It was tempting to just let you
read the article that appeared in the
New York Times this week entitled "Making
Health Care the Engine That Drives the Economy", but it was so
dumbfounding, that I had to at least make a few comments. Let's see what
health care is in this country and think about what it should be.
"Angus Deaton, an economist at
Princeton, had a hip replacement last year. And while he was happy with the
outcome, he wondered how much it had cost. He got a few answers. His hospital
room was $10,000 a day. 'Telephone and television were extra,' he said. As for
the total cost, there were so many charges associated with one service after
another anesthesia, pain management, physical therapy, the surgery
itself that he was never able to figure out how much each of them cost.
'Maybe if I devoted my life to this for six months I could find out,' Dr.
Deaton said. 'The price that is paid is the price an insurer negotiates, and
that is kept in a vault somewhere.' All he knows for sure is that insurers
say they pay, on average, $50,000 for a hip replacement."
"The United States already spends
nearly 16 percent of its gross domestic product on health care, and it
is almost impossible to know where all that money goes. Projections are that
health care will take up even more of the G.D.P. as the population ages and as
more expensive drugs and medical devices are developed. But a new economic
approach to health care expenditures views costs in a very different light.
Economists agree that huge increases are coming. But some say that may be
just fine. By 2030, predicts Robert W. Fogel, a Nobel laureate at the
University of Chicago Graduate School of Business, about 25 percent of the
G.D.P. will be spent on health care, making it 'the driving force in the
economy,' just as railroads drove the economy at the start of the 20th
Economists say that it is just
fine that huge increases are coming because health care will be the driving
force in the economy just like railroads were? In an article on the impact of
railroads, it says, "The railroad epitomized American technological and
commercial development during the 19th century. During this time railroads
opened up our local region to both settlement and natural resource development,
carrying produce back east to feed a growing market. In turn, the railroads
made national and international markets accessible to merchants, allowing them
to grow far beyond the limits of our local economy." Railroads were symbolic
of our growth and expansion and development as a nation. Health care, to
me, means that we have let ourselves become dependent on a system.
"Unless the current system is
changed, most health care costs will continue to be paid by insurance,
especially Medicare, which means that the taxpayers will foot the bill. But Dr.
Fogel says he is not alarmed. Americans can afford it, he says, because the
nation is so rich. 'It takes so little of household income to satisfy
expenditures on food, clothing and shelter,' he explains. 'At the end of the
19th century, food, clothing and shelter accounted for 80 percent of the family
budget. Today it's about a third.' Other economists agree. 'We have to spend
our money on something,' says Robert E. Hall, a Stanford University
"Victor R. Fuchs, also an
economist at Stanford, notes that buying health care is fundamentally
different from buying a television or a car. 'Most of it involves transfers
from the young to the old,' he said. 'Down the road, most medical care will be
for people over age 65, and most of the payments will be from taxes on younger
people.' Dr. Fuchs calls it the restaurant check problem. 'You go out to
a restaurant with a bunch of friends and you sort of understand that you will
split the check,' he said. 'The waiter comes along and says, The lobster
looks very good, and how about a soufflé for dessert? The restaurant
check balloons, but you are not so careful because you figure everyone is
"The issue, he says, is not how
much is being spent but whether spending more is the answer. Are those extra
dollars buying marked improvements in health or are they making any difference?
That, Dr. Deaton said, was the point of his exercise in trying to find out the
cost of his hip replacement: 'Is it worth spending all this money on a hip
replacement?' In London, he said, a hip replacement costs £5,000, or
about $9,500. Don't you think people would prefer to have it for
£5,000? Dr. Deaton said. 'It is probably true that if we spent twice as
much money on health care we'd be better off. But half the money we spend is
In a paper published in The
Quarterly Journal of Economics, Dr. Robert E Hall, a Stanford economist and
Charles I. Jones of the University of California, Berkeley, write: 'As we get
older and richer, which is more valuable: a third car, yet another television,
more clothing or an extra year of life? We have to spend our money on
something,' says Dr. Hall'"
We have to spend our money on
something? "A typical person aged 45 will spend $30,000 more over their
lifetime caring for cardiovascular disease than they would have spent in 1950.
And they will live maybe three more years because of it. So drug
companies and medical technology companies will drive our economy because we
are so rich that we have to spend our money on something? What about research
and development to eradicate devastating diseases or lowering the rate of
poverty in the United States. "The official poverty rate in the U.S. has
increased for four consecutive years, from a 26-year low of 11.3% in 2000 to
12.7% in 2004. This means that 37.0 million people were below the official
poverty thresholds in 2004. This is 5.4 million more than in 2000. The poverty
rate for children under 18 years old increased from 16.2% to 17.8% over that
period." The official Health and Human Services Poverty Guideline is that a
family of four has to make $20,000 a year or less. I will let you figure out
the impact of poverty on our health care system.
Can you imagine how much money
there would be to spend on the development of our nation if "health care"
was an individual thing consisting of eating right and exercising and a healthy
lifestyle instead of being dependent on a system where we don't even
know where our money is going...?