Today’s Numbers Game: Health Care
Many socialists love to point to the evil United States health care system and smirk. Indeed there are entire organizations made up of socialists throwing boulders at the US that are somehow given credibility by the media. Harvard University has an entire department devoted to it.
Now there are several things wrong with the US health care system and as an employee of this Canadian one I can affirm that there are several things wrong with ours as well. So much so that I would rather have the US system.
The problem is that most socialists assume that public health care will be much cheaper in the US like they think it is elsewhere. The important point to remember is that public health care in the US isn’t very cheap at all for a variety of reasons. What people don’t realize is that the US has one of the largest social safety nets in the world, and with that comes rent seekers. Socialists will claim that the public system is better for example, because it is a monopsony but the problem with monopsony all you junior economists is that a monopsony is Pareto inefficient due to a decrease in optimal quantity purchased and that means waiting lists (notice how they love economic words when it suits them?).
(Creating disasters - the government has been doing it for millenia)
The main reason socialists love public health care is because they know they can get rich off of it. The idea of of more unions and bureaucrats makes them incredibly happy.
Lets do some quick goat calculations in today’s game:
“How many more bureaucrats could the US hire if the system was Public?”
Ok get out your calculators.
- The US GDP : $13 ,244,550,000,000.00
- Percent spent on health care 15.3%, total spent $2,026,416,150,000.00
- Percent spent on public health care 44%, total $891,623,106,000.00
- Percent spent on private health care 56%, total $1,134,793,044,000.00
- Current population 302,280,000. People covered under both systems 253,915,200
- Percent of those covered by public system 27%, population covered 68,557,104
- Percent covered by private system 69%, 175,201,488 (There are a few percent covered by other systems)
- Cost of public system per person in system: $13,005.55
- Cost of private system per person in system: $6,477.07
- Cost of US system if it was fully public: $13,005.55 X 243,758,592 = $3,170,215,488,000.00
The increase in cost of a full Public System is $1,143,799,388,000.00.
(A graph for Captain Capitalism. Click to Enlarge)
Cost of a bureaucrat: $40,000.00. Projected increased number of bureaucrats: 28 million!!!
And that, folks, is a lot of bureaucrats!
Just think how extra fun it will be to try and navigate your 80 year old parents through a system with 28 million more bureaucrats.
Oh and just so you know, if you have a heart attack, you want to have it in the US. You’re more likely to survive. Indeed, when you actually look at mortality and morbidity outcomes between Canada and the US in terms of things doctors can change, all that money may result in better outcomes.
* Raw Data from OECD.
First, worshiping at the alter of Pareto efficiency is misguided in the case of health care. Your criticism of a monopsony insurance scheme as Pareto inefficient assumes that Pareto efficiency is desirable here. Not so — a system can be Pareto efficient but highly inequitable. We’re talking about access to health care services, not access to DVD players. It’s in the public interest that all citizens have equal access to health care services. Pareto inefficiency is acceptable given the more pressing need to ensure equity of a scarce commodity.
As for your US numbers, especially the cost per person in the public v. private systems, you’re assuming that all patients are the same. Again, not so — the public system is for the elderly, the poor, those who pre-existing (and disqualifying) medical conditions — i.e., all groups with poorer health and greater health care needs. Estimating total cost by multiple “cost per person in public system” by “total number of people in the public and private systems” is hugely over-simplistic and utterly unjustifiable.
Comment by A'dam — August 20, 2007 @ 3:44 am
You miss the point, but like any socialist its what you do. Since it isn’t Pareto efficient people are suffering since the demand for service that would occur isn’t being met. Hence there are increased waiting lists. Obviously you are not a doctor or you would know what it means when you have to tell someone its 2 years before they may get a hip replacement.
You are right in some ways, many of the people in the public system require more services, and by looking at the numbers they are getting more than the people in the private system. Its no longer equal.
I would argue that the system is equal access then under your loose definitions. If you mean “to each by his want” you’ll never get that no matter where you go.
