Don't let your schooling interfere with your education.
~ Pete Seeger

Sunday, October 19, 2008

Socialized Medicine? Let’s Do the Math (or at least make some conservative estimates)

With our health infrastructure crumbling, 50 million folks without health insurance, and a growing sense of urgency, you frequently hear about the evils of "socialized medicine." So I thought, let's take a closer look. Let's do the math, and see just how bad we'll get ripped off if we nationalize health insurance and adopt a single-payer insurance system like what France or Germany or Sweden or Japan or some other backward, socialist liberal country does. Sure and if we do, our health system will go right down the tubes and be like theirs, huh?

Oh, wait. Their systems are all rated LOTS better than ours. Though we do pay about 2.5 times as much, per capita.

For simplicity's sake, I'm just going to figure this as if we expanded Medicare to include everyone. After all, we've already got socialized medicine, which by law is required to try to make itself competitive with private insurance. This is tough, since Medicare operates at about 3% overhead, and private insurers operate at 12% t0 30%. So, by law, Medicare is not allowed to negotiate drug prices, it excludes a huge number of people based on age and ability, and they've got tons of complicated, stupid paperwork that drives health providers nuts and makes them hesitate to accept Medicare patients.

So, my employer pays about $6.35 per hour that I work into private health insurance. Under Medicare, I'd save, conservatively, 10%. (6.35x.1=.635) So, right off the bat, I get a 64 cent raise. Cool.

Then the math gets more complicated. For instance, I know that there will be 50 million more people with health insurance, but how many of them would be taxpayers? I don't know the details well enough – does that number include kids and workers, or just workers? Either way, it's going to spread the premium base, and so bring down the cost. Let's call it another 10 cent reduction in my share. Now I've got a 74 cent raise.

But folks that are uninsured now will have access to regular checkups and wellness programs, so overall emergency room costs will go way down. I don't know how to account for this mathematically, either, so let's conservatively take another 10 cent reduction in my share. And my raise is up to 84 cents.

And what if we allowed Medicare to negotiate drug prices? I wonder how much that would save? I don't know, but it's bound to be significant. Let's say that savings reduces my share another 10 cents. I'm nearing a dollar! (And that's not even counting if we allowed Medicare to negotiate the cost of procedures.)

So what if the paperwork problem were fixed, which should be pretty basic since Medicare wouldn't have to exclude everybody who is young and healthy. That would reduce the costs to providers, so Medicare wouldn't pay as much – say, 6 cents.

Wow! A dollar raise! Just for socializing medical insurance!

What would your raise be?

And how cool would it be if every kid had health insurance? (Real cool, in my opinion.)

Of course, that doesn't account for the fact that the money I pay into Medicare taxes currently goes to cover the oldest, sickest people around – in other words, by adding young, healthy people to the premium pool, my current taxes would go down.

How would this affect health providers? Wouldn't they be totally demoralized by getting paid by a socialized insurance program? Doctors would flock across our borders to work in Canada and Mexico and …

Oh, wait. Yeah, they probably wouldn't. They'd just have an easier time with paperwork. (Believe me, any fix of this nature is not complete without fixing the Medicare paperwork nightmare.) And their liability insurance would probably go down a lot. So their overhead would go down, further reducing costs, and even if their pay got reduced through negotiations, the savings in insurance would likely mean increased take-home.

But you couldn't pick your doctor, right?

Why not? They're all getting paid by the same insurer. Seems like having a license to practice medicine automatically puts them into the preferred provider pool, which means you'd have more choice of which doctor to use.

But there has to be some downside to socializing medical insurance. Right?

Well, it would mean increasing taxes. My share of that would be $5.35/hour (worst case scenario). Which still leaves me a dollar per hour more in discretionary income. I'm actually okay with that. (Some employers might not want to pay out all of their savings on health insurance to wages. So, join a union!) Only Republicans are so anti-tax they'd rather spend lots of money on inefficient private systems and reduce take home wages than surrender their ideology.

For the past 30 years or so, we've been bombarded with the myth that government efficiency is an oxymoron. It's true that government is typically incompetent and inefficient in producing goods and moving them around. But in fact government does excel in certain efficiencies, and one of these is insurance. Social Security, for instance, is an enormous program; yet it operates at under 3% overhead. Medicare is the biggest health care payer in the nation, yet it has by far the lowest overhead of any health insurance company. Continuing down our course of blind ideology to support a myth that the "free market" provides the best service in all situations and circumstances, while the data, both from our own nation and from the rest of the world, proves otherwise is worse than stupid. It's insane. When it means withholding health care from sick people and kids, it's cruel and unjust.

