The Unbelievable Cost of Free Health Care

Okay, gang, here it is…  The long-awaited discussion on universal health care.  You’ve been clamoring for it, and I’m game, so let’s chat.  First, what I believe…

Unbelievably Expensive / Taxes Through the Roof 
I believe that pulling health care under the umbrella of the federal government and paying for it with tax dollars will create an unbelievably expensive line item on the federal budget.  As it stands already (without universal health care), the cost of Medicare and Medicaid is unbelievable.  The 2007 federal budget allocates $387B for Medicare and $205B for Medicaid, totaling $592B … larger than any single line item on the budget.  For comparison, we are allocating $503B for defense in ’07.  This is to cover medical expenses for the 55 million poorest Americans — roughly 18% of the country.  So, even if we were only going to provide the same service to the rest of the country (which we won’t; it’ll be way more), that means we’d have to increase the budget for medical by about 450% to about $3.3T.  Total tax income in 2007 is projected at about $2.5T.  Do the math, your taxes would triple.

Don’t Rely on a Massively Inefficient Government
I also feel that (echoing some of Bill Woessner‘s comments) the federal government has proven that it’s absolutely terrible at managing large complex processes, and in the attempt would descend expertly into a massively inefficient, massively overpriced bureaucracy.  It would make Social Security or the IRS look like well-oiled machines.  We already pay for some of the basic elements of health care (in Medicare and Medicaid) for the elderly and the down-and-out, and we can’t even run that system efficiently (wrought with bureaucracy), let alone make it financially solvent.  Can you imagine how this would be exaggerated in attempting to establish a system that handed everything for everyone?

And speaking of inefficiency, isn’t it a well-known fact that universal health care systems in places like Canada, the UK, France and elsewhere take forever to get things done?  People from all over the world clamor to come to our country for surgery that can’t wait, because (among other reasons) in their progressively advanced universal health care system, waiting is all their doing.

Not a Fundamental Right
I also believe that universal health care is not a RIGHT in this country.  We are endowed by our Creator with the inalienable rights of life, liberty and the pursuit of happiness.  We are guaranteed the opportunity and freedom to do with our lives what we will.  Nowhere is the basic human right of “good health” or “health care” guaranteed.

Let’s get an (easy) extreme case out of the way…  Many choose to use their freedom to indulge self-destructive patterns – reaping the rewards of everything from obesity to physical addictions to sexually transmitted diseases.  As a taxpayer, should it be my obligation to pay for these choices? 

But this group is a small percentage of the people who would be covered by a universal health care system.  For everyone else, I think the government has an obligation to provide clean water and sewage, basic food needs, a fundamental level of health (fight the most pervasive diseases, etc).  This is all part of a living in a modern, wealthy society.  I also think the government is an excellent oversight mechanism (organizations like the CDC or the Office of the Surgeon General), and should have that authority.  However, we have to draw the line somewhere.  I just don’t think that the feds should RUN any more programs than they have to.  They most certainly should not absorb the responsibility for everyone’s health and well-being.  That’s just crazy expensive and crazy impractical.  I have to believe there are other ways to make health care affordable for everyone.

We’re not Just Talking about Minimums 
Brad has repeated focused on minimums (the government should provide minimal health care for everyone), but that’s not the proposal on the table, is it?  Someone like Hillary Clinton would replace our current system with one run entirely by the State.  That’s a far cry from “minimal”, isn’t it?  Don’t we already provide for “a minimum standard” by making Emergency Room treatment mandatory – regardless of insurance coverage, etc?  This alone is an incredible drain on the system, because it’s taken advantage of left, right and center.  Also, the existing Medicare / Medicaid infrastructure provides for the health care needs of over 1/6th of the nation’s population as it stands.  Doesn’t this also constitute providing “a minimum standard”?

People Will Take Advantage of “Free”
And speaking of that…  When something’s free, it’s taken for granted and abused.  Period.  That’s human nature.  If I have to pay for my doctor’s visit, then I’m more likely only to go when I actually need to.  If it’s free, I’d go for even the slightest thing.  I can’t tell you how many people I’ve known who took 45 minute showers when they were renting and water was included, but suddenly started taking 10 min showers once they had to pay the water bill themselves in their newly-purchased home.  The same is true at a restaurant – you eat more at the buffet than when you order off the menu, or if someone else is buying then most will order the more expensive entree.  The same is true with a car – you don’t invest in preventative maintenance on a car you were given.  How many people do you know who treat a rental car with far less care than their own?  On and on it goes.  Wouldn’t making our system (appear to be) free cause it to immediately be overrun and beaten down by the trivial “needs” of every person with a hangnail?  Wouldn’t that just exacerbate the cost and inefficiency concerns I’ve already mentioned?

