Healthcare, Socialized Medicine, and Free Market Fallacies

[Cecil James]

According to the Kaiser Family Foundation, it’s advancements in technology and medicine that has been the main driver of increased costs. MRIs, chemotherapy, patented medicines, neurosurgeries, etc. provide us with much care and longer life expectancies than ever before, but they aren't free.
Meanwhile, worker's wages haven't exactly kept up with these costs.

These costs have affected both private health insurance and Medicare/Medicaid costs. The private sector has adapted by simply increasing premiums or denying coverage to higher cost patients. Medicare and Medicain don't have this option (and senior citizens are among the more costly to insure). And private health insurers, in knowing that they won't be the ones footing the bill for these future treatments have no real incentives to provide real later-in-life preventative treatment, and thereby pass these costs onto Medicare (win-win and lose-lose!).
So we pay lots more per person for health care, and get less health care as a result. Notice how much better care is provided in other advanced countries.

See Also: International Comparison: Access & Timeliness
See Also: Runaway health care costs — we’re #1! (health care spending as a percentage of GDP)
Not only so we pay more on health care as a percentage of GDP, we also pay more in taxes (in other words, not including private sector spending) than countries with more government-run health insurance. Read Some slides on costs

”SOCIALIZED MEDICINE”

The phrae "socialized medicine" gets thrown around by detractors. Even a single payer system would at most "socialized insurance." A system of socialized medicine would mean government ownership/employment of the medical industry (ie hospitals, doctors, pharmaceuticals, etc). And as it is, most health insurance costs are already socialized.

With rising costs of health care, and an aging population, we are heading for a storm in Medicare costs. While it’s stylish to blame whoever’s currently president for increase spending, this is one of those factors that’s on the increase regardless of who happens to be president at the time.

And note: the vast majority of federal social spending goes to senior citizens, not the iconic “welfare queens” or a society growing “dependent on Governemnt” of fiscal conservative semantics. In other words, most social spending goes to the middle class.

And for the all talk about "bloated beauracracy" with government programs, the private sector is far worse 9at least when it comes to health insurance). This can be seen in the National Health Expenditure Report, which clearly shows costs have skyrocketed at a faster pace with private health insurance.

Entire Report (Warning: Kinda big PDF file)

The reason is that the costs below are incurred by private health insurance plans.

* Underwriting (researching prospective customers and figuring out how much to charge them, or if to cover them at all)
* Lobbying politicians to not pass any health reform that might cut into profits (See Also: Joe Lieberman)
* Running scare ads to trick people into thinking Obama wants to put their gramma away
* Overpaid CEOs and other execs
* Dividend Payouts
* Super Big Profit Margins

Our relatively privatized healthcare system is inferior to those of other large industrial nations. So the idea that our system can be solved making it even more free market-oriented is demonstrably false.
See Also:
* CBO: Senate healthcare bill would reduce deficit by $132B
* Politifact's dissection of the GOP's crappy ineffectual HC plan
* Why We Need a Public Health-Care Plan - Wall Street Journal
* Fixing Health Care Is Good for Business - Wall Street Journal
* Health Statistics > Death from cancer (most recent) by country
* 450,000 Doctors Demand: ‘Heal Health Care Now
* Support for National Health Insurance among U.S. Physicians: A National Survey

 

[DrunkenAsparagus]

The problem is that the United States doesn't have anything close to a free market healthcare system. In our system, due to tax breaks, employers cover most insurance plans. Because of this, there is little incentive among customers or insurers to watch their costs or shop around for the best price. This leads to overuse and negligent use of the system that drives up the price.

 

[Harry Guerrilla]

* Running scare ads to trick people into thinking Obama wants to put their gramma away
* Overpaid CEOs and other execs
* Dividend Payouts
* Super Big Profit Margins

Our relatively privatized healthcare system is inferior to those of other large industrial nations. So the idea that our system can be solved making it even more free market-oriented is demonstrably false.
See Also:

Those two things alone tell me your entire well planned posted is false.
Profit margins for insurance companies are slim and only a few pay dividends.

You also included the life expectancy argument which is invalid on it's face.
To many other things, besides medical care, are involved with that.

 

[Harry Guerrilla]

The argument that UHC inherently improves the life expectancy is pretty much a bunk argument that can be easily disproven.

Take a look at life expectancy in 1965 when Medicare was approved.
Then go forward 5 years, life expectancy for men improved .3 years, for women 1 year.

Can anyone tell me if this was because of Medicare or because it was naturally improving anyway.
I think we know the answer.

 

[Donc]

The argument that UHC inherently improves the life expectancy is pretty much a bunk argument that can be easily disproven.

Take a look at life expectancy in 1965 when Medicare was approved.
Then go forward 5 years, life expectancy for men improved .3 years, for women 1 year.



Can anyone tell me if this was because of Medicare or because it was naturally improving anyway.
I think we know the answer.

