What are we really spending on medical care in the US?

[PLC1]

According to this, we spend about 16% of our GDP on health care.

And, according to this, we spend just a little more than that on the federal government: 17.2%.

So, it's tempting to say that the federal government costs just a little more than health care, however:

Part of that 17.2% is Medicare, Medicaid, and Veterans health care. How much?

Medicare is 7.5%.

Medicaid is around 2%.

I couldn't find an exact figure, but that's close enough for government work.

The VA is <1%.

Add those together and subtract from the total cost of government:

17.2 - 7.5 - 2 = 7.7%

So, the total cost of government, military and social, everything except for health care consumes 7.7% of the GDP. Meanwhile, health care, public and private, consumes 16%. Health care costs more than twice as much as the entire federal budget.

Moreover, we pay more than any other nation in the world, and for no better outcomes.

And health care costs continue to rise faster than inflation.

Forget global warming, the debt, the Islamic terrorists. This is the biggest challenge currently facing this nation, bar none.

 

[pocketfullofshells]

According to this, we spend about 16% of our GDP on health care.

And, according to this, we spend just a little more than that on the federal government: 17.2%.

So, it's tempting to say that the federal government costs just a little more than health care, however:

Part of that 17.2% is Medicare, Medicaid, and Veterans health care. How much?

Medicare is 7.5%.

Medicaid is around 2%.

I couldn't find an exact figure, but that's close enough for government work.

The VA is <1%.

Add those together and subtract from the total cost of government:

17.2 - 7.5 - 2 = 7.7%

So, the total cost of government, military and social, everything except for health care consumes 7.7% of the GDP. Meanwhile, health care, public and private, consumes 16%. Health care costs more than twice as much as the entire federal budget.

Moreover, we pay more than any other nation in the world, and for no better outcomes.

And health care costs continue to rise faster than inflation.

Forget global warming, the debt, the Islamic terrorists. This is the biggest challenge currently facing this nation, bar none.

I think the real problem is the insurance companies don't make enough profits...right? or did I miss the point

 

[Dr.Who]

16% of GDP is spent on health care (ignoring that some is spent by government) that is money that people voluntarily spend however they want to. If they want a face lift then so be it.

Assuming your figures are correct the 7.7% of GDP plus the amounts spent on state, and local governments are not voluntary.

Who am I to complain about how people spend their own money? I have no problem with the 16% number that is really smaller.

But I am a citizen and I do have a right to complain about the 7.7%, which is really bigger, ( I personally pay more in real estate taxes than I do in Fed taxes. maybe this number should be more like 15%) that is taken through coercion.

And why are we comparing 16 minus whatever to 7.7 plus whatever (or should it be 15% plus)? Each will cost whatever it will cost. If gov spending were justified then it could be greater than health care spending and a comparison would still not matter.

But you did bring up that for our 16% we are not getting outcomes as well as other countries. We can compare our 16% of other countries percents. Now it would be important to remove all the cosmetic surgeries because other countries with national health plans won't allow so many of those if any.

Are we getting worse outcomes for our 16% which is really smaller? When we look at any particular disease, any kind of cancer, heart attacks, etc. the US treats just about every disease better. If we treat just about every disease better how do we get lower outcomes? Because outcomes are often measured in silly ways. The WHO for example grades the US lower because it is not socialistic. That's bogus.

If we adjusted down from 16%, by subtracting cosmetic surgeries for which the US is king, and compared that to other countries in meaningful ways, i.e. who gets better after treatment, then the US is the best country in the world to get health care in.

 

[PLC1]

16% of GDP is spent on health care (ignoring that some is spent by government) that is money that people voluntarily spend however they want to. If they want a face lift then so be it.

Assuming your figures are correct the 7.7% of GDP plus the amounts spent on state, and local governments are not voluntary.

Who am I to complain about how people spend their own money? I have no problem with the 16% number that is really smaller.

But I am a citizen and I do have a right to complain about the 7.7%, which is really bigger, ( I personally pay more in real estate taxes than I do in Fed taxes. maybe this number should be more like 15%) that is taken through coercion.

And why are we comparing 16 minus whatever to 7.7 plus whatever (or should it be 15% plus)? Each will cost whatever it will cost. If gov spending were justified then it could be greater than health care spending and a comparison would still not matter.

But you did bring up that for our 16% we are not getting outcomes as well as other countries. We can compare our 16% of other countries percents. Now it would be important to remove all the cosmetic surgeries because other countries with national health plans won't allow so many of those if any.

Are we getting worse outcomes for our 16% which is really smaller? When we look at any particular disease, any kind of cancer, heart attacks, etc. the US treats just about every disease better. If we treat just about every disease better how do we get lower outcomes? Because outcomes are often measured in silly ways. The WHO for example grades the US lower because it is not socialistic. That's bogus.

If we adjusted down from 16%, by subtracting cosmetic surgeries for which the US is king, and compared that to other countries in meaningful ways, i.e. who gets better after treatment, then the US is the best country in the world to get health care in.

