A Little Perspective on the Cost of Health Care Reform
There are lots of legitimate reasons to dislike the current bills being considered as health care reform. For instance, the best of them considers universal coverage to mean that more than 12 million people are still left without health insurance. None of the bills do much to contain costs, meaning that health care costs may still rise faster than inflation and consume even more of our GDP. Too few people are likely to be able to access many of the benefits of reform, such as the insurance exchange.
Reform as currently prescribed does not fully decouple insurance from employment. Out of pocket costs are still too high for many Americans. And it’s unclear whether even the regulations contained within will be able to curb the worst practices of the private insurance industry.
But instead of any of these arguments, we’re left with this from the Republican Minority Leader:
This is not affordable... what this is going to do is bankrupt America.
A little perspective please, Mr. Boehner. Not only is it not going to bankrupt America, it’s one of the first things we’ve seen in a while that actually has been scored to be deficit reducing in the long run. Even if it weren’t, even if it weren’t paid for, it would be worth remembering how much this bill costs compares to other spending. All of the plans come in under $900 billion over a decade. That’s an average of $90 billion a year.
Remember the tax cuts signed into law by President Bush back in 2001 and 2003? A “defensible estimate” is that these cuts cost about $1.8 trillion from 2001-2008. Brian Riedl of the Heritage Institute said that number was about 25% too high, because it doesn’t account for stimulus and growth. Let’s go with his numbers. That’s $1.35 trillion over (conservatively) eight years, or about $169 billion a year. That’s about twice the cost of health care reform.
Take a look at some entitlement programs. In the good old days, you could always count on Republicans to talk about how Social Security and Medicare were going to bankrupt the government. And we should be concerned, because Medicare cost us almost $470 billion in 2008. And, with expenses rising fast, it’s likely that number will continue to rise.
When the Republicans passed Medicare Part D (which was never, ever considered deficit reducing), I don’t remember hearing many concerns from them about the cost. And now, since the Republican party has become the “protectors of Medicare” and has positioned itself never to allow any cuts to Medicare, that could bankrupt America.
We should also worry about Social Security, because last year, old-age and survivors insurance (OASI) payments for social security were over $515 billion. That’s just for 2008. Granted, more is still being brought in than is going out when it comes to social security, but that’s a lot of money.
This is a pittance, however, compared to what we spend on defense. Just in the last month, the president signed a defense appropriation bill for $680 billion. For this year. That doesn’t include the costs of the wars in Afghanistan or Iraq. That’s bankrupting money.
But get this. We spent about $2.4 trillion on health care in 2008. That’s trillion with a “T.” You and I – through taxes – pay for more of this than you think. Remember Medicare? Taxes pay for Medicare. Medicaid? SCHIP? The Veterans’ Administration? Taxes. That tax break for employer provided health insurance? That also costs money. Many people also forget the health benefits of public employees. This includes not only those who work for the federal or state governments; it also included people who work for public institutions. Policemen, firemen, teachers, even me – you are all paying for our (private) health care out of public funds.
When you add up all these costs, they come to about 60% of health care expenses. This means that the public – your tax dollars – paid perhaps $1.5 trillion for health care last year. That’s what will bankrupt us.
Here’s a handy chart to compare these yearly expenses:
Think about that every time someone complains about the cost of reform. People are saying that of all of these things, health care reform is going to break the bank. No. Health care costs are what might bankrupt us, and I am all in favor of reducing those, but railing against the cost of reform while ignoring all the rest is willful ignorance.
Look, I get that for political reasons, those that oppose reform are going to come up with any excuse they can to fight it. I accept that. But the media doesn’t have to swallow it; neither do you.
Read more about health care policy and get your questions answered at Rational Arguments.
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To the "no body" who thinks Dr. Blumenthal will address the "cost & errors in healthcare, etc." I worked for Medicus and EDS on health IT systems and I worked for most of the major IT players before that. Dr. Blumenthal has no experience in usability engineering - one of THEE biggest areas that has consistently choked any progress on this stuff.
There is not ONE person currently on the panel who is a usability engineer. I saw this kind of "throw a programmer working with a bunch of MDs, et al at it" approach at Medicus and EDS. Kaiser approaches their stuff that way. It doesn't work. Ask any usability engineer and they'll tell you the same thing I'm telling you right here. This has been a topic of discussion amongst professionals in the industry (ACSM, SIGCHI) and there is ongoing frustration that the US HHS just is ignoring this and has not placed even 1 of these scientists on their health IT panel.
Health IT will help but given the complete ignorance about usability engineerin
You mention all private companies you worked for and I would agree with your statements. But when and if the HHS comes to realize that they and only they have the resources and business model needed to create the medical workbooks for all treatments will the cost of healthcare come down. A healthcare inter-state highway so to speak. Which is why I keep sounding like a used car salesman.
