AzTeK

First of I just want to get out there that this is by no means an attempt to bash anyone, I really just want to get to the bottom of it.

You know, I've really been thinking about this isse a lot lately, but somehow I can't come to a real conclusion. Capitalists and libertarians would think that the basic logic behind a free market should assure that a healthcare system based on free trade should ensure for the best treatment for the smallest price. Basic law of a competitive market if you will. However, there is no denial that this somehow goes wrong in the US and actually backfires. I tried to compell some numbers here in order to make it a bit easier to overlook the matter.

• relative healthcare costs France (% of total GDP) - 10.1%
• relative helathcare costs US (% of GDP) - 15.2%
  
• absolute healthcare costs per capita France - $6.401
• relative helathcare costs per capita US - $3.374
  
• France internationally, according to WHO - #1
• US internationally, according to WHO - #33

Those numbers seem pretty obvious, and we're not even taking into account socialised medicine covers 100% of the population, while in the US only 5/6s are insured. In other words, the costs for covering everyone in the US would probably amount to $7.712. But I've heard a couple of times before that the high costs for healthcare in the US is due to programs like Medicaid and Medicare, so let's look at those and substract them from the number above.

Costs of Medicare according to 2008 US budget plan - $386 billion
Costs of Medicaid according to 2008 US budget plan - $209 billion

Considering the US has an estimated population of 303,302,000 people, the costs listed above per capita amount to $1.270 for medicare and $689 for medicaid - a total of $1.959 per capita "because" of government plans.

If we substract that from the total per capita costs that leaves us with $4.442 per capita that are "produced" by the free market. That's still a whooping $1.100 per capita more than in a compareable socialised medicine country. Since any other comparison would be useless, let's calculate what the costs per capita would be if really 100% of people where to be covered by a free market system - $5.351 per capita, which, relatively speaking, leaves us with 11,7% of GDP, which is compareable to france, eventhough this number is flawed since all the patients that are under medicare or medicaid would also have to get private insurance, in other words, you'd have to add more than just 1/6th to the "free market costs" if you want everyone to really be covered by the free market, which would drive the costs higher.

But let's just assume this is the number, then we have something compareable to France in terms of costs - but lightyears away from it compared to performance (as the WHO study shows).

Let's look at another number, the first six months of breast cancer treatment:

• breast cancer treatment France (% of GDP/capita) - 34%
• Breast cancer treatment US (% of GDP/capita) - 52%
  
• absolute cost breast cancer treatment France - $13.856
• absolute cost breast cancer treatment US - $23.708
  http://www.cancer.org/downloads/AA/CancerAtlas16.pdf

That's breast cancer treatment almost twice as expensive in the US as in france!

So what is going wrong? Shouldnt a free market provide for a better product at cheaper prices? In the US, we have the opposite - a worse product at a more expensive price.

It boggles my mind, for I too believe in the free market being able not only to create wealth but also, as long as competitiveness exists, provide the best value, but considering the overwhelming numbers above, it's really hard to be an advocate of the free market these days...

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Modica

The bible says that "the lord blesses a nation that takes care of its poor". I assume that god isn't very happy with the United States since it denies almost 50 million people healthcare.

AzTeK

Thnx Modica for your statement, but it doesn't really help me in terms of understanding what's going wrong

Anyone out there with a clue? Whenever one tries to argue the free market is superior to a government run system, they bring up the healthcare system and the US and stop anyone dead in his tracks...

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LessGovMrPrez

OUr market is not free. It is one, if not the most regulated industry we got. People are spending their employers money every time they go to a doctor. The insurance company and the government know this. So they jack up prices on the employers, which bleeds into the market place and prices. Pull the middleman out (employers) and let the people deal directly with the insurance company themselves. As we do that, pull the government out as well and prices fall b/c competition takes hold, where there currently really is none. It is not like I can go down the street and compete for health insurance, like I can for car or homeeowners. I either take the job and get covered by whatever brand of insurance the company uses or I dont.

Prices alone dont mean healthcare is bad either.

LessGovMrPrez

No, our nation denies nobody. Anybody, even illegals, get treated in this nation, so your entire statement is false.

The 50 million number has been explained 6 ways from Sunday and people still dont get what it means. The 50 million number is what is used to sell UHC. Once you break down that number into its actual constituents, the number is only 10-15 million. But government politicians will make it sound dire so as to create crisis where there really is none. It is one way the socialist movement gets things done: by scaring people into the government's arms.

Is God upset at the nation, or the people who run the nation who knowingly provide false information in order to enslave them?

LessGovMrPrez

Crap! It double posted, sorry.

AzTeK

As you say, companies end up paying for their employees. Considering companies have a much higher bargaining position than an individual, competition should be even stronger with companies instead of individuals exerting power towards lower prices, should it not? Even further, as companies will most likely get "packages" since they'r providing the insurance company a lot of customers, that ought to drop prices even further.