The next question is, does everyone deserve it? Is there any system that takes into account someone’s personal actions such as smoking? Which system?
You may call numbers simplistic, A’dam, but the numbers speak. IF you want public health care in the US, you’re going to pay more for it. So why not leave the system alone the way it is? It seems more efficient and the poor are taken care of.
Comment by langmann — August 20, 2007 @ 5:11 am
If the Canadian system was so good how come the nation with 30,000,000 people couldn’t find the room for a woman to give birth to her premature quadruplets whereas a hick city in Montana (pop 50,000) had the room. I guess every women’s dream is traveling 350 miles in a small plane, in rough weather while in labor. When my niece went into premature labor in a town far from home (Huntsville AL if you care), there was a neo-natal room for her 4 miles from the house she was visiting, what would her chances be in Calgary of the same?
I also find it funny the though she lives in Great Britain, Madonna advises her friends to give birth in the US like she does.
Comment by David — August 20, 2007 @ 12:11 pm
@david
if you actually read the original article, the Canadian system was never claimed to be better than the Americans. In fact, the American system was touted as better, especially for certain types of care.
now, I myself believe in public health care, but i believe in lifestyle choices affecting personal liability to one’s own health. if you’re a smoker or alcoholic, you should pay more user fees than if you are a triathelete. if you use the system less you should have to subsidize the use of people who abuse their bodies (and the system).
The Fraser Insitute has some good articles about comparing Canadian health care to other systems (though not many comparing against the US or Mexico, as they are not universal access systems). The link below goes to a good article about the state of Canada Health Care vs other OECD countries as of 2006:
http://www.fraserinstitute.ca/admin/books/files/HowGoodHealthCare2006.pdf
Apparently, Canada is the only public health care monopoly in the OECD (of universal access countries). Personally, I like the Japanese model.
Comment by Darrell — August 20, 2007 @ 1:17 pm
@Darrell
I’ve gotta agree with you here. I’m not an economist but I feel like there’s gotta be some sort of ‘minimum access threshold’ where, assuming a mixed public/private system is better we make some sort of (probably inefficient by economics standards) safety net where people have access to doctors for serious conditions irrespective of income. Maybe I’m just being an idealist, but I think that it would be pretty crappy if people were dying because they couldn’t afford care. There must be ways to increase the efficiency of healthcare in Canada. I mean, I assume that many people are just wasting doctor’s time (I say this only from speaking to many doctors). Couldn’t we train triage nurses to deal with the ’small stuff’, maybe pay them more, free up more doctors for serious work and perhaps make the system more efficient and perhaps cheaper overall by reducing waiting times? Maybe this is just crazy-talk…
Comment by Carlo — August 20, 2007 @ 3:12 pm
As someone who had a recent brush with orthopedics, it seems that the issue is not so much funding per se (of course absolute dollars and how their spent plays into it), but number of physicians/staff. My wife had a serious leg-break over the holidays and she was operated on post-haste. Not one, but three times, but I’m convibced that someone’s so-called “elective” hip/knee/joint surgery was bumped because there are too few surgeons. Canada is graduating the same number of surgeons today as they did in the mid sixties. Who’s fault is that? CMA? Governments? I don’t know. However, they saved my wife’s leg and I’m grateful. Contrast this to a case of a family friend in the US who lost her leg following an accident because the insurance company wouldn’t pay for the ortho surgery but instead had to have her leg amputated.
I’m still vexxed by how my dad manged to go to Poland and access their public healthcare system to have a bunch of imaging done because the wait lists were too long here.
Comment by Necator — August 20, 2007 @ 4:45 pm
I also wanted to comment that the bureaucratic duplication from multiple Provnces having their own health care systems is ridiculous. If the $$$ is ultimatley coming from the Feds, then they should hold the reigns.
