She’s Got That Right
I heard this phrase first on a Fox Business “Nightly Business Scoreboard” and thought it was “Historical Quest for Delusional Grandeur”, but this clip (that I think is from another FOX news show) has Andrea Tantaros saying “Delusional Quest for Historic Grandeur”. I think the one I remember was the first use (it was a bit spontaneous as it came across, where the later use is more practiced.) Either way, I think she has it right.
http://mediamatters.org/mmtv/200903160010
Every Government “Gift” begins with a forced “Theft”
The government does not create wealth nor increase national resources. The government, in order to give “The Gift” of free medical treatment, must first take the resources from someone else. Every government “gift” begins with a “theft”; the only question is relative merit of the two actions.
Why she has it right is a bit convoluted to demonstrate, but simple to grasp:
Medicare / Medicaid are running out of money. The Ponzi / Madoff scheme of Socialized Medicine needs “new blood” in the game or it will collapse.
So they need to somehow suck a large chunk more money out of the ever smaller number of workers. And folks would notice a $5,000 to $8,000 increase in their income taxes.
The present system takes money from those who are under retirement age and gives it to those who are over retirement age (Medicare), very young (they added kids to the system a few years back), and the poor (Medicaid). The major problem the Dems face is that there is a huge bolus of folks (The Baby Boomers) who are about to retire and collect Medicare. I know, I am one. This is the actuarial overhang facing the Federal Government.
This unfunded obligation WILL come home to roost in the next 10 years.
When first set up there was on the order of 100 workers paying for each retiree. We are rapidly headed for 2 to 1. And about 90% of lifetime medical costs come toward the end of life. Those last years consume a great deal of medical resources. The “bill” (to be presented to the Gen-X, Gen-Y, and Millennials) will end up being about $20,000 each per year (potentially headed to $40,000). Right now, it’s about $5,000 to $8,000. (These are rough estimates, but good data is hard to come by.)
The Choice
So the Dems know that they have a Hobson’s Choice. They can admit that their Socialized Medicine game is up, that the system is bankrupt; or they can try for one more round of “new marks”. What I find hilarious, is that they have convinced the very people who will be fleeced the most that this is a good idea for them. The Gen-X, Gen-Y, and Millennials who will be paying for all this are the ones most supportive of “Change We Can Believe In”. I think they will eventually realize this means “Change We Will Be Forced To Pay For”…
Why do I say that? Because the Boomers will be retired and on the Medicare dole. I’m not going to be paying for Medicare, I’m going to be collecting it!
How The Fleece Works
The new Socialized Medical Plan has a couple of gimmicks to get the gold.
First, and in some ways worst, is the mandate that you must buy medical “insurance”. Ignoring the fact that once the government can mandate purchases of anything, ALL of “your” income is now theirs to spend (you no longer own any money, you get any left over after the government spends most of it… think of it as a ‘gift’ ;-)
Gee, buying insurance sounds OK, right? Small Problem: Part of the law eliminates many of the valid distinctions between insurance and socialism. One is forbidden to use many actuarial methods to match actual risk to premium. The end result is to make huge premiums for “needy” folks smaller and small premiums for young healthy folks huge. It’s a stealth tax / wealth redistribution to make the young and healthy pay about $5,000 of ‘health care tax’ but call it ‘health insurance’ even though they will use nearly none of it. And the folks who get whacked (by paying for this) are all in love with “free medical care”… Go figure.
We will see how they feel “10 years in” when that “mandated purchase” runs up to $8,000 then $10,000 and eventually $20,000 per year… Boomers WILL retire and the Medicare load WILL roughly double in short order. Then it will get worse as we age, become ever more sick, and suck down exponentially more medical services. On YOUR nickel. (Or thousand dollar bill…)
Cost Savings and Fixing Doctors
Second, Doctors will get the shaft. In the jargon, this is called “The Doctor Fix”. (One wonders how the Doctors feel about being “fixed”…) The plan is that in a few years the pay rate for Doctors will be cut by 20%. Don’t think so? Ask those banking executives and car company executives who is setting their pay caps…
Socialism is first and foremost a “command and control” system. You will be controlled, by command. If you don’t like it, you can go work for the other national medical system… I expect we’ll be seeing a lot of older doctors just retire, and the best and brightest will not enter the system. “Wage and Price Controls” are regularly tried, and regularly fail. Lower wages get less supply of labor and / or lower quality of product. It takes a few years to work all the way through the system, but that’s the end game. Every time.
The “cost savings” they talk about are a fantasy. If they could be achieved, they would have been achieved. The Medicare / Medicaid system is just not competent to deal with this. (I once worked as a medical accounts clerk, I also programmed a medical accounts receivable system early in my career. I’ve got medical billing experience…) The government billing systems are always byzantine and inefficient. They already under pay.