It Doesn’t Work Elsewhere
Lastly, haven’t universal systems like the ones in Europe and Canada proven that this just doesn’t work?  Federalizing the system kills its quality.  How many people fight their way from Minnesota into Canada for major heart or brain surgery each year?  How many fight to get into our system from Canada (or all over the rest of the world) each year?  Doesn’t that tell you something?  Broader topic (an aside), but…  Why are we always trying to model after failed and failing systems?

Conclusion
Don’t do it.  It’s too expensive.  It’s inefficient.  It will encourage abuse.  It doesn’t work elsewhere.  It’s a bad idea. 

Your Turn
Okay, I’m had my say, now it’s your turn.  Open shot…  What do you think?  Pros?  Cons?  Reasons for?  Reasons against?  I want to hear your opinion!

Technorati tags: , , , ,

Advertisements

About Jeff Block

Lover and follower of Christ. Husband and father. Writer and seminary student. On a long journey, learning to swim with the current of God's love and walk with Him in the garden in the cool of the day.
This entry was posted in Business and Finance, News, Politics and Culture and tagged , , . Bookmark the permalink.

13 Responses to The Unbelievable Cost of Free Health Care

  1. Brad Bull says:

    First a few points in my argument.

    1. We already have a de facto universal heath care.

    As you mentioned, by law emergency rooms cannot refuse treatment to anyone. That means anyone who cannot afford health care and need medical attention will go to an emergency room. Emergency room procedures are easily 3X more expensive than scheduled visits. This cost gets passed on to you.

    2. An ounce of prevention is worth a pound of cure.

    You made the point that most people will not seek medical attention until they absolutely have to. With a universal health care system people will be more encouraged to perform routine check ups and preventative care which will amount to a huge savings in the long run.

    3. Insurance companies exist to make a profit.

    Many insurance companies exist to make a profit. This can only be done by discouraging you to seek medical help and by charging you more than they spend on you (also by negotiating prices, which is a good thing). The government will not seek to profit by your medical care.

    4. Is the Canadian system horrible?

    I have done some looking and it appears the problem of long wait times is true. I don’t know if this is a problem directly caused by universal health care or Canadian infrastructure. Their are large rural expanses in Canada that are hard to service. But look up “health care in Canada” in Wikipedia and at the bottom you will find a comparison to the U.S. showing the Canadian system is cheaper per capitaq and Canadians are generally healthier.

    5. Less bankruptcy helps the economy

    The number 1 cause of bankruptcy in our country is due to large medical expenses. With universal healthcare families will be more secure, bankruptcy filings will decrease and this will benefit the economy.

    Now onto Jeff’s comments.

    I admittedly don’t know how much the system would actually cost, but I know I have had very large medical expenses in the past and wouldn’t anticipate paying much more if at all to what I have paid in the past. I think the system would be more efficient due to the reasons I listed above. However, the expense from universal healthcare would be predictible and you could plan for it, compared to unexpected medical expenses. This expense should also be pre-tax, which would reduce the overall impact to your wallet.

    We obviously disagree on whether this is a fundamental right. But, I am sure you agree with me that it is ridiculous to think that universal healthcare will create more junkies, increase obesity, etc. These problems will exist with or without this system. I personally feel their is a general public health concern that outweighs my anger at the self-destructive choices of other people.

    I completely agree with you that this system is more that the “minimum” lifestyle that I have agrued in other topics.

    I do agree that in general most people will take advantage of something that is free. But, medical care is different. I am not going to run out and get cancer because treatment will now be free. And noone is proposing that cosmetic surgeries would be covered by this. In fact I was debating the other day if orthodontia should be covered, we agreed it probably wouldn’t be.

    Obviously their would be alot of decisions that need to be made. For example abortions could not be covered due to the large number of tax payers who would object to their tax money going there.

    Conclusion
    I think we can make this work. We can take the best of other systems, learn from their mistakes, and create accessable healthcare for all. We can do this without bankrupting the country.

    Like

  2. Brad Bull says:

    In doing more research I have found the following countries have universal healthcare, or are in the process of implimenting it. From Wikipedia:

    Argentina, Australia, Austria, Belgium, Canada, Cuba, Denmark, Finland, France, Germany, Greece, Ireland, Israel, Italy, Japan, The Netherlands, New Zealand, Norway, Portugal, Russia, Saudi Arabia, Seychelles, South Korea Spain, Sri Lanka, Sweden, The Republic of China (Taiwan), and the United Kingdom are among many countries that have various types of universal health care systems.

    Mexico, South Africa, and Thailand are among those nations attempting to implement universal health care systems.

    Like

  3. Jeff Block says:

    Wonder what the average income tax rate is across those countries for a median income family ($60 income for family of four in the US). Also wonder how the lifestyle of that family would compare to the lifestyle of the US family I just described.

    In the middle of 50 things. Will have to offer more detailed response later.

    Like

  4. Brad Bull says:

    Correction. I doing some searching it appears there is some debate about the amount of bankruptcies caused by medical expenses. It may still be the leading cause and the debate appears to span between 27% and 51% of declared bankruptcies.

    Like

  5. Neva says:

    Just adding a couple of very minor and random thoughts in between other things as I don’t have time for a full, detailed response right now.

    Orthodontia: I wouldn’t categoricly exclude it. Rather, exclude cosmetic orthodontia. For example, my oral surgery and orthodontia were actually medically required because of a potentially life-threatening problem. My canine teeth were buried in the roof of my mouth underneath my sinuses. Had this not been treated, they would have begun to rot, leading to a sinus (and possibly brain) infection that would be extremely difficult to treat. Obviously, to go back to the prevention is cheaper than treatment option, the orthodontia was a far better option than waiting until it became a problem.

    People going to a doctor for minor things: Good. I would much prefer that people do go to a doctor for potentially smaller problems because without being a medical professional, it’s very hard to know what is or isn’t a serious problem. A couple of personal examples here also… This week I went in for a CT scan because of vision problems and intermittent loss of feeling in my hand and face. Sound pretty serious, right? No, just migraine symptoms I’d never experienced before, not a big deal, as it turns out. A year ago, my father went to the doctor because of a small but painful swelling on the back of his head. This sounds pretty trivial, and I suspect that without insurance he wouldn’t have let my mother talk him into seeing a doctor about it. It was metasticized lung cancer of an extremely aggressive variety. The reason we have doctors is because we can’t always interpret our symptoms and know what’s wrong and how serious it is. I would rather that people take more minor concerns to a doctor before it becomes a major concern. Can that be taken too far? Of course, but I would still rather err on the side of caution when it comes to health care.

    Going back to the point about trusting the government more than corporations, I think that applies here also. I would rather have a health system administered by a government that, however inefficient, is still nominally acting for the good of the general public rather than insurance companies that are acting for a profit and the good of the bottom line, not the health of those they serve. Additionally, I think universal health care could go a long way to reducing the commercialization of health care and pharmaceutical company advertizing and influence on physicians.

    I really think a lot of the differences between our philosophies here come down to the fact that I don’t believe higher taxes would be the end of the world if the money is put to a good purpose. I wouldn’t mind paying more if it meant that people like my uncle who lost his career due to a serious on-the-job accident that nearly killed him would have the ability to go to a doctor when they were ill without spending weeks deciding if they can afford it.

    Like

  6. Jeff Block says:

    Still nobody’s even begun to address how we’d pay for something like this. Brad, you just dismissed the cost out of hand, and Neva, it’s clear we’re talking about more than just “higher taxes”. The numbers I threw together in just a few minutes already point me toward thinking we’d need to more than DOUBLE our current taxation rates. That’s insane. How would that not utterly destroy the economy?

    On top of that, it’s pretty generally accepted that 40% of all government spending (at every level) goes to waste, stealing and fraud. On top of that, the biggest spending category (by a long shot) in the entire budget is already our entitlement system (which I’ve explained that I don’t buy into), so why would I want to throw TRILLIONS more at it, line the pockets of those stealing the (unbelievable amounts of) cash out of the system, and create seemingly-infinite new ways for people to cheat and defraud the system? … .even IF I believed it was for a good cause?