The usability is exactly why I choose DITA and the telecoms because one of the biggest failings of XML is that people use it like SGML or a transactional database. By prepossessing the workbook first and registered steps you have complete control of the process, step order and external tool interfaces. In addition, the smallest nodes or steps are created first for instance “take two aspirin and call me in the morning” is created before a procedure to do a face transplant. So the workbooks are then a means of communication between the different medical groups. They always guide never compel and they can be interlaced with other systems. Each page or step in the workbook can be validated but never the whole workbook.
I think you're thinking about a program but workbooks are loosely-coupled XML and using DITA can be created for a particular specialty, limit who can view the data and can be saved with default values just like a pdf form can. The problem is first to create the business structure to maintain the process, the second is to create the right granularity so updating across the country is never noticed by most users, the third is to make sure it is a data/workflow collection mechanism because Healthcare knowledge and Technology is always changing we need to allow for private industry innovations like Iphone Apps. I can tell you truthfully in RI this week we've had our fifth or six wrong site surgery, if workbooks were available and you were required to take a picture before you cut recognition software could tell you if you're right. It's not just about a market but also economies of scale.
The house bill just released is a piece of crap. $400 bilion in subsidies to the private insurance industry, CBO stating the public plans will be on average more costly in premiums to the buyer than the private plans offered, and forcing everybody to buy FROM the private insurance cartel... I'm sorry, this is NOT even close to "change we can believe in".
TONIGHT, Wednesday, for any interested, Weiner's office told me (this was 7pm PSTime by email from an aide there I correspond with regularly), Weiner amendment vote/debate (whether Pelosi will keep her promise) will be "resolved TOMORROW". The bill may go into "suspension". My experience with suspension (having seen this happen in California with its bill there) is that it goes into a state of "idle" - or on hold until certain conditions are in place (ppl to vote on it, etc.). Maybe Dr. Carroll's understanding of suspension is different but that was my experience in California when the singlepayer bill there went into "suspension" now 2 years ago.
And having done all of that insufferable billing and claims management for both insurance companies and providers, someone PLEASE explain to me how billing and managing claims for yet ANOTHER carrier is going to cut the provider's cost to do the admin work required to provide healthcare.
Look at the electronic 1099 form in pdf format it is an Xform the only thing missing is the email button which was left out in deference to private tax preparers.
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If it goes into "suspension" I don't think there will be a vote. But I've seen Congressman Weiner in person. I wouldn't want to be the one breaking a promise to him. I'm remaining optimistic that he will force Speaker Pelosi to keep to her promise.
I'm still waiting for you to get back to me on why my ideas are wrong and will not solve any of the problems you've addressed.
Great post Dr. Carroll. The numbers are absolutely staggering and I am yet to read anyone who puts things in perspective like you. Look forward to reading more from you soon.
Right on brother. You speak the truth.
I don't know why I bother watching the news anymore. Now they're saying there might not be healthcare reform because a conservative won in NY-23. Yep. A conservative won in a conservative district, so that means Democrats can't vote for health care reform. Great story.
So the bill IS going to cut Medicare, Medicaid , Vets bennies and SCHIP? that's what I thought I heard you say.
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Me? I'm sure I didn't say that. Were you thinking of someone else?
The health care crisis is a ticking time bomb. Is this really a debate in America? I have recently had to stop taking my HIV drug that I have been taking for three years because my insurance only pays a 50% copay which leaves m with a balance that is impossible to pay. I want to put my story on Front Street so that America can watch me die as we wait for healthcare reform. I have a TCell count of 110 which by the opinion of many medical professions is full blown AIDS. I am at peace with death but I hope for a future for others that is filled with equity and fairness. Please follow my blog at someonesba
Bait and switch: How the “public option” was sold
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If you would like to help pressure Congress to pass single payer health care please join our voting bloc:
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If health care reform were enacted based solely on logic and the good of the American people it would reduce what we pay right now by nearly 1/2. Bringing us inline with our industrialized competitors. This does not even take into account the upward spiral acknowledged by all.
Instead the decisions will likely be based on the financial interests of the "players" involved in the current system. The same "players" who funnel millions to our elected officials out of the goodness of their hearts with absolutely no intention of swaying the decisions made by Congress.
I saw on television last night a Congresswoman comparing the cost of health care reform to "terrorism", saying that it was a larger threat to the U..S then Al Qaeda
Depending on the source of information between 2,752 and 2,985 American citizens died on 9/11 in the world trade center tragedy. (Make no mistake, this was a national tragedy, and I do not wish to trivialize it) The costs of the wars in Iraq, Afghanistan, and increased security measures has now exceeded $2.172 Trillion dollars, to date.
44,000 citizens die each year in the U.S. from lack of affordable healthcare . (That's 352,000 deaths since 9/11, 136,000 of those deaths were children). Just the profits from one industry for one year (pharmaceuticals) would cover the projected cost of reform for the next decade. Health care reform is a threat?
Maybe what we really NEED is a little more "Perspective".
