My Socialist Insurance Payments

[Kung Wu]

Man, what happened in 1965 that caused that nice linear trajectory that would have resulted in a 1.75% of GDP spend on government healthcare in 2015 to over 7% of GDP?

Technology and pharmaceuticals caused this?

One of my favorite topics.


1) Early adopters of new technology always pay a premium for the new technology (pharmaceuticals are just techology).

That's a good thing -- without investors recovering their dollars from early adopters, there wouldn't be innovations and cures. Over the long term, in a free market, those prices always come crashing down; patents expire, competition invent substitutes, costs get spread among many people. However is healthcare operating in a free market? ... that leads to 2...

2) Did you know that Medicare/id pays whatever the drug companies set as a price, with no free market check/balance system to cause prices to fall?

Prior to 1965, when Medicare was not involved, the price of drugs was kept at bay by insurance companies that negotiated the prices down on behalf of the consumer paying those premiums. With Medicare patients, we the taxpayers have no advocate to drive drug prices down. They will eventually drop, for the reasons stated above, but not at the normal free market rate that we should expect.

3) There has _always_ been advanced medical technology (at least since the industrial revolution), and all of it came with a price tag; and that price tag was certainly built into the cost of healthcare prior to 1965.

Did you know:

* A cure for polio was invented in 1952.
* The first open heart surgery was performed in 1951.
* The pacemaker was invented in 1952.
* DNA was discovered in 1953.
* The first organ transplant occurred in 1950.
* Penicillin was invented in 1945.
* A cure for tuberculosis was invented in 1943.
* The kidney dialysis machine was invented in 1944.
* The first heart cath procedure was done in 1941.
* Anesthesia was invented in 1942.
* A cure for yellow fever was invented in 1935.
* The first blood transfusion took place in 1930.
* A cure for typhus was invented in 1937.

...

More here (these are neat reads actually): 1950s, 1940s, 1930s


I could go on ... but the notion that curing diseases began in 1965 and is the cause of our disaster of a healthcare situation is ludicrous. The notion that curing diseases drives costs up is also ludicrous. Keeping people out of hospitals by curing them drives DOWN costs.

4) Did you know that "More than 75% of health care costs are due to chronic conditions." In other words, curing people with very high priced drugs for a year is still way favorable to keeping them in a hospital or on a lifetime of medicines.

5) Did you know that only 9.7% of the total spend on healthcare goes toward prescription drugs?

Folks, that means in 1960, of the 1% total healthcare spend of GDP, we spent only about 0.1% of GDP towards prescription drugs in 1960. In 2014, we should be paying about 10% of 1.75% ... or about 0.17% of GDP in 2010. Our total healthcare expenditure as a percent of GDP is currently 16.4% and climbing ... 10% of that is 1.6%.

Again this argument is a FULL MAGNITUDE off of the trajectory we were on prior to 1965.


No ... drug pricess and technology are not the problem.

[Play Angry]

I would enjoy seeing the percentage of health care costs attributed to litigation and threat of litigation. That has been the drumbeat for about 20 years by my fine party.

I believe most studies place it as accounting for ~2% of total health care costs, including both direct and indirect expenses?

That number has always floored me. You would think it was responsible for at least a third of the price inflation given the amount of lipservice it's received over the last 20 years.

[Aargh]

Pacemaker - 1952
Medicare - 1965

Let's say you're a 70-year-old sharecropper in Tennessee in 1963. You develop a heart arrhythmia. You don't have the money to pay for the Pacemaker, so your doctor tells you to go home, get a lot of bed rest, don't strain too hard. One doctor visit. Problem "resolved". Low medical cost. Short life expectancy.

Take another 70-year-old with limited resources in 1966. He gets the Pacemaker. Not only that, but this guy is likely to live another 20 years and have large medical expenses during that time.

Keeping old people alive is very expensive. The United States made a move to keep old people alive in 1965. Health costs as a percentage of GDP started rising when Medicare was implemented. Is that because Medicare is inherently evil and leads to high medical costs, or is that because old people in the United States are getting medical treatment they used to not get?

Complaints about Medicare are being made here, but I'm not seeing any ideas or suggestions to improve anything. Just complaints about how bad things are. Unless there is another plan to compare, then the status quo will always prevail.

[Kung Wu]

I would enjoy seeing the percentage of health care costs attributed to litigation and threat of litigation. That has been the drumbeat for about 20 years by my fine party.

I believe most studies place it as accounting for ~2% of total health care costs, including both direct and indirect expenses?

That number has always floored me. You would think it was responsible for at least a third of the price inflation given the amount of lipservice it's received over the last 20 years.

Exactly. Completely negligible.

And I haven't dropped the most compelling statistic yet.

I wonder if there is any factor where the PCI cost of group insurance pre-1965 vs the cost of group insurance today will convince even the most stubborn person from realizing how badly Medicare/id has jacked up our healthcare system?

5x? 5.5x?

[Aargh]

I wonder if there is any factor where the PCI cost of group insurance pre-1965 vs the cost of group insurance today will convince even the most stubborn person from realizing how badly Medicare/id has jacked up our healthcare system?