    Like

  7. Brad Bull says:

    The points I made in my first point contribute to my belief that the system would not cost as much as you estimate. My argument for this is that the 18% you are referring to does not represent an average citizen.

    Medicare and Medicaid are over-repesented by the elderly, who typically have far larger medical expenses that the young. Another contributing factor is the population of people who sustain medical problems that cause a downward spiral to Medicaid.
    (They can no longer work due to medical reasons so they lose their job, and therefore their health insurance. Because they can no longer work it is inevitible that they will eventually end up on Medicaid unless they are independantly wealthy)

    The only stabilizing factor I am aware of in this group are the very poor who have healthy childen that recieve Medicaid coverage.

    Based on these arguements I feel the actual cost would be far less than the $3.3T you estimated. I don’t know where, but maybe half that.

    Another thing I have discovered is that your argument that
    “People Will Take Advantage of “Free””
    Has been discredited. Google the “Moral Hazard Myth”

    Like

  8. Neva says:

    I did not speak to your numbers, largely because I am not convinced by your numbers. I’m not entirely certain how you arrived at them, but my best guess from what you said is that you looked at the portion of the public covered by Medicare/Medicaid and just multiplied the costs up to the rest of the population. Is this right?
    If so, I don’t think that’s accurate. Medicare covers the elderly and disabled, a segment of the population that requires a proportionally larger amount of medical care. It’s unreasonable to assume that the general public would need the same amount of care. I am quite certain that my grandparents on Medicare require a lot more medical spending per year than I do.
    Also, have you taken into account the amount of money that individuals and businesses would not be paying for health insurance and other medical expenses? How does that number compare to the increase in taxes? It’s not like we’re not currently paying for health care, so there would be some money freed up.

    Of course I’m not happy with government waste and fraud, but I don’t know that it’s automatically worse than corporate greed. Are you happy with the current system where drug companies spend tons of money to influence doctors to promote their drugs and make up the cost by charging patients and their insurance companies more for medications? Are you happy with the current system where insurance companies find reasons to deny coverage for various conditions while raising premiums in order to make a profit because drug costs are going up? Are you happy with the current system where pharmaceutical companies ignore serious medical problems in order to develop drugs for erectile disfunction, cholesterol treatment, and ADD because people with serious medical conditions don’t have as much money to spend and it’s all about what drugs you can make a profit from? Are you happy with the current system where drug and insurance companies are not forced to focus on patients’ best interests because they can lobby legislators and doctors’ groups to keep policies and practices favorable to a medical-industrial complex? Why should I want to spend my money to line the pockets of insurance and pharmaceutical execs and investors so they can buy doctors and ad time to up their market share without much regard to my health and well-being?

    I’ve actually lived in a country with universal health care, and what little interaction I had with the system was positive; I received efficient, effective treatment on the few occassions I had need of it. One side effect that I found very noticable was the focus of the medical research community. Medical researchers were talking about things like developing new antibiotics to deal with the growing number of bacteria with resistance to multiple antibiotics, developing and delivering treatments to third-world countries where mortality and morbidity rates are extremely high, etc. Medical researchers that I’ve interacted with in the States tend to be more focused on marketable treatment for diseases of the rich and elderly: diabetes, cholesterol, hypertension, Alzheimer’s, cancer.

    Like

  9. Bill Woessner says:

    Wow… Universal health care… Big topic. Far bigger than me, but I’ll put my 2 cents worth in, anyway.

    I’ve said this before (many times) but it bears saying again. Every aspect of universal health care pales in comparision to the question of whether it’s a right. And only the people can answer that question. Installing universal health care would be such a radical social change, it can’t be pushed on people who don’t want it.

    OK, let’s address the cost. According to the National Coalition on Health Care, the total health care spending for 2006 will be $2.25 trillion. Divide that by 300 million people and you get a nearly even $7500 per person. Is that expensive? Depends on how you look at it. My company spends about $9000 per employee for health insurance. That includes families, but the vast majority of our employees are single and have no kids.

    Federalizing the system kills its quality. I believe this may be a case where history would not repeat itself. The number one reason socialized medicine brought down the quality of care in Europe and Canada is that a lot of doctors left. If we switched to socialized medicine in the US, the doctors wouldn’t have anywhere to go. In addition, medical research would probably be largely unaffected (or perhaps even helped), leaving the US the number one country for medicine.

    An ounce of prevention is worth a pound of cure. I’m not really sure this is a failing of the health care system. I think it’s a quirk of our culture. Let’s face it, people hate going to the doctor. It’s time-consuming, it’s scary, it’s often awkward… Even people with excellent insurance, for whom the cost is not prohibitive in any way, resist going to the doctor.

    Insurance companies exist to make a profit. That’s a pretty lame argument. Every company exists to make a profit. But they make that profit by offering a service that people want. In the case of insurance companies, their service is mutual insurance. If people don’t want it, they wouldn’t pay for it. Moreover, making a profit is a good goal for insurance companies. It means that they have extra incentive to strive for efficiency and eliminate waste.

    I would rather have a health system administered by a government that, however inefficient, is still nominally acting for the good of the general public. This is a very scary statement to me. It’s not enough that the government be nominally acting in the best interest of the public. They have to really be doing it! I don’t accept the premise that the government always has the public’s best interests at heart. The government, after all, is largely in the hands of Congress. And they’re far more interested in garnering votes than the public good.

    Going back to Jeff’s big point about cost, I don’t really think socialized medicine would be siginificantly more expensive that what we pay, now. If you think about all the money that you pay in to the “health care system” (premiums, deductibles, co-pays, Medicare tax, income taxes for programs like Medicaid…), I think most people will realize that they’re already paying a lot. Maybe not $7500 per person, but definitely on the order of thousands.

    Furthermore, as Brad said, socialized medicine would reduce bankruptcies due to medical bills. Yes, that’s good for the economy, but that’s GREAT for the health care industry. The industry currently has to account for patients from whom they won’t collect payment. Of course, those costs get passed on to the rest of us. So if fewer people default on their health care bills, providers can lower rates, lowering the overall cost of health care.

    Overall, I’m on the fence on this issue. I lived in Germany for a long time, so I saw the benefits (and pitfalls) of socialized medicine. My belief is that the American people don’t want socialized medicine right now. If we do go over to socialized medicine, we have to make sure we definitely want it. Because once it’s done, it’s done. And, just like breaking up, getting rid of socialized medicine is hard to do.

    Like

  10. Brad Bull says:

    RE: it can’t be pushed on people who don’t want it.

    Why not, if the majority want it the minority will except it or leave.

    RE: My company spends about $9000 per employee for health insurance.

    Good point that this would help make U.S. companies more competative, and encourage foreign companies to set up shop in the U.S.

    RE: I don’t accept the premise that the government always has the public’s best interests at heart.

    Do you think insurance companies do?

    Come over Bill, get off the fence, the water is nice over here 🙂

    Like

  11. Neva says:

    I agree that, of course, I want a government that is actually working solely for the public good. As that’s impossible, I still would rather trust a government that has to justify itself to the public (“See what I’ve done for you to deserve re-election?”) than a corporation with few goals beyond profit.

    Yes, every company works to make a profit, and in case you haven’t noticed yet, that’s a good reason why I’m not thrilled with the idea of leaving everything to big business and market forces, particularly when it comes to health care. In order to maximize profit, an insurance company’s goals are to take in as much as possible in premiums while paying as little as possible in claims. The “as much as possible in premiums” is set by what people will pay, so that’s not something they have real control over. So in order to maximize profits, insurance companies have to find a way to adjust what they pay in claims downward. How is this done? Strict limits on what is and is not covered, including telling doctors what medication they can and cannot prescribe. Bargaining with health care providers to pay less than their stated prices for services (driving up the costs even more for those without insurance). Higher deductibles and copays for their customers.
    I see how all of these things are good for a company and its profit-margin. I even see how some of them (okay, one: bulk price bargaining) are good for their customers. What I do not see is how this is good for the health care system as a whole, which is what I was speaking to previously.

    Like

  12. Neva says:

    Okay, Brad, we need to quit posting simultaneously; it’s creeping me out.

    Like

  13. Brad Bull says:

    This string has been dead for a while, but I want to applaud republican governor Arnold Schwarzenegger’s bold new health care plan for California. From everything I have read and seen this looks like a bold step in the right direction. A big question about universal health care is the steps that need to be taken to get there. This looks like it could be the way

    Like

Join the Discussion

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s