The Cost of the U.S. Healthcare ‘System’

If you don’t have healthcare insurance, obviously the most important healthcare issue is getting some. But, to channel my inner Reagan, many people have health insurance. What has always puzzled me is why healthcare reformers haven’t tried to sell significant reform (e.g., single payer) by emphasizing two other features that are important to people who already have healthcare insurance: ease of use, and lower personal costs. Which leads me to this excellent column by David Cay Johnston (boldface mine):

Excessive health-care costs drain both the public purse and private purses, make manufacturing uncompetitive and force employers to divert attention from running their firms to dealing with health insurers.

Our universal single-payer health-care plan for older Americans, Medicare, has lower costs and lower overhead than the system serving those under age 65. If everyone in the U.S. was on Medicare, the savings would move the federal budget from deficit to surplus.

Of the 34 modern economies, the U.S. has by far the costliest health care system. For each dollar per capita that the other 33 economies spend on health care the U.S. spends $2.64, my analysis of Organization for Economic Cooperation and Development data shows.

Canada, Germany, and France each spend about 11.5 percent of their economy on health care, compared to 17.6 percent in the U.S.

We could have eliminated the income tax in 2010 had we adopted the Canadian, German, or French health-care systems.

Look at your pay stub and how much goes to federal income taxes, then think about the unnecessary economic pain American health care causes you.

Think about all your pay stubs over the last fifteen years and how much you paid–and think about what you could have done with that money. If you run a business, think about all the potential business you might have lost. Meanwhile, conservatives caterwaul about a system that preserves private health insurance companies and decry ‘socialism’–so that they might pay higher taxes.

Alternatively, if we split the savings half between you and half between fixing all the broken things (including TEH SCIENTISMZ!), that would be hundreds of billions of dollars per year fixing all the broken things. Which need fixing.

If reformers had focused on this, I think it would have gone a long way to dent the “I want to keep my insurance” mindset. Like my Uncle Harry used to say, rich or poor, it’s always good to have money.

Aside: Since taxes, serve a vital role in preventing inflation (especially top-down inflation with a progressive system), I wouldn’t want to eliminate the income tax.

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2 Responses to The Cost of the U.S. Healthcare ‘System’

  1. dr2chase says:

    There are other ways to look at the astounding amount we spend on healthcare — if spent with Spanish levels of efficiency, we could provide medical care to everyone in North, South, and Central America, and except for the Canadians, we’d all be better off.

    Or you can look at that 6%-of-GDP extra spending that we get nothing for, and wonder if we really ought to think of our economy as only being 94% the size that we think it is.

    • Robert L Bell says:

      Excellent points.

      However, given that our economy has been running at 6% below capacity since 2008 and we still can’t get the austerians to quit choking off the recovery I have little to no hope that the mere fact that THIS WOULD BE A REALLY GOOD IDEA is going to lead to anything constructive.

      Sorry for shouting, but my patience at long last is wearing thin.

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