Sunday, November 4. 2007
Is Health Care Unaffordable or do Millions of Americans Just Have Other Priorities?
Posted by Joerg Wolf in Transatlantic Relations, US Domestic and Cultural Issues on Sunday, November 4. 2007
Today N. Gregory Mankiw, professor of economics at Harvard, writes in the New York Times about "true but misleading statements about health care that politicians and pundits love to use to frighten the public."
Two of those statements are often used by Europeans to criticize the United States. One is about the infant mortality rate and the other about the 47 million Americans without health insurance. Mankiew on the latter statement:The 47 million also includes many who could buy insurance but haven't. The Census Bureau reports that 18 million of the uninsured have annual household income of more than $50,000, which puts them in the top half of the income distribution. About a quarter of the uninsured have been offered employer-provided insurance but declined coverage. Of course, millions of Americans have trouble getting health insurance. But they number far less than 47 million, and they make up only a few percent of the population of 300 million.
Given Mankiw's analysis, the pro-American German blog antibuerokratieteam asks (rhetorically): "How bad is it that 47 million Americans don't have health insurance?" I don't know. It seems that health care is much more expensive in the United States, but also in many categories worse than in five other industrialized countries. Perhaps some households with $50,000 cannot afford health care, if they want to save money for the college education of their two kids? But that would still be their free choice, right?
Well, the solution would obviously be a cheaper health care system. Two days ago, the New York Times ran another piece on health care by another Economist: Paul Krugman criticized Rudy Giuliani's new radio ad attacking Democratic plans for universal health care. Giuliani claimed that the chances of surviving prostate cancer are much higher in the United States than in England. Krugman disagrees and concludes:There's very little evidence that Americans get better health care than the British, which is amazing given the fact that Britain spends only 41 percent as much on health care per person as we do.
Greg Anrig criticized Rudy Giuliani as well in the article "If it's from Europe, forget it," published in The Guardian three months ago: "Conservative dismissals of Democratic healthcare plans as 'socialist' explains a lot about the hole America is presently in."
Anyway, Mankiw makes some good points. There are many reasons, why 47 million Americans don't have health insurance. Europeans should not use that statistic to trash the United States as an inhumanely capitalistic country with widespread poverty and lack of minimum welfare.No, Mankiw does not make good points. He plays games with points. The $50,000 is gross income before income taxes and payroll taxes. How many are barely above that figure? What other expenses do they have? That money doesn't stretch as far in New York, Massachusetts or California as it might in the Midwest. How much do those who turned down coverage make? Coul they afford coverage on top of their basic living expenses? Although he mentions the two "facts" together they do not in fact relate to one another. Same old, same old from Mankiw.
"How much do those who turned down coverage make?"
How does it work in the US? Do employer and employee pay equal shares (50%) of the cost of health care?
Only if your union - or work for a really big company. Then it can be a 50/50 deal. Sometimes the company will pay like 70%.
That has been my experience - there are obviously exceptions to the rule.
Let's take your hypothetical someone in the USA with a 50K job and a standard employer benefits package (medical, prescription, disability, life insurance, 401K, flex plan). This person is really getting paid close to 65K. If he turns down medical coverage, he will bring home $100-200 per month extra (depending on whether he turned down single or family coverage), and the employer, grateful not to have to pay the premium, will often throw in a bonus (for example, my employers gave me $1600 a year not to use the their medical insurance). So yes, a person who has access to an employer-subsidized plan but chooses not to use it can probably afford some kind of insurance (although not probably not as comprehensive as the employee-sponsored plan). It's not economically rational to turn down your employer's benefits if you make 50K.
Since we're using the New York Times as a resource here, let me link to two columns by Bob Herbert that illustrate how dysfunctional the health care system is in America:
[url=http://www.nytimes.com/2007/11/03/opinion/03herbert.html?n=Top/Opinion/Editorials%20and%20Op-Ed/Op-Ed/Columnists/Bob%20Herbert]Worsening the Odds[/url]
[url=http://www.nytimes.com/2007/10/23/opinion/23herbert.html?n=Top/Opinion/Editorials%20and%20Op-Ed/Op-Ed/Columnists/Bob%20Herbert]The Long,Dark Night[/url]
Yep, David. And Herbert shows only one facet of the health care crisis.
Another aspect is the way the health insurance companies limit theor liability - always at the cost of the insured. If I were to come back to the US to work my (mild) congestive heart problem would not be covered under most private health insurance. Try changing employers (and health plans) when you have something - anything at all wrong. Maybe the top executives can do it - I don't know. But with everyone else they will exclude the existing condition.
A huge reason for me to stay in the UK is the NHS. They don't play these games and as a permanent resident and UK taxpayer I am covered unconditionally. The care the NHS provides may not be leading edge and the Superbug thing scares me - but it's not nearly as scary as exposing myself to the US health care system.
If I need an operation and there is a long waiting list - well that is what savings are for. I can travel to Germany, France, or even India and get good procedures for a relatively affordable price. That covers most of the problem with the NHS although at a price.
I figure it's US health exile for me until I reach 65 and am eligible for Medicare.
I don't see how America can have cheaper healthcare. Our lifestyle is very anti-longevity and health. Our diet alone condemns us to levels of need not likely seen in Europe (kidney dialysis, heart surgery). Also, multi-million dollar lawsuits for anything that may not go as planned during one's care is also a very non-European thing. Presidential candidate John Edwards is the poster child for why healthcare is so expensive.
