There’s little disagreement that healthcare costs in the United States currently amount to $2.5 trillion per year, or at least for this year.
The average annual cost of a family policy is now $13,375 and if costs continue to rise at their current rate, this figure will be $24,000 in 10 years, all according to the non-profit Henry J. Kaiser Family Foundation and the Health Research and Education Trust.
Noam M. Levy reporting from Washington in the L.A. Times said: “With healthcare costs rising faster than the cost of living, the country is expected to spend more than $30 trillion on healthcare over the next decade if nothing changes.”
The uninsured are understandably reluctant to jump into such an ineffective system. John Garamendi, currently the Democratic lieutenant-governor of California and previously the state’s insurance commissioner, said this week that: “We are about to force at least 30 million people into an insurance market where the sharks are circling.” He went on to say: “Without effective protections, they will be eaten alive.”
The taxpayers should be even more concerned, inasmuch as a good deal of the tab will be picked up by them.
The eventual course of healthcare is unavoidably intertwined with the future path of economic conditions. A continued surge in unbridled costs will likely add a much greater burden to our national debt and this could result in more negative ramifications throughout the economy.
The healthcare plans now under consideration in Congress and by the Obama administration do not call for limits on prices but, if we expect the eventual reform package to responsibly represent the interests of the taxpayers, perhaps they should.
Price controls are difficult to manage and are, for the most part, unpopular, but which is worse, unrestricted cost increases or a program to impose brakes on the situation? Sometimes it’s a necessary evil.
In considering this question, it might be well to ask ourselves - why is it that we are well aware that healthcare costs have risen much faster than the cost of living, but we have little idea exactly where the excess spending lies? Is everyone padding the bills, or is it just focused in particular segments of the industry?
It would seem to make sense to first determine where and why the prices are escalating to the extent that they are. Then, if it turns out that certain sectors have been unreasonably gouging the system…let the price-control axe fall where it will do the most good.
Dave McGill, News Correspondent
Dave’s column, “The Contrarian,” generally published every Friday, to Gather Essential News and other groups will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day. It will also often appear on other days of the week
Dave has been a senior officer of an eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development.
You can find all of Dave’s “the contrarian” columns at: http://gather.com/thecontrarian. Keep up with Dave’s other postings and Gather activity by joining his Gather network at: http://atadaskew.gather.com. You’ll find Dave and other News correspondents, plus celebrity content and plenty of news experts at: news.gather.com.
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Comments: 50
It reminds me of a quote by Winston Churchill, something along the lines of
You can count on America to do the right thing, just as soon as they have exhausted every other possibility.
Incremental does not do this. We need to enact a single-payer system from the start and let insurance companies develop optional product from there. Do not allow tax deductions for the premium on these optional products -- do not tax the $$ contributed to the "base" insurance package. It is time to make a level playing field.
Yes!
We have seen down through the years that reforms do not work because they only last until a new president is elected and then the first order of business it to destroy any progress made.
I think their is going to be a great shake up in Washington politics this time if we do not get the public option and price controls on drugs the majority of the public wants.
Be careful now. Why are you saying that we should dispassionately analyze the reasons for the high costs and implement particular solutions to address them up to the draconian and undesired price control idea?
Wouldn't it be better to just cram through an unread bill prepared behind closed doors by we don't know who and which is passed under cover of darkness regardless of the cost, regardless of it's violation of the spirit of House/Senate rules and and without concern that it violates the Constitution. Wouldn't that be better? Dave, we need to do something now. NOW!
"We are about to force at least 30 million people into an insurance market where the sharks are circling. Without effective protections, they will be eaten alive.” California Lieutenant-Governor John Garamendi.
John worked very hard against big insurange companies and for that I admire him. He is campaigning to be my U.S. Congressman and I hope he is elected. We need people like John to representr us.
Something needs to be done about the cost of health care. There are many things that can be done. We need to let our representatives know that we expect them to do the right thing for the citizens of these United States rather than big business.
And that, in itself, is a shameful statement, implicit with the thought that they don't care as much for the people they represent as they care for themselves...Sad.
Wilka
I do hear about poor health, but I also hear about that it is cause by poor diets (by choice), poor physical activity (by choice), poor lifestyle habits such as excessive drinking and smoking, and risking activities such as high speed driving. I don; hear anyone saying how the reforms will change any of those habits so what is the crisis? Is personal choice or poor medical care?
I hear how 50 million people aren’t covered by medical care insurance. I hear that if we add all of them to the insurance system, we increase the insurance coverage by 20%, the cost of medical care which is about 20% of our economy will go down. If we add 50 million people the cost of medical will go down and that is somehow going to make medical care a smaller part of our national spending. How gullible do they think we are?
I have four questions;
1) What is the difference in our medical care today compared to when it was deemed affordable?
2) What is the difference in the individual’s (on average) health today and when medical care was deemed affordable?
3) When and where have wage/price controls ever worked?
Using the 50s and 60s as the time frame for affordable medical care/treatment; the technology, the expertise, and the number of people involved in medical care today is far superior to then. There are many who reminisce about the “good olds”, not I, when things were affordable because what we had then would have allowed me and mine to have the quality of life we have today. Regularly read about people who receive treatment that is consisting in the millions and complain about the cost. If this was 50 years ago their medical bills would never have been able to reach even one million.
Based on what I hear, today the overwhelming contributor to the demand for medical care is obesity (from chronic conditions such as diabetes, high blood pressure, heart failure to such is as joint failure). Even worse they say, it is a major problem in our children. 50 years ago that was both a minor contributor to needing medical care and even a rarer problem for our children. As best I can tell then if we eliminate obesity then we significantly reduce the demand for and therefore the cost of medical care.
4) Why is everyone so quick to change things that the individual has no responsibility for and little chance of working and never talks about what the individual can do to lower their need for medical care?
As best I can tell when you control prices it comes down to discouraging improvements in quality of service/equipment, investment in innovation is discourages, and higher quality people are encourage to go elsewhere to develop their talents. Maybe I am the exception, but truth be told how many of you to work where I am underappreciated (I get lower pay than others doing equivalently skilled work), where everything I do is questioned (there is a detailed prescription of things you can do, such as what the government always creates when it is controlling/regulating something), and no one is giving you better tools to work with?
It isn't the "health care" its the system, it's all that "overhead" in the system that is the problem. The delivery of health care services by doctors, nurses, and others who actually do things that help people is a good thing and we have some excellent people working in those areas.
But back up another step and look at the bookkeeping, the insurance, the profits and expenses in the drug industry. Look at all the people working in the system and all those buildings and all that equipment which is just to process forms and move money from one party to another. Those activities don't improve anyone's health or fix any physical ailments. Those activities are waste and corruption in office. Those parts constitute more than half of the expense of the system we use. Those parts are the problem.
I agree there appear a lot of potneital for a lot of cost reduction by improving effeiicenies both in the adminstrative and the application of medical care.
What my frustration is that no one is talking about the care we are getting and the helath of the people who are getting the care. Before anyone starts screewing with the laws governing medical care and creates governeemtn control (like they have figured out how to be effiecient in managing anyhting) we first need to establish what are we trying to improve or at least maintain.
If we want to reduce the cost of medicare care without having some way to meausre the of the health of people then we will get cheap medical care.
If we want to make medical care more efficient then we need to measure (and publish the effectiveness of those providing the care) so the pressure will be on shifting cost to imporved care.
If you want to eliminate corruption you make the the system more competetive not governemtn controlled. The most current example of benefits of governement control in Michigan is the City of Detroit.
As for the insurance companies, you have to decide who pays them and why.
My insruance company is paid by the employer as part of a way to entice me to stay with the employer. That was who was the major drive for medical insruance and others such as for drugs, dental, and optical. Or like GM legal.
If you don;t think the employers need help in getting fair value then make it so only the individual pays. But remember how well that has worked for mortgages. And for me my employer develop ways both internally and with the insurer to help the employees work at improving their own health.
Before we all run off half cock (a gun half cock is not ready to fire) we need to decide what it is we want to be better and maybe even why. DO we want better health, better medical care, innovation in medical care, or do we want cheaper medical care. Pick 3 of the 4 because you can't control all 4.
The argument that wage and price controls were more important than single payer is already made. Few countries on that list has a true single payer system, the UK has 15% in private insurance, but all of them regulate by wage and price controls.
We have been misdirected towards single payer arguments.
What criteria do you use to score the quality of health in this or other countries?
What criteria do you use to measure the quality of medical care in this or other countries?
Should the criteria be the same or do you think it should be what and how each country wants to report their performance?
Why don;t you pick a country who you think does better than the US and let us see if we can compare them to the US?
What criteria do you think is important when deciding whether the countries health is good or what criteria do you think is important in determing the quality of medical care in a country?
As I understand it in some countries the death of a new born is not counted as part of the medical care data if it is below a cettain weight, while in the US if the baby makes it to medical care it is counted. WHich do you think is a fair representation?
This article talks about a minimum infant weight in Germany being 1 pound otherwise the baby is considered still born, in France it says a baby must reach 26 weeks to be considered viable. Here if the bay is born with any signs of live it becomes art of the data for infant mortality.
WHat criteria do you think should be used as a minimum 1 pound, 26 weeks, or signs of life?