Comment by Necator — August 20, 2007 @ 4:53 pm
@ necator: your postulate on the insurance company not covering your friend sounds like a lot of the whole story is not being told to me. The likely reason they didn’t cover it was because the limb was unsalvageable and quite possibly dangerous to be left alone. We do the same thing here and the same decisions are made on health care by our socialist system here so I’m not really impressed. In fact I would find it somewhat amusing if it weren’t so terrible, that many drugs are not covered here but are covered by US Medicaid/Medicare because OHIP (our socialist insurer) refuses to pay for it for a variety of reasons.
Also necator the problem involves funding. There are OR rooms left closed here simply because nursing staff isn’t available (hiring, unions etc.). There are many surgeons who would like to operate more often.
The reason there are not enough doctors is because of funding of Medical School positions in the last couple of decades. It was decided by the government that there were too many doctors and that one way to reduce costs was to freeze the number of physicians trained. We have seen how well that worked.
@ Carlo:
You are right, it is completely inefficient to pay for someone else’s health care. For one thing there is no reason for them to do anything to make sure they are taking care of themselves and thus will waste your money. Economists call this a lack of “co-insurance” or a “free rider”. I can attest that there are many people of a certain nature in our system who are quite literally blowing all our money away - they smoke, do drugs, eat crap, drink to excess, etc. etc. My main point about the cost of the US public system was two things, 1) poor people tend to use more health insurance and 2) if it is free people will use a lot of it. In the US they cannot have as long waiting lists as us or the hospital or state can run up fines and politicians will complain.
However that being said, I help these people I guess because I have difficulty turning someone away. If I were somewhere where someone couldn’t pay me I’d likely help them anyway. There isn’t much we can do about it, and what the socialist don’t seem to ever accept is that the people of the United States are very generous people and don’t want others dying because they couldn’t pay. Hence the US has a huge public health care system and laws which prevent hospitals from refusing to treat emergent people with no insurance or money.
As Milton Friedman once said - “there is no way a libertarian free society would accept people living in this way”. in other words it is likely that if the government had nothing to do with health care, private citizens would pay to fund hospitals for the poor (they did previously). Most of these donars would be conservatives and libertarians ironically as those kinds of people have been shown to donate more money or time than any other so called political grouping.
@ Darrell: Quite honestly the US is a public system with private insurers and hospitals mixed in. Its really no different from anywhere else in the first world. The Fraser Institute will not do a Canada US comparison although they’d probably love to because it would open them to attacks from the left, the media, and their buddies in the Conservative party would distance themselves from them. They also realize that there is no way Canada will ever adopt a US model EVEN THOUGH WE LIKELY WILL and have already gotten halfway there. There are private hospitals in Canada already - the Providence network is one. Eventually a private clinic that doesn’t bill the provincial insurance company will open and be allowed to stay open. Then the private insurers will sell insurance for this private clinic. At that point we will have a US system, really. What id you like about the Japanese system?
Comment by langmann — August 20, 2007 @ 5:56 pm
The Japanese system has three levels of payment. There is a combination of public, private and user pays. Everyone has a certain portion of their medical expenses covered by the government (paid through a medical levy, I believe - though I may be messing this part up with the Aussie system). There is also private insurance which can cover most of the rest (and this is paid by personal and corporate dues). However, almost every use of the medical system hs a “user fee” solution, that may be anywhere from 5-25% depending on how well insured you are privately.
The advantage with user fees is that it makes you think twice about going to the doctor’s for little things (I have the sniffles, boohoo, give me antibiotics, even tho’ they are worthless). The advantage with medical levies going directly to the public health system is that there is an increase in transparency. If we see $15billion going into medical and $15billion is used, we’re a lot happier. It also makes it easier for the public to demand efficiencies and better end user accessibility. In taking public health care costs from general taxation, it makes it more difficult to see how muc from what tax is going where, etc.
The other advantage with the Japanese system, is that even though they spend less per capita (publicaaly) than us, they have 3-6 fold (per capita) the number of machines (CT Scans, MRI’s etc). The average wait time for access to a machine is about 2 days - and that is only because some of the rural people need to train into the city. Japan actually has less doctor’s per capita than Canada, so that doesn’t necessarily mean more doctors will help.