The ‘dirty little secret’ is that the present socialized medicine system (about 1/2 the US system now) does not pay it’s own freight as it is. The shortfall is ‘third partied’ onto the bills of everyone else. THAT is why private medical insurance costs are sky rocketing. Another stealth tax theft for wealth redistribution gift. So how are you going to have ‘cost savings’ in a system that is already about 40% shy of covering it’s own costs?
Two Sets of Books and Rubber Rulers
There are some other gimmicks, too, but I’m just going to skip on down to: Double Set of Books. The OMB has said that the $ 100 Billion+ of ‘budget savings” are false and only the result of counting the (IMHO illusory) ‘efficiency improvements’ twice. Once to keep Medicare solvent (where they are spent) and again as national debt offset. You can’t do that. If you spent it, it no longer offsets the deficit. The medical plan actually runs $ 100 Billion+ of deficit. Right Out The Gate.
And this can only get worse since the deficit will grow as more Boomers age onto the “freebee” socialized medicine system and fewer workers are left paying (that is the fate of the Gen-X, Gen-Y, and Millennials – to pay. I, for one, do not wish to sell my children into such tax bondage for my own comfort…)
Oh, and don’t forget that the various taxes (real direct and stealth indirect) start immediately but the “benefits” of “The Gift” only begin 4 years later. They compare 10 years of payments with 6 years of costs… So you can take all the “bad numbers” and give them a 40% ‘uplift’ if you want to know the reality… This $Trillion cost that is only $100B+ of actual deficit with a 10 year accounting is actually running about a $400B deficit run rate (and that rate will rise as Boomers retire and the worker / retiree ratio gets worse.)
What to do?
It would be best to have the socialized medical takeover fail and to confront the problems already caused by socializing 1/2 of the system by fixing that broken half, not torpedoing the whole thing.
We need to recognize that socialism leads to rationing and explicitly ration the quantity of medical services payed for by Medicare/ Medicaid.
Further, we need to be honest and mandate that all hospital fees paid for by insurance of any kind be paid at the same rate. (Letting the doctors and hospitals choose to charge more or less of folks paying cash or the indigent with little money and no insurance). But the Socialized system needs to pay it’s own freight and not put a stealth tax on the rest of us (now, they will pay $100 for a surgical tray that private insurance must pay $200 to get. The reality is that both ought to be paying $150; as a hypothetical example.)
The medical malpractice tort system needs to be rolled back from what it is today. It is used as a wealth redistribution system to provide lifelong care for folks with problems. A child is born with ‘issues’ and they will be paid for, for life, by the doctor via insurance premiums. Never mind that in many cases the doctor prevents issues (but does not get a lifelong stipend from that…) and never mind that in many cases the outcome would have been far worse had the doctor not been there to make things as good as possible.
Basically, we need to stop blaming doctors for the fact that we are sick and they can not fix all ills. We need to let them do what they can and try things that have risks (with our consent) knowing that it is not THEM that cause the ills and it is not possible for them to fix all ills. The alternative is ‘no care’. It is already hard to find OBGYN services in many areas. This will get worse.
Simply doing those two things would cut medical costs for most of us by a lot.
An added thing, that I do not expect will ever be done, is to increase the number of doctors. The medical establishment has a tight grip on the supply of doctors. I doubt it is possible to break that grip. But if you would reduce the cost of medical care, the easy way is to build more medical schools and create more doctors. Simple supply and demand.
Turning the whole thing into a copy of the UK system will not be a good thing. (I’ve “had dealings” with the UK system. It makes the worst USA “HMO” look like a godsend).
Should the Dems Dominate
They will claim their “Delusional Grandeur” and speak a great deal about their Historic Gift. They will laud each other and their limousines will go from party to party as the champaign (oh, pardon, “sparkling wine”) flows.
But eventually the Laws of Economics will win out.
The efficiency improvements will simply not be there. There is not a lot to be gained. Computerized medical records cost more, not less. The fantasy that they will reduce costs is just that. The sales pitch for the computer consultant who will make a bundle at the public trough. (That you will then have no medical privacy will be glossed over with ‘honey words’ about how great their security system will be… but don’t believe it. The tens of thousands of folks who are authorized access will assure no such thing. And do you really expect any government agency who wants access will be kept out by the government?…)
So costs will skyrocket. Over the next decade the ‘private insurance costs’ will rocket to $10,000 then $20,000. There will be great wailing and gnashing of teeth about those horrid private insurance companies bilking people (even though the rules are set up to force them to do so to feed the socialism monster). In the end, the Dems will be back to give “The Gift” of single payer to that group not already with the socialism noose installed.