I,ll be back Harry. :2wave:

 

[RightinNYC]

http://www.nytimes.com/2007/11/04/business/04view.html

CARPE DIEM: Beyond Those Health Care Numbers: US Looks Good

 

[Cecil James]

The argument that UHC inherently improves the life expectancy is pretty much a bunk argument that can be easily disproven.

Take a look at life expectancy in 1965 when Medicare was approved.
Then go forward 5 years, life expectancy for men improved .3 years, for women 1 year.

Can anyone tell me if this was because of Medicare or because it was naturally improving anyway.
I think we know the answer.

Actually, the point was mainly to show that all this extra money we spend doesn't translate to better care. The data was can extrapolate, if anything, shows the opposite.

 

[Cecil James]

The problem is that the United States doesn't have anything close to a free market healthcare system. In our system, due to tax breaks, employers cover most insurance plans. Because of this, there is little incentive among customers or insurers to watch their costs or shop around for the best price. This leads to overuse and negligent use of the system that drives up the price.

And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours. Hence, you're on shaky ground arguing that we need a "freer" system.

And in fact, the tax breaks companies get make it cheaper for them to provide employees with coverage. Take away those tax breaks and health insurance becomes more, not less expensive for individuals.

 

[Cecil James]

Those two things alone tell me your entire well planned posted is false.
Profit margins for insurance companies are slim and only a few pay dividends.

You also included the life expectancy argument which is invalid on it's face.
To many other things, besides medical care, are involved with that.

I'll admit I was being a being over the top calling the margins "super big." But either way, they account for a cost that's passed on to the consumer that's not present in a public system. As for divident payouts; it doesn't matter if only a few insurance companies pay them; it's a few who largely account for most coverage for Americans.

 

[RightinNYC]

And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours.

Actually quite the opposite:

http://1.bp.blogspot.com/_otfwl2zc6Qc/Ry3G-q6PFFI/AAAAAAAACsw/9TDVhnyUYfw/s1600-h/le2.jpg

 

[Cecil James]

Actually quite the opposite:

le2.jpg (image)

I see, so if someone in the US lives long enough to be on Medicare, their life expectancy increases. YAY for public plans!

 

[DrunkenAsparagus]

And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours. Hence, you're on shaky ground arguing that we need a "freer" system.

Freedom and effectiveness of care aren't a 1:1 ratio. This is a huge oversimplification. When the government removes any free market price incentive (a critical part in calling anything free market) it isn't a free market.

And in fact, the tax breaks companies get make it cheaper for them to provide employees with coverage. Take away those tax breaks and health insurance becomes more, not less expensive for individuals.

At first glance, yes. However, these plans obscure the cost of insurance. People have no incentive to shop around for the best price. There is very little incentive to control costs.

 

[Harry Guerrilla]

And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours. Hence, you're on shaky ground arguing that we need a "freer" system.

Outperforms how?

I'll give you cost but how or where in other ways?

And in fact, the tax breaks companies get make it cheaper for them to provide employees with coverage. Take away those tax breaks and health insurance becomes more, not less expensive for individuals.

Individuals should be paying more, that's part of the problem now.
You take away pricing and people will run up costs.

 

[RightinNYC]

I see, so if someone in the US lives long enough to be on Medicare, their life expectancy increases. YAY for public plans!

How is that what you got out of those graphs and articles?

The point is that the US has a much higher mortality rate during life for various non-health related reasons, which artificially lowers our life expectancy. That directly contradicts your claim.

 

[Harry Guerrilla]

I'll admit I was being a being over the top calling the margins "super big." But either way, they account for a cost that's passed on to the consumer that's not present in a public system. As for divident payouts; it doesn't matter if only a few insurance companies pay them; it's a few who largely account for most coverage for Americans.

Their margins are usually around 5%.
Not exactly huge.

Many don't pay any dividend, believe me I know I was considering investing in them after the health care bill passed.
Those that do, don't pay much.

Aetna pays .04 a share in dividends, same for Cigna. :sarcasticclap

 

[Harry Guerrilla]

I see, so if someone in the US lives long enough to be on Medicare, their life expectancy increases. YAY for public plans!

There is nothing that proves that Medicare extends life expectancy.

Looking at the yearly life span statistics shows that we have been puttering up at a easily measurable average for the most part.

 

[drz-400]

How is that what you got out of those graphs and articles?

The point is that the US has a much higher mortality rate during life for various non-health related reasons, which artificially lowers our life expectancy. That directly contradicts your claim.

His point is, if someone is 70, or 75, or 80, they are on a socialized insurance plan. Those under 70 have a higher mortality rate in the us, which is why the mean life expectency is skewed, however those people are less likely to be on a socialized insurance plan, except maybe medicaid.

