Thread: Universal care cheaper and better than private insurance.

Originally Posted by Gun Grape

Oh come on man. Look around. What are the health effects of smoking? And how long do they take.

Compare that to being a fatbody. Diabeties, heart problems, joint problems
Long term drain on the health care system. Look at the fat teens that are getting type 2 diabetes. Unheard of years ago. And they are looking at a life of health problems.

I've seen the effects of both in my family.

Cancer, hyper tension, heart disease, stroke, obstructive pulmonary disease are pretty things. We don't need the "young" smokers to get sick to deal with those problems we have a steady supply of old smokers.

Again I ask do you think our healthcare system is more than twice as good as anyone else's? It costs twice as much and I am told here a for profit system costs less due to the efficiencies of it. How long can we sustain 15% a year heath care inflation?

Originally Posted by ba1025

Cancer, hyper tension, heart disease, stroke, obstructive pulmonary disease are pretty things. We don't need the "young" smokers to get sick to deal with those problems we have a steady supply of old smokers.

But those smokers are making it to an old age. How often do you see the onset of smokers illnesses before the individual is in his/her 50s or 60s?.
And although the cost of treatment is high, it is normally short term.

Children are developing heart disease, having strokes and suffering the effects of type 2 diabeties such as kidney failure and blindness from being fat.
Even a scratch can turn into a long term hospital stay. We will be paying for their care a very long time.

Again I ask do you think our healthcare system is more than twice as good as anyone else's?

I am satisfied with my healthcare system. I don't think that I pay too much and I receive excellent service.

Originally Posted by JAD_333

This statement tops them all. Can he be serious? We're at 16% now and we could be below 10% if we put together a cost-effective system. How can he blithely state that 30% will be ok? Is he thinking we'll be living to 150.

Another badly thought out statement, and this guy is at Harvard. What isn't spent on profitable medical care industry will be spent elsewhere. Who wouldn't rather buy new furniture than pay for $20K for a minor operation? So the furniture industry does better and the medical does worse. Where's the loss?

JAD,

This is not a zero sum game – it is a positive sum game due to real growth. So, more spending on health care doesn’t necessarily mean less spending on other things.

To illustrate this, let’s think of a dual income family that makes $80K a year. Spending 16% of their income on health care equates to $12.8K. Next, we take into account that real income will grow over time. Given that income has grown an average of 2.31% over the past several decades (the growth rate they use in the study), we will now determine what this family’s income will be in 2050 (the starting year is 2005)

Knowing the rule of 72 for compounding, we divide 72 by 2 and know from this that it will take less than 36 years for their income to double. The more precise way of determining the factor of how much their income will increase is (1.0231)^45 = 2.79. Thus, their real income will be $223K in 2050, and spending 30% on health care is $67K. They will then have $166K to spend on everything else. Put another way, after health care spending, they still have $76K more in discretionary spending power in 2050 than in 2005, so you can have your health care and more furniture (you can even go crazy and get that Italian leather sofa you always wanted).

While a bigger slice of the pie is being cut, the pie is growing faster than the slices are. These results are actually pretty boring in terms of the economics – it conforms exactly to theory.

http://elsa.berkeley.edu/~chad/hx300.pdf

Health care extends life. Over the past half century, Americans spent a rising
share of total economic resources on health and enjoyed substantially longer lives as a result. Debate on health policy often focuses on limiting the growth of health spending. We investigate an issue central to this debate: Is the growth of health spending the rational response to changing economic conditions notably the growth of income per person? We develop a model based on standard economic assumptions and argue that this is indeed the case. Standard preferences of the kind used widely in economics to study consumption, asset pricing, and labor supply imply that health spending is a superior good with an income elasticity well above one. As people get richer and consumption rises, the marginal utility of consumption falls rapidly. Spending on health to extend life allows individuals to purchase additional periods of utility. The marginal utility of life extension does not decline. As a result, the optimal composition of total spending shifts toward health, and the health share grows along with income. This effect exists despite sharp diminishing returns in the technology of life extension. In projections based
on the quantitative analysis of our model, the optimal health share of spending seems likely to exceed 30 percent by the middle of the century.

