The health care crisis is a product of federal legislation that was designed to take away choices from patients and doctors at every step.
Since 1970, the health care industry has undergone a revolutionary change. Before that time people were overwhelmingly (about 70%) in traditional indemnity plans where patients pay a certain percentage of health care costs. With the passage of the Health Maintenance Organization Act written by Ted Kennedy (D-Mass), very quickly over 70% of Americans were covered by HMOs.…
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26 - Daniel X. Wray
The health care system in the United States has been crippled by the Federal Government. For people between the ages of 18 and 55 the average health care annual expenditure is about $600(with the exception of childbirth related expenses). Even crisis intervention for critical life threating issues is extremely low for this segment of the population. Death rates from medical related conditions are on the order of 3 in 100,000. If those three people require $500,000 in care the cost for the rest of the 100,000 people is $15 each.
So if the cost of health care for the 18-55 year olds is $600-700/ year, why does health insurance cost $8500?
The answer is that the Federal Government decreed that the folks on medi-care get really cheap Health Care. While that is both literally and figurative the cost to subsidize this care comes from your insurance. Right now it is estimated that 80% of all your health care costs are incurred in the last two months of your life.
Your $8500 insurance bill is another transfer payment to the older folks because the Congress of the United States has already spent all of the money.
Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy.
27 - STM
"Golden revolution" ... sorry, typo. Make that Glorious revolution.
For more clues on the origin of the US constitution and the declaration of independence, see John Locke.
28 - Alec
John - Very good article. A nicely reasoned analysis of some of the key issues regarding health care.
However, I think that some employer-based plans, especially some PPO's were not just creatures of politics and the tax code, but initially reasonable attempts by employers to offer plans which would help their employees. The original elements of the Kaiser Health plans come to mind, as do the various health care plans offered by aerospace companies in California during the Golden State's boom years.
RE: Let's give the free-market and freedom of choice a chance.
Has this worked anywhere recently without some form of government intervention?
29 - Baronius
Handy is right to compare health care and education. Both sectors are experiencing enormous inflation. The more government gets involved in them, the higher the prices go, and the less say the consumer has.
If I want to go to college, the payments are essentially a deal between a loan officer and a registrar's office. If I want to go to the hospital, an insurance company works out a price with a hospital administrator. Everyone makes bookkeeping entries, but no money changes hands. I have no say, because I'm not paying. The doctor has as little input as I do.
Every year, the government promises to pay a little more of the exchange. So the payments increase proportionately. The actual payments (from me, to the doctor) are on the margins.
Fortunately, in the medical field, technology is progressing so quickly that it's able to sustain this pyramid scheme. In the academic world, the overbooking of college is sustained by the continual lowering of standards (grade inflation). The fracture point in the medical field is the supply of doctors. We're creating new layers of techs, doctor's and nurse's assistants, et cetera, just to keep the system running.
Both political parties are committed to government expansion in health care and education. But we know that's only going to drive up prices further. As P.J. O'Rourkes says, if you think health care is expensive now, wait till it's free.
30 - bliffle
The Federal Government, as well as the weak system of state governments, has been successfully manipulated and suborned by the Insurance companies to ensure their iron grip on the finances of the US health system (do you ever hear a mention of health care financing without reference to "the need to secure Health Insurance"?).
It is always so, with monopolies and oligopolies, just as the other abusive corporations in the USA use their power and deep purses to bludgeon elected officials into conformity with their objectives, which are set by the top executives, and, conveniently enough, serve mostly to enrich those same execs.
31 - Clavos
O, those evil executives!
We should make it a capital crime to be a businessman and execute them all forthwith.
Scum...
32 - REMF
"Without questioning the validity of what you say, SS, I do have to point out that I can't recall anyone from another country with socialized medicine being as enthusiastic about their system as you are about yours."
I disagree. Being close to the border, I know plenty of Canadians who are more than happy with their system.
33 - troll
*O, those evil executives!*
executives aren't evil (necessarily) - they serve many useful functions in our economy and deserve a good $25/hr...maybe even $30/hr depending on experience
34 - Doug Hunter
"Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy."
One of the best arguments for some sort of forced or universal care. Lots of healthy people aren't covered, yet they know in a medical emergency they get de facto coverage and within a period of months with a debilitating disease they could adjust their income enough to qualify for free healthcare anyway. In a way we almost have universal healthcare already, we just don't have universal sharing in the cost.
As a far right winger I'm usually against most programs pandering to the poor, but in this case the poor are already covered. This is one democratic idea that might actually remove some stress from the middle class. How to implement it is anyones guess, but I like tax credits for coverage except for those with no income who should get coverage vouchers.
Why do I make this possible exception to my right wing views? Simple. Everyone receives de facto health coverage, therefore everyone should have to pay for that priviledge.
35 - bliffle
"Why are there 47,000,000 uninsured? Because they are not stupid enough to pay for the other guy."
Also, because there's no assurance that after you pay premiums for several years that the insurance company will actually pay for your healthcare when the time comes. They're experts at wriggling out of their responsibilities.
36 - Clavos
"Also, because there's no assurance that after you pay premiums for several years that the insurance company will actually pay for your healthcare when the time comes. They're experts at wriggling out of their responsibilities."
Never had one do that yet, and my wife is hitting them for more than $50K a year (the amount not covered by Medicare) on a premium of $10K a year.
Occasional initial denials, which invariably are paid when we object, usually because their clerks have made an error.
37 - Baronius
Bliffle, insurance isn't an oligopoly, but it will be if we lose our right to opt out of it.