Equation of the day

U

usta in Portland

Daily Driver
GDP=$15T (approx.)
Total earned wages and salaries as % of GDP=44% x $15T=$6.6T
Total health care costs as % 0f GDP=18% x $15T=$2.7T
Total health care costs as % of total earned wages ands salaries=41%

=OMG:eek:mg::eek:mg:
 
Indeed. Some fairly drastic reform is long overdue yet some are still trying to roll back the baby steps already taken. :sigh:
 
Unfortunately, let's hope not tragically,...

the 'baby-steps" in the form of the PPACA have become both lightening rod and red herring. There is so much political heat generated over how the premium payments for health insurance are to be accounted and paid for and who will be Peter and who Paul that the sheer magnitude of the underlying costs are all but ignored. Not sure there is a good answer.:hmm2::sigh: especially in the abence of clear and useful questions.
 
I totally can't understand some of those so opposed. I have a cousin with a son who has seizures, and he seems to think insurance just rains from heaven for people with 'existing conditions'! I also have a co-worker with a 'chronic' uncurable form of leukemia who is on a medication that cost $180,000 a year! In the small print of our company policy is a $1,000,000 lifetime max per individual... despite this, he rants on against the 'socialist takeover'!!!
 
It's a funny sort of...

socialism that demands you buy something from a for profit, capital intensive business. Lite-Totalitarianism maybe; anti-liberty maybe; but socialism, hmmm:hmm2::hmm2: That word needs to get back where it once belonged , just like Loretta:grin:
 
People forget that we once had the greatest health care system in the history of the world. Every attempt to fix it has only made it worse. At this point the only chance we will probably have to get back to that will be a complete financial collapse of the Federal government which will have horrific short term consequences for everyone. But unfortunately when it's nearly universally agreed that government intervention is the answer to problems caused by government intervention fixing the problems just aren't going to happen.
 
There is a way to look...

at that assessment as a rebuke to all other health care systems. They were so bad (and they were) that ours was indeed great.But that was in a period when raw health care was a direct consumer product and prior to broad emloyer based, insurance supported, systems. The impact of Medicare can't be overlooked from either end of the discussion. It certainly warped the market in medical services, but it also extended care where care had not been available or affordable. Also the issue at this juncture is not about returning to some Golden Era but about making some kindof care,available and affordable to everyone. I am aware that the libertarian stance on this is pretty much that health care is just one more thing that some people can afford and some can't and that's that. But such a stance is simply running in the face of trends that are both historical and global. Even China, the last holdout in the big economies, is heading towards greater health care access. :)
 
That ignores the enormous role charity has historically played in health care. For example, in the early days of the Mayo Clinic they charged based on what people could afford. With that business model they were enormously successful.
 
But that way doesn't keep the shareholders happy

The problem is that hospital care is not always provided by non-profits, and even when it is the costs that are charged are high to cover the cost of care for the uninsured patients they are required to care for.

We have two hospitals in my town. The for profit one turns away the uninsured and sends them down the road to the non-profit that has to take them.
 
The shareholder profit...

is one of the unsung features of the PPACA that ought to get more attention. Back in the early 90s health insurers operated at a so-called 'medical loss ratio" of about 90%. This ratio simply means that $9 out every $10 goes directly for payment of services and material for the care of patients. The remaining $1 is for profit and overhead. The reduction of this ratio became the main menas by which insurers competed for investor dollars and by 2005 the medical loss ratio was at around 77% and falling quickly. The PPACA actually establishes a limit on the ratio at between 80%-85%. I have not been able to find out if this range is just to allow for market fluctuation or applies to different types of policies. In any case it entails a couple of things-1) more of each premium dollar should go to patient care 2) there will undoubtedly be an effort by the insurers to define 'patient care' in such a way that some of the premium dollar finds its way back into profit. Also it is a ratio and therefor says nothing about the size of the premiums. If the big insurers remain 'for-profit' there will be some competition for investor money and it remains to be seen how this pans out in terms of cost and levels of patient care. The already obvious response has been increased co-pays and increased deductibles.
 
However big its role....

it has obviously not offset raw cost of care over the whole health care economy. Besides, this is now and that was then-I dont see how this applies:hmm2:

Anyway, before this spins out too far, the point of the original post was justt put the magnitude of the health care issue in some perspective so that when hearing Romney or Obama or their proxies yapping on about the PPACA the elephant in the room won't be entirely forgotten.:):) Idon't have a philosophical dog in this fight really. To me health care is just something we have to have and I think it should be had at the lowest cost with all stakeholders doing their part to hold down costs. That means people taking care of themselves first and foremost (CDC estimates that between 70-80% of all health care is essentially avoidable through the expedient of healthy lifestyle choices) thereby reducing demand. It also means redirecting our thinking away from health insurance to health care-the two are unproductively confounded right now.
 
"That means people taking care of themselves first and foremost (CDC estimates that between 70-80% of all health care is essentially avoidable through the expedient of healthy lifestyle choices) thereby reducing demand."

This is precisely why things have spiraled out of control. As long as "someone else" is footing the bill, there is no economic incentive for the consumer to take care of themselves.

