“Everyone has a lesson to learn here, including you and me. We have to live within our means.” - Dr. Mark Dotzour, PhD., chief economist and director of research for the Real Estate Center at Texas A&M University.
I know that we all have some hard positions formed on issues like healthcare, energy, taxation, etc... but just for a moment, loosen up, work with me...
Imagine for just a second, that Americans, and Westerners in general, actually SAVED MONEY. I am not talking 3% per year in their 401k. I am talking Asian style saving, 12%, 15%, even 25%. Just kidding, let's go with 12%.
Now let us take healthcare.
In an environment of 12% savings, how many fewer medical bankruptcies would occur? I will give you a "guesstimate" - OVER 90% OF BANKRUPTCIES DUE TO MEDICAL BILLS WOULD NO LONGER BE NECESSARY.
Let me give it to you straight. This is not empirical, but there was enough data for what I would be willing to bet would turn out to be a pretty accurate hypothesis. Just from surfing the web and reading, it seems to me that the vast majority of bankruptcies were for less than, get this, $35,000! The 3 major reasons for bankruptcy were unemployment, divorce, and medical bills - and not necessarily in that order.
People under 40 have fewer health problems than people over 40, so it is a reasonable assumption that more of the over 40 bankruptcies would be for medical debts, but the amount of debt being discharged did not vary much with age. It seems that there is a point of hopelessness at about $25,000 of debt. It also makes sense that the total debt to be discharged would be capped by market forces (inability to borrow more) and government programs like Medicaid and Medicare Disability (don't understand how these programs work? Neither do most Americans - but that does not stop them from having some VERY HARDENED POSITIONS on healthcare...).
If Americans had a culture of savings (and savings are for rainy days, no?), and saved 9% to 12% of their household income, and did not view savings ONLY for vacations and other consumer items, the issue of healthcare bankruptcy would be next to ZERO (as savings at 9% to 12% of average household income would pile up many multiples of $35,000 by the time people reached 40).
I can do this same trick with Social Security, College, your daughter's wedding, etc...
The problem is that as a society, we are all debtors, not savers, and it will take some time and continued forced adjustment of expectations to fix it... but every government policy we have rolled out has been designed to increase your debts - NOT YOUR SAVINGS.
The vast majority of our issues would be cured, over time, by increasing our savings rate and accepting that we must all live within our means. The problem with our political system is that our politicians must tell voters what they want to hear, or already believe, in order to get elected. Americans do not want to have to save (savings means delayed gratification, and even when we do save we don't it to be for securing life's risks, we want it for consumables). They want to run their lives right on the edge of financial disaster and then gnash their teeth if one of life's wheels runs off the road.
I have an idea... if government really feels the need to interfere with the free market... Let it limit Law School slots and INCREASE Medical School and Nursing School slots. The increased number of physicians will increase competition and drive down prices. In addition, government should create tax free medical savings accounts that people get to KEEP if they do not use them, while at the same time decriminalize drugs. This would give folks serious incentive to keep fit and not abuse tobacco and alcohol and drugs, and the savings from law enforcement for drug prohibition could be used to expand Medicaid and Medicare Disability for people who exhaust their Medical Savings Accounts.
Or we could just keep doing what we are doing, and have a bunch of innumerate lawyers (the mathematical equivalent of illiterate) coming up with policies without doing a SHRED of cost/benefit analysis.
"The first years of man must make provision for the last." Samuel Johnson, 1709-1784
Mentatt (at) yahoo (d0t) com
15 comments:
I know that both of my adopted children came to us with huge problems. My youngest eats via a feeding tube and has had 3 major surgeries. The elder of the two needs about $4000.00 a year worth of medication. Both girls are doing very well-they are fabulous kids and we have never regretted our decision- but their care would have bankrupted us many times over and we are really good savers. They have state sponsored medical care because they were adopted from the foster care system so we were saved from that fate. There would have to be a catastophic illness provision. The impossible thing for me to imagine is a world where these kind and loving little girls would have died because of rationed care. I can think of it in the abstract but not in the reality of my dear little Phoebe.
From the European perspective (esecially Britain) it seems impossible that a civilised country can subject its citizens to a life-and-death healthcare lottery like you do in America. Isn't that part of the definition of civilised?
