There is general agreement that our country spends too much on health care. I’m not so sure that’s actually true.
Why? The key here is recognizing the truth of David Goldhill’s distinction: “Health insurance isn’t health care.” This points us to another distinction, that of spending on care vs. spending on insurance. We tend to run them together, and I would certainly agree that we spend too much on these two things in combination; but we need to understand that in fact they’re two very different things—and I would argue that we should view spending money on them very, very differently.
Money spent on health care proper is money that goes to local businesses, perhaps a local non-profit organization (that would be, perhaps, your local hospital), and to other businesses that employ people to make things and to design new things to make. Money spent on healthinsurance is spent on bureaucrats who generate paper; indirectly, it also goes to subsidize trial lawyers and their campaign contributions to Democratic politicians. A good chunk of what you pay for health care also goes to this purpose, of course, in the percentage of your bill that is used to defray insurance costs for your doctor, your hospital, and so on.
Do we spend too much money on health care? No, what we spend too much money on—far too much money—is bureaucrats and trial lawyers. This is what needs to change most of all if we’re going to bring down the combined cost of health care and health insurance; and if we focus instead on reducing the cost of health care, we’re going to reduce the quality of our care without ever addressing the real problem and the real inefficiency of the current system.
This is, I think, what has happened to health care in Britain under the National Health Service. British cyberfriend David Riddick defends the NHS, in part, on the grounds that the UK spends less on health care than the US, and certainly the share of GDP spent on the combination of health care and health insurance is lower there; but given that they spend a higher percentage of that on bureaucrats, I don’t think that’s actually a good thing. That doesn’t drive good care, because the money isn’t being spent on care, and it doesn’t help the British economy any, either. Bureaucrats aren’t productive for the economy—they don’t create wealth, they don’t create jobs, they don’t create innovation; they just create red tape and paperwork.
The same is not true of much of the rest of the health care sector in modern economies. To take one example, the community where I live is the home of a cluster of orthopedics-products companies that make artificial joints, spinal hardware, and the like—products that relieve people (mainly, but not only, older people) of a great deal of pain and greatly improve their quality of life. These companies employ a lot of people, offering good manufacturing jobs as well as a lot of design and engineering work, and they drive research, as they’re always working on developing new and better products. So far, they’ve weathered the financial storm quite well; people will put off luxuries and elective purchases in tough economic times, but if you’re in pain and you can’t walk right, you’re not going to put off getting a new knee or a new hip if that will solve the problem.
Right now, though, they’re deeply worried about the push to nationalize our health care system, because it’s going to devastate their business. That artificial hip that the president keeps talking about, the one that he thinks might have been a waste to put in his grandmother, didn’t come from nowhere; it probably came from Warsaw, and it employed a number of people. His idea of how to cut health-care costs isn’t going to reduce the amount of money that goes to bureaucrats—it’s going to increase that spending, because we’ll need a lot more bureaucrats to run his program and decide which people are allowed to get new hips and knees. Instead, it’s going to reduce the amount of money that goes to companies like Zimmer and Biomet, which means it’s going to reduce the number of people they employ to design and build their products.
Health care “reform” as envisioned by the Democrats will take money out of their pockets to pay even more bureaucrats; it will shift money from a profitable sector of our economy, one that creates jobs that pay good wages and new products that improve people’s lives, to an unprofitable sector (the government)—and all in the name of spending less money. The contrast with the “stimulus” package is ironic. There we were told, “Spending money is good—increasing spending is good for the economy.” When it comes to health care, though, the government is telling us that spending money is bad, and so we need to hire lots and lots more bureaucrats so that we can cut down on the money we spend on actual health care. In the spirit of the “stimulus” package, wouldn’t it make more sense to increase the amount of money going to companies like Biomet and Zimmer so that they can hire more people and help the economy?
We tend to talk about the cost of health care as if cost were the only side of the coin, and it just isn’t; the money we spend doesn’t just vanish into thin air. Instead, that money goes to actual people, and much of it drives good things in our economy. Health care spending creates economic growth; it’s good for our country. We don’t need to spend less money on care; we need to spend less on bureaucrats and trial lawyers. Unfortunately, the president’s plan gets this backwards; we need to put it right way ’round.
I agree – sort of. I think you really let insurance companies off the hook far too easily (though putting trial lawyers on the hook makes sense). I'm suspicious of any industry that posts such massive profits and can go to such lengths to keep from providing people care – maybe just a half of a percent, but every one of them suffering from a serious injury or illness and very much in need of what they thought they were paying for.
I mean, let's be honest. If insurance is for-profit, that means that the only way an insurance company is viable is if they never pay out what people pay in. They have ever incentive to drop someone like a bad habit as soon as they really, really need medical care, while they rest of us go to the doctor every few months and pay our $500 monthly bill meekly. We hope that, when the time comes, we won't be the ones being dropped, but I sure wish there was some kind of guarantee on that bet.
On the other hand, if health coverage is non-profit, that means that the incentive is other than maximizing profits. And the thing is, those socialized health systems in Canada and Europe do pay less and do result in better care for the vast majority of the populace (that is longer and healthier lives). Everyone can find a scary anecdote, but the fact remains that our health care is abysmally poor among industrialized nations.
In brief, the profit motive has failed to deliver good health, and the solution isn't just going after trial lawyers, or preferring for-profit bureaucrats to government bureaucrats (since both basically function as you describe)
I don't see how I let them off the hook when I said that spending on health insurance needs to come down because all it does is enrich bureaucrats. As I thought I made clear, we need to cut spending on all bureaucrats, and I don't care who writes their checks.
As for your comparison of our health care to that of other countries, I think you're wrong; I just don't see the evidence to support that claim, whereas I can pull a fair bit to refute it. That said, I am not for that reason advocating for-profit hospitals over non-profits, by any means.