But where will the money come from to pay for it?
Simple: It won’t.
There will be some broad increase in taxes (such as income, inheritance, etc.) but that will be far too little (no matter how big it becomes). So the traditional three answers will be useed.
1) Print the money. There will just be a massive run to the printing press. We are seeing this already. $12+ Trillion debt and rising by the hundreds of billions every few weeks. “Bugger the Dollar”. The results will not be pretty. Inflation is a ‘stealth tax’ on anyone who holds cash or cash denominated assets like bonds. Don’t think you own any bonds? How do you think your insurance company sets money aside to pay your retirement annuity, your life insurance, your …
2) Cheapen the product. First step will be ‘the doctor fix’. Then will come forced clinics for things that presently are office visits. Expect time limits on consultation and forget customized care. You will get the approved drug in the approved dose that works for 80% of the folks. If you are in the 20% that need the more expensive and more effective drug, well, tough…
3) Ration access. In the end, this is all that can really work. The whole “health care debate” is really over how to do the rationing. There is an infinite demand for medical care. Toward the end of life, it can take a lifetime of money to pay for ever more exotic life extension measure that give ever less benefit. At present, if you are a billionaire, you may choose to spend $100,000 a day. This drives medical advances that eventually benefit us all. But if you have little money, do not expect a knee replacement at 70 something years old. So we will move from ‘rationing by price and income’ to ‘rationing by government employee’. But along the way we will lose about 20% (that’s the usual rough estimate for ‘slippage’ when money is washed through D.C.) and that is how much more will go to government clerks and not to medical care.
We will end up paying more, and getting less. With luck, the system will collapse along the way and we can start over. I, for one, will be finding every way I can to avoid paying for it, while using as much ‘services’ as I can get. And in the end, that is typically what causes The Socialism Shiny Thing to collapse. I’m happy to ration my own care when spending my own money; but if I’m spending your money, well, that’s a whole different thing …
And that is why this “historical quest” will end in “Delusional Grandeur”. Because in the end we will be spending long hours standing in queues at dismal government clinics to get mediocre care from underpaid (and eventually that leads to under skilled) staff with poor facilities that cost us far too much, and being told that the thing which we need is not on the approved list, so we can’t have it. And we will not think kindly on our masters who bound us to this fate so long ago…
Musings from the Chiefio 
How does medicare work in other countries? They have better longevity, lower infant mortality and better outcomes than US but pay half as much per capita.
REPLY: [ “Medicare” is the name of a U.S.A. program, so by definition it does not work in other countries. Many other countries have a variety of other medical systems, many are varieties of “Socialized Medicine”. Most work through some combination of rationing (you did not see a lot of MRI machines in the rest of the world until long after US demand had driven the cost down, for example) and reduced pay for staff (doctors in India are about $5000 US / year). Longevity is not as closely tied to medical care as you seem to imagine (diet, automobile accidents, prevalence of smoking, etc. tend to dominate) and infant mortality has similar idiosyncratic issues.
BTW “better outcomes” is at best a loaded term and then there is the issue of how the statistics are manipulated. In the end, attempting a ‘cross border’ comparison between counties is prone to all sorts of issues that make it largely a pointless exercise is self deception. For example, all those hundreds of thousands to millions spent in Hollywood for cosmetic surgery will be part of our aggregate costs. To compare that as though it were part of the cost of broad medical care is a deception. Yet that is what is done with a simple $/”outcome” or $/longevity statistic. We do a lot of elective surgery here that is not done elsewhere. Further, many of the most expensive and difficult procedures are done here and not in most of the rest of the world. So our statistics are also skewed by having all the ‘hard cases’ come here. (See the queue abandonment from Canada and the UK that come here, for example…). You would do better to compare “outcomes / Dr.Hour” or “longevity / diagnosis” (so, for example, life expectancy post breast cancer diagnosis).
Now if I was going to build ‘the ideal system’ I would not build what we have now. I would also most certainly not build what I experienced in the UK. So don’t expect me to laud the status quo. Frankly, what we had when I was a kid worked rather well. There was free medical care for indigents at The County Hospital. Most things, folks paid cash to their local doctor. (It was, IIRC, $5 for an office visit and $10 for an extended exam with antibiotics handed to my Dad at the end. Call it $50 and $100 in today’s money. Folks bought catastrophic insurance, for things like extended care and major surgery, for reasonable prices. Not a lot of overhead (all those government billing and insurance companies take money to run) and not a lot of malpractice suits. Basically, I’d have a “mediocre basic government care for free to the poor” at dedicated facilities and I’d leave government completely out of the rest of the system. Oh, and I’d double the medical and nursing school capacity…
Per the rest of the world: I have no qualms with Cuba and China having barefoot doctors, or with Russia having smart doctors who can do miracles with no facilities nor any money. And I have no qualms with 3rd world governments having socialized medicine clinics that they run everyone through in queues and treadmills, again with no money. I just don’t need them in my life or in my country.
Finally, realize that the rest of the world has in many ways been getting a free ride on US R&D costs. Drugs are priced high here to “buy down” the cost to those other countries. We buy the first $Millons Dollar MRI machines to fund the market that eventually drives down the prices for the rest of the world. So in part, your assertion of “half as much per capita” is just recognizing the degree to which global socializing of medical R&D costs has distorted US prices. BTW, you might also want to compare world prices for things like a suit of cloths, a dinner out, home rent, etc. You will find that many places are far cheaper for most things than the USA. Cross national and cross currency price comparisons are very difficult and direct price comparisons are substantially always misleading. But don’t worry, with the rate the US $ is being buggered, we’ll be a low cost 3rd world country in nothing flat… -E.M.Smith ]
Confused asked:
“How does medicare work in other countries? They have better longevity, lower infant mortality and better outcomes than US but pay half as much per capita.”
It doesn’t. We are simply ‘told’ this by those who have a horse in the race.
Better longevity? Lower murder rate.
Lower infant mortality? More abortion for difficult pregnancies.
Better outcomes? Only survivors counted.
Half as much per capita? Fewer patients survive the waiting period for treatment.
There are no magic bullets. Want innovation? Pay for it. Want choices in drugs? Pay for it. Want finest doctors? Pay for it. Want speedy treatment? Pay for it.
Want cheaper? Don’t seek treatment. Or seek less qualified doctors. Or less effective treatment. Or take less effective drugs. Or live with more discomfort. Or live incapacitated.
It’s amazing how many people think passing a law will change things. The answer to our ills has always been there, we just lacked the courage to pass a law. Sheesh!
Sounds like confused likes to use the “they” argument where “they” remains unspecific and has magically worked created a utopian system far superior to ours in vaguely defined measures of comparison.
“Now if I was going to build ‘the ideal system’ I would not build what we have now. ”
We might do worse than model human medical business rules on those working for veterinary practice.
You can choose any program in any country and it will be more effective and cheaper than what the US is proposing. Anyway, Merry Christmas and a Happy New Year.
(and good health to all)
Well Chiefio, if you’ve had dealings with the NHS (National Health Service, the UK system), then you’ve seen the future of this new US system.
Prepare to pay for more bureaucrats (thats administrators and managers) than for doctors, nurses and other medical workers.
Prepare for a bureaucratic entity to decide which new, life saving drugs can be ‘allowed’, and which have to be rejected because they’re not cost-effective. These are not just the latest cancer drugs – these are drugs which prevent osteoporosis progressing (but who cares, its only some old women …), and allowed the use of a drug helping with macular degeneration only if the patient had already lost the sight in one eye.
Prepare to pay for what we here call ‘health tourism’ – people from Third World countries who come and ask for life-saving treatments (AIDS, cancer, TB) and have their babies here in the UK – because its ‘free’! And we who have to pay – we are stuck on waiting lists because the beds and doctors we pay for are having to look after the health tourists …
You ain’t seen nuthin yet!
At age 65, the longest life expectancy in the world is in the US. Our numbers are brought down by much higher murder and accident rates (blame the doctors).
Infant mortality is simply a definitional trick. We classify premies as live births. Other countries don’t.
Costs — we subsidize drug development and purchase for the rest of the world. Same with medical technology. Socialized medicine in the US will be a disaster for us. It will be an even bigger disaster for the rest of the world.
Finally, we spend more on health care than the rest of the world. We also spend more on cars, tvs, cell phones, and lots of other things. I guess this means that the government has to socialize all those industries, too.
Chiefio,
In regard to your comments about paying out of pocket for office visits: I don’t know what time period that was for you, but if people were willing to accept a 1960s level of care then many of our problems would solve themselves. It’s an entirely different story when trying to acquire the latest treatment, which in many cases actually is better than the last new treatment despite only being a couple years newer.
Even in the realm of medical care mature technologies come down in price. Unfortunately many specialties simply aren’t mature and if one problem actually does get solved some new problem is just over the horizon.
As for the amounts uninsured people pay providers, sorry, but I see no reason that insurers shouldn’t be able to negotiate on behalf of their clients. It would be a strange regime indeed that prevented such negotiation.