How can a country pay trillions of dollars on war machinery and yet not care for ALL its citizens? What does it cost the country to have so many too sick to work?
This is where your free market fails. As I see it, education and healthcare are part of maintenance of the human capital which makes a country wealthy and civilised, as much as maintaining a clean water supply, electricity grids, railways and ports is essential for capital infrastructure.
If you don't take responsibility nationally to maintain your capital, both human and infrastructure, the country falls to pieces. Isn't that what government is for?
Thank you for that. Who said that a nation is judged by how it cares for its most vulnerable citizens?
Kathy & Donal:
This is really tough.
If industrial society was going to go on forever, with ever increasing energy, fish, wood, water, etc... consumption, AND we had a political system that elected not only competent people but allowed them somehow to do only noble and perfectly thought out, perfectly executed policy... We, as a society, could do ANYTHING that ANY noble heart thought was right.
And there is earth, early 21st century... How do you reconcile your vision of a "noble society" with the end of the age of industrialization?
We can provide care for our citizens AND everybody still has to die... how does that compute in a society that is measured by how noble it is...and where does society draw the line?
Care is ALWAYS rationed, in America, in Europe, in China, in the FSU.... ALWAYS and EVERYWHERE. The question was how do we get the most output for our input, right?
Donal specifically:
Our system is absolutely, positively not broken. The wealthy from the world over come HERE for care. The poor have not a care in the world (as far as healthcare goes) - they have medicaid.
Those that cannot afford to pay, simply do not pay! THEY STILL receive care. What is so bad with bankruptcy for people who had nothing to lose? If you went bankrupt for $35k in debts it would seem to me that bankruptcy cost you NOTHING because you HAD NOTHING, otherwise you would have forked overt the $35k.
No, this is simply another manufactured political issue EASILY sold to people that want something for nothing.
Donal... BTW... it is not necessary to bring up America's silly war machine in response to everything.
We will stipulate that you are 100% correct in this regard in any future discussion... but don't worry, the fix is in for that, too.
Donal:
This is AMERICA, not Europe. You simply cannot apply your sensitivities here, anymore than Americans can apply their sensitivities to Russia, China, Iraq, Iran...
We have to deal with the political realities of HERE, and you have to deal with the political realities of THERE - and they are not the same.
When (not if) Europe must provide for its OWN defense, your system will be required to change MOST dramatically... and this is in addition to the energy issues that are about to Smash Europe in the head sometime in the next decade.
We are just coming up with excuses and rationalizations why we don't have single-payer health care in America, as in Europe and everywhere else with modern thought and clean water. We spend $2.2 trillion a year and can't give everyone at least a primary care physician to find the little things before they become big things? We have dozens of bandaids for the health care system (medicare, medicaid, public hospitals, charity care, clinics, etc etc) to provide everyone with care who isn't like me: 42, white, educated, employed, and covered by Blue Cross. Let's stop wasting time and do whatever one else appears able to do ... cover everyone here. The rich will manage, assuming their gold-plated health care doesn't kill them like Michael Jackson's did.
Greg; I'll answer your responses:
A noble society is one where basic human rights are provided first, not at the end of a long list of military through to plasma TV's. Last I heard, the U.N. rated the U.S. 36th in its healthcare provision, far below Cuba! Are you saying that's OK? Are you saying you can't afford to be better than Cuba for everyone?
It isn't that everyone dies, it is the manner in which people LIVE! The quality of people's lives (EVERY person, not just rich people) is surely the most important. In fact, as a capitalist, isn't it a sensible business decision to have a healthy (and literate) workforce?
Yes, you are right, America is the place where RICH people go for private health care. Yet you pay more per capita in the U.S. than we do in Britain (or France) for free universal health care, so isn't it a sound business decision to change to free universal health care?
You mention the military; it IS valid because veterans (usually in their 20's when released from service)are overly represented in physical and mental healthcare, bankruptcy, homelessness and the prison population. Not just a financial cost but also a miserable human tragedy for many families. Your comment that 'bankruptcy isn't so bad' doesn't work; many people obviously feel differently because it is one of the prime reasons for suicide. These aren't European sensibilities, these are human sensibilities.
Lastly, yes, Europe has energy issues too. But Britain is still almost self-sufficient in oil and France has 80% nuclear and 7% hydro electricity, Britain, Holland and Germany are investing heavily in wind.But also our infrastructure has long followed a more efficient model.
