Psssst, Don't Tell the Post, Fixing Health Care Saves Money
At a time when the unemployment rate is about to shoot past 8 percent, the Washington Post tells us that the deficit projections are "ugly" in the first sentence of a news article. Since budget deficits are the only tool available to fight mass unemployment, some might people might view these deficits, and in fact even larger deficits, as quite beautiful.
More important than the choice of adjectives was the Post's assertion in the last paragraph that the deficit may make it more difficult for President Obama to follow through on his campaign promises, and specifically lists extending health care coverage. Of course Obama had always proposed extending coverage as part of a larger process of health care reform. The purpose of this reform was to get U.S. costs more in line with costs elsewhere in the world. If the reform succeeded then the government would be spending less on health care, not more.
--Dean Baker
Feeds: 


COMMENTS (16)
Actually, if meaningful reform of the health care system is accomplished, the US government will probably end up spending more on health care than it currently does. Depending on the specifics of this reform, the government could spend much more than it currently does. However, if the reform is effective, the cost to the US economy as a whole should be lower.
Posted by: David Morgan | February 20, 2009 8:56 AM
David Morgan wrote, Actually, if meaningful reform of the health care system is accomplished, the US government will probably end up spending more on health care than it currently does.
I doubt that. Under truly meaningful reform---nationalizing medicine itself, not just health insurance---we could reduce the fraction of GDP spent on health care to that of Britain or Japan. My bet is that the government alone currently spends more than that on health care at present.
Posted by: liberal | February 20, 2009 10:36 AM
And the number we spend is approximately twice per capita what others spend, even though they get full coverage and outcomes at least as good and usually better. Unless you think the USA can't do what everybody else in the industrialised nations has been able to do, we would see our health care spending drop dramatically while covering everyone and having better healthcare.
Posted by: QrazyQat | February 20, 2009 12:13 PM
What David says is correct, the others have misunderstood him.
Nitpicking sometimes gets short shrift.
Posted by: Carol | February 20, 2009 12:58 PM
I am an administrator at a large, teaching health system in the US. I see first hand the waste each and every day. However, I also see that the vast majority of adult patients are here due to their poor life style choices. Most of us are born healthy. As we age, if we do not adopt good health habits, our health will deteriorate faster than it should. If people in this country really did what is suggested (eating right, getting exercise, wearing a seat belt, limiting alcohol consumption, avoiding tobacco, avoiding illegal drugs, etc.) then the health care system would have a much different problem - namely, over capacity. That would be a great problem to have. I just don't see enough emphasis on personal responsibility regarding individuals’ health. Most lung transplants we perform are performed on smokers. Should we the people be asked to pay for some or all of that care? That is what is happening today. I laugh when I see another federally funded study confirming that exercise improves the health of patients with “fill in the blank” condition (most recently it was heart failure). I’ve never seen a study that proved that exercise does not improve health. So, why are we spending tax payer’s money on things we already know? Shouldn’t we be figuring out ways to get people to do the right thing when it comes from their own personal health? This is a win-win if I ever saw one. Take care of yourself, if not for you, then for the good of your country. However, we live in a free (although I’d argue decreasingly free) society and we are all allowed to make choices. I find it a shame that many people get up and go to work for companies that produce products that have negative health value, tempting people to make the wrong choices. Companies that make and sell soft drinks, fast food, junk food, and tobacco to list a few keep people employed, but they also keep the health care system employed. It would be better if half of these people employed in these fields got up every morning and dug holes, while the other half filled in those holes. They would be healthier, and so would everyone else. We could even pay them with bail out money. At least we would have tangible results, something that I am afraid will not be so under today’s plan. Sorry for the long rant, but I see this every day and I just don’t think the US citizens get this at all. The answer isn’t insuring more people. The answer is teaching people to take care of themselves to avoid getting sick in the first place.
Posted by: Hospital Administrator | February 20, 2009 3:57 PM
@Hospital Administrator,
Can you say that our unhealthy lifestyle choices are the sole extra cost to our health care system? Any studies of similar populations with unhealthy lifestyles in countries with nationalized health care?
You may not be aware of, or have forgotten, but private health insurance companies have been sued for racketeering.
The doctors said the reviewers had paid ''direct bonus payments and other benefits to claims reviewers who deny a certain percentage or absolute number of submitted claims'' regardless of whether those claims or hospital admissions were medically necessary.
So before you go after the unhealthy lifestyles of people, lets take a strong look at the moral bankruptcy that exists in our profit driven health insurance industry.
Posted by: End The Echo | February 20, 2009 5:14 PM
We need HR 676 Medicare for All.
Dean's solution of buying into other countries health systems is pure hyperbole.
Only through a public single payer system can the costs of management, profit, record keeping, best practice be lowered.
For example, Medicare delivers health care at 3-5% while health care companies need 25-30% to cover overhead (political contributions?) and profit.
