Thursday, June 25, 2009

The Health Care Debate in Washington has the Wrong Metrics

I don’t fault Max Baucus for trying to forge some sort of reasonable bill or being a fellow member of the deficit hawk wing of the Democrat Party but let’s not lose sight of what really matters:

A bipartisan group of senators at work on health care reported progress Thursday in holding the cost of legislation to their $1 trillion target, but Republicans quickly added there was no agreement on even the outlines of a bill. "We have options that would enable us to write a $1 trillion bill, fully paid for," Sen. Max Baucus, chairman of the Senate Finance Committee, told reporters. His comments came one week after analysts set the cost of earlier proposals at $1.6 trillion over 10 years.

How much the government pays for health care is not even an issue in my book. The real budgetary issue is what do we pay as a nation overall. Let me explain with a simple example based – suppose that the average citizen currently spends $6300 a year out of his own pocket or via private insurance for health care and the government is spending $700 per person per year so the total cost of health care is $7000 per person per year. If a new health care system doubled what the government was paying (to $1400 per person per year) but lowered private payments to say $5500 per person per year, the cost of health care would then be $6900 per person per year. If we could do that with sacrificing the quality of health care, then the only issue would be how to pay for the extra government spending. Of course, the answer is easy and generally supported by the public – it’s called raising taxes. Of course, some of our nitwit political leaders see tax increases as the ultimate sin.


Oso said...

terrific synopsis. Thank you.

TheTrucker said...

The news media are beating the "cost" drum at every release. While all the intelligent analysis indicates that health care costs would decline _DRAMATICALLY_ in a single payer system without altering any health care procedures or tolerances, the media is hyping the tax angle. The media is corporations and corporations love Republicans.

Max Baucus is a Republican dresses up in a Democrat suit.

TheTrucker said...

The discussion about health insurance needs desperately to be waged on a whole life policy basis in order to make the most sense. Unfortunately, the public has the attention span of a lab rat and cannot think in those sorts of terms. And while this is one very good reason for representative government as opposed to a direct democracy, the news media actively undermines the value of such agency.

Our representatives are elected to spend their time on these sorts of matters and instead spend their time concerned about reelection and warding off the assaults form a media used to distort the issues.

The reality is that people age 20 to 65 are the producing group of the economy and they MUST support the non producing members or those members will do without. All health care costs and all other costs are borne by this segment. Burying gold in your back yard merely allows you to command the activities of this segment. The actual production is done by these people yer gold is worthless. They also support the education and development of the young. This is not a theory. It is an objective reality. My own calculations say that the productive members of the society (they are like 58%) would need to pay $200 a month into a health insurance pool and that would cover themselves and all the kids on a whole life basis. AT age 65 they coast till age 77.5.

I don't believe my own estimates but I have no valid data to work with and am forced to GUESS at the cost of "kid care". I can't remember how much doctoring my kids required but I don't recall it being a lot.

Jack said...

"Unfortunately, the public has the attention span of a lab rat and cannot think in those sorts of terms." Trucker

You're being too generous. I worked with lab rats way back when. Once learned, never forgotten. For the lab rat that is.

In fact it is that very lack of the ability to remember and to analyse that sets the human animal as distinct. Just when he thinks he's doing himself a great service, he is more likely stepping on his own member. Recall that more than 50% of the voters chose George Bush a second time. The old adage is hereby modified, "Fool me once shame on you. Fool me twice proves what a fool I be."

TheTrucker said...

My actual complaint lies with the, so called, "economics profession". All of the numbers needed to estimate the actual cost of health care with all the bloat and mismanagement incorporated at present is surely attainable. The amortization of that cost across the actual productive sector of the population is surely a number to which one could arrive. The publication of that number per capita is not too much to ask. That is the number that should be used as the initial COST and reductions in that costs need to be estimated and metrics set to record success or failure.

But the economists do not seem to be interested in doing what they should be doing.

Anonymous said...

I've been visiting a sick parent so seen more TV than usual.

The answer to the $trillion cost is to compare a trillion in improved health the the tens of trillions squandered by DoD on the same horizon. No one wants to consider, even remotely, that some of the waste in the pentagon or going to Mars might be better spent on health outcomes.

Second, I saw some "political commentator" saying health might cost the average tax payer $25 or such and that changed the support in their poll.

How about if the cost of the pentagon were broken out that way and the fact it detracts from productive use of the money were so analyzed?