Monday, October 19, 2015

A Fatal Accident Waiting to Happen: U.S. Healthcare

U.S. healthcare isn't just an historical accident--it is a fatal accident waiting to happen.
Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities.
The U.S. healthcare system was not planned; it is largely accidental.
As Jeff Deist of the Mises Institute and I cover in our recent conversation on The US Healthcare Debacle (21:23) (YouTube version), the system of employers providing healthcare insurance began as a means of offering a bit of extra compensation in the 1940s era of wage/price controls.
This historical accident is at the heart of the current system's dysfunction. Those without jobs are covered by the government at horrendous expense, and those with coverage are terrified of risking it by moving to less secure employment or self-employment: The New Shackle of Serfdom: Clinging to Healthcare Insurance (September 22, 2015).
By removing the consumer from the equation, pricing is now purposefully opaque. The cost for a test or procedure is all over the map, and insurers have few incentives to demand truly transparent pricing.
Meanwhile, the federal/state healthcare programs of Medicare and Medicaid are riddled with the same lack of transparency and are vulnerable to fraud, over-billing and paying for needless tests, medications and procedures.
Few seem to know that the cost of these two behemoth programs exceeds the Pentagon's budget.
This contraption of private insurance paid by employers, co-pays paid by employees and state programs guarantees paperwork consumes an estimated 40% of all healthcare expenditures. How is that for inefficiency and needless expense?
Employees and the self-employed are expected to pay their co-pays and fees but without giving them true choice. Most regions are served by two or three insurers, i.e. a cartel. The "choice" is purely illusory, and the result is soaring costs.
Healthcare in 2015 ($4 trillion) accounts for almost 23% of U.S. GDP. ($17.4 trillion)
Some will quibble that the U.S. spends "only" $3.3 trillion on healthcare, but the salient question is: how much of this enormous expense is "fat," i.e. waste, needless or counterproductive tests, meds and procedures, paperwork, claims, counter-claims, fraud, cartel collusion, government patronage and protection of private profiteering, etc.?
I present the photo of human blood that has been spun in a centrifuge as a metaphor for U.S. healthcare. Red blood cells (heavier) are on the bottom. Above is the serum, which is normally clear and yellow tinged. This serum is opaque and buttery looking due to very high fats (hyperlipidemia).
It is abundantly clear to anyone who peeks beneath the surface of America's state-cartel healthcare system that roughly half of all expenditures are needless, counterproductive, profiteering, fraud, etc., compared to a system that was actually designed to be efficient, transparent, and that gave consumers real choices, real power and real responsibilities.
U.S. healthcare isn't just an historical accident--it is a fatal accident waiting to happen. Anyone who thinks this system is effective and sustainable will be disabused of that fantasy within the next decade.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
Thank you, Charley W. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.
Thank you, Erle H. ($50), for your superbly generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act
This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Limit the Use of My Sensitive Personal Information.


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP