whites make up two thirds of the population but less than half of the uninsured ...."

According to a 2004 report by the Institute of Medicine of the National Academies of Science:

"Lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States. Although America leads the world in spending on health care, it is the only wealthy, industrialized nation that does not ensure that all citizens have coverage."

18,000 unnecessary deaths every year. In the richest nation on Earth. According to liberal "scientists" and their "facts", anyway.

Now, let's assume the Old Man is right in claiming that 60% of the uninsured are eligible for “government health insurance (Medicaid and state programs)”, but they simply aren't signing up. Something's fishy here. Being eligible for Medicaid currently means going utterly broke beforehand (see above). It's hard to believe people would pay all of their income, sell their house, spend their savings, qualify for Medicaid—and then forget to enroll. Perhaps many of them have Alzheimer's. At any rate, here's one possible solution, and this goes for the “state programs” as well: just enroll uninsured people automatically.

Reviewing data from the World Health Organization, there are three salient facts about health care in the U.S., compared to other wealthy nations (and many not-so-wealthy nations):

1. We have a more privatized system
2. We spend more on drugs and insurance
3. We get worse care
   

We spend about 15% of our GDP on health costs (data from the WHO ). Sweden, on the other hand, spends 9% of its GDP. In the U.S., costs are split about even between government and private insurance plans. In Sweden, 82% of total health care expenditure comes from the government; virtually all of the remaining cost is paid for out-of-pocket (not private insurance plans). The U.S. government spends 22% of its total revenue on health costs; Sweden spends only 14%. Swedes have a longer life expectancy, they have less than half our infant mortality rate, and they are ranked highly for health system responsiveness and fairness--meaning low-income people don't get worse care (WHO data, qtd. in University of Maine Bureau of Labor Education ). Oh, and a much higher percentage of Swedes are satisfied with their system.

Sweden is not a unique case. The same trend plays out if you look at the data for Germany, France, Australia, Canada, Luxembourg, the UK, and so on. (There is one interesting exception where we are not only better-than-average, but ranked first place: system responsiveness.) We're more private, we spend more, we get worse care, we're more dissatisfied, even though we are the richest and most powerful nation in the history of our species. Other than that, we have a great system.

The Old Man claims Medicare and Medicaid cost more than private insurance, running “$9,600 per patient compared to approximately $7,100 per patient for private insurance”. That's an interesting statistic. (By the way, what's the source? And does the $7,100 per patient include out-of-pocket expenses, or just the cost of the insurance plan itself?)

Several key facts may account for this difference. Private insurance covers people in general. Medicare/Medicaid, on the other hand, is designed to cover the most expensive forms of health care. A for-profit insurance company, by nature, is designed to avoid covering the most expensive (and least profitable) forms of health care. This includes long-term care for the elderly and disabled, and people with chronic illnesses. Long-term care cost $178 billion in 2006 (according to the Kaiser study), of which 63% was paid by Medicare/Medicaid, 22% was out-of-pocket, and only 9% was contributed by private insurance (Kaiser study). Mission accomplished! Yep, we already have a big government health care program, alright. Its purpose is to make people with money, who are middle-aged and healthy, pay into the profits of the private system for care they won't get when they need it most, AND foot the bill for the chronically ill, the poor and the old, because the private system (by design) does not "work" for those people.

Speaking of profits, check out the Fortune 500 on the health insurance and pharmaceutical industries. Profit has made up 25% of sales revenue for decades in the top pharmaceutical companies. By my estimate, the top 10 companies in pharmaceuticals, and the top 10 health insurers (United Health Group, Wellpoint, Aetna, etc.) made combined profits of fifty billion dollars in 2007 alone. That's one of many costs of a private health care system: we pay for the care, plus fifty billion extra. Each year.

