What can be done about health care expenditures?

Anonymous

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I was assigned in a university level course to write an argument revolving around health care reform. I would appreciate any feedback I receive. Thank you.

Prior to a few months ago, I had never really had much interest in the health care debate, much less any knowledge on the topic. Were someone to ask me how I felt about universal health care, I more than likely would have told them it would never work, that the government’s rotten, and that we’ve no reason to trust them to provide our medical services. I probably would have told them that there’s nothing wrong with the state of our health care now, so why change it?

Around July of this year, however, a friend of mine posted a YouTube video on Facebook by a man named John Greene. In Greene’s video, entitled “Why Are American Health Care Costs So High?” he offers several explanations for why we as Americans spend so much on health care (you can view the video here: http://www.youtube.com/watch?v=qSjGouBmo0M). He begins by stating that, contrary to popular belief, America already spends more tax money on health care than many of the countries that have universal health care, and “in exchange for those taxes, [we] get no health care” (Greene). When you add up the amount we spend privately on health care, the numbers add up to about 18% of our total income. This was news to me, as I had not a clue as to the amount we actually spend, and certainly no clue that we spend more than the United Kingdom or Germany.

Greene goes on to explain that the main reason we spend so much on health care is because most everything related to health care is far more expensive than it is in most other countries. Much of this has to do with the fact that in countries where the government is providing health care, the government purchases medical materials in bulk from whoever is willing to sell it for the cheapest, thus creating competition among the producers. In the United States, however, we don’t do such aggressive negotiations, allowing companies to charge most anything they want to.

And in spite of these extra costs, our health care outcomes are “not notably superior” to that of other countries.

How can this be? How can it be that we are spending far more on health care than most any other country in the world, even more in taxes, yet not receiving some sort of government provided health care option?

This made me want to do a little research on what health care is like in some of the countries that have theirs funded by the government. The first country that came to my mind was Japan, since I have many Japanese friends and am planning on moving there in the next few months. From talking with my friends, many of them seem to feel that the system works fairly well. Many procedures there are far cheaper than they are here; one of my Japanese friends who lives here joked that he was planning on flying back to Japan to have a bad tooth of his looked at, because it would probably still be cheaper even with the plane ticket.

Rather than go purely on their testimony, though, I figured I should find more information on how the Japanese health care system works. I came across an excerpt from the 2008 PBS Frontline documentary Sick Around the World (you can watch this here: http://www.youtube.com/watch?v=LHwIks1-8jg). In this excerpt, T.R. Reid travels Japan to see the pros and cons of how they run things. He states that the vast majority of the 130 million Japanese are healthy. All of them are covered by insurance policies, yet they spend half as much per capita as we do.
Unlike the United Kingdom, the Japanese citizens due pay a portion of their health services, which comes out to about 30%. The rest is paid by the government. The government also makes sure to set many limits on the prices of almost every element of health care, making things rather inexpensive.

Remarkably inexpensive.

MRI’s cost about $98. Spending the night in a hospital in a room with four other patients comes out to a whopping $10. Not only that, but insurance companies are also not allowed to charge enough to make a profit. If there is extra money at the end of the year, it goes towards the next year. Sometimes they even make the premiums lower.

Because of the low rates and ease of access, most everyone goes to the doctor three times as often as Americans do. Interestingly enough, many of the hospitals in Japan are not public. In fact, 80% are private practices.

This sounds pretty good to me, but what are the downsides? A glaring issue they are faced with now is that half of the hospitals in Japan are in financial deficit. Reid says that while our problem here is we charge too much, the Japanese are charging too little.

There is also the question of what role culture plays in this situation. Is it possible that Japan’s health care system works (for the most part) because of some sort of cultural factor? One I can think of off the top of my head is that the Japanese are nearly as collectivistic as we are individualistic. Between their collectivistic mindset and having a primarily homogenous population (98.5%, to be exact), they tend to have a different type of unity than what we have here in the States. They also feel the government has a large responsibility to take care of the people, even if that means higher taxes. Every single Japanese friend of mine that I have asked this question has felt this way (and I have a lot…we’ve had roughly 17 stay in our home at different times…).

So could it possibly be cultural? This question also applies to other health care systems, such as Sweden’s. Sweden seems to have things pretty good, with things like vouchers for universal school choice and an overall trust for their government. Could we do this in the United States?

In ReasonTV’s short video about Sweden’s economic model, Dr. Charlotta Stern claims that it can’t be done (you can watch this here: http://www.youtube.com/watch?v=tDAQWJbEl9U). Similar to the Japanese, Sweden is largely homogenous, creating a kind of unity. Not similar to the Japanese, Sweden’s population comes out to a grand total of 9.5 million, which makes for an even tighter knit community. Trying to implement the more socialist policies of Sweden when we are two entirely different countries doesn’t necessarily seem like the best idea either.

This has left me feeling a bit bewildered, particularly after hearing the many negative things about universal health care I’ve also come across (insanely long waiting lists, death panels, poor services, etc.). I wish I could have a firm stance on the issue one way or the other, but I’m afraid I don’t. What I do know is that there certainly needs to be a change of some sort. Things cannot continue to go on the way they are now. The universal health care system seems to have worked in other nations, so it may be worth a try here. On the other hand, however, there seems to be evidence that shows universal health care may not be the way we should go. It may just make things worse, and put too much power into a government that can’t seem to agree on anything, much less how to spend money.

I suppose with the looming Affordable Care Act, we’ll find out soon enough.
 






Your basic question is, what can be done about health care expenditures. First and foremost, I believe personal responsibility is at the heart of the answer. America has some of the least healthy people in the world... most of which is self-imposed by: poor eating habits, sedentary life-style, drinking and smoking. Look at America's obesity rates. Look at the high-rate of diabetes. These are factors that could be taken care of by individuals taking personal accountability for their health. Instead, many lead these unaccountable lifestyles and expect The U.S. healthcare system to fix them. This is all fine and dandy, but it costs money. The money to treat these people puts an enormous strain on our healthcare system. One might say, however, this is the cost of freedom. People either take personal responsibility for their health or the government imposes things like smoking bans, soda bans, etc. Many of the healthcare systems you mentioned, do not have to deal with the problems that exist in America. As such, their healthcare costs are lower. Unless you are comparing very similar populations in terms of healthy lifestyles, any comparisons between countries and their health care systems are invalid.

The U.S. healthcare system is/was not perfect, but Obamacare has and will only make it worse. The best way to lower costs within America and keep our individual freedom is to introduce and encourage as much competition as possible. We don't need single-payer. Single-payer is a monopoly. As a basic law of economics, monopolies NEVER lower cost. We need as many options as is humanly possible to create competition, build a better healthcare model and lower costs. I can see no other way.

Hope that helps... Good Luck.
 






"He begins by stating that, contrary to popular belief, America already spends more tax money on health care than many of the countries that have universal health care, and “in exchange for those taxes, [we] get no health care” (Greene). "

If you change "America" in the above quote to "Congress" I think the statement becomes more accurate. It's not just healthcare that is expensive and poorly administered from the government, last year Congress appropriated $556 billion for "surface transportation" projects over a 6 year period. That's on top of the $30-40 billion spent annually over at least the past 10 years for road and bridge work yet our roads and bridges are still crumbling. At those budgets the stripes should be gold leaf. The truth is nobody in our government can accurately tell us how money is spent regardless of it's intent in tax collection, the system is too big and too complex to get great results whether it's healthcare or highways.