5x? 5.5x?

Providing health care to the poor and elderly is expensive. Are you proposing we stop doing that?

[Kung Wu]

Complaints about Medicare are being made here, but I'm not seeing any ideas or suggestions to improve anything.

Because half of this country has bought the lies that Medicare/id is NOT THE PROBLEM. What's the point of offering change if voters don't even believe it needs changed? There are people in this very thread denying that Medicare/id is the problem. Those are the same people that wanted Obamacare. They have voted to amplify the problem. Why even discuss alternatives?

Until people are educated enough to understand that at some point in the near future, the current system will result in the fact that they are NOT going to get treated for cancer in enough time to save them, what's the point? That type of waiting list is going to explode.

In fact it already has.

---

Here is a completely anecdotal story that just happened a few weeks ago:

We have had a single young black woman with a newborn child living rent-free in my basement for the past year and a half. We are simply trying to give her a leg up during her pregnancy and while she gets her life together. She has paid off a huge amount of her debt, has got a good job, and almost completely weened herself off of welfare since living with my family. But ... her child is still on state health insurance (medicaid), so she hasn't completely weened off.

Well the baby has been getting ear infections off and on for the past several months causing him to be sick and irritable over and over. At the same time, I have had a bad sinus something-or-other. We advised her to call the ENT that put our son's ear tubes in, to see if perhaps this child might need ear tubes as well, since the symptoms were very similar.

Well after about 3 months of living with my jacked up sinuses I called the ENT to set up an appointment. They said they could see me the very next day. That didn't work for me so they set up the appointment for me for the day after that.

Well our friend's baby was sick, but what I did not know is that one day prior to me calling our ENT, our friend called the exact same ENT. The earliest appointment they would give her was at the very end of October -- 6 weeks out.

[Aargh]

This chart looks very similar to the chart showing the rise in health care costs

[MoValley John]

Providing health care to the poor and elderly is expensive. Are you proposing we stop doing that?

The poor and elderly always had access to healthcare. Churches provided much of it and counties provided the rest. It was inexpensive, and for the most part, effective. In 1965, the federal government took over that role. By the mid 80's, religious organizations were effectively squeezed out of the charitable healthcare business by regulation and cost. County governments and county hospitals are for the most part extinct. County hospitals that have survived are usually just wellness centers, and or, psych wards.

[Play Angry]

The poor and elderly always had access to healthcare. Churches provided much of it and counties provided the rest. It was inexpensive, and for the most part, effective.

This is some handsome revisionism where the grain of truth it's based on applies almost exclusively to rural bumpkins. Come on dude.

[Kung Wu]

This chart looks very similar to the chart showing the rise in health care costs

Actually, no it doesn't. You are showing a 10% increase in life expectancy. GDP has increased by a factor of 16.4x (1640%) over the same time! It has gone from 1% to 16.4% of total GDP expenditure. There has been no major acceleration of life expectancy since 1900 and the corresponding ramp-up of GDP spend prior to 1965 was on a slow linear trajectory, just like our life expectancy is:





In fact, from 1900 until 1965 the life expectancy went from 49 years of age to 69 years of age ... that's nearly a 40% increase! Yet the total spend on healthcare did not spiral out of control.

[MoValley John]

This is some handsome revisionism where the grain of truth it's based on applies almost exclusively to rural bumpkins. Come on dude.

Sisters of Mercy, a Catholic order of nuns, nurses treating the poor.

You don't see this in Healthcare today. But arguing over this being revisionist or not is pointless. You don't, or cannot believe that charity could or would treat the poor is understandable. It's been almost 50 years. Arguing the point would be pointless and foolish on my part, it wont change minds. Needless to say, even though I had a great aunt that was a nurse with the Sisters of Mercy that spent her adult life treating the poor and elderly, it is all just my fantasy.

[Play Angry]

Nobody would dispute charitable organizations existed or provided services. Arguing they were sufficient for the poor and elderly and implicitly asserting there was no problem to begin with is silly.

People have a way of remembering the past that glosses over inadequacies. People also have a way of overgeneralizing their own anecdotes.

[MoValley John]

Nobody would dispute charitable organizations existed or provided services. Arguing they were sufficient for the poor and elderly and implicitly asserting there was no problem to begin with is silly.

People have a way of remembering the past that glosses over inadequacies. People also have a way of overgeneralizing their own anecdotes.

So, what we have today is sufficient? I don't have answers, and I don't claim to. I do know that medicare has become immune to criticism and no liberal or conservative has the nutsack to even begin to try to fix it. Furthermore, I dont think it can be fixed. Medicare was, is and always will be the problem. You will never hear that from any politician or from any political party, that is suicide. You won't hear it from the media or anyone else, either, too risky of a topic. Medicare was flawed from day one and each attempt at a fix exacerbated the problem. We have created a monster we cannot fix.

[Play Angry]

Sigh. I never defended the current system.

[Play Angry]

@Kung Wu:, I am woefully uninformed on single payer systems when it comes to cost inflation. I don't want to be a pain and make you do all the work, but can you point me to a good starting place to read up on it?

I have a feeling that is the direction we will continue to creep.