To tell a story from the abstract that is less technical, people on average prefer having both more years and a higher quality of life during those years (e.g., I want to be able to see my grandkids grow up and be able to play with them; this is worth more to me than buying more stuff for my house) than spending money on more furniture that may not even fit in their house.

Once again, while this paper doesn’t address the efficiency of the spending, it is important to frame the problem. More costs is bad is not a good problem solving approach. We must measure costs against benefits, and this paper (and Mankiw’s inclusion of its results) frames the problem in a more holistic way by forcing us to think about how spending relates to growing incomes as well as well as how it relates to the expected benefits gained from the additional spending, especially in terms of opportunity costs, or the benefits that would be gained from using this money consuming some other good or service.

Mankiw's piece wasn't on how to solve the problem, but rather how to frame the extent of the problem.

Originally Posted by ba1025

To those who believe our system to be more than twice as good as any other country because it is costs twice as much and the efficiencies of a for profit system increase that value. It's clear I think that idea ludicrous but for the purposes of discussion i will agree with it. That leaves one question.

This is a strawman. Point to me where someone has stated that it's twice as good. I don't think there's anyone here who is happy with the current setup, although that is not the same as saying that it isn't better than other systems.

Originally Posted by ba1025

How long can the current system sustain 15% a yr inflation rates before you consider it in trouble?

I've already called you on this statistic. It is wrong. In fact, costs have increased by 15% or greater for only two years between 1960 and 2006. Two years. Those two years happened to also be the two of the highest inflation years in post-WW2 history. Health care cost inflation has been 7% over the last decade for which we have stats (1997-2006).

Historical

Is it sustainable? Yes, see my post above. Is it optimal? No.

Originally Posted by Shek

This is a strawman. Point to me where someone has stated that it's twice as good. I don't think there's anyone here who is happy with the current setup, although that is not the same as saying that it isn't better than other systems.



I've already called you on this statistic. It is wrong. In fact, costs have increased by 15% or greater for only two years between 1960 and 2006. Two years. Those two years happened to also be the two of the highest inflation years in post-WW2 history. Health care cost inflation has been 7% over the last decade for which we have stats (1997-2006).

Historical

Is it sustainable? Yes, see my post above. Is it optimal? No.

if it isn't twice as good it's inferior for return per dollar spent than other systems. We spend twice as much. A for profit system is a superior one. I just extrapolated those claims from claims made here.


regardless of the source healthcare costs are rising much faster than the inflation rate. Anyone who doesn't get government insurance has seen that in their paycheck or their insurance bill
Health insurance jumps twice inflation rate - Health care - MSNBC.com

Health insurance jumps twice inflation rate
Study: Smallest increase since 1999, but costs up 78 percent since 2000 By several measures, health care spending continues to rise at the fastest rate in our history.

I once again ask for your reasoning. If costs rise far faster than inflation how is it sustainable?????


NCHC | Facts About Healthcare - Health Insurance Cost

In 2007, total national health expenditures were expected to rise 6.9 percent — two times the rate of inflation.1 Total spending was $2.3 TRILLION in 2007, or $7600 per person.1 Total health care spending represented 16 percent of the gross domestic product (GDP).

U.S. health care spending is expected to increase at similar levels for the next decade reaching $4.2 TRILLION in 2016, or 20 percent of GDP.1

In 2007, employer health insurance premiums increased by 6.1 percent - two times the rate of inflation. The annual premium for an employer health plan covering a family of four averaged nearly $12,100. The annual premium for single coverage averaged over $4,400.2

Experts agree that our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud. These problems significantly increase the cost of medical care and health insurance for employers and workers and affect the security of families.

Record Share Of Economy Spent on Health Care

By Marc Kaufman and Rob Stein
Washington Post Staff Writers
Tuesday, January 10, 2006; Page A01

Rising health care costs, already threatening many basic industries, now consume 16 percent of the nation's economic output -- the highest proportion ever, the government said yesterday in its latest calculation.

The nation's health care bill continued to grow substantially faster than inflation and wages, increasing by almost 8 percent in 2004, the most recent year with near-final numbers.