As for military protection, yes, times are changing. But it has cost Britain dear (not just in money)to keep alongside America in Iraq and Afganistan, both seriously flawed decisions. France was right; we shouldn't have gone there.
But hey; its healthy to disagree! (especially when you realise you're wrong on this one!! ;-)
The problem with pure capitalism is it generally leads to pure totalitarianism thru communism. The system we have now provides excellent care if one can afford it but at the bottom we have people going to the ER for minor problems. Public preventive care could save money in the long run.
On the health savings plan it would be fairly simple to do major medical insurance then set up health savings accounts that would build up to the deductible then roll over into taxable income when it was topped off. It would also mean anyone seeking care for minor issues would feel the cost of all the unnecessary tests and balk; driving down one of the major costs. On the other hand it would give all the decision-making ability to the person seeking care and their physician so it’s probably politically impossible.
@Donal
Vets get free healthcare for life thru Veterans Affairs though most have private insurance and private physicians.
I have the flu (H1N1)right now. I have been sich as a dog for over a week. Thank goodness I could call my MD, get an appointment for the same day, get an antibiotic and go home to bed (and read my favorite blogs- Hey Greg-I am going to be laying low for another week. Could you please post a lot? I am so bored). Otherwise I would probably die as I have some underlying asthma and got a terrible sinus infection to tag along. I am not suggesting that we will be able to save every one pound premie in the future, just that there should be a basic level of care one shouldn't have to worry about.
I know a guy who cuts hair for a living, he makes enough. He told me when he is sick he goes to the emergency room, gives a false name, address and social security number, and gets free treatment. This means the taxpayers are on the hook for what should be a $100 doctors visit, that balloons to $1,000 since he goes to the e.r. The head of the hospital told me last year he had to send a bill to the feds for 100,000,000. I think the hospital likes this because they get $1,000 for treating minor problems. If we are gonna give free care it makes sense that we do it in a more efficient way.
Oh, on the other hand, my friend moved to Holland, it takes six months to go to the dentist.
And the Dutch government sent some busybody into her apartment to count her toothbrushes, to make sure too many people are not living in one apartment.
Kathy,
I hope you are feeling better soon.
Check back soon, we will continue on this line of thinking.
If the Cuban medical system gets higher ratings from the UN, then the UN is run by leftist loonies! What the hell good is universal health care, when the system can't afford Bandaids? Give me a break.
Donal,
My best friend's mother-in-law had a stroke. She came under the care of the NHS, and was hospitalized. Her doctor came on rounds every 3 to 4 days. She lost the ability to swallow, but was prescribed oral medications, regardless. Her nurses, none of whom spoke English, simply shoved the pills into her mouth, where they were allowed to melt. His wife is an MD. She took a trip to England and had the situation corrected.
The only place in the US where anything close to that level of neglect occurs is in state run nunsing homes.
No thank you!
Regards,
Coal Guy
A medical savings account that you could KEEP is the best idea to come around in a long time. It would bring some market sanity back to medicine. No one cares about cost in a personal way as long as there is third party billing. Costs for routine care would plummet.
I grew up in a steel town in Western PA. My dad worked for the electric company, however. Within a month after the USW won a dental care package, the price of a filling at the dentist went from $14 to $28 for everybody. Medical savings accounts would correct that problem.
Regards,
Coal Guy
1) Any comparison to the UK health care system (the NHS) assumes that things are oh-so-much-better in U.S. hospitals. I was in one, off and on, for three months in 2005. While the rest was nice, the communication and actions of the doctor and nurses was far from "gold-plated." I was kept in the dark about mostly everything, and everyone said or did nothing (except the medical students, who actually talked a lot) because everyone was either too busy or likely told by the hospital management not to risk a lawsuit by saying anything that might not be the exact truth. You don't get better care in American hospitals just cause we have private insurance. We're treated like pets just the same.
2) When you are in a hospital with a "life-threatening" illness, you don't get to "shop around" for better care. You are stuck with the first place you go to. Medical savings accounts, when it comes to serious medical care, does nothing for you. You want the discomfort/pain to stop, and you aren't in a "shopping" mood to make get it fixed. Shopping fr health care, except for low-dollar things, is unrealistic.
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