REPLY: [ It was about 1960. BTW, my last dozen visits to the doctor were substantially the same as then. A lot more paperwork, but the medical part was the same. A few questions. Vitals. Look down the throat. Prescription on the pad. While some of medicine has moved to expensive high tech like MRI’s and exotic lab tests, the bulk of day to day medicine is not much different from 1960 (or 1860 for that matter … heck, I think even Galen could get ‘up to speed’ for a flue clinic screening in a couple of hours…) So look more closely at what I wrote. “Out of pocket” for regular office visits. Insurance for the catastrophic (i.e. terribly expensive) stuff.
Also, I would generally agree with letting insurers compete as a monopsony as as well in setting prices were it not for the fact that there is no ‘countervailing force’ to offset the power of one of them. The US Government has “monopoly power”. This is normally prevented from running rampant over the other competitors with regulation of some sort. In medical insurance, we have not done that. So you can just accept that this extraordinary power of the Federal Government gets to run rampant and raise the bills of everyone else by 50% or so; or you can take action to constrain that force. I’d be equally happy to let “every insurance company but the government” negotiate prices then set the government payment at the median of that rate; but it’s a pretty complicated process to implement and does not allow for competition between facilities. “One size fits all” usually doesn’t… but it is easier to implement and does leave competition between facilities.
The number one thing we need to do is clear (prevent government monopoly power from doing a ‘cram down’ on everyone else); how to get it done has many options, mine is just a simple and workable one (but may not be the ideal). -E.M.SMith ]
“Oh, and don’t forget that the various taxes (real direct and stealth indirect) start immediately but the “benefits” of “The Gift” only begin 4 years later. They compare 10 years of payments with 6 years of costs… So you can take all the “bad numbers” and give them a 40% ‘uplift’ if you want to know the reality…”
It’s actually worse than this… the double counting may make the deficit $100bn, but the 40% is far worse.
Suppose that taxes are $100bn for 10 years, and costs are $166.66bn for 6 years, equaling $1T each. If you matched costs and premiums, 10 years of that would result in a $666.66bn deficit. This is not independent of the $100bn; take $10bn out of each year that were false savings, and you’ll have $1666.66bn in costs and $900bn in revenue/savings, for a loss of $766.66bn.
And that is, of course, independent of all other cost issues you raise, which further worsen the picture. Not to mention hits to GDP from thousands of medical companies going bankrupt.
Germany embraced socialism in the late 1800’s and encountered all the problems we are now facing. The solution they found, Nazism, worked wonderfully, however, for many reasons, it ran afoul of the rest of the world. It seems to me, the the U.S. best hope to avoid becoming a police state (in the short term, at least), is to open the borders to hard-working, fast-reproducing immigrants. No?
REPLY: [ No. First off, “Nazi” is National State Socialist Party. It was not a ‘solution’ to socialism, it is the final police state form of the command and control urges of socialism.
Secondly, one does not cure a flawed economic system built on a ponzi scheme by bringing in more ‘new blood’ (from whatever source – we could just have 10 kids each like Americans did 100 years ago). All that does is postpone the problem while making the eventual collapse larger. The ‘bring in fresh meat solution’ gets proposed regularly by both the Dim Dems and the business lobby Republicans. Both are wrong. When you are in a hole, “First, stop digging” is the right answer. “Dig faster and stand on top of some poor persons back” is not a very good ‘solution’. That sort of ‘solution’ just moves the demographic ‘bomb’ 20 to 30 years further out.
THE basic problem, that must be addressed for any real fix, is that “One Old Person” can suck down about “2 young people” worth of resources. And it takes several ‘young people worth’ of resources just to keep the bulk of the economic system running. So you can “support” one “old person” with about 10 young people fairly easily (as in the early days of Social Security); at 5 young per old, the system becomes stagnant with ‘issues’. Add in a bunch of ‘free medicine for children’ and drop the ‘young / old’ ratio to 4:1 headed for 2:1 and the system fails, as it is doing now.
The problem is that ‘population stability’ comes at about a 2.5:1 ratio (some folks don’t make it to reproductive age). So, at the core, the system is unstable. You can have stable population, or you can have lots of social security benefits redistributed from young to old , but you can not have both. Denial of this is what leads to all the other problems. The Loony Left loves to think otherwise and regularly promotes more spending. The Radical Right knows it is unstable, but is happy to run the game out one more hand with an influx of ‘fresh meat’ poor folks who will end up screwed in 20 or 30 years (unless you can take exponential population growth for centuries… an unsustainable answer).
So my solution would be the completely politically impossible one of “set a budget and live within it”. Pick a number, 5% ? or 10% of GDP ? whatever… that is to be used for ‘indigent medical care’. Go ahead and make the Socialism Shiny Thing of Socialized Medicine (just limit the scope to the actual indigents) and let the rest of us move on. Never happen, but hey, I can dream…
The correct approach would be: Make all poor rich to enable them to pay their medical attention. Give them their money back, promote businesses, free enterprise, multiply entrepreneurship instead of self indulgement and laziness.
