Saturday, April 16, 2011

If You Want to Decrease the Budget Deficit, Decrease Health Care Costs

Original Link:

By Robert Oak

With the never ending pundit pontificating on the budget deficit and how we must cut spending, it seems always the bulls-eye is on the backs of the U.S. middle class, poor and national interest. Yet, even the Wall Street Journal notes health care costs are out of control. In their number of the week, they amplify the U.S. Spends 141% More on Health Care than other nations.

141%: How much more the U.S. spends on health care, per person, than the average OECD nation.

At a time when politicians in Washington are battling over — among other things — the future of the U.S. health-care system, it’s instructive to see just how well that system operates. According to the Organization for Economic Cooperation and Development, we’re doing a terrible job.

141%, that's an astounding number, as illustrated by the above graph. The health care comparison report WSJ refers to is this one. The United States is the most inefficient health care system of all of the OECD countries. Regardless whether a health care system is public, private or a mix, the U.S. is plain getting ripped off and inefficient as hell to boot.

The CBO shows health care costs increasing as part of the federal budget. The White House budget for 2012 shows health the largest of all expenses, at 22.62% of the 2012 budget. See how much Medicare and Medicaid is, from the percentage breakdown for fiscal 2010 spending.

Below is an OECD graph on health care costs versus life expectancy. As we can see, the United States is off the charts in terms of costs versus what we're getting.

We live less, yet pay more, which is more amazing because frankly, once you're dead, you no longer are paying for health care. The chart below is from the OECD health care efficiency report on the United States. The numbers below the black circle mean the United States is below other nations, the numbers above the black circle mean the United States is higher than other nations. On the left are prices, on the right are supply.

Notice on Health Care costs (HC) is off the chart on the above graph as are other costs. We're simply paying way more per service than other nations, yet getting way less.

The department of Health and Human Services gives the breakdown in Medicare spending for fiscal year 2010:

As we can see, drugs are a huge percentage of the budget! Medicare only covers those age 65 and over, so one would think nursing homes, hospice, home health services would be much more expensive. Instead prescription drugs are over 13%. Could that be due to the United States having the highest prescription drug prices in the world? One must wonder how many of these drugs are even necessary. Anyone watching television or opening up a magazine knows expensive drugs are pushed on people 24/7, with side effects such as death listed in the fine print. How much of this Medicare expense is simply to increase profits of pharmaceutical companies, versus any real service to citizen's overall health?

This is just one example. While corporate lobbyists turn America's ire on Obamacare, their solutions are usually worse. In spite of all of the rancor since 2008 and major legislation passed, the reality is we simply do not have health care reform that will increase efficiency, serve all Americans and lower costs.

Fundamentally this is part of the problem. The statistics and numbers tell all, yet are continually buried to never see the light of day. Instead of drilling down deep into the U.S. health care system inefficiencies and rip offs, politicians, pundits and the press continually misdirect the public discourse into vague sounding, meaningless terms which do not solve problems.

You want to solve the budget crisis? Get corporate lobbyists out of D.C. and the first place to start is with the American health system. It is not Obama who will destroy the financial health of the nation, or even tea partiers. It is corporate lobbyists who will bankrupt the nation by getting their way, every time, subverting the public good.

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