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.