As an old proverb says:”God, please help me against the good ones that I will take care of the bad ones”
@Adolpho: Amen! A couple favorite sayings include (either as sarchasm or with an upfront statement that it is something you NEVER want to hear):
“I’m from the Government and I’m here to help you”.
And
“The road to Hell is paved with good intentions.”
and one I havn’t heard in a while:
“Lord save me from people who want to help me.”
(I’ve also heard it as … “want to improve me.” )
You have misunderstood me. There is not much, if anything, you have said that I disagree with. However, I am concerned that the current trend to health-care bankruptcy will foster a socialist police state. I think we need to buy some time before sensible ideas, such as a sustainable health-care system, can take hold. I do not support a continuation of the current government ponzi scheme, which if sold to the public by a private company would result in long prison terms.
REPLY: : [ I don’t think I misunderstood you. You want to “buy time”. I think we don’t need to do that at all. I think we need to get Medicare / Medicaid / Obamacare to break as quickly as possible so we can get past it. Until the bubble bursts, we are just making the ‘end game’ that much worse. Import 5 years worth of added people, it is just that many more that get hurt when it breaks. -E.M.Smith ]
If you were president I’d trust you to deliver the cure.
But some will not let any crisis go to waste … such as the short-term acute crisis that would follow the breaking of the bubble…
REPLY: [ Aye, now there’s the rub… Unfortunately, you are correct. The “crisis” would be used for more Socialism Shiny Things, not less. But that does not change that it is the right thing to do. The earlier a Ponzi scheme blows up, the smaller the ultimate damage. That it can not be done with our present Congress Critters is the travesty… -E.M.Smith ]
No matter how they dress it up in the beginning once they have extended their control then they can do so much more.
Government that is big enough to give you everything is also big enough to take it all away
REPLY: [ I would go even further. Government, to “give you everything” must by definition first take it all away. They do not create The Gift. Even if government employees produce it, they have taken the labor of those employees… Every government “gift” must start life as a “theft” from someone else. -E.M.Smith]
E.M.Smith; Thank you for an informative article and the comments that followed. I would like to see a breakdown of how each $100 in the medical system spent. (IE, so much to the doctors, so much to the office and realestate, so much to medicines, so much to administration, so much to nurses, so much to attorneys, etc. Does such a break down exist?
I would love to see the same break down for our public schools. I have never found one for either.
REPLY: [ Good idea, don’t know where to find it and I’m busy on other (AGW) projects right now. I would only point out that you left out “How much goes to lawyers and lawsuits?”. For many specialties, the Dr. may get $400,000 of “income” but then has to buy $250,000 of malpractice insurance per year. While $150,000 a year is nothing to sneeze at, it isn’t quite what a highly trained post doc specialist is expecting to take home (before taxes…). So, IMHO, the biggest nut to crack is our crazy ‘socialism lottery’ where the Doctor just acts as a conduit to move money from those that have it (folks buying “care”) to those that need it ( “injured” parties, even if the injury was substantially an “act of God” and the Doctor mitigated it, but could not eliminate it…). For the rest, you can make reasonableness estimates. Doctors offices are not much different from any other. A bit more equipment, but not much (unlike hospitals). It will be about the same as an auto mechanic (and maybe less… “lifts” are expensive! and tables not so much ;-). There is a bit more ‘office staff’ than at the mechanic. I’d guess the split is more or less 1/8 facilities, 1/8 staff and supplies, 1/4 outside services (labs et al), 1/4 Doctor, 1/4 various legal and insurance costs (but it will vary by specialty). Oh, and I’d guess about 1/2 of the “outside services” is tied up in legal and insurance costs too… but on their P/L statement. For example, a “shrink” probably has a lower “lab and xray” bill than the “bone guy” or the GP. I’m sure much better data would be available with a bit of work, but I’m swamped right now.
Oh, and per schools:
By Law in California 1/2 the state budget must go to education. Take 1/2 the budget and divide by the number of students. The number is enough to buy an excellent private education for every kid in the state. Why does it not reach the classroom? Well, those 6 figure administrator salaries WITH yearly BMW and new furniture in nice hardwoods tend to take a chunk… (NOT hyperbole. There were newspaper articles about our local Admins getting BMW perks with their (I think it was about $140,000 ?) salary and wanting a new hardwood desk… and expense account.) So, want excellent education in California? Take off all the stupid “mandates” to show how to dress up Mr. Banana and do endless mindless testing, ‘can’ the administrative staff, and just put the kids in one room school houses with the money handed to the teachers. You would be amazed what a decent teacher could do with $3,000 to $4,000 PER STUDENT per year. (IIRC it was a bit higher than that – maybe $1,000 higher, but it was a while ago that I last ‘did the math’.)