It seems to me that if you choose one number that is less inclusive than the signs of life the reporting country is much more likely to appear to have a better performance, or as some are claiming better health care. What do you think?
http://www2.timesdispatch.com/rtd/news/opinion/op_ed/article/ED-HINKLE11_20090910-191206/291895/
good article.
If there is a Chrisis in the health care why do most of the benefits not come into effect until 2013?
Back a few years ago I, as a healthy individual could get insurance that covered evrything for about $200 a month. The same policy for an individual of the same age now would be about $1,500. About the same considering that in the last 45 or 50 years the value of a dollar has gone down so much that $1,500 would be about the same as back then at $200. A really good job then paid about $3 an hour. The same job now would be $25 to $30 and hour.
Considering the advances in diagnostics alone the cost to hospitals has risen fast. We live longer than at any time in history because of health care and diagnostics.
The people pushing legislaton NOW are misrepresenting the truth and publishing figures that look really bad until you break them down to cover like time frames.
So health care will go up and so will the COL and wages. Everything remains the same.
We have only the liberal Democrats making these wild claims about the cost of health care and they want their bill passed.
First, our costs per capita are twice as high as the next most ecpensive country, Switzerland.
Second, the measure of our health by such yardsticks as longevity and infant mortalithy is relatively poor, suggesting that we're not getting our money's worth.
Third, there are at least 30 million and perhaps as many as 44 million people who have no insurance coverage whatsoever.
Foreclosures, caused by health care, begone!
So, the next time you need surgery, go see a politician. Just like Congress, you don't think that the American people are smart enough to react to changes in government policy. That's what we call, "The law of unintended consequences" (or "The law of stupid politicians", whichever you prefer).
My cat's pills were costing over fifty dollars for a three month supply. We found a place on the Internet where we could get the pills for just over $30.
Thank heavens we can care for our cat. But if my husband or I become ill, heaven help us. Even with insurance, we most likely will not be able to make the bills.
Maybe we need to start protesting again like my generation did agaisnt the war in Vietnam.
Put yourself in the orthopedic shoes of the senior citizens. They are being told that their healthcare will soon be put in the hands of a bunch of lawyers and incompetent lying politicians- the best is the outrage that these scared to death seniors have the nerve to say No you Can't.
They saw and heard Obama tell that woman that perhaps at your mothers age it would be best to just give her pain- killers rather than a pace- maker to keep her alive.
Her mom got the pace maker and is alive and contributing to society 7 years later.
Knowledge you get from reading a book
Wisdom you get from life
Seniors have been around the longest, they know how poorly government runs anything they have seen all the disastrous effects of big government run anything. And they will not put their lives in the hands of a bunch of Political-liars-thieves and Bunglers.
First we the people should demand that all these politicians pay for their own health insurance out of their pockets and get off our backs.
Lets stop the pitiful conversations about whether or not the elderly in America are worth the cost of keeping them alive. Does anyone stop and think how worthless these elders must feel? your mom-dad, thinking that maybe I should die for the good of other Americans.
What a sorry day in America.
and Hillary-care, just Republican radical attacks with no points ... enough of Republican "care"-lessness and lies.
So, what do you want? "Gas lines" outside of hospitals and doctors' offices? Canadian type 5 or 6 month waits for "urgent" care?
Price is not good or bad, it is the mechanism that the market uses to adjust supply and demand until they are stable. When the politicians use price as a whipping boy and the public allows them to set prices we either get a shortage of supply and excess of demand, because price is too low, or and an excess of supply and a shortage of demand because the price is too high.
I know you are a smart guy and know these things, but some of your readers may not have had ECON 101 and may be tempted to repeat the mistakes of the past. That would be a disaster when applied to our health care system. At least no one died from sitting in a Nixon gas line.
I guess I missed it.
So, the question is, will it continue?
At this point, it seems that it will. There may be a "reform" and the industry may benefit from the tens of millions who will be forced into the program, but will our healthcare no longer be twice as axpensive as the next most costly country and will the measures of our health improve?
The millions of dollars being pumped into the campaign bank accounts say "NO !"
As usual, the winners will be the healthcare industry and the losers will be the patients and the taxpayers...
This being the case, the solution to the problem is to give those same corrupt politicians more authority, allowing them to regulate prices, and their corrupt regulation of prices will somehow protect "the patients and the taxpayers".
You usually take logical positions, but you are losing me on this one.
I seriously think that there is finally enough light cast on this matter that the health care meme is starting to burn and flame out of control. The end for the insurance companies is going to come soon.
Once that happens we are going to see the rest of the iceberg of the parasite that has been feeding off America and through America the world for the first time really, better and more clearly.
We will be lucky to get into the new world order before the old world order collapses around our heads.
I am not saying throw away the whole concept, but it can and needs to coexist with a civil society that is inclusive of all people, not just those with vast amounts of capital and power.