I remembered the 42% as coming from The Telegraph, but couldn’t find the article I read - it’s likely paywalled. It may have been drawn from this article:
VAT is generally included in PPP adjustments rather than tax.
Anyway, it is kind of an old fact that the US pays more in tax for its public health care than almost all nations with UHC.
Yeah, but that’s precisely the reason why nothing can be done about it. As mentioned above, you have to look at it as percent of GDP. US healthcare is something like 17% of GDP. If we want to create a good Universal Healthcare System akin to other advanced countries, that number has to come down and not by a little. It needs to likely be below 10% to be sustainable. So where exactly do you bleed that money out of the system? The ‘popular’ talk is insurance companies and the magical realm of ‘waste’ via administration or some other fairy land of magic money. The reality though is that it’s people out of work and not a small number of people. Even if those people out of work are pencil pushers, it’s pencil pushers that don’t have jobs.
In the US, healthcare has largely replaced manufacturing as the way to reach the middle class. In the 1960s, if you were poor, you’d go to work for GM and could become middle class. In the modern US, you get an LPN or Med Tech or some other 2-year healthcare degree/certification. Until social media influencer becomes a real occupation, those types of jobs are still one of the main ways to actually jump classes. When you put downward pressure on those jobs, you are going to actually end up increasing wealth inequality. When 17% of your GDP is forced to make due with less, there’s going to be a reckoning on the income side of things and it’s not going to be a small thing. Shedding 8% of your GDP is not an easy process to go through and it’s workers that are going to most feel that pain. We can pretend otherwise, but you’re going to have a very tough time telling me that healthcare companies are going to sacrifice profits instead of workers wages and jobs.
Does something need to be done? Oh yeah. Healthcare as an industry is very problematic. Costs show no signs of coming down and typical ‘capitalist’ solutions seem unable to deal with the problem for obvious reasons. Do I envision any politician or group of politicians willing to bite the bullet necessary to actually fix the problem? Nope. It’s a political death sentence and unless you’re willing to cede control of the government to the other party for a decade or more, you’re not going to do it.
LPN and Med Tech <> Pencil Pushers.
And Pencil Pusher is a pretty transferable skillset.
The money you are currently spending on Medicare, Medicaid, VA, IHA, Childrens etc total roughly what a full UHC system would cost. A big part of the extra costs is the excessive bureaucracy and duplication of work that comes with having so many systems running in parallel.
That is true. There is a very large number of jobs that are just middle men, and would be lost. The thing is, a number of those jobs, the gate-keeping, reviewing, claims etc are not neutral but actually harmful. You’d be better off if they were paid the same wage to do nothing.
Of course the US never struck me as a country that were inclined to pay bureaucrats after their jobs have been obsoleted. I don’t really see why this field should have a priority right to hundreds of billions of dollars that the auto industry, coalworkers, VHS makers etc didn’t get.
You’re looking at killing between 40 and 50 per cent of healthcare expenditures. It’s going to be pencil pushers, techs and doctors. I don’t think you’re grasping the enormity of the problem. Right now US healthcare expenditures are about 3.5 trillion dollars a year. The NHS budget is 115 billion pounds. We have 5 times the population, so if we do a simple scale up, that’s about 600 billion dollars. So that’s 2.9 TRILLION dollars that have to disappear from somewhere. (Actually, not quite Britain does have private insurance as well that spends about 25 billion pounds a year, so we can raise the US value and say about 2.5 TRILLION dollars) If we look at per capita spending, we can get a better grasp on things. Total per capita spending for the NHS (along with their privates) is about 3000 pounds a year. US spending is about 8000 pounds a year. That money is going to people. Sure, some of that is corporate profits and some of that is unnecessary administration, but a whole lot of it is salary and equipment expenditures.
We can look at countries that are trying to balance these issues and we know that salaries are intentionally depressed to keep budgets under control. For instance, the average GP salary in the US is about 220 grand a year. In Sweden, it’s about 85 thousand and the second most expensive country is Germany where it’s 150 thousand. Nursing salaries are similar. Canada is known as a very generous country for RN salaries, but still it averages somewhere in the 50 thousand USD a year band. The US averages 70 thousand a year. When you look at other countries, nursing salaries are pitifully low. US Healthcare wages are much, much higher than any other country (Except Luxembourg which has high compensation for nurses, but lower compensation for doctors)
We know exactly the three places that US healthcare is out of wack with the rest of the developed world. Salaries (where we’re spending sometimes twice as much as other countries), prescription drug costs (which is a complicated issue. Our drug costs are largely subsidizing research that is benefiting the rest of the world. The question is if we cap drug prices, will that research continue or will it dry up? I don’t think anyone has the answer to that yet.), administration (Administration costs in the US are about 8% of costs. 3% is more typical. So we can save roughly 5% by getting our administration down to world averages. A fine chunk, but a small part of the problem.) Largely, the rest of our healthcare costs are not far out of line with the other OECD nations. If we want to get in line with them, those are where the cuts have to come from.
