Health in Crisis

Health in Crisis

Frequent readers will know that Healthcare in our country is my primary soapbox issue. The importance of this most important system not only impacts the quality of life and longevity it is the single largest contributor to both the national debt and the high tax burden on the middle class.  The following link will take you to an excellent article regarding the decline of health in our country. Our healthcare system is broken.

America Was in an Early-Death Crisis Long Before COVID – The Atlantic

In terms of quality care, the USA does not fare well. There are several services that rate countries by quality. None of them rank us above #18 and the WHO (probably using the most credible factors ranks us as 37th). See info on how they define the quality of care at:

Since we spend far more per capita on healthcare than any other country we should expect to be number 1 rated by all. What has gone wrong? Why is our per capita costs more than double the average of the EU countries, Australia & New Zealand? Should residents of the wealthiest country in the world expect that quality healthcare is a “right”, not something that is available if you can afford to pay?

The ”Affordable” Healthcare Act was initially a step in the right direction, the final version was a disaster from the perspective of the middle class.  Keep in mind that although per capita GDP has doubled in the past 20 years, the average family income has only increased by 8 %. Consider a middle-class couple that earns a typical middle-class income of $80,000 per year, but has no company-provided health insurance. Their insurance premium will run about $800 per month for a silver plan. This plan is only affordable if neither person uses it. The premium only amounts to about 12% of their pretax income. However, If both max out usage then the cost (with co-pays & deductibles) can exceed 30% of pretax income.

Compare this to the situation in most of the EU countries where healthcare is considered a right and not a privilege. The cost of health insurance and copays is less than 5%. This is what I mean when I say that our healthcare system is a “hidden” tax that we are paying.

The situation only gets worse. Healthcare is the single largest Industry (by dollar volume) in our country.  At over $3 trillion per annum, this is a massive industry. About 1/3 of this is covered by Federal Programs (Medicare & Medicaid) and slightly less than 1/3 by company benefit plans with the balance paid by private residents via the affordable care act premiums and all insurance copays. In total, we are paying out over $11,000 per capita per year. This is about 2 ½ times the average of the EU countries. If we could cut our costs in half (we would still be higher than most) how would that impact the National Debt? Did you know that the average administrative costs for Medicare & Medicaid are under 3%? Did you know that the average administrative costs plus profits for Health Insurance Companies are over 20%?  Did you know that the average nightly room cost in a hospital here (Not including any medical services) is over $1,100 (about 4 times the EU average)? Did you know that the average income of physicians is double the average for EU countries? You probably know how much more we pay for RX drugs here. You may not know that we have 3 times as many lawyers per capita as the EU countries. Do you think any of the previous factors are impacting healthcare costs?