Agreed. I see no common sense on the table. Why is it that other countries, like France, Germany, Britian, Switzerland and many others can do such a better job at far less than the US? The US just seems to stumble around from pillar to post without a clue like some blind guy. We need a lot more perspective and a good dose of common sense.
Thanks for your comment. Common sense seems to be a commodity in short supply these days. Especially in congress. I have been following health care reform on a number of sites. Some of the remarks attempt to demonize those they disagree with, some are rhetoric taken line for line from cable pundits, (personal opinion) but a great many are well thought out and offer real insight into needed changes. I am hopeful that our elected officials have someone reading these blogs in an effort to understand the concerns of their constituency. (REALLY? boy am I naive). There are a lot of good suggestions floating around that have not been addressed by the current bills in progress.
My biggest concern is that our congresspeople are being bought by the very industries they should be regulating. Why this blatant conflict of interest continues belies rationality. Funny how often money interferes with the thought processes.
A little perspective please. Let's start with the lie about Bush tax cuts. Bush tax cuts INCREASED TREASURY REVENUES. There's no need to say estimate - just go look at the USA treasury revenues history from 2003 to 2008. Treasury revenues from income increased - coz more people were working.
The wealthy never really had any tax breaks on the wealthy. The alternative minumun tax replaced any cuts.
Second - it is impossible to spend money and reduce deficit. Get a life. Absolutely impossible. This is another lie. Please show me how you can add $1000 dollars to your credit card and reduce your debt.
You use part of that $1,000 to pay for treatment for your ailing leg. That way, a month from now, you don't have to spend $5,000 for surgery. Then you take another part of the $1,000 and use it to buy a bus pass, saving you hundreds of dollars on gas and car maintenance. Then you can use the rest to buy some good ole, healthy food, which might do nothing more than make you feel better than fried chicken and soda.
And actually, (according to the Bureau of Labor Statistics) unemployment increased from 2001 to 2008, that kind of flies in the face of your "coz more people were working" theory.
Finally, the AMT is an additional tax for people who try to hide their money in various tax shelters ( munip bonds, tax loopholes, etc.) so I don't really feel sorry for rich peole having to pay the same percentage of their income as the working class. Also, the last amendment to the AMT was in '93, so I'm not sure how the '01 tax cuts were "replaced" this. The AMT has nothing to do with your nominal tax rate, per se.
Create a simple public-private open-source HIT process to answer the Brookings Institute http://www
XML http://en.
XML schema http://en.
XForms http://en.
Dita http://en.
web-services http://en.
(savings Director Orszag's 700b, no medical errors) which are IETM Class V compliant documents http://en.
The U.S. is already headed for bankruptcy because of our existing obligations to Social Security, Medicare and Medicaid, which total $58 trillion. Can anyone conceive of a worse idea than the creation of an entirely new federal entitlement? As we can see, Obama and his accomplices can. They can't let a “good crisis” escape without using it to force us into Marxism.
Make all income subject to Social Security and Medicare taxes, problem solved.
Did you even read this article, Antonio? Do you not understand how much money we spend for so many unneccessary reasons, which only increases our debt? The funding of social security is a problem that needs to be addressed, but we have time. In fact, if we do nothing at all, Soc Sec would last another 30 years, just fine. Reagan, Greenspan, and Moynihan are the only reasons Soc Sec is in trouble anyway. I don't really have time to give you a history lesson, but Soc Sec is approaching crisis because Reagan used it to pay for his tax cuts for the ultra-wealthy in the early 80s. What about those "entitlements?" Nothing "trickled down," income ratios between workers and CEOs increase by about 10 times. The cost of medicare-for-all would pale in comparison to the costs of war and tax cuts for the rich.
End the wars, increase upper-income tax rates, provide preventative health care for everyone, and we'll be doing fine. You know, like the rest of the industrialized world does.
I still think National Coordinator for Health Information Technology Dr Blumenthal will present a public-private Healthcare Technology plan that actually addresses the cost and errors in Healthcare and makes all the CBO estimates moot ,by the end of the year.
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To the "no body" who thinks Dr. Blumenthal will address the "cost & errors in healthcare, etc." I worked for Medicus and EDS on health IT systems and I worked for most of the major IT players before that. Dr. Blumenthal has no experience in usability engineering - one of THEE biggest areas that has consistently choked any progress on this stuff.
There is not ONE person currently on the panel who is a usability engineer. I saw this kind of "throw a programmer working with a bunch of MDs, et al at it" approach at Medicus and EDS. Kaiser approaches their stuff that way. It doesn't work. Ask any usability engineer and they'll tell you the same thing I'm telling you right here. This has been a topic of discussion amongst professionals in the industry (ACSM, SIGCHI) and there is ongoing frustration that the US HHS just is ignoring this and has not placed even 1 of these scientists on their health IT panel.
Health IT will help but given the complete ignorance about usability engineerin g/science, it is not even CLOSE to a "silver" bullet.
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