Record Share Of Economy Spent on Health Care - washingtonpost.com
PPI: Almost Half of All World Health Spending is in the United States
[QUOTE]

U.S. Health Care Spending In An International Context -- Reinhardt et al. 23 (3): 10 -- Health Affairs

How can we compete in a global economy with those numbers? Other nations pay labor and have a 6-7-8% of gdp healthcare cost. We pay labor plus 15% and that is sustainable. It's a boat anchor on our economy bigger than any capitol gains tax.

Originally Posted by ba1025

if it isn't twice as good it's inferior for return per dollar spent than other systems. We spend twice as much. A for profit system is a superior one. I just extrapolated those claims from claims made here.

No, that's fallacious reasoning. You need to think on the margin, not at the average.

At some point, you get diminishing marginal returns on any consumption. The first dirty water hot dog in Central Park is delicious. The second not so much, but it's still worth price. I spent the same on it as the first hot dog, but I get less satisfaction out of it. However, at some point, the benefits of consuming an additional hot dog are not worth the price of paying for the hot dog. I should continue buying hot dogs until the benefits I derive from stuffing my face as less than the costs.

If we look at the average return on benefits, because my most satisfaction was from my first hot dog and it will decrease for each hot dog I eat, the average benefit will decrease with each additional hot dog I eat. Therefore, if I use your reasoning, I should never buy an additional hot dog. However, we really shouldn't be looking at averages, but instead, the costs and benefits on the margin, or for the next hot dog that we have to make a decision on buying.

Even though my next hot dog will decrease my average benefit per dollar spent, that's not the decision criteria I should use. Instead, will this next hot dog increase my total benefit measured against the (opportunity) costs of buying the hot dog.

The one difference with health care is that in the beginning, you'd expect to see an increasing return on each additional dollar spent on health care. However, that caveat isn't an issue in the case of what we're talking about, which is what is the benefit of each additional dollar spent at the 8-15% of GDP range, which I think we both would agree is in the decreasing marginal return range.

Originally Posted by ba1025

I once again ask for your reasoning. If costs rise far faster than inflation how is it sustainable?????

Read what I wrote. A pie that grows faster than the piece that is being cut is sustainable. It's really not that difficult of a concept.

Originally Posted by Shek

No, that's fallacious reasoning. You need to think on the margin, not at the average.

At some point, you get diminishing marginal returns on any consumption. The first dirty water hot dog in Central Park is delicious. The second not so much, but it's still worth price. I spent the same on it as the first hot dog, but I get less satisfaction out of it. However, at some point, the benefits of consuming an additional hot dog are not worth the price of paying for the hot dog. I should continue buying hot dogs until the benefits I derive from stuffing my face as less than the costs.

If we look at the average return on benefits, because my most satisfaction was from my first hot dog and it will decrease for each hot dog I eat, the average benefit will decrease with each additional hot dog I eat. Therefore, if I use your reasoning, I should never buy an additional hot dog. However, we really shouldn't be looking at averages, but instead, the costs and benefits on the margin, or for the next hot dog that we have to make a decision on buying.

Even though my next hot dog will decrease my average benefit per dollar spent, that's not the decision criteria I should use. Instead, will this next hot dog increase my total benefit measured against the (opportunity) costs of buying the hot dog.

The one difference with health care is that in the beginning, you'd expect to see an increasing return on each additional dollar spent on health care. However, that caveat isn't an issue in the case of what we're talking about, which is what is the benefit of each additional dollar spent at the 8-15% of GDP range, which I think we both would agree is in the decreasing marginal return range.



Read what I wrote. A pie that grows faster than the piece that is being cut is sustainable. It's really not that difficult of a concept.