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LessGovMrPrez

No, competition is achieved out in the open market by individuals, not companies themselves.

No, b/c the individual is the force that drives the competitive markets, not companies then individuals. Companies are only solvent when individuals, see a good enough deal to make a contract with them. If that company sours, then the individual turns away from it, forcing the company to either continue business as usual and go under, or change to the market forces.

You have got the competition thing completely backwards.

No again. Insurance is heavily regulated by government and therefore the insurance company will ask for more from the companies themselves b/c they know that the government makes companies pay for their employees coverage. There is no choice in the matter b/c the government has made it so. So insurance hikes premiums on companies b/c they know the company will have to pay for the employees benefits. The company is caught in the middle. The company is caught inbetween the employee and the insurance/government...aka the middleman. The government and insurance companies are profiting from the setup as it is, but the company and the individual gets the shaft. That is why we need to take the company out of the middleman position and make the individual deal directly with the insurance company and the government. By doing this people will see just how far the government controls it and will ask for answers from teh government, which will make the government a little more weary of their relationship with insurance companies.

It really isnt rocket science. Want higher wages at work? Go talk to an employer and ask how much money they could have if they didnt have to pay for their employees health benefits. Right now it costs a company 100,000 to higher someone. How much of that is insruance related?

Every time someone goes to a doctor, people dont ask how much it costs. They hand over their card and let the company they work for pay the bill. In the end it hurts the company and the individuals own pay b/c our government has made the company the benefactor of our health.

AzTeK

I still don't get how companies should not be in the position to bargain with insurance companies. It's not like there was a monopoly of one insurance company owning the entire healthcare system in the US. Even if companies are "forced" to provide healthcare for their employees, if they'r stuck with an insurance company that costs them too much they can just make the switch and take an offer that is made by another company. As you say, it's not rocket science If you are suggesting insurance companies are sort of standing together in order to keep prices up, then we'd be talking about a cartel or syndicate, which atleast in Europe are illegal, and that law is enforced pretty strongly.

The fact that there are obviously fewer companies than individuals only makes every deal struck for an insurance company even more valuable, so they should be scrambling all over eachother in order to get those big deals, which should lead to lower prices...

From what you'r saying I dicern that the US is sort of in the middle of free market and government controlled, which combines "the worst of both worlds" - is that sort of like you mean it?

I really appreciate you taking the time to go through this with me btw, thnx.

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LessGovMrPrez

Well....lol. Insurance is in league with government, you could call it a cartel or syndicate by all means...lol. I guess I will stop just short of it and dabble my toes in it but I wont outright say it is one.

Look, in Texas last year, Gov. Perry wanted to give school girls 8-14 I think was the ages, a new drug that kept them from getting STDs or something, I cant remember. You could probably google it and read about it, I just cant remember specifically what the drug was and its target, but parents were outraged b/c they had to have it for school purposes. Well come to find out the drug was made by, I think Merck?, and the Governor, had a financial link to Merck. I think he was on their board or something not to long ago. And this Governor is a Republican, just to throw that in there. That is how close the insurance/pharmacutical industry is to government.

No, like you said, there are fewer companies compared to individuals, so therefore the difference b/w Company A and Company B, C, D, etc doesnt have to be that great. It just depends on who teh company is. Plus remember, we are talking million and billion dollar companies here, the insurance companies know this and will dig in b/c they know the companies can afford it at the expense of the employees.

Something else I didnt mention before, is that health insurance covers every single thing. Check ups, basic doctor visits, etc. All of those things go into the price of the premiums. Lab work is done for free in some instances, but who is paying the bill? The company you work for, so it is not really free.

Insurance was intended, originally, to pay for catastrophic stuff in general. Car insurance doesnt cover you get an oil change, tire rotation, air filter, fluid needs, etc. It is there is you get in a wreck or total your car. A catastrophic event. How much would it be if all those other things were covered? Same with homeowners insurance.

If we take out of the coverage a basic doctor's visit, check-ups, basic vitals, runny noses, a bruised calf, my arm hurts, etc all those things are routine and payed for by insurance. Take that stuff out and it would drop prices across the board. The problem is, we are paying for what is largely the most common used insurance mark-ups. We are not being smart with coverage.

Then there is litigation. Lord knows, a doctor's insurance himself is outragous. I think the basic is 1,000,000 in coverage for a doctor's malpractice insurance.

In a way yes. It is quasi-free market. Not really free enough to allow market forces to catch hold but not totally controlled by government.

This is why in all these topics on UHC I always say we are not a free market system. It is kind of in limbo I guess you could say.

Your welcome. I know you and I are on opposite ends of the spectrum on this but doesnt mean we cant have good discourse nonetheless.