Are you seriously suggesting that the US pays 1/3 to 1/2 more than anyone else due to cosmetic surgery?

Do you have any figures that support that idea?

 

[ProudLefty]

There seems to be no question that health care costs are rising faster than inflation, whomever is paying. There is a point where that can not continue.

Are there ways to rein in costs and yet provide good solid care to everyone? Sure there are. Most of the developed world is already doing it.

We are the only ones not smart enough to figure out how to do it. Wouldn't you think that perhaps we should take a look around us and see what we are doing stupidly? Tort reform is not the solution.

 

[PLC1]

There seems to be no question that health care costs are rising faster than inflation, whomever is paying. There is a point where that can not continue.

Are there ways to rein in costs and yet provide good solid care to everyone? Sure there are. Most of the developed world is already doing it.

We are the only ones not smart enough to figure out how to do it. Wouldn't you think that perhaps we should take a look around us and see what we are doing stupidly? Tort reform is not the solution.

Exactly right, and the out of control cost of health care is at least as much of a drag on the economy as is the out of control cost of government. Further, a large part of government overspending is directly related to the cost of health care.

 

[ProudLefty]

Exactly right, and the out of control cost of health care is at least as much of a drag on the economy as is the out of control cost of government. Further, a large part of government overspending is directly related to the cost of health care.

I guess then that your solution is the "Hurry up and die fast" approach?

A further question: How come the private sector hasn't long ago solved the problem of out of control price increases when they were pretty much the only game in town?

 

[ThisTooShallPass]

There's a lot of noise in any cross-national comparison dataset. Americans are in a unique position in that we have a large minority population with extraordinarily high death rates, and we have a failed state at our southern border that exports large amounts of drugs, illicit firearms, and violent criminals.

For another, "healthcare spending" means something qualitatively different here than it does in Europe. Here, "healthcare spending" is the aggregate of millions' of people's choices (or lack of choices) regarding health care; over there, "healthcare spending" is whatever amount of money the government chooses to spend on healthcare.

Our system also has a few oddities, like Medicare cost-shifting and the requirement that ERs treat people for free if they can't pay, that are absent in other systems and which serve to drive up costs.

 

[Openmind]

There's a lot of noise in any cross-national comparison dataset. Americans are in a unique position in that we have a large minority population with extraordinarily high death rates, and we have a failed state at our southern border that exports large amounts of drugs, illicit firearms, and violent criminals.

Are you aware of the immigration issue in Europe? Are you aware that every immigrant and their (usually large) family are eligible for national healthcare? I do not believe this argument is valid.

For another, "healthcare spending" means something qualitatively different here than it does in Europe. Here, "healthcare spending" is the aggregate of millions' of people's choices (or lack of choices) regarding health care; over there, "healthcare spending" is whatever amount of money the government chooses to spend on healthcare.

This MAY be true in the UK. It is not true all over Europe, since most countries offer a government option AND several private options. The difference is that the govenmnent option acts as a REAL competition to the private options who have to lower their price to be competitive. . .and they still make a profit!

Our system also has a few oddities, like Medicare cost-shifting and the requirement that ERs treat people for free if they can't pay, that are absent in other systems and which serve to drive up costs.

Both Medicare and requirement that ER provides STABILIZATION care in emergency room does cost a lot more. This requirement is just not needy in countries that do offer universal healthcare, so they realize a saving over all.

But go tell that to the GOP!

Another reason health care is cheaper there, is:

REAL competition among private insurances and government insurance
The care of the elderlies is spread over ALL insurances (both government and private) so their much higher need is "water down" by the lower needs of the other (younger) people insured.

If Medicare was extended to younger people as an option, this would accomplish 2 things to lower health care costs in the US (including medicare per capita cost):

It would provide competition for private health care industry and
The younger medicare clients would be generally healthier and the AVERAGE cost per capita would be lower because there would be a balance between the high cost of caring for the elderly and the lower cost of caring for the younger population.

Currenty, the "for profit" health care is getting HUGE premium to insure ONLY basically healthy, younger population, while the government (Medicare) is getting very low premium to care for the higher risk, higher cost population!

If these two populations were allowed to be insured by the same provider (i.e, medicare or another non-profit company) it would drastically lower the average cost per capita for EVERYONE!

 

[ThisTooShallPass]

Both Medicare and requirement that ER provides STABILIZATION care in emergency room does cost a lot more. This requirement is just not needy in countries that do offer universal healthcare, so they realize a saving over all.

Of course. But that saving is achieved by the government arbitrarily throttling supply, resulting in the horror stories we all here about months-long waits for routine medical treatments, people bleeding to death in hospital waiting rooms, etc.

REAL competition among private insurances and government insurance
The care of the elderlies is spread over ALL insurances (both government and private) so their much higher need is "water down" by the lower needs of the other (younger) people insured.