There is a whole host of someone elses out there:
1. For the majority, it's the employer paying 75-100%.
2. For medicare recipients, it's current fica taxpayers paying about 75%.
3. For medicaid recipients, it's general taxpayers paying for 100%.
4. For the uninisured or underinsured, it's the majority making up their slack.

Let's not forget that medicare reimbursement levels are lower than the "market" price, so the shortfall between reimbursement and market is tacked onto the price paid by #1.

Re: #2 and #3, don't forget that for federal health care dollars, since the feds run such a high yearly deficit, the Chinese and Mideast bondholders are paying something like 25-40 of the shortfall.

The free market is the best available method (or to paraphrase Churchill, the worst method except for all the others) for allocating scarce resources. Yet shameless politicians continue to clamor for less and less and less of a free market in medical care. Each step they take makes the problem worse. Yet these a**holes continued to get voted back into office.
 
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If I try to follow out the.....

implications of the "...taking care of themselves.." I do land inevitably on some kind of incentive / disincentive mechanism. And of course a pure market solution should provide that theoretically, but we are dealing with a fairly inflexible commodity here and the market, in the absence of restraint, could simply become extortionate;especially as medical care is not mobile. I'm not so sure that it hasn't become so already. I think this is a real issue and not one that can be just Podsnapped away. So, how does the market handle that except by providing abundant good care to those that can afford it and providing lower quality or no care to those that cannot? I've not heard a good answer to this-have heard many bad ones though. Still it may be answerable:hmm2:
 
Under any system those with more money will be able to afford better care. There are benefits to being rich being able to afford nicer goods and services is one of the big ones. The unintended consequences of trying to fix this "problem" are pretty bad.
 
Dan Sarandrea (Phila) said:
"

4. For the uninisured or underinsured, it's the majority making up their slack.
Click to expand...


You make the assumption that everyone in this group gets the care they need and the majority pay for it. That is patently NOT the case. Many uninsured or underinsured people have to make the difficult choice to forego care. THEY pay for that either in the form of foregone earnings through sickness, increased burden on their family, or even early death. Being a member of a society means taking care of more than just yourself.

Apologies for getting all fired up. This is a topic of huge importance to me.
 
That is not the real issue...

it is simply a truism that people with money will buy what they need or want. The question in this, as always, is what about those who do not have enough money. If this were a matter of small sums and foregoing a luxury the arguments would be easy, but it is patently not about either small sums or luxuries. An day in a hospital with initial doctor's visits to get you there and follow up care and medications can easily reach a to a third or a half of the national median income. Who knows what chronic illness can cost!
Now, I recall that you believe health insurance should be like any other, that is to say against an unforeseen occurence. I have a sort of gut level attraction to this (in fact wish that I could buy just such a policy myself) but I don't understand how this would mesh with our real world wage structure (see original post) or deal with chronic illness, pediatric care, geriatric care, etc.... Would love know how all this could work. Keeping in mind that median household income is slightly south of $50k and medical costs are what they are.:hmm2:
 
"You make the assumption that everyone in this group gets the care they need and the majority pay for it."

Not in the least.

Let me clarify what I meant. When someone who is uninsured/underinsured presents at a medical facility with an emergency, they will get care. Either by law if the facility accepts federal medicare money, or by local law, or by charity.

Let's say uninsured Joe falls in his bathtub and breaks his arm. He goes to the ER. The docs set and cast his arm and he gets a scrip for some pain pills. Whatever that cost the facility, they are not going to get a dime from Joe, so that cost gets put in the "expenses" column of the ledger and overall "income" of the facility has to be increased by that amount so they don't lose money and eventually go out of business. So the "paying customers" prices are jacked up a bit to cover Joe's expenses.

This is not exclusive to the medical care business, all businesses have to raise prices to cover losses. For example, any retail business has to cover "shrinkage"....not Seinfeld-style shrinkage, but the fact that thru shoplifting and employee theft, some stock (or product, or service as the case may be) is going out the door without being paid for.
 
MGandini said:
Being a member of a society means taking care of more than just yourself.
Click to expand...

IMO voluntary charity is much better than forced charity, ie, the gov't collects taxes and then administers a welfare system. For me it's a case of my abhorrence of government coercion. But for the pragmatic types out there, better for no other reason that private charity is SO much more cost effective.
 
The 'shrinkage' in hospital...

emergency room losses is about 20% of gross income on a nationwide average-not a trivial sum-and is why hospital share prices bounced way up the day after the SCOTUS ruling. Health insurers shares did a little dip in anticipation of and after SCOTUS but nothing very dramatic. This is just in the way of background info.
But, one wonders if, all things considered, it wouldn't have been simpler and easier for the feds to just give block grants to states to distribute to non-profit hospitals for such care of the uninsured who show up at ER. For that matter wouldn't it have been equally simpler and easier for the feds to handle the 16.3% of the population that is uninsured by the same method. A seriously compromised and probably ineffective overhaul of the whole system (while still leaving up state to state barriers to insurance sales) seems naive at best.
 
How do you know?

As regards the last sentence. Besides which, how would charity keep up if the entire burden were dumped on them-there is such a thing as contribution fatigue that all charities suffer when donors are hit up too often for help.:hmm2: There is something in Scrooge's query about the workhouses:sigh:
 
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