The issue with health care

$2.7 trillion per year is a lot of money and healthcare inflation is high (at least 6% annually.) That’s what we are annually spending on healthcare in this country. By total dollars and by percentage of GDP, we are spending more than anyone else in the world on healthcare. Furthermore, on most metrics, we rank far behind many other developed countries with regards to health. It does not sound like a bargain – shouldn’t we be able to provide coverage for everyone and/or have better results?
 
Other countries run on basically a Medicare model of care, ensuring that all have healthcare coverage, while limiting the knee-jerk use of expensive tests and interventions. In medicine, we call this “conservative management.”
 
The U.S. is like no other country in the world. We rely upon private insurers to pay for a large amount of care (about 45% of individuals have private insurance.) The goal of the private insurers is to make money. They do this by reducing their payouts whenever possible. This means insuring only healthy individuals, excluding “sick” individuals (or making them pay much higher premiums), and avoiding paying for as much care delivered as possible.
 
Private insurers are expensive and inefficient. Using data from the California Department of Managed Care, private health insurance companies regulated by the department spend $6 billion each year on administration, and divert an additional $4.3 billion to profit (approximately 25% of the moneys that they gather.) Measuring the administrative costs in the public insurance entities is much lower, but by how much is unknown (some say admin costs are on the order of 2 to 4%.)
 
What we want in our healthcare proposals are
  1. Inclusiveness – everyone should be covered
  2. Efficiency – healthcare dollars should be spent on healthcare, not on administrative costs and not on excessive profits
  3. Cost containment – inflation in healthcare costs must be controlled

A lot has been written about the healthcare proposals for the campaigns at this point. Perhaps, the biggest differences can be attributed to the differing philosophies of the two campaigns. The Obama plan favors an expansion of some public insurance programs (including mandating coverage for all children), while the McCain plan favors the private insurance market. As I wrote previously, I am not a big fan of the McCain plan in its current incarnation (as it is more likely to result in problems for individuals who are sicker) and favor Obama’s proposal as it is (as it expands current programs without shifting adults out of their current healthcare.)

 
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Comments

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Rachael says:

That's a ridiculous amount to be spending on healthcare. I wonder how much of that is sucked up on administration costs.

Wer says:

Its really good that health care is completely taken care of including that of <a href="http://www.gerber.com/Expert_Advice/Expert_Advice_By_Topic.aspx">children</a>. Guess this plan is more people oriented and should really work out well.

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