Sunday, August 9, 2009

If it ain't broke, don't fix it. If it is, fix it!

Factoring in costs borne by the government, the private sector, and individuals, the United States spends over $1.9 trillion annually on health care expenses, more than any other industrialized country.

Based on OECD analyses, the United States spends more per capita on health care than any other country, and has one of the highest growth rates in per capita health care spending since 1980 among higher income countries. The U.S. spent by far a higher share of its gross domestic product (GDP) on health care than any other industrialized country. Since 1980, the U.S. also has had among the highest average annual growth rates in per capita spending on health care. Despite this relatively high level of spending, the U.S. does not appear to provide substantially greater health resources to its citizens, or achieve substantially better health benchmarks, compared to other developed countries.

The United States spent 16 percent of its GDP in 2007 on health care, higher than any other developed nation. The nonpartisan Congressional Budget Office (CBO) estimates that number will rise to 25 percent by 2025.

A lot of people seem to believe that the reason the U.S. spends more than other countries is because we're a litigious society, i.e., they blame malpractice law suits. Others believe our health care costs more because it's more readily available (to those who can afford it). They claim people living in places with "socialized medicine" have to wait forever to see a doctor or have a procedure done. And yet a recent study by the John Hopkins School of Public Health found that neither one of these factors explain more than an insignificant fraction of the difference in health care costs. This study also showed that the U.S. citizens are paying more for comparable, or worse outcomes.

U.S. businesses, finding the cost of health care benefits for their employees too onerous, are out sourcing jobs overseas, and access to employer-sponsored health insurance has been on the decline.

No wonder it went bankrupt. General Motors covered more than 1.1 million employees and former employees, and the company said it spent roughly $5.6 billion on health care expenses in 2006. GM said health care costs added between $1,500 and $2,000 to the sticker price of every automobile it made.

There are some 43 million Americans without health insurance. Uninsured persons accounted for nearly one-fifth of the 120 million hospital-based emergency department visits in 2006. The absolute number of people using emergency rooms has gone up as much as 20 to 30 percent in the last six to eight months due to the recession and people losing their jobs. Handling health care in the ER is the most inefficient, lest effective way of addressing America's health needs. The cost of ER care for uninsured patients doesn't disappear. It strains hospital budgets and can be indirectly shifted onto families and individuals that do have insurance coverage in a "hidden tax" of higher premiums. Estimates put the hidden tax somewhere between $1,000 and $1,300.

Of course the true cost of a broken health care system is in the quality of care that's afforded American citizens. Yes, it's broken. Let's fix it!

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