Like Northern Piper said, it comes out of general government tax revenue, so I really don’t know.
I could tally up all the expenses that are not covered by Universal Health Care, like physiotherapy, dentistry, orthodontics and the like. Some of those will be partially covered by my company’s health insurance.
Pretty soon my household will have a negative number, since my wife finishes her residency this year and will be earning considerably more than I do.
This previous thread had some discussion of the costs.
This is the elephant in the room. My understanding is that in most countries being a medical doctor is a well-respected upper-middle class profession. In the US most doctors (especially specialists) are solidly upper class. Average physician salary is $300K - in the top 2-3% for household income. The average orthopedic surgeon or cardiologist is a one percenter.
Thing is, salaries are not a big contributor to the high US costs. US health care salaries are high and generally crack the top 3 in the world, but they are not uniquely high like US health care costs.
Of the top of my head, the high spending in the US are due to three factors very roughly contributing 1/3 of the excess each:
a) Massive bureaucracy caused by a fragmented system with billing and gatekeeping
b) Inefficiency, drug costs, duplication of efforts and overprovision
c) Everything else, including defensive medicine, malpractice insurance, high salaries, advertising etc, etc.
If you got a system with normal costs you could very easily do a Bevan, take 3 - 5 % of the savings and add 50 % to the salaries of all the physicians in the USA.
To describe this as a “meme” seems pejorative, or am I mistaken? Don’t you think there’s a lot of truth to it? It seems to me that a lot of Americans don’t understand the principle that the cost of any private insurance that their employers provide is really coming out of their paychecks, let alone quantifying the percentage.
You are mistaken.
meme: an idea, behavior, style, or usage that spreads from person to person within a culture
The item in question is an image that is being passed around the Internet. Memes are not necessarily untrue.
And they aren’t necessarily bad. Way back in the dark ages long before the internet, I took linguistics, and a meme was simply a “unit of meaning.”
The problem is that you’re going off the top of your head rather than looking at the studies.
The three drivers are the three I mentioned above. Harvard’s School of Public Health did the most widely cited study on it.
Labor costs are roughly 60% of healthcare spending in the US. They’re the main driver of costs.
We know this. We just don’t have the will to do anything about it for obvious reasons.
senoy:
More likely it will mean that US drug buyers will pay a less, and out-of-US drug buyers will pay more. Pharmaceutical companies are low-balling prices to the rest of the world that has UHC because they know they can make up their profits in the US. If the US wises up and gets UHC, the pharma companies are going to have to negotiate prices with those other markets with the knowledge that the US is not going to take one for the team anymore.
That study is a bit of an outlier itself. I’ll see if I can find some better ones when I get back in. But labor costs are a big driver of costs in every nation. The question is why costs in general are so much higher in the US.
Now the US has roughly one million physicians. If their average wage is 200 000 $, that is 200 billion. The US healthcare system consumes 3 200 billion per year, about twice what you’d expect. So about 1 600 billion more than you’d expect.
But if physicians in say, Belgium makes an average of 150 000 $ (rough guess), the gap up to the US is 50 000. So compared to Belgium, US overspending on pysicains salaries is 50 billion out of 1 600 billion.
50 billion is not nothing, but its not one of the major drivers.
2016 figures, but shouldn’t be wildly different to today.
Look up the AUD value of your salary before you visit the site. Adjust the slider and see how much of your tax would go to health if you were earning that income here.
How much does heath insurance cost in the US, broadly?
Note that the 2% does not pay all health costs. It’s an artificial number that was introduced to avoid having an artificial increase in the government “cost of living” numbers, which would have had political consequences. The rest of the UHC bill is paid out of general revenue. And we aren’t a “pure” system anyway, so there is some other stuff as well.
Aus Health costs are running around 10% of GDP – up significantly from what it was 50 years ago. Note that different sources will give you slightly different numbers.
Wikipedia has some cash numbers: List of countries by total health expenditure per capita - Wikipedia
The OECD has some numbers too: http://www.oecd.org/els/health-systems/health-data.htm
In the UK the only medical bill most people see is a standard prescription charge of drugs with is £8.60 ($11.33). But that charge does not apply if you are under 16 or over 60 and there are a lot of other exemptions. It used to be the case the dental and opticians services were also free for all. Though that provision has been drying up for many years.
The right to state provided healthcare free at the point of delivery and according to need is a principle that is very firmly held in the UK and is defended with the same almost religious zeal that Americans reserve for defending their favourite constitutional amendment.
We do, of course, pay and this comes from general taxes, but compared with other healthcare systems, it is good value for money. The fact that there are no pesky insurance companies to deal with probably has something to do with that.