You go to the store and if the price is too high, you try another store. You shop for the best value for your money. On the other hand, if your child gets sick you go to the quickest and best health care provider you can. You don't ever ask what the price will be and shop around and if you did, probably no one could tell you what it really would be and even if they did, you wouldn't have any idea if that was a good deal. Heck it doesn't matter if it is a good deal. Your child is ill and you need to see a reliable doctor now. Besides that, the price probably doesn't matter to you if you have health insurance, medicare, a military health plan or medicaid.
The Republicans who advocate a market structure for health care services that will lead to competition on price and quality are either dreaming or spinning a yarn to cover up the agenda of special interests that financially support them. The evidence shows our health care system IS NOT competitive or a good value for amount of money spent on it by any measure. No, actually it is arguably the most expensive and overpriced system in the world. On top of that, we rank low in terms of health outcomes vs. other developed countries. We are below average in health and yet spend almost twice as much on it as pretty much the other developed counrtries.
Spending Per Capita Health Care in Dollars
Germany $3100
Japan $2900
Canada $3300
USA $6900
Democrats, you are next. You want to extend coverage? Do you consider for one moment that we can't afford the entitlements we already have? Have you considered the effects of your polciies on hiring? Furthermore, do you think it is in the nation's interest or our health care system to block tort reform at every opportunity. We know it is in your interest, trial attorneys are among your biggest financial backers. Why don't you admit to the public your conflict of interest and stop enabling trial attorneys' pillaging of the medical liability insurance golden goose?
Germany has a good health care system and people have confidence in it. They spend 10% of their annual economic output (GDP) on it. Our health care system may be known for the most amazing cures and procedures, but for the masses of people, the outcomes are at best average. Americans don't believe we have a good health care system. People sense it is too expensive but actually it is extraordinarily expensive. Health care spending takes up 17% of our annual GDP. What if we copied Germany and spent 10% of our GDP? What if we saved 7% of our economy's spending for other purposes?
I am simplifying to get to the point. If we spent 10% instead of 17%, we would save 7% or $980 billion dollars a year. Our national deficit this year is at about $1400 billion. Wow! If we saved $980 million wouldn't that help fund our deficit? How could that much wasteful spending have got by us?
A Little Story
This waste of money is also killing our job market and businesses. Big companies send jobs to Asia to lower their costs including health care costs. A friend of mine has a cheaper health insurance plan at his small firm. He employs six people and is still going even though many of his competitors have been driven out of business over the last three years. He is doing whatever it takes to stay in business and take care of his people.
He became ill recently for about a month. There was a pill he could take once a day that would give him relief so he could live and keep on working. The cheapest price he could find for that pill was $175 each and after five days his insurance company cut him off. $175 a day was more than he could pay but he found some relief. A Canadian online pharmacist offered the very same pill in quantities of 10 for only $27 a day. My friend was saved by Canada's health care system. Our own country's health system failed him in favor of apparent profiteering.
From these examples, we can see how the the cost of health care is out of all proportion in America. It is wrong. We also can see that a small businesses, that have to struggle mightily to stay in business, are having a hard time employing people and providing health insurance. How many more people would be working today if health care was affordable?. How much would they be paying in taxes or at least not drawing in support from the government and how much better would our deficit problem be?
At some point we will confront this issue. Employment, deficits and our health are all at risk. The profiteering of special interests (those MD's who seek riches, pharmas, trial attorneys, medicare cheats and scammers) and who are protected by their sponsored politicians are at the heart of the problem. It is time to make our system over. Germany and several other countries have decades experience sorting this out. We can learn from them.
Investment Implication: Health care business models generally are going to feel increasing pressure on profit margins as the US has hit a ceiling on what it is able to pay. Generally, it seems health care will become a stagnant industry in the US, even as demand grows ever stronger.