Bottom line is that its the ‘legal and administrative’ part of the budget that kills both of these service industries.
-E.M.Smith ]
OT, but I noticed MRI’s were mentioned above. The magnetic field in one of these beasts is extremely strong, so a quick tale about one.
I had a scan several years ago, It sounded that the guns of the Korean war inside the thing. After what seemed like half a day of not moving a muscle – it was probably half an hour – the female attendant pulled me out admonishing me at every other breath to not to move. She then told me she was going to inject me with something or other, and then shove me back in for a while, and that this would hurt a bit, “BUT DON’T MOVE or we have to start over.”
She injected me, and asked me how I felt. My nose itched like crazy, but being a wise guy, I answered that I had this almost uncontrollable urge to stand up and and point north.
She apparently didn’t get the joke about how to make a compass, and they must have heard her through the walls yelling at the top of her lungs, “DON’T MOVE – DON’T MOVE – DON’T MOVE!!!”
REPLY: [ I once was admonished to ‘not move’ when, highly sedated, I talked to the nurse… they were preparing to do something near the jaw… so talking can be ‘moving’… But I liked the joke about being a compass ;-) Since metals are so forbidden near the darned things I’ve sometimes wondered what they do with things like fillings, caps, etc. A family member has some screws holding a plate to a bone, broken long ago, too. Oh Well… the folks running the things seem to know what the’re doing. -E.M.Smith ]
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Fillings are non-ferrous, so not an issue with an MRI.
Mark
This was a really good read, btw, including the comments and subsequent replies.
Mark
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As an European living in a country with an almost pure socialist health system (Norway), I’m somewhat puzzled by the discussion in the US. I won’t try to argue for the Norwegian system here, since I don’t think it works very well, but I lived for three years in Germany, which has the world’s oldest universal health care system, and the German mixed private-government system appeared to work very well. Now, I know they’re facing huge problems too, but total health care costs in terms of % of GDP are still significantly lower than in the US.
I’m skeptical to the assertion that almost all medical R&D is covered by the US. Many of the pharmaceutical giants are seated in Germany and Switzerland, and R&D is done there. I’ve hand-on (or should I say toes-on, since it was after a toe surgery ;-)) experience with brand new medicines being released on the German market after, it would appear, insufficient testing…
As an outsider, my impression of medical care in the US is that there’s an absurd amount of over-treatment. There’s a tendency to try to solve any problem with medication, e.g. put far too many kids on ADHD medication. And then, when medication doesn’t quite work, try more medication instead of less…
@Espen:
I do generally agree with your assessment. Don’t think I said ALL r&d was US, just a lot of it is (but I can see where I might have left that impression). And yes, we ‘way over treat’ but a lot of it is lawyer driven. If you can’t stand up in court and say “I did everything possible and then some” you will likely get whacked with a judgement. “I did the usual” is not a decent defense here.
BTW, the issue of “universal access” is disjoint from the issue of “socialized”. When I was a kid, ANYONE could get treatment at the county hospital. It was “universal access”. Today anyone can get treatment in an emergency room (not as efficient…).
It is the wholesale conversion to “Government run” that makes it a socialized system and brings with it the decay of government run sloth.
FWIW, I do believe in “universal access” but not at “socialized equality levels”. If I can buy a private hospital room with a maid and chef, I ought to be able to do so. If I have no money, I ought to get basic treatment at a grey hospital with no maid and a doctor who graduated, but maybe not ‘cum laude’… and maybe my wait will be longer too…
E.M.: In Germany, you get extras like private room if you’re privately insured. I had the choice (since my income was high enough) to insure my family privately, but chose one of the non-private, since the standard level of service was more than adequate (in fact much better than in Norway).
About the over treatment issue: Aha, lawyers, the doom of the US ;-) It should be possible to turn the tide, though: Sue doctors who prescribe more meds when less would be better?
Anyway, this might interest you, perhaps especially the part about the system in the Netherlands: http://www.brusselsjournal.com/node/665
E. M. Smith wrote:
If I have no money, I ought to get basic treatment at a grey hospital with no maid and a doctor who graduated, but maybe not ‘cum laude’… and maybe my wait will be longer too…
But at whose expense? Why is one man’s doctor bill another man’s responsibility?
A man who needs medical care and cannot pay for it has only the right to ask for voluntary charity — he doesn’t have a right to have the government confiscate another man’s earnings to pay for it.