It's also very, very expensive.

5 comments:

David Carrel said...

Hey, I hope you are right Seda. And I hope I am wrong, seriously.
But if your not, then what? I just don't know if it is worth the risk. I guess that I have just had bad experiences with government run places.

Seda said...

The risk of keeping on as we are, with a steadily corroding system unfairly distributed, is unacceptable to me. When I see that places like Cuba are doing better with their health care system than we are, despite huge problems in availability of medicines and equipment, well, what can I think? We have the best medicine in the world in our nation, so to get such poor results the problem must be in the distribution system. If ours isn't working, and socializing health insurance isn't the answer, what is?

Would you care to share any of those bad experiences?

David Carrel said...

Oh, just going to our county health department and there are several people sitting around. Everything was so lackadaisical. We set up an appointment to get shots again because we needed one certain shot, set the date, went back a couple weeks later, and, "no, we don't even have that shot available today." Well, that was the only reason we were there and they had set up the appointment.
Anytime you go to get a driver's license it takes a while.
Then while I was there someone told me he was there to get unemployment privileges and we talked about flipping houses and how he does that on the side. So he obviously had an income, yet was still getting money from the government. And it is not like he is the only one. (examples of dishonesty killing us, you know).
Then I called the IRS about the tax rebate because we only received 600 and I thought we were going to get 1200 so I just wondered why. I called and waited for 45 minutes. I finally got someone who said he wasn't sure and that he was going to transfer me. Then it said, all lines are busy, call again, goodbye.
So those are my examples from the past year.
Again, I hope it works, and yes right now, the system is not that great.
I really believe that if the morals of the country (dishonesty, greed, etc...) are bad, the country is not going to work efficiently, and that is what we are seeing.
Answers, maybe instead of teaching in schools; "you can live by your own conscience and whatever is ok for one person, is ok, you should not be judged." It is dangerous to tell kids that because then they grow up doing what is best for them, when that is not what is best for all. So why not bring morality back into the school system. Teach good morals, like the Ten Commandments, or even other religions like Catholicism, Hinduism, (I don't agree with these) but there are good things that come out of them. Or what you say about peace and non violent communication.
I guess I got on a rabbit trail there, but I hope the original point of the post was conveyed. haha.
Thanks for asking Seda. I wish I had a perfect health care plan that worked. (Actually, my dad probably has plenty of ideas on that). But my only answer is that because of a lack of morality it is really tough. (Did that all tie in?)

Seda said...

Thanks, David. The health department story is just what I was talking about. Since many people don't have health insurance, and therefore access to health care, we end up with government making the difference. So, if I understand what you're saying, you encountered government at its worst - trying to provide a service that can be better provided by the private sector. What I suggest is looking at what gov't does well - provide insurance. Social security is a good example - it's run extremely efficiently. Now, imagine if you had the choice of going to any medical provider available. Would you make a different choice? If everyone had health insurance covered by Medicare, and Medicare didn't have the paperwork hassle built into it for political reasons, why wouldn't it work that way?

aj said...

wow yes

very very expensive.

and very very sad..

david you should watch a documentary called Sicko it may help to see what our country and some other countries are really up to when it comes to health care.

Security is mostly a superstition. It does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than outright exposure. Life is either a daring adventure, or nothing. To keep our faces toward change and behave like free spirits in the presence of fate is strength undefeatable.
~Helen Keller

Reading List for Information about Transpeople

  • Becoming a Visible Man, by Jamison Green
  • Conundrum, by Jan Morris
  • Gender Outlaw, by Kate Bornstein
  • My Husband Betty, by Helen Boyd
  • Right Side Out, by Annah Moore
  • She's Not There, by Jennifer Boylan
  • The Riddle of Gender, by Deborah Rudacille
  • Trans Liberation, by Leslie Feinberg
  • Transgender Emergence, by Arlene Istar Lev
  • Transgender Warriors, by Leslie Feinberg
  • Transition and Beyond, by Reid Vanderburgh
  • True Selves, by Mildred Brown
  • What Becomes You, by Aaron Link Raz and Hilda Raz
  • Whipping Girl, by Julia Serano
I have come into this world to see this:
the sword drop from men's hands even at the height
of their arc of anger
because we have finally realized there is just one flesh to wound
and it is His - the Christ's, our
Beloved's.
~Hafiz