Also, the Japanese tend to be the longest lived country, and not all of that has to be due to lifestyle (though I’m sure it really helps).
my two cents
Comment by Darrell — August 20, 2007 @ 7:20 pm
Langmann, you may or may not be right about insurers. I mentioned this story to you before and the way I heard the it, it transpired somethinng like this:
Doctor: “We can most likely save your leg by doing an orthopedic surgery.”
Patient: “Great!”
Doctor: “But your insurance won’t cover it because you’re too old and they decided that the possibility of success is too low and the post-operative care will cost too much. You’ll have to pay out of pocket.”
And as it happened, she was retired, her husband dead and living on a pension, and so couldn’t afford it. At least this is the way we heard the tale told. I wasn’t there, I can’t vouch for the truthiness. If this is the case, then I find it appalling.
Carlo, Darrell, there certainly has to a be a burden of responsibility on persons who have higher risk life-styles including smokers, drinkers, substance abusers, and the obese. But how far does it go and how do we attach a $$$ value to this? What about high risk behaviiour such as rock climbing, sky-diving, bungee jumping or even water skiing?
Comment by Necator — August 20, 2007 @ 8:16 pm
@necator,
high risk behaviour should be included in the higher user fee scale. it is in life insurance. value should be ranked in some way similar to life insurance - the more likely something will cause disease/injury/death - the higher the cost to the user. well, i guess death doesn’t need to be included, because then there isn’t any medical care. so sports like sky-diving, where failure usually equates death may not cost as much to the user as, say, downhill skiing, which could involve any sort of bone breaks, concussions, etc.
the only thing i don’t think should be equated into the fee equation, is genetics - you don’t choose your genetics. however, people should be better educated on the likely results of their own matches and be better informed of their decisions. i’m not quite as draconian as the romans and greeks of pre-christian times, but i don’t really fall that far out either. as a geneticist or evolutionary biologist (or at least someone who understands some of the principles), the one bad thing about modern medicine is the capability of previously “unfit” individuals to procreate, thus prolonging that the “unfit” genes are allowed to remain in the genome. now before I get equated with the nazis, i only mean severe genetic disorders and I only mean enabling reproduction between people who carry such disorders.
oh, and redheads…. i mean, who wants to be a redhead anyway? jk
Comment by Darrell — August 20, 2007 @ 8:34 pm
@ Necator:
People often get the story confused after speaking with a physician, it may be due to poor communication. I find it happens all the time, you ask a person a question and then you look in their chart and two different stories stare you in the face. In the US doctors get to use the excuse that the private insurer won’t pay when they don’t want to perform a useless operation. If a doctor in the US is convinced of the necessity of a treatment plan he can advocate for the patient and have second or third opinions done, insurance companies realize such a claim is legitimate. In canada we get to use the excuse that the public insurer won’t pay in the case of expensive medications, or we have to act as the barrier to prevent bad care and a bad outcome and in that case we get the blame, however in the case of the public and private disability in canada if we feel that a patient’s claim isn’t reasonable yet we don’t want to get blamed by the patient we will not fill out a very strong recommendation which the disability provider will use to deny a claim. Then we have the easy excuse to blame it on the insurer. In the states if you have money and a negligent physician you can attempt to have a high risk poor likelyhood of outcome operation.
Either way it is still a story and you don’t know the truth.
The fact remains that in Canada if the public insurer says “no” then you have no recourse. In the US you can always pay for it yourself if it is worth that much to you. Or if you are a Canadian you can drive down to the US or India and pay to get it.
For example at a certain hospital, a small number of drug eluting stents are available for cardiac operations (the drug eluting ones last longer and prevent re-operation). Once these are used up for the year on a generally first come first served basis everyone gets a normal stent. If you have the money you cannot upgrade yours. Why?
Actuarial Science is how you figure out the risks when it comes to insurance. That is how you attach a dollar value to it. Its done for all other insurance plans. It is unlikely that rock climbing would void your insurance, but participating in criminal activity or military operations would just like it does in the US.