No one can claim a right to have any amount of involuntary servitude enforced on his fellow man — no matter how badly he may need said servitude to pay his bills.
@Michael Smith
While I generally agree with the sentiment, I have to say it is for the same reason we have animal shelters and public police (we could, after all, just let folks hire private police…)
There is a basic level of common good we, collectively, would like in our society. Letting a person die from plague (and putting all of us at risk in the process) is a far worse moral choice than giving them $10 of Doxycycline. It’s that old “nose to spite face” thing. So $10 to cure their plague, or $1000 to bury them…
(This is NOT a hypothetical. Plague is endemic in rodents in, for example, California. If you don’t treat the couple of cases that pop up from time to time, you get a plague epidemic.)
For folks who are ‘able’, I could see having them do something like a community service program to “pay the bill”. But for the poor souls who have no capacity at all, it is inhumane to let them die for a libertarian principle… So I cut to a middle ground. “Free” care, but unpleasant enough that it will not be abused.
Also, for things like measles vaccination or polio vaccination, we all benefit from getting more folks vaccinated (you need a high percentage to squash the outbreak and prevent it in the first place). So ‘community health’ has good reason for wanting a ‘free vaccination’ program for poor folks. If YOU don’t pay for it, YOUR child (too young for vaccination) is at greater risk.
Again, not a hypothetical. When I was a kid, the county IIRC had a ‘free vaccination clinic’. It was held in the migrant worker camp in a cold concrete cinder block building with a desk, table or two, a nurse or two, and long lines. Folks with money went elsewhere, but in the end we all benefitted from eradication of Small Pox and suppression of Polio and Measles. (I still have my small pox scar from the vaccination I got in that clinic, and I’ve paid far more in taxes than it ever cost). So investing in a new generation can return more than the cost. We collectively no longer have the Measles epidemics of my youth nor do you have dozens of friends walking in braces from polio (as kids just a few years older than me did…)
So some nutter breaks a leg dumping his dirt bike. OK, we set it and put him in a cast after he waits a few hours for the gunshot drug dealers to be dealt with. But we don’t give him an artificial knee and welfare for life… And when he has recovered “enough” maybe we have him stuff envelopes for the “please send money” pledge break to pay for it all…
Just like we don’t let folks lie in the gutter drunk because your private police are not responsible for him nor the gutter. We drag him off to the drunk tank, on our collective dime; because we like the world better that way. And just like we don’t let the burglar run free because the home he burgled did not have a private prison.
@Espen
An absolutely fascinating article about European options. Something I wish our politicians would read…
Unfortunately, the USA will undoubtedly do something else that is the worst combination of the most expensive and least functional parts available ;-)
Mr. Smith:
I am not an anarchist — I did not and do not advocate “private police” or “private prisons”. Nor am I a “libertarian”. I am an Objectivist — I uphold the philosophy created by Ayn Rand, which she called Objectivism and which she dramatically demonstrated in her works of fiction such as “Atlas Shrugged“ and in numerous non-fiction works as well.
Government is an institution that holds a monopoly on the legal use of physical force in a given geographic region. Objectivism holds that it is never proper to INITIATE the use of physical force (or threat thereof) against individuals — that the only proper use of force is in retaliation against those that initiate its use (or threaten to). And to insure that force is only used in this fashion, Objectivism holds that government is crucially necessary.
The treatment of communicable diseases is a proper government function for the same reason the pursuit of criminals is proper — both pose a physical danger and/or threat to the rights of others. No disagreement there.
That, however, is not the issue I raised. I say that forcing one man to pay another man’s doctor bills — for a condition that is not a physical threat to anyone else — is every bit as wrong as forcing one man to pick another man’s cotton. It is wrong no matter how badly one may “need” the bill paid or the cotton picked.
It is wrong because all men possess the equal right to exist for their own sake and to pursue their own happiness, by means of their own honest effort. No amount of “need” on the part of one man endows him with a superior status relative to other men — no amount of “need” confers upon him a special right to have others forced into whatever amount of involuntary servitude is required to fulfill his needs.
The only answer you’ve given is the assertion that it is “inhumane” to let those who “have no capacity at all” die. Those who have “no capacity at all” must depend on the voluntary charity of others ( and such charity has never been lacking in this country. Prior to the creation of Medicaid and Medicare, the indigent and the elderly poor were cared for by doctors who donated their time voluntarily). Simply put, a “lack of capacity” does not give anyone the right to stage an armed robbery to get the funds they need — and nothing essential changes when you advocate that the government do the robbing for them.
Off topic, but I wish you included a way to post your blogs to places like facebook, twitter, and digg.
REPLY: [I don’t think it’s up to me, I think it’s up to WordPress. But I could be wrong… -E.M.Smith ]