I am not sure were to find it, but it would be interesting to look at the median life expectancy, since it is more resistant to such outliers. However, none of these measures will tell us why the life expectancy is what it is.

 

[Harry Guerrilla]

His point is, if someone is 70, or 75, or 80, they are on a socialized insurance plan. Those under 70 have a higher mortality rate in the us, which is why the mean life expectency is skewed, however those people are less likely to be on a socialized insurance plan, except maybe medicaid.

I am not sure were to find it, but it would be interesting to look at the median life expectancy, since it is more resistant to such outliers. However, none of these measures will tell us why the life expectancy is what it is.

The vast majority of the advances in life expectancy have to do with adequate nutrition.
We're super on that end.
Other things involved work place safety, not smoking, and other mostly cultural practices (like not killing each other.)

 

[drz-400]

The vast majority of the advances in life expectancy have to do with adequate nutrition.
We're super on that end.
Other things involved work place safety, not smoking, and other mostly cultural practices (like not killing each other.)

I would tend to agree. It is hard to completely remove outcomes from health care financing, however I would say that the bigger concerns when speaking about this subject are cost and efficiency (maybe transaction costs, number insured, risk, etc), especially when we are referring to advanced nations, which tend to have similar though not equal standards of living.

 

[RightinNYC]

His point is, if someone is 70, or 75, or 80, they are on a socialized insurance plan.

His argument was: "And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours."

That's not true.

Those under 70 have a higher mortality rate in the us, which is why the mean life expectency is skewed, however those people are less likely to be on a socialized insurance plan, except maybe medicaid.

That higher mortality rate is due to non-health related reasons.

Mankiw points to a study by economists June and Dave O’Neill, and writes:

Americans are more likely than Canadians to die by accident or by homicide. For men in their 20s, mortality rates are more than 50% higher in the United States than in Canada, but the O’Neills show that accidents and homicides account for most of that gap. Maybe these differences have lessons for traffic laws and gun control, but they teach us nothing about our system of health care.

1. In a previous CD post, I cited a study from researchers at the University of Iowa that compares unadjusted life expectancy means in OECD countries from 1980-1999 to standardized life expectancy means, which account for the effects of premature death resulting from a non-health-related fatal injury. As the chart above shows (click to enlarge), the U.S. has the highest standardized life expectancy among the OECD countries (76.9 years), and 0.70 years higher than in Canada (76.2 years).

 

[Harry Guerrilla]

I would tend to agree. It is hard to completely remove outcomes from health care financing, however I would say that the bigger concerns when speaking about this subject are cost and efficiency (maybe transaction costs, number insured, risk, etc), especially when we are referring to advanced nations, which tend to have similar though not equal standards of living.

I think self managed medical is the best possible system because you remove the middle man, insurance companies and government.

It's funny to me, that the one area we have ignored in the whole health care debate has been the childhood disability issue.
A giant part of the system that has had very little government interference in pricing, subsidy and control.

Charity has taken care of a large portion of the costs of that particular aspect of the system.
All self managed baby.

 

[drz-400]

His argument was: "And yet virtually all the data can extrapolate shows that the "less free" healthcare industries of other large advanced countries outperform ours."

That's not true.



That higher mortality rate is due to non-health related reasons.

Fair enough, however I don't think he was trying to knock on medicare when he wrote that (he was arguing for similar programs), which is why his response was "I see, so if someone in the US lives long enough to be on Medicare, their life expectancy increases. YAY for public plans! "

 

[drz-400]

I think self managed medical is the best possible system because you remove the middle man, insurance companies and government.

It's funny to me, that the one area we have ignored in the whole health care debate has been the childhood disability issue.
A giant part of the system that has had very little government interference in pricing, subsidy and control.

Charity has taken care of a large portion of the costs of that particular aspect of the system.
All self managed baby.

I know very little about this sector, but I do know SSI does fund some poorer families with disabled children. Plus, you have to figure that some are covered by chip or medicaid. However, how many I do not know.

 

[Harry Guerrilla]

I know very little about this sector, but I do know SSI does fund some poorer families with disabled children. Plus, you have to figure that some are covered by chip or medicaid. However, how many I do not know.

Yep but SSI and Medicaid only fund poor children.
For middle class and upper income people, there is no other option, unless you want to purposefully impoverish yourself.

SCHIP is relatively new, many of these hospitals and charities were around long before this.

 

[drz-400]

Yep but SSI and Medicaid only fund poor children.
For middle class and upper income people, there is no other option, unless you want to purposefully impoverish yourself.

SCHIP is relatively new, many of these hospitals and charities were around long before this.

True, and I guess the hope is if you have a middle/upper class parent(s) they have a decent job and can get insurance through their employer or their own individual policies, though with the prior pre-existing condition filtering done by insurance companies I am not sure how many could get onto their parents policies. I am sure charity filled some gaps because I always see on the news some story about disabled children being helped out by someone.