And here's another cost of our private system: lobbyists. About one-quarter of health industry expenses go to funding thousands (literally) of lobbyists in Washington; political campaign contributions; and media campaigns. All to prevent the democratic majority of us from reforming the system. That's according to the former head of corporate communications at CIGNA. (Watch the interview from a few weeks ago. Interestingly, he mentions the tactic of focusing public attention on Michael Moore, instead of real issues.)

The drug companies are not far behind, with an army of 3,000 lobbyists and cash to match, according to the Center for Public Integrity . But lobbyists aren't the industry's biggest expense. Neither is actual drug research and development. No, their biggest expense, by a hefty margin, is not R&D for the next miracle pill, but marketing. To the tune of billions of dollars each year. (How much did that wasteful, inefficient government enterprise, the Human Genome Project, spend on marketing?) This may seem inefficient and wasteful, until we realize that the word "efficiency" really means efficiency in creating profits. In fact, the most profitable drug companies (Pfizer, Johnson & Johnson, and GlaxoSmithKline) seem to have the biggest marketing/research expenditure ratios. Don't get me wrong--I'm not against people making profits. But when it comes to health care, there are collective and ethical considerations, and our private system doesn't seem to work. Allowing companies to market prescription drugs in TV commercials may fit with the conservative free-market paradigm, but maybe that's one bit of liberal regulation we were better off having.

For at least ten (and I believe twenty) years, polls have shown a solid majority of Americans have said it is the federal government's responsibility (in other words, our collective responsibility) to make sure everyone has health coverage, as is the case in all other wealthy nations. Just like food, shelter, and an education. And they have been saying for years that they want the government to expand its involvement. In fact, I could have sworn the Old Man told me he favored expanding Medicaid....at any rate, the pharmaceutical and health care industries have been blocking democracy for many years, and it continues to this day.

Healthcare Myths Part 2

There was a very interesting AP article in the newspapers today. It was titled: “Silver Lining in Healthcare Storm? Lobbyists.”

The article starts out “A strong force, perhaps as powerful in Congress as President Obama, is keeping the drive for healthcare going, even as lawmakers seem hopelessly at odds. Lobbyists. The drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year. Television ads paid for by drug companies and insurers continued to emphasize the benefits of a healthcare overhaul…”
Wait a minute…aren’t the “powerful lobbyists,” the “big drug companies,” the insurance companies who are only interested in profits, the high doctor fees….the villains railed against by President Obama, the liberals, the State run media, and the Grad Student?? What do you think is going on here? Are these “powerful,” “evil,” “profit hungry,” “heartless,” “big business,” entities now “the good guys” because they’re: (a) paying the right people now; (b) doing Congress’ bidding; (c) reached deals with the current administration where their interests will be protected; or (d) they’ve just had a change of heart,… have become altruistic and are willing to give up all profits and their former ways?
Is there a clue in the deal that the AMA struck, to support reductions in Medicare and Medicaid costs (saving $219 billion) for the bill “providing $245 billion to eliminate an annual shortfall in payments to doctors”? Democrats then introduced legislation to remove this ($245B) obligation from counting against the federal deficit!!

So, the government will (a) claim $219 billion in savings, (b) get AMA support, and (c) not count $245 billion of committed funds for the doctors in the AMA. Magic! I can hardly wait to hear what the drug companies are going to get, can you? Sounds more like “Pay-Vote” than “Pay-Go”.
Hmmm….doesn’t sound like “change we can believe in” to me…how about you?

The Uninsured Healthcare Myth

The State and the State run Media have been whipping up a frenzy about the uninsured, the "Crisis" of millions of Americans without health insurance (implying it is caused by greed and heartlessness of business, of course).

The health care system can be improved, and we should endeavor to do so. There are no perfect health care systems out there, no matter the media and the administration presenting government run health care as nirvana, or Michael Moore's love affair with the Cuban health care system (now overwhelmed with foreigners flocking there for treatment after his glowing review). There are, however, three huge myths about our health care system being foisted on us by the State and the State run media.