This is the definition of cost-shifting, and it's what's responsible for the rapid growth of private insurance costs here.

There is not really "competition" in health care, at least in the UK (the system I'm most familiar with). Private insurance accounts for less than a tenth of medical expenditures and it's mostly used as a supplement to NHS. And the reason there is not competition is because governments can keep prices artifically low because they can run deficits (at least in health care costs) indefinitely; private insurers that do this fail and go out of business.

If Medicare was extended to younger people as an option, this would accomplish 2 things to lower health care costs in the US (including medicare per capita cost):

It would provide competition for private health care industry and
The younger medicare clients would be generally healthier and the AVERAGE cost per capita would be lower because there would be a balance between the high cost of caring for the elderly and the lower cost of caring for the younger population.

That does not make any sense whatsoever. If the cost is spread evenly between the elderly and the young, and the elderly requires more services, of necessity the young must pay more.

This is why getting health insurance if your job doesn't offer it, or if you're self-employed or unemployed, is prohibitively expensive: they transfer the costs of Medicare's low reimbursement schedule onto the private sector.

Enrolling more people in Medicare isn't going to solve that because the problem isn't that there are too few people enrolled in it. The problem is that Medicare's reimbursement schedule is crap and the government allows health care providers to charge Medicare patients X and everyone else Y. That's price discrimination, and it's forbidden literally in every business sector except health care. And the reason it's not forbidden in the health care sector is that price discrimination allows the government to pretend that Medicare isn't costing the country more than it says it is.

 

[Dr.Who]

Are you seriously suggesting that the US pays 1/3 to 1/2 more than anyone else due to cosmetic surgery?

Do you have any figures that support that idea?

Um, no I am not. I am, claiming that we are spending less than countries that don't count it or don't do it as much by some amount that I don't know.

Countries like France pay for a doctor's schooling from a separate budget from health care yet in the united states doctors schooling is included in our health care cost because doctors pay for it themselves and then pass the cost along. So the French system hides the cost of medical school.

Additionally, in many European countries the people rely much more than we do on herbal and natural supplements which is paid for out of pocket and not counted as health care while we more often rely on pharmeceuticals which are counted in our health care cost.

just saying that a straight comparison of health care costs from country to country is not at all easy.

 

[Dr.Who]

There seems to be no question that health care costs are rising faster than inflation, whomever is paying. There is a point where that can not continue.

And the laws of economics would tell us that soon enough that would cease.

Are there ways to rein in costs and yet provide good solid care to everyone? Sure there are. Most of the developed world is already doing it.

We, likewise do provide solid care to everyone. (every single person in this country has solid health care) And there are ways to reign in costs - the best would be to make the market system driven more by market forces and less by congress. It is congress after all that set up the sytem in which most of us get our insurance through our employers thereby making the employer the one who chooses an insurance company and not us the consumer. Divorcing the consume from the role of choosing the insurance company is a great way to drive up costs.

We are the only ones not smart enough to figure out how to do it. Wouldn't you think that perhaps we should take a look around us and see what we are doing stupidly? Tort reform is not the solution.

Absolutely, we are letting congress get involved too much.

But again your two points from above: 1. Every one of us does have solid care and 2. costs are not necessarily higher than other countries because we are not counting the costs in the same ways.

 

[Dr.Who]

I guess then that your solution is the "Hurry up and die fast" approach?

Such a productive statement.

A further question: How come the private sector hasn't long ago solved the problem of out of control price increases when they were pretty much the only game in town?

because the private sector is not the only game in town. Gov accounts for a large part of health care spending and medicare is directly responsible for a rather large part of the increased costs. And gov regulates the private sector so much that it drives up the costs in countless ways. One way was mentioned above when I said that congress set up the system that has our employers buying our insurance for us instead of us making those choices ourselves.

 

[Dr.Who]

Both Medicare and requirement that ER provides STABILIZATION care in emergency room does cost a lot more. This requirement is just not needy in countries that do offer universal healthcare, so they realize a saving over all.

If we treat all of our people, some in the ER and some through insurance or direct pay and they treat all of their people through universal then all the people are being treated and there is no savings for that reason.

Another reason health care is cheaper there, is:

We have not actually seen that a comparably good system is cheaper anywhere else.

 

[Openmind]

Such a productive statement.



because the private sector is not the only game in town. Gov accounts for a large part of health care spending and medicare is directly responsible for a rather large part of the increased costs. And gov regulates the private sector so much that it drives up the costs in countless ways. One way was mentioned above when I said that congress set up the system that has our employers buying our insurance for us instead of us making those choices ourselves.

Once again: IF the high costs are the fault of the government. . .how do you explain that every other developed country who has some form of government care (whether all government, or a combination of public and private options. . .like most do) have such lower prices, and their prices are not going up?

Are we the only developed country who believe all the lies from private industry? Or are we the only country stupid enough to pay huge premium to private industry when we are healthy, and then count on our government to take care of us when our health really fails?

Talk about an unfair situation!