The % of the gdp spent on healthcare is rising at a brisk pace. It would seem that the pie slice is growing faster than the pie. That's apparent by the inflation rates you posted for healthcare. My 15% was from a bad source. Your numbers were the ones I was able to verify. They still show hwealth care costs rising much faster than inflation. I believe that healthcare costs rising at twice the inflation rate is unsustainable


The hot dog analogy is great. in America i am getting three hot dogs i have healthcare as part of my wages. Granted my three hot dogs cost me a bit more but i still get them. the same is true of most government employees and those in unions
You from the sounds of it are active military. you are getting your 3 hot dogs. The same is true with any other military personnel

Where the analogy breaks down is the woman who is less likely to be insured that has to go to an ER not the park to maybe get a hot dog with a bun only when she feels hunger pains. That's evidenced by our HIGH infant mortality rates. If pregnant women were getting the three hot dogs at the park you and I get they wouldn't be loosing their children:( i think that's really an area of tragedy. How can we say we have the best when we have the worst infant mortality rate of the G7 because of the lack of "hot dogs" for pregnant women? our systems shortfall even w/o looking at cost is in "hot dog distribution in the park"



The uninsured in our country have to go to an ER for a hot dog as well. But by the time they get there they are starving and it takes 6 hot dogs to fill them up because they didn't get 3 regular hotdogs at Central park and walk around gorged like you or I. Then when they leave the ER and go home they often need additional hot dogs because they developed a chronic need for extra hot dogs to live because there wasn't a system in place to even get them access to 1 hot dog on a regular basis.

Then there is the women who had a hotdog contract to get regular hotdogs but lost it either through a job loss, shadey hotdog contract distributer or a missed payment due to unemployment. She has some kind of pre existing disorder where she needs might need 6 hot dogs so she can no longer afford a hotdog contract and ends up in the ER waiting with the other guy.

We have an obesity crisis in health care as has been stated. Our problem stems from some getting more hot dogs than they really need and tipping the scale a bit and others being so malnourished that by the time they get to a place the system starts supplying them hot dogs it takes far more hot dogs than it should to bring them back to a healthy weight
i think hot dogs at Central park is a great analogy. You have the fat people eating to many and someone else who cant afford a hot dog waiting till the vendor discards the extras. Ever see someone grab a meal from a garbage can in America....I have:(. Truly hot dogs are not a necessity but healthcare is. Think of it in terms of oxygen. How can we accept a system where some people suffocate for lack of air? At some point not having access to good care kills whether it's the patient or a patients unborn or newborn/toddler.

this is unconscionable
Boy's Death Fuels Drives to Fund Dental Aid to Poor - washingtonpost.com

Originally Posted by ba1025

The hot dog analogy is great. in America i am getting three hot dogs i have healthcare as part of my wages. Granted my three hot dogs cost me a bit more but i still get them. the same is true of most government employees and those in unions
You from the sounds of it are active military. you are getting your 3 hot dogs. The same is true with any other military personnel

I'm employed in the private sector. I think I have great health care. I don't need no stinking government or unions, or worse, government unions.

Originally Posted by ba1025

Where the analogy breaks down is the woman who is less likely to be insured that has to go to an ER not the park to maybe get a hot dog with a bun only when she feels hunger pains. That's evidenced by our HIGH infant mortality rates. If pregnant women were getting the three hot dogs at the park you and I get they wouldn't be loosing their children:( i think that's really an area of tragedy. How can we say we have the best when we have the worst infant mortality rate of the G7 because of the lack of "hot dogs" for pregnant women? our systems shortfall even w/o looking at cost is in "hot dog distribution in the park"

Why do you insist on democrat-esque anecdotal examples? Are you saying we can eliminate these rare occurances in a government health care system? Are you saying countries with a national health care systems do not have these problems?

We have high infant mortality rate? Compared to G7? That may be true. But have you looked at other factors? We have a far larger populatioin base with a higher birthrate. In fact, our illigal immigrant population is as big as some of the more advanced nations' entire population base. They bring their 3rd world customs over and warp our stats. Let me tell you something, they are still better off here suffering from our "high" infant mortality rate than back in their own countries. If not, they are free to leave.

Originally Posted by ba1025

The uninsured in our country have to go to an ER for a hot dog as well. But by the time they get there they are starving and it takes 6 hot dogs to fill them up because they didn't get 3 regular hotdogs at Central park and walk around gorged like you or I. Then when they leave the ER and go home they often need additional hot dogs because they developed a chronic need for extra hot dogs to live because there wasn't a system in place to even get them access to 1 hot dog on a regular basis.