The first myth is that 45 million Americans are without health insurance because they can't get it (due to being unemployed, or their employer doesn't offer it, or they are denied because of pre-existing conditions), or can't afford it. But this is just flat untrue. Approximately one-third of all of those 45 million uninsured are eligible for government health insurance (Medicaid and state programs) and almost 40% of the children are eligible. This data is reported as roughly the same whether you check the Census Bureau, the CDC, or the comprehensive government sponsored Kaiser Commision for Study of Medicaid and the Uninsured. (Please note, these are all government or government sponsored data...no "right wing" or conservative group info was used (or else the data would be even more damning)). Another 20% of the uninsured earn over $50k per year, and have employer plans or private plans (Which average less than $5k per year)available, but choose not to pay for them. Granted, paying up to 10% of your income for health insurance is not fun, but it is certainly a viable alternative. By the way, almost half of those people earn $75k or more per year. The Kaiser study estimated that 26% of the uninsured were not U.S. citizens, but it was not clear how much overlap there is between the unisured who are medicaid eligible, plus those who earn over $50k/year and the 26% who are not citizens. I assume there is a very large overlap, but it is certainly not 100% overlap. Therefore, over half of the 45 million uninsured are eligible for government insurance, or should be able to afford it, or are not citizens. Interestingly, the Kaiser study found that health "90 percent are in health that can be considered excellent or good". This is more understandable when you realize that 60% of the uninsured are under 35 years old.
A 2005 study by BlueCross Blue Shield showed very similar data...of 41 million uninsured (in 2005), 14 million were eligible for government health insurance,but not enrolled, and another 13 million earned over $50k/year (in 2004). That's right, about 60% of the uninsured were eligible and just hadn't signed up, or were working and should have been able to afford insurance.

The second myth is that the goverment will lower health care costs and insurance costs (by being a big, efficient provider). That's almost laughable. We have a big, government health care program. It's called Medicare/Medicaid. It costs more than private insurance (approximately $9,600 per patient compared to approximately $7,100 per patient for private insurance). And...Medicare/Medicaid just added prescription drug coverage (included in almost all private plans) in 2006...it's going up from here!It's projected to go bankrupt! Are you people crazy?!....the Government in the same sentence with low cost or efficient? The government who says we have to spend One Trillion Dollars to save money?! But the government won't have the paper work and bureaucracy of the insurance companies...right?

The third myth is that we'll all be healthier when the government runs health care...why?..."cause Obama say so". Every private insurance program I've been in had "wellness" programs. There is little or no evidence they work, because people are so reluctant to change their lifestyles. Do you really think, as the most obese nation in the world, people who should lose weight to improve their health don't know it? I'm all for education and promotion of healthy lifestyles, but not for the government telling people what their choices should be.

Yes, the health care system can be improved. But it is a myth that there are huge numbers of people who can't get or afford health insurance (at the most 6% to 7% of Americans), and it is a myth that the government will make health care less costly and be a more efficient provider (it may well lower cost to some by shifting that cost to others, or just running at a deficit, butthat's not efficiency or lower cost). Instead of spending a trillion dollars to give control of health care to the government, we could do two things quickly and much less expensively. Spend more money to reach the one-third of the uninsured who are eligible for government insurance but not enrolled (which by the way, points out that as a percentage the government is much more delinquent in signing covering eligible patients than the private sector). Second, as mentioned earlier, we have a government healthcare/insurance program...Medicare/Medicaid. If the argument is that insurance is available, but too expensive for working families earning $40k per year, expand Medicare eligibility up to 2 times the poverty rate (instead of 1.33)and Medicaid would cover another 20% of the "uninsured". These two steps would solve as much of the problem as the CBO says the government's $1 trillion plan(or $1 1/2 trillion, but who's counting)would solve.

But that wouldn't accomplish the real mission...give access to and control of the hundreds of billions of dollars in the health care system to the State.

The Old Man