Comment by langmann — August 20, 2007 @ 10:12 pm
@ Langmann,
People often get the story confused after speaking with a physician, it may be due to poor communication. I find it happens all the time, you ask a person a question and then you look in their chart and two different stories stare you in the face.
It goes both ways. The patient isn’t always wrong. In Sudbury, my BH’s chart read broken tibia and femur, NOT broken tibia and fibula (what it actually is/was). The ortho techs came into her room one day and tried to fit her for a splint that went up to her hip. She told them that it was a broken tib/fib. No, no they assured her, the charts read boken tibia and femur and that was what they were going to rectify.
The mess got cleared up eventually (with my intervention along with a few nurses I recruited). We mentioned the error to her vascular surgen and he was most apologetic (he really was a swell guy). When we arrived in Hamilton, the nurse read the chart and said, “Broken tibia and femur eh?” Apparently the change was never made.
Either way it is still a story and you don’t know the truth.
More heresay than a story, but yes, I don’t know the truth. But you don’t know either and it may indeed be true. If however the physician lied because it was more convenient, then this was disengenuous and a sh!tty thing to do.
In any case, I think most perons in this thread agree that there have to be changes to our healthcare system. If this means having parallel private/public systems then so be it. However, I perhaps like the other self-proclaimed idealist here, Carlo, do not want that to happen if it’s at the expense of universal accessibility for all. Although I beleive thaat for the good of the country we have the share the burden, I’m in full agreement that we also have to bear our own responsibility for our life style choices.
Comment by Necator — August 21, 2007 @ 12:33 pm
I certainly don’t think patients are always wrong, its not what I am saying. Quite often they are the go to source. What I am saying is that from the description of the event I would be surprised if there were not some real medical reason she did not have her leg surgically reduced. But anyway its not important.
We already have a private public system as anyone with a drug plan can attest. Indeed people with drug plans do much better in our system as they can afford their medications, surgery, PT etc. We will undoubtable get more private money in the system whether we like it or not. People will have to accept that wealthier people will get better treatment in many cases, as they already do now. The question is what sort of basic care are people willing to pay for, for those who cannot pay. In my mind there is no reason for the public system as well intentioned people would set one up anyway. People like me would help pay for it. Would other people here help as well?
One thing we should consider is the benefits for sincerely disabled people are very low. This is something I am glad to see the Conservative party address, its good that conservative ideals are alive. Are people who destroy their own health through selfish actions deserving of our care, and do these same people take resources that should be going to disabled people who deserve the help?
Comment by langmann — August 21, 2007 @ 5:17 pm
@ Langmann,
Well put. I’m gald to see that there is a bit of a humanitarian in you after all! And you’re right (at least in this case) that persons with drug plans do fair better. We happen to have one, and so it’s reduced our burden somewhat.
Now why don’t you pop on over to my blog and spread the love?
Comment by Necator — August 22, 2007 @ 11:06 am
Actually necator, just because my views are libertarian doesn’t mean I am not a humanitarian. In fact I would argue that libertarians are the most humanitarian people of all because they have used their energy to research and understand what is best for people.
The main reason I rail against socialists is because I know for a fact having studied economics and been in health care that many of the schemes concocted by socialists do more harm than good. That is the point that I keep trying to make. All these interventions are actually hurting people even though we think we are doing a good thing. When someone like me raises these points or questions certain programs with evidence we are called everything from racist to nazi by and I am sorry to say, people who you probably think are humanitarians. It makes me cringe that my money is used to hurt people.
I believe the most important right a human being should have is the right to do or say whatever he or she pleases as long as it isn’t actively harming someone else. Personal property is an intrinsic and integral aspect of personal freedom. The government is in place to protect your property not take it from you.
Hence I am and people like me are your best friend and ally because while some of your other socialist friends may one day turn on you because you believe something different or want to do something different, or while they may steal your money or put you in jail for questioning their beliefs, I and people like me will be there to defend your rights. We may not like you, we may not like what you are saying but we believe it is your right no matter how odious or incorrect it is. (And we’l still tell you your beliefs are wrong but we support you being able to say or do it.)
