Saturday, November 22, 2003

The Truth About Private Medicine

Just So You Know

Matthew Yglesias gives a tight summarization of some basic facts about medical care and costs.

Note the conclusions: Government health care is cheaper than private health care, and delivers better service.  It’s pretty easy to see why this is so. 

The cash flow in the medical system goes something like this: Government pays doctors.  Patients pay co-pays to doctors, and insurance premiums to insurance companies.  Insurance companies pay (sometimes) doctors absurdly low amounts for services.  Doctors pay massive amounts for malpractice to insurance companies.  Insurance companies pay out roughly 25% of that in claims.

So, while bitching endlessly about the spiralling costs of medical care (which they pass on to patients, resulting in the world’s most expensive health care system), insurance companies are quietly pocketing a big chunk of the money on the back end. 

US health spending per capita is $4287.  Canadian spending is $2433.  Using lifespan as a measure of basic health system efficacy (which seems quite reasonable), the Canadian system delivers better results for around 56% of the money. 

Our Minister of Supply-Side Economics, Buckethead, has maintained over and over that the US system is just better.  By what measure?  The tired saw of “access to health care” comes out over and over again.  Yes, if you are a wealthy person, your access to health care is better here.  And I’ve said over and over again that if the Canadian system spent anywhere near what the US system spends, there would be limousines to pick patients up and bring them to the hospitals.

The real question here is why the American system is so shitty, given the rather incredible levels of funding.  It’s time for a sober dollars-in, dollars-out analysis.  Exactly how much of our health care dollars are being siphoned out of the system by lawyers and insurance companies?  They are responsible for the situation.  They bleat and whine about the benefits of “private medicine”, while they hold guns to the heads of sick and dying people all over this country, denying every benefit they can in a pure expression of one of the sickest forms of profitability.

Let’s summarize; the American health care system:

1. Delivers poor results, relative to other countries.
2. Is dramatically more expensive.
3. Is ANTI-BUSINESS.  Why should a small business have to provide health insurance to its employees?  That’s just stupid.
4. Is full of insurance-company corruption.  Ask any doctor.

If this goes on much longer it will be a serious impediment to the competitiveness of this country.  If you want to make the American worker more productive in a global economy, you have to make health care more efficient.  The current system is utterly broken.


Posted by Ross on 11/22/03 at 02:37 PM
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