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Momma said wonk you out

GOVERNMENT-DOMINATED HEALTH CARE.

We may not have government-run health care, but according to new data analyzing the distribution of health care spending and subsidies in 2002, we certainly have a hefty amount of government-funded health care. About 56.1% of all health spending comes in the form of public outlays. Of this, about 28 percent is tax subsidies (like the employer health deduction) and 72% is Medicare, Medicaid, and assorted other programs. And while most of this spending is on the old and the ill, somewhat less than you'd think is on the poor. In fact, "the public sector finances nearly half of all health care spending for families with incomes over four times the poverty line."

In other words, our health care system isn't nearly so free of government as some like to suggest. But in a uniquely American twist, we've managed to offload an incredible amount of spending onto government but done so in a way that ensures the government can't use its size or regulatory power to cut spending growth or produce a manageable, moral health system: So Medicare Part D can't bargain for better drug prices; Republicans have systematically killed attempts to produce good cost-effectiveness research that could be used to cut waste; insurers operate in a confusing-but-counterproductive regulatory structure which spurs them to compete on risk-shifting rather than better care delivery; the government pays billions in tax subsidies so paper companies, toy retailers, and assorted employers to act as middlemen in the health care system, etc.

Other countries, of course, don't have these problems. They realized early on that if you were going to guarantee health care to your segments of your society and accept the government intrusion that entails, you may as well do it right, and leverage the benefits of government involvement to restrain spending and rationalize your delivery system. And it worked: Our per capita spending is double that of any other industrialized country, even as they cover all of their citizens (we don't) and boast outcomes that are comparable, and frequently better, than ours. Sadly, we've decided to go with the worst-of-all-worlds compromise: Demand lots of government involvement, but stubbornly insist on doing it wrong.



COMMENTS

Yea, our healthcare 'system' is broken, and we're f*cked twice - we can't fix it because of entrenched interests, and the programs are submerged enough in the bathtub that most folks don't see all the working parts that don't quite fit together.

I shudder to think what Obama and a bigger Dem. majority will bring us - in the case of McCain/GOP we at least know their ultimate objective (let the market sort it out, just as it has in housing mortgages (/snark)).

But I fear even more layering, hiding, patches, workarounds, and favors to lobbyist interests and political contributors if McCain doesn't get elected.

This is what society gets when it has forgotten for several generations the wisdom of the saying: make no little plans. We now have lots of (not so) little plans that look a lot like the Big Shitpiles in housing finance that Atrios has aptly named.

No other country has for-profit insurance companies running the show.

The pathetic fact is that the public sector part of the U.S. health care dollar (medicare, medicaid, VA, DoD, public hospitals, etc) already cost more per capita then other countries with real universal health care pay. We are already in effect "paying" for universal health care, but we don't get it.

see: http://wwww,pnhp.org

I think as a study of "what the government spends per person on healthcare" it's a little curious to include the employer tax breaks for employer insurance offerings. Yeah, it's kind of a government outlay... but the person paying for the healthcare, in the end, is the employee.

It seems simpler, and clearer, to me, to total up outlays from Medicare, Medicaid, VA and other programs where the government actually spends on healthcare, and see what that amounts to; it seems, from the numbers here, that it would be the lion's share of what's described. I suspect what it would do is lower the per capita income overall of people receiving government support, but even that would seem a little more honest.

I think this would be helpful because, in the end, it would make a clear refutation of right wing claims that we don't want "government intrusion" into healthcare. As Ezra points out... we're already there. The question is can we do a better a job of involving government, which clearly I already think is the case, but I still think we muddle the presentation to the public. Confusing them further by lumping tax subsidies for insurance in with Medicare clears up mostly nothing.

I agree with JimPortlandOR and Steve. We need a simple system.

Weboy 56% x 62% is still over 40 percent and still more than is spent in total in some countries. We should demand that the politicians give us all health insurance for what they currently spend. They have no excuses since they control so much of it with regulations, licensing, ownership etc.

For an off the wall idea I think that a plan that give all citizens’ health insurance with a family deductable equal each families prior year adjusted income minus the poverty level, would worth a try. They could then tax insurance that covers the deductable.

It is alarming how much better than the rest all Ezra's posts on health care are.

Yeah, it's kind of a government outlay... but the person paying for the healthcare, in the end, is the employee.

Weboy: You're absolutely incorrect about this. The persons paying for the healthcare in the end are the employee, the employer, and the government. If your employer gives you payment-in-kind income of, say, $6,000 in the form of health insurance, and the government tells you don't have to pay the (say) $1,800 income/payroll tax bill that would accompany this income were it the form of cash, the economic effect is identical to the government simply writing you a check for that same $1,800.

Ezra, you may find this interesting:
Task force says that men should ignore prostate cancer

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/04/AR2008080401516.html

Since the task force issued its previous recommendations in 2002, at least eight new studies have been published. Among them was a large Swedish review that found that men age 65 and older who were treated for prostate cancer were no more likely to survive than those who were not. ...

It seems that a good health-care plan would be for all the directly-government-funded healthcare to serve as an example of how good government-run healthcare can be.

Once Medi-Care restricts utilization enough to get costs down to French levels, we'll consider the French system for everyone else.

Deal?

"Other countries, of course, don't have these problems. "
You seem to insinuate that policy is responsible for the international discrepency between spending and coverage for all. Respectfully, you are misguided.

First consider that socialized systems in all other countries rely on generic drugs and denial of premium care for sustainability.

In the 60's, France and the U.S. came up with the same number of new drugs, which I use here as a proxy for innovation. Today that number is (conservatively) 70% US, 30% REST OF WORLD. Capitalism drives innovation that the world calls on for treatments and cures.

This fact makes the direction of NIH funding that is purportedly for HEALTH particularly disturbing: even in light of recent increases of $500 million for TRANSLATIONAL research (that which translates research from the bench to the bedside), the rest of the $30B goes to academia for basic science research. What is the National Science Foundation for, exactly? This is not government funded, it is TAXPAYER funded. American taxpayers want improved health outcomes, they pay for it, and the ROW free-rides. The US takes enough shit, please consider shoveling some of it on the ROW when they deserve it.

Thank you for your time.

Best,

The Greatest State in the North

Excuse me, but the government does not produce anything. It does not bale hay, it does not manufacture, it doesn't sell soap, it does not do anything that gains a profit. It only gathers taxes from its' citizens and re-distributes that money as IT sees fit. Please help out those who think that the 'THE GOVERNMENT' is somehow an entity that actually uses money other than yours and mine. Thanks.

Excuse me, but the government does not produce anything. It does not bale hay, it does not manufacture, it doesn't sell soap, it does not do anything that gains a profit. It only gathers taxes from its' citizens and re-distributes that money as IT sees fit. Please help out those who think that the 'THE GOVERNMENT' is somehow an entity that actually uses money other than yours and mine. Thanks.

The reason heath care costs have sky-rocketed in the first place is because of government intervention. The Government is terribly inept and inefficient at assessing their costs in health care and it is the taxpayers who are bearing the brunt of their incompetence! I've experienced government-run health care provided through the military and it is horrible. If Obama institutes his plan, taxpayers will be burdened with tremendous costs for relatively poor coverage and fewer choices. It will be some office in Washington determining what is best for you. And who makes out like bandits? The healthcare companies! Why do you think Obama has so many as donors???

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About Ezra Klein

Ezra Klein is an associate editor at The American Prospect. An archive of his articles for The American Prospect can be found here.

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