This is my main grief with the Conservative Party of Canada and Carlo well knows how I feel about certain individuals who demolished the libertarian ideals of the old Reform party. However I maintain that with minimal government interventions we will have minimal infringements of people’s rights. That is why I support them in general but wih misgivings, however 150 years ago I would have supported the Liberals because of what classical liberals used to stand for (free market, freedom of though and exression, property rights, democracy, free trade etc). Unfortunately at this point in time they have switched to the group of theives and human rights abusers through unintended consequences.
I used to come by your blog but you had shut it down for a while for an unfortunate reason. If you notice my links include your blog.
Comment by langmann — August 22, 2007 @ 5:48 pm
Well I’m open or business again. BTW, I have a picture of Preston Manning on one of my guitar cases…oh my idealistic high school days (sigh).
Comment by Necator — August 23, 2007 @ 2:30 am
ok, this is off topic but I had to post these links… makes me happy i’m going to australia :
http://www.harperindex.ca/ViewArticle.cfm?Ref=0056
The above is essentially about joining canadian, us and mexican policy such that the corporation has power over the laws that the government may have. It focuses on harper and his role in the SPP (may have heard about the protests recently) and TILMA (a bc/alberta project that i just heard of, that really sucks).
http://www.prisonplanet.com/articles/august2007/210807SPP.htm
The above is about the essential merging of the Canadian Forces with the US army, and having them being under the control of US Northern Command (not the joint NORAD force). Seems the only reason it hasn’t happened yet, is the patriotism that Canadians have.
I’ve been seeing more and more info floating on the web about the upcoming almagamation of Canada into the US and Mexico. There is mounting talk for a joint currency (the “amero”) to compete with the euro. In fact, some commentators believe that the us fed is purposely tanking its own dollar to expedite that. and more and more legislation is falling in favour of corporate controls. now, some has to be conspiracy theories, but there also has to be some truth too. (I mean we all know little green men are being held by the US military ;o) ). There is another good article here:
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=57263
In fact the site usually has some interesting points to make, though I can’t vouch for all of them.
http://www.worldnetdaily.com/
My main point is give us transparency and then give us a choice (referendum?). of course, then the powers-that’be wouldn’t acheive their goals.
If Harper moves forward in this, the little respect that i have gained in him would be completely removed.
Not that I trust the Liberals in this either.
Comment by Darrell — August 23, 2007 @ 2:34 pm
The biggest opponents of the Amero is the US Government itself. The idea of their fiscal policy being subverted by other nations is enough to get them ready to shut down the borders even quicker. All US congressmen and senators are acutely aware of the 1980’s inflation terror for which Milton Friedman described the way out based on strict bank control of the currency availability. They will never relinquish control.
I remember going to a Fraser Institute conference where a panel of US and Canadian economists were discussing NAFTA. At one point in time a well meaning but ignorant journalist from the CBC asked if NAFTA meant that an Amero was just around the corner, and if that meant Canada and Mexico would be assimilated into the US (no doubt like some sort of borg). I distinctly remember the US economists laughing and implying that owning Canada and Mexico would be way too expensive for the people of the US.
What Harper is doing about freeing up free trade between provinces in Canada is commendable,and sorely in need of being done. This is a major lamentation to many people who market within Canada nationally and has done a great deal of damage to Canadian firms trying to grow into new markets. Now this may mean that some provincial laws get challenged, and so be it. Not all of those laws are good ones, something the articles fail to explore.
Comment by langmann — September 4, 2007 @ 10:38 pm
When do you think the Feds will implement the Amero currency?
Do you think the Amero will be just as worthless as the current dollar? Do you think things will be far worse if they do bring in the Amero?
What things can we expect to see (economy, society, housing, food, energy, foreign relations ect..) when they do bring in the Amero?
If I were you I would start buying gold and silver coins which I am.
Because those coins will be worth more than the dollar and the Amero.
Comment by Dan — March 6, 2008 @ 7:26 am