Monthly Archives: January 2018

Health Care revisited

Health Care revisited

In several prior posts, I have railed at length regarding the healthcare cost epidemic in our country. As a refresher, I want to summarize the issue and the components that comprise the issue.

The cost of health care per person in our country is the highest on earth. Our entire system in broken and tweaking it is not a viable remedy. The primary culprits creating the out of control costs are:

  • Insurance & insurance companies – While providing a service their overhead and profits mean that a large % of premium payments do not reach the healthcare system. A single payer system, similar to the ones in Italy & France, are much more cost effective.
  • Drug Companies – Rx drugs just cost more here. In some instances, as much as 10 times more. The reason is that US companies amortize all of the research costs over US sales only and they view International sales as “incremental”. Outside of research the actual cost to make most drugs is miniscule.
  • Daily cost of hospital stays – This area is totally out of control. It can run as much as $12,000 per day as compared to under $1,000 for most European countries! The single largest contributing culprit are procedures. For example: The average cost of a CT scan in over $1,500 while that same cost in France is $183!
  • Physician compensation – Part, but not all, of the disparity here has to do with the outrageous cost of a medical education in the US. Advanced education is the only area of our economy where cost has increased at a faster rate than health care! Physician salaries and a doctor visit both average 2 ½ times more than their European counterparts.
  • Legal factors – We have far too many lawyers. We have 3 times as many per capita as The UK and 8 times as many as France. Some of this is due to our out of control incarceration rate. With only 5% of the world’s population we pay for 25% of the world’s incarcerated population! We still don’t seem to have enough work for the numbers of lawyers produced so they tend to create work. In this regard health care is an easy target. The result of this work is added costs for the Drug Companies and also for malpractice premiums. As expected, all of these are passed along to the tax payer.
  • All of us – We play a significant role. Obesity is a significant contributor to increasing medical costs. Obesity is a concern for all countries, but especially so here. Our rate stands at 35% while it is under 20% in both Italy & France. The most alarming fact is that our obesity rate has and is trending in the wrong direction, despite the billions tax payers are spending on Health Education each year. Not only is obesity a cost issue, it is also a significant factor in reducing “quality” of life for the afflicted. A case can be made that the trend would accelerate if we were not spending this money. My view is that there are much more cost-effective methods which will turn the trend around. The sad fact is that all that is required is 30 minutes a day of the proper exercise and a slight reduction in caloric intake. There are simple carrot & stick solutions.

Earlier posts contain considerably more details on the preceding six factors as well as sources for the statistics. Health care costs are the single largest factor contributing to the current budget deficit as well as our massive unfunded liability.

Violence in America

Chapter 61 Violence in America

Who cares about the facts? Since we can’t seem to solve the problem of violence in our country our only option is to ignore the facts.

The facts support the perception that we have nurtured a culture that is more violent than almost all the other first world countries.

Following are some facts:

The intentional homicide rate in the US is just under 5 per 100,000 per year.

This is more than 5 times the rate for the following countries:

UNODC murder rates (per 100,000 inhabitants). Most recent year UNODC has published
Country (or dependent territory, subnational area, etc.) Rate Count Region Subregion Year listed Notes
 Andorra 0.00 0 Europe Southern Europe 2015
 San Marino 0.00 0 Europe Southern Europe 2011
 Liechtenstein 0.00 0 Europe Western Europe 2015
 Monaco 0.00 0 Europe Western Europe 2008
 Macao 0.17 1 Asia Eastern Asia 2015
 Singapore 0.25 14 Asia South-Eastern Asia 2015
 Hong Kong 0.30 22 Asia Eastern Asia 2015
 Japan 0.31 395 Asia Eastern Asia 2014
 French Polynesia (France) 0.38 1 Oceania Polynesia 2009
 Brunei 0.49 2 Asia South-Eastern Asia 2013
 Indonesia 0.50 1,277 Asia South-Eastern Asia 2014
 Austria 0.51 44 Europe Western Europe 2015
 Bahrain 0.54 7 Asia Western Asia 2011
 Norway 0.56 29 Europe Northern Europe 2014
 Palestine 0.60 26 Asia Western Asia 2012 notes
 Netherlands 0.61 104 Europe Western Europe 2015
 Madagascar 0.62 130 Africa Eastern Africa 2010
 Ireland 0.64 30 Europe Northern Europe 2015
 United Arab Emirates 0.66 60 Asia Western Asia 2015
 Spain 0.66 303 Europe Southern Europe 2015
  Switzerland 0.69 57 Europe Western Europe 2015
 Burkina Faso 0.71 117 Africa Western Africa 2012
 Luxembourg 0.72 4 Europe Western Europe 2014
 China 0.74 10,083 Asia Eastern Asia 2014 notes
 South Korea 0.74 372 Asia Eastern Asia 2014
 Poland 0.74 286 Europe Eastern Europe 2015
 Czech Republic 0.75 79 Europe Eastern Europe 2015
 Italy 0.78 469 Europe Southern Europe 2015
 Taiwan 0.82 192 Asia Eastern Asia 2015
 Maldives 0.85 3 Asia Southern Asia 2013
 Greece 0.85 93 Europe Southern Europe 2015
 Germany 0.85 682 Europe Western Europe 2015
 Croatia 0.87 37 Europe Southern Europe 2015
 Slovakia 0.88 48 Europe Eastern Europe 2015
 Iceland 0.91 3 Europe Northern Europe 2015
 New Zealand 0.91 41 Oceania Australasia 2014
 United Kingdom 0.92 594 Europe Northern Europe 2014
 Tonga 0.95 1 Oceania Polynesia 2012
 Malta 0.96 4 Europe Southern Europe 2015
 Portugal 0.97 100 Europe Southern Europe 2015
 Australia 0.98 236 Oceania Australasia 2015
 Denmark 0.99


I wonder how the above countries manage to keep their homicide rates so low. Could we learn anything from them?

Path to a Balanced Budget

We spend far too much time arguing about increasing or decreasing taxes as a mean to stimulate the economy and solve the deficit issue. Our focus needs to be on spending. Following is a family simple and straight forward approach to balancing the Federal budget which I believe that the electorate, regardless of political “leaning” will support. For reasons that should by now be apparent, this will not be supported by our current elected representation:

1.     Despite our poor performance in providing quality health care our single largest area of spending is in this area. The solution is not to spend more. We have been doing this and it is not working. Available statistics show that our capita spending is more than double other countries that are providing a superior level of care. Our current level of spending for Medicare & Medicaid is $1.15 Billion. A new system of health care would conservatively save $500 billion.

2.     Our 2nd largest budget is Social Security. I am not in favor of cuts in this area. In fact, with the aging of our population this area will need to increase.

3.     Next largest area is Defense/War. I do not have a problem with Defense. I favor additional funding here as long as it spent efficiently. I have a problem with the “war”. Our current level of spending is over $630 billion. We the currently spent more than $2 trillion in “direct” costs to the offensive campaigns in Iraq & Afghanistan. This does not take into account the cost in human lives which now stands over 300,000 (125,000 of these have been civilians). Nor does it take into account the related costs to our dedicated warriors in terms of rehabilitation. It is estimated that if we withdraw now the total eventual cost of these incursions will exceed $4 trillion.  Other estimates put the total nearer $6 trillion. Currently about $200 billion per year (about $100 billion in each war zone) is being spent on these, so far unsuccessful, efforts. I am in favor of bringing our boys and girls home now.

Focus on just two areas of spending has the potential to balance the budget. The current budget deficit is running at $684 Billion. Financial opportunities would remain in the areas of: productivity/efficiency, civil service salary inequity, disability abuse & other income security reform.