Tuesday, April 16, 2019

Health Care - Some Numbers

The italicized information below comes from the book American Amnesia - How the War on Government Led Us to Forget What Made America Prosper by Jacob Hacker and Paul Pierson.

It's not as fun to read as Beautiful Country Burn Again - Democracy Rebellion and Revolution by Ben Fountain, being more in the academic than literary realm, but it's an important book if you are interested in figuring out how we got where we are.

I'm still reading American Amnesia and am looking forward to getting to the part of the book where they suggest ways to fix this broken system.


If you live in the San Francisco Bay area a knee replacement will cost you more than $100,000. In Fresno, approximately 150 miles away, it will cost you less than $14,000.

In the U.S. a patient was quoted $78,000 for a hip replacement - not including surgeons fees. The patient got the hip replaced in Belgium for $13,660 which included all provider fees, operating room costs, five days in the hospital, a week in rehab, and round-trip airfare.

On average, U.S. insurers pay $10,000 when a woman gives birth, in the Netherlands it's $2,824.

American's spending on health care accounts for about one-sixth of the domestic economy compared with around one-tenth or less in other rich nations.

In 1980 Switzerland and the U.S. had comparable per capita spending on health care. Switzerland moved to control costs while universalizing coverage. By 2010 the Swiss were spending about a third less per person than we were. If the U.S. would have followed the same trajectory we would have saved $15,000,000,000,000 (trillion). That remarkable sum could have financed a four-year college degree for more than 175 million Americans. It could also have eliminated all federal deficits over the same period and left a healthy surplus.

Take out rising medical expenditures and the federal budget is more or less balanced as far as the eye can see. In 2010 Republican politicians made cutting food stamps the centerpiece of their agenda for fiscal constraint calling for $40 billion in cutbacks over five years. The federal government spends more than that on health care every three weeks.

In the early 2000's when Medicare Part D was enacted, and since that time, the Republican party blocked efforts to allow Medicare to negotiate drug prices to contain costs.

Republican politicians pursued changes to Medicare that increased, rather than restrained medical costs. In particular the growing role of private plans within the program. Through an aggressive lobbying effort and gaming of the reimbursement formulas this has cost Medicare nearly $300 billion in excess payments between 1985 and 2012.

Even facing these headwinds Medicare costs have risen slower than private insurance costs in recent years. Medicare has seen a 1% per increase in costs vs. private insurance increase of 4% per year for comparable procedures.

The health insurance industry gave the U.S. Chamber of Commerce over $102 million dollars to fight health care reform in 2009 and 2010. Since reporting began in 1998 pharmaceutical manufacturers, medical device makers, health insurers, hospitals and medical professionals have reported spending over $6 billion on lobbying. Between the start of 2009 and the end of 2010 three industries - health care, finance and energy each spent $1 billion dollars on lobbying. No one knows how much dark money is spent in these efforts.

Republican politicians in the 2000's jumped on the "tort reform" bandwagon claiming frivolous malpractice lawsuits were causing health care costs to rise. So called defensive medicine to avoid these lawsuits account for a tiny fraction of health care costs (1 to 2 percent). Texas and California, two states that enacted caps on damages (tort reform), saw their medical costs rise as quickly as states without such measures. 

Republican politician Rick Scott the recent Governor of the great state of Florida and now one of it's newly elected Senators oversaw the largest Medicare fraud in history during his tenure as CEO of the health care corporation Columbia/HCA.

I can't help but think that there has to be some division within the business community about Republicans and some Democrats catering to special interests in the health care industry to maximize profits. This drives the costs for consumers (including businesses who pay for health insurance for their employees) ever higher...while we see increasingly poorer outcomes relative to other rich nations.

If you are a Republican, in case you didn't already know, this is not your father's (or mother's) party.


Since we're talking about numbers how about a song about math?

Well not exactly but I'm a fan of Laurie Anderson and am really glad B and I got to see her in Seattle years ago.