They can go to charities too. But it's too difficult, too embarrassing, and too personal to actually ASK for help. It's just easier to fill out a form and get your free stuff from the government.

Originally Posted by ba1025

Then there is the women who had a hotdog contract to get regular hotdogs but lost it either through a job loss, shadey hotdog contract distributer or a missed payment due to unemployment. She has some kind of pre existing disorder where she needs might need 6 hot dogs so she can no longer afford a hotdog contract and ends up in the ER waiting with the other guy.

Quite an incentive to learn a trade and be active at looking for a job isn't it?

Originally Posted by ba1025

We have an obesity crisis in health care as has been stated. Our problem stems from some getting more hot dogs than they really need and tipping the scale a bit and others being so malnourished that by the time they get to a place the system starts supplying them hot dogs it takes far more hot dogs than it should to bring them back to a healthy weight
i think hot dogs at Central park is a great analogy. You have the fat people eating to many and someone else who cant afford a hot dog waiting till the vendor discards the extras. Ever see someone grab a meal from a garbage can in America....I have:(. Truly hot dogs are not a necessity but healthcare is. Think of it in terms of oxygen. How can we accept a system where some people suffocate for lack of air? At some point not having access to good care kills whether it's the patient or a patients unborn or newborn/toddler.

And a nationally subsidized, nearly "free" health care will fix this...how? People don't live healthy because they know they can get fixed up for very little money. If they had to pay for it and know they have to pay for it, they might take better care of themselves.

Originally Posted by ba1025

this is unconscionable
Boy's Death Fuels Drives to Fund Dental Aid to Poor - washingtonpost.com

You are free to start a charity and ask like minded people to help.

Originally Posted by ba1025

The % of the gdp spent on healthcare is rising at a brisk pace. It would seem that the pie slice is growing faster than the pie.

If we were only spending money on healthcare and nothing else, it would not be sustainable. However, healthcare is not the only thing in our "consumption" pie. Health care costs contribute to the rise in the overall price level, but its contribution isn't enough such that the price level is rising faster than the rate of growth, i.e., there is still real growth.

Originally Posted by Shek

JAD,

If you note from the statement, he doesn't state that the other national health care systems are successful per se, but only to the extent that they harness the market instead of having an all knowing bureaucrat make decisions.

Here's an excerpt from the body of the paper. There's some cherry-picking that is going on that probably makes the differential seem a little bit greater, but I doubt that the excluded data points from national health care system countries on some of these metrics would yield a vastly different result.

If you recall, I wasn't sold on a national health care system. My prodding and defense, if one can call it that, of national health has been more as devil's advocate rather than as convinced supporter.

Thanks to the many informative articles you've posted and what I have been able to glean in my own searches, my view comes closest to Stossell/Sullivan's, namely that market aberrations are adding unnecessary cost to our health care and that free medical care isn't free. Correcting market aberrations would go a long way to reducing costs.

Given the choice between a government run system and one that competes for consumers, I would choose the latter. But, as I have said, without any adequate response in this thread, a system that is beyond the reach of lower income consumers is inherently flawed.

The question then is, how do we have a market system and at the same time cover our neighbors who can't afford even moderately priced medical care?

I would like to see medicare and medicaid eliminated completely. That's probably a pipedream. But if private insurance could provide the same level of medical care the government does, wouldn't it make sense for the government instead to pay a part of their premium for private insurance while letting low income folks shop for their own insurance? Isn't that a way to tap into market forces, rather than the government being held hostage by medical providers?

Well, maybe we here haven't risen to that level of expertise, but we're getting there. Next, we have to start working on draft legislation. When I worked in Congress, I wrote a few bills (none passed). It isn't that hard. Of course, I am a joking. Politically, nothing will happen until both parties begin a bipartisan process for developing a plan at the state and national level.

Originally Posted by ba1025

That's evidenced by our HIGH infant mortality rates. If pregnant women were getting the three hot dogs at the park you and I get they wouldn't be loosing their children:( i think that's really an area of tragedy. How can we say we have the best when we have the worst infant mortality rate of the G7 because of the lack of "hot dogs" for pregnant women?

When you look at the causes of infant mortality in the United States, you will see that the majority are not due to lack of care. In fact, I'd make the argument that it is because many insurance plans are willing to spend so much money that the rate actually increases because babies that couldn't be brought to term elsewhere because it costs the state too much are brought to term or at least to a point where they are viable.

QuickStats: Infant Mortality Rates* for 10 Leading Causes of Infant Death --- United States, 2005<SUP>†</SUP>

There's also a definitional distinction that artificially lowers the mortality rate and makes the standard statistical comparison an apples and oranges comparison. This is from the "Grass is Greener" article I posted last night in the thread.

Similarly, infant mortality, a common measure in cross-country comparisons, is highly problematic. In the United States, very low birth-weight infants have a much greater chance of being brought to term with the latest medical technologies. Some of those low birthweight babies die soon after birth, which boosts our infant mortality rate, but in many other Western countries, those high-risk, low birth-weight infants are not included when infant mortality is calculated.24

24. In Austria and Germany, fetal weight must be at least 500 grams (1 pound) to count as a live birth; in other parts of Europe, such as Switzerland, the fetus must be at least 30 centimeters (12 inches) long. In Belgium and France, births at less than 26 weeks gestation are registered as lifeless. And some countries don’t reliably register babies who die within the first 24 hours after birth. For a full discussion of the issue, see Miranda Mugford, “A Comparison of Reported Differences in Definitions of Vital Events and Statistics,” World Health Statistics Quarterly 36 (1983), cited in Nicholas Eberstadt, The Tyranny of Numbers: Measurements and Misrule (Washington: AEI Press, 1995), p. 50. Some, but not all, countries are beginning to standardize figures, and future data may be more reliable.

Originally Posted by JAD_333

Thanks to the many informative articles you've posted and what I have been able to glean in my own searches, my view comes closest to Stossell/Sullivan's, namely that market aberrations are adding unnecessary cost to our health care and that free medical care isn't free. Correcting market aberrations would go a long way to reducing costs.

Kling's article at this post, Universal care cheaper and better than private insurance., is the one that has the most intuitive appeal to me thus far (Stossel's piece hits at the essence of Kling's post). Having read through a bunch of stuff as well, the market failure isn't adverse selection at all, but rather, that price isn't being allowed to serve it's role.

Cost insulation has people asking for more procedures than what may really be necessary (it's easy to spend other's money), and I suspect that this has resulted in doctor's marking up prices - if an insurance company pays it all, great, if not, then they'll still a nice chunk of change at the capped price. Also, if patients were more responsible for their decisions, then I think it'd also reduce litigation.

"Your honor, I know I refused the treatment that the doctor recommended, but he should have made me pay."

I think your idea of a public service corps of doctor's might be a decent solution for those communities/markets that are underrepresented. However, I suspect that moving to a health insurance system instead of the current health care cost insulation scheme might induce more doctors to become clinic doctors that are the frontline of health treatment by offering general practice care and screening for minor illnesses. I think that Walmart was already trying to do this in some areas.

Originally Posted by gunnut

They can go to charities too. But it's too difficult, too embarrassing, and too personal to actually ASK for help. It's just easier to fill out a form and get your free stuff from the government.

I agree it would be embarrassing, but that is me and probably you're coming at it from your own beliefs too. But believe me, when you're hurting and no one is there to help, you'll go to churches, Salvation Army or anywhere help might be available. That's what a lot of poor folks around my neck of the woods do when they're up against the wall. Maybe you don't have as much contact with people like that. I can't avoid it being in construction. When you actually meet people who can't afford to see a doctor or get treatment, your perspective changes dramatically.

I have been following this debate with great interest. Both sides have made valid points, as has JAD who is neutral. All I can say is, those countries that have a National Health Service view it as a positive benefit. In Europe it is seen as proof that we are living in a caring and civilised society. No-one has yet found the perfect system but half a loaf is better than no bread to a hungry person.