Employing Dean's ideas on abolishing drug patents and medical monopolies we could save even more.
HR 676 Medicare for All is the way to go.
Posted by: mmckinl | February 20, 2009 5:26 PM
@End the Echo - I agree with your assessment that for profit health care payors are a huge part of the problem. However, if anything, the broken insurance/multi-payor system puts downward pressure on demand by rationing care. My point is that the vast majority of adult hospitalizations are caused by an accumulation of personal poor health care decisions. This puts upward pressure on demand. No one individual in this country can impact the for profit/multi-payor issue. I doubt it will be solved within any of our life times. However, each individual (who is born healthy) can do a great deal for themselves by developing healthy health habits, regardless of the health care system the country they happen to live in functions under (or dis-functions in our case). I also agree with the next post that a single payor system makes a whole lot of sense. However, there are just too many people involved in today's system who have figured out how to game it to their advantage that trying to change it will be nearly impossible. They also happen to have deep pockets and lobby like crazy. Alas, I go back to my main point again that the ultimate solutions lies within our own control. If we each take better care of ourselves then much of the noise and brokenness of our current system will quiet down because we will simply obviate the need for most (but never all) of it.
Posted by: Hospital Administrator | February 20, 2009 7:28 PM
Are you missing something here, Mr. Baker? From the next to last paragraph:
"[the deficit will] average at least $1 trillion per year for the 10 years after 2009, even if the economy returns to full employment and the stimulus package is allowed to expire in two years."
That's huge bad news to me. Do you accept their projections?
Posted by: eds | February 20, 2009 10:30 PM
Plfffpt. Someone tell Baker that a huge subsidy to the insurance companies keeps them from having to lower the cost of their product to remain competitive. Insurance companies have Obama on speed dial and just got a nice boost to their bottom line. We subsidize a few unemployed who were lucky enough to have insurance in the first place. It did nothing to make health care affordable for the rest of us. In fact, it makes it worse.
Posted by: Peon | February 21, 2009 4:46 PM
Hospital Administrator wrote, Sorry for the long rant, but I see this every day and I just don’t think the US citizens get this at all. The answer isn’t insuring more people. The answer is teaching people to take care of themselves to avoid getting sick in the first place.
That is all true, but the right way to do this is to include those things under the umbrella of public health, and actually set policy to accomplish them, instead of pretending that the only way to do it is to appeal to people as individuals.
Examples would include: no crap food sold in schools; taxes on food proportional to added sugar content (with healthy foods actually receiving a price subsidy), etc. Finding incentive schemes to get people to exercise. And so on.
Problem is that there's tons of money to be made selling H2O plus high-fructose corn syrup to people. (Sh*it, they even fool masses of people into buying water.) Those economic forces are difficult to deal with.
Posted by: liberal | February 21, 2009 8:09 PM
Hospital Administrator wrote, However, if anything, the broken insurance/multi-payor system puts downward pressure on demand by rationing care.
Yes and no. It certainly does in the shortrun. But in the long run, all evidence is that the insurance companies simply pass the higher costs along in the form of higher premiums.
But you're right, to the extent that if no one at all rationed care, costs would explode.
Posted by: liberal | February 21, 2009 8:12 PM
Americans have a big problem with math when it comes to health care.
In 2007 we spent almost $7000 per person for health care (about 16% of GDP). For this we get about 20+% of the people either uncovered or underinsured.
Every other developed country pays $2500 to $3500 per person (around 8 to 10% GDP). For that they get 100% coverage.
Are Americans that deficient in math. A properly run single payer health plan could save about $250 billion a year.
The only negative is that so many people are now going without proper medical care that as soon as there is a fair universal plan, there will be big lines at the doctor offices.
Posted by: FoonTheElder | February 23, 2009 5:18 PM
Yes, nationalized health care is an essential part of our economic recovery, not something we can deal with after our economy has recovered.
The easiest thing for the U.S. to do would be to replicate the military health care system for the nation as a whole. Their system has its limitations but it is a realistic way to provide adequate health coverage within a budget because it does things like giving yearly physicals to everyone to catch problems early.
Posted by: E Backaner | February 25, 2009 8:01 AM
Taking over the auto industry's health care obligations would be a far more effective way of helping them restructure themselves into viable businesses than just giving them emergency loans.
I am not suggesting that we screw the unions out of the benefits they fought for and deserve. I just think that by making them the first group to come under an adequate and sustainable national health care system would be a good idea.
Posted by: O W | February 25, 2009 8:51 AM
MAXIDEX DEXAMETHASONE WARNING
I had eye surgery and in the post-op pack was MAXIDEDX(dexamethasone) drops by ALCON LABS.
Two days later I was BLIND
Use Google and enter EPOCRATES MAXIDEX REACTION to verify
Or call 800-757-9195
Posted by: WEL | April 1, 2009 6:14 PM