I am a business manager for an OR department in a large hospital that provides care to a majority of patients who are not insured. You can and will get care in America. It will be quality care. You do have to seek it, however. No one is going to beg you to go. It is the objective of our medical system that all of the Memphis metropolitan area not only has access but has it in attainable locations throught the city. Is our healthcare wonderful? No. I, however, am still not convinced that the average American is ready to put up with what the average Euro-Canadian accepts in thier care.
Americans are not going to let the government take 12% or more of their paycheck to go into an enormous and unaccountable bureaucracy. Our schools, social security and most everything our government touches sucks except the military since productive outcomes are mandatory in that department.
America does not get quality like the Europeans have in the past with taxation and government oversight. We won't get any of it. Costs will rise, the share of our money the government takes will rise but the quality and availability of care will fall annually. When this occurs and someone complains, that individual or organization will be accused of hating children and minorities and told to shut up until the whole system crumbles down with a higher level care system for those who can pay and to which the poor will never be allowed access (see public schools mentioned before). But that doesn't matter because, like welfare and public education, its the thought that counts not the outcome.
Vince, I think one huge problem is the fact that Americans cannot trust that they will be covered by private health insurance plans - for a variety of reasons.
Let's say you lose your job. You also lose the health plan, and the health plan at your new employer won't cover manypre-existing conditions, right? Surely anything expensive will be excluded.
Or you keep your job and/or plan but when cancer comes they have the lawyers go over the paperwork with a fine-tooth comb and dicsover 'voila!' - you failed to 'disclose' something. You're coverage becomes uncoverage very swiftly.
I contrast this with the NHS, which is my 'insurer'. There are lots of problems with the NHS. They have the MSRA crisis, the wards can be very basic and lack privacy, sometimes your wardmates can be - problematical. Often it's not on the bleeding edge.
But the NHS has two enormous virtues in my eyes; First, it's unconditional care. If I get sick they take me. Second, the funding problems are not worked out on the individual - I get cared for and the government worries about covering the bills.
There are big holes in the NHS. The UK has excellent private doctors. If I need to 'game' the system I can go to a private specialist and get a second opinion at reasonable cost. If there is a multiple year wait for a procedure I can go to Germany or France and get it for a fraction of the US list price for the procedure and I know up-front what that cost will be. Not cheap but sometimes it is worth it.
Seems to me there are two answers to the US healthcare crisis. You can have the NHS (or possibly the French system which seems to work better). Or you can have heavily regulated private insurance so that the private insurers can't play their little exclusion games.
I suppose another possible solution might make the government the insurer of the last resort for an otherwise private system. Basically that is what you have now anyway, but the current system cruelly and arbitrarily bankrupts individuals to make it easier for the government. That is backward I think.
"Our schools, social security and most everything our government touches sucks"
Ask Americans if they are willing to give up Social Security and Medicare (a form of universal healthcare).
You know the answer...
A program, Medicare, available only to those over 65 or handicapped and have worked in jobs that were covered by Social Security can hardly be described as "...a form of universal healthcare." Only 14% of the population is covered according to current eligibilty requirements.
One problem only hinted at so far is that given a choice the healthy and the young generally do not voluntarily acquire health insurance. Thus increasing the cost for those that do seek such coverage. If one can get coverage of $150 to $500 a month then if young or healthy it would be better simply to save that money for a year or so then use it to cover major medical expenses. The actuarial tables rely on a fairly large sampling of insured to never or rarely need medical care to pay for the ill and elderly that selfishly don't want to be in pain or die!
Ask them if they'd give up government healthcare if that is all they got. Yes, I know the answer. What was your point? Don't complain? Try getting Americans to do that about anything.
My point is that most Americans don't share your view that Medicare and SS "suck".
My hope is that Rudy and the Republicans keep telling voters that SS and Medicare "suck" and need to be privatized (i.e. dismantled). You'll then see next year the biggest Democratic landslide victory since 1964.
Medicare/Medicaid only work because of a still vibrant private insurance system for typical healthcare. Medicare is a constant loser for us in the healthcare field. It is only private insurers that keep us operating. I hope the Dems won't continue to use "scare tactics" to rush the American people into a quagmire. (Where have I heard that before?)
I don't see why Medicare has to be dismantled or commercial insurance payers need to be banned. Why must everything be a revolution?
Of course, I just work in healthcare and am unlikely to posses the understanding of a New York Times article.
Most Americans I know are reluctant experts in the US healthcare system, since life is a constant battle - usually unsuccessful - with their insurance providers to cover care that keeps them or family members healthy. ANd these are the "lucky" ones, since they have "healthcare insurance."
Of course, denying coverage is what keeps these insurance providers "vibrant".
David is correct.
The only manner in which Medicare and Medicaid 'suck' is the unfairness. The retired and the welfare dolees get unconditional health insurance and the rest of the citizenry must trust to their luck even though they are carrying the bills.
Its still about expectations. Can American expectations settle for what the UK system doles out? Do you trust our government to provide it? Do you think Americans will submissively dole out the money the Brits contribute to bail the system out year after year? Are there billionaire lawyers sueing doctors for any and every default in the UK?
Welfare has caused less trouble in Europe than it has in America. Euro public education appears to produce more educated students than America according to tests. Is socialized healthcare in America going to defy all past trends and give us everything?
Having the money to go to a private doctor in a public health system is a much more loaded political issue here than in Europe. It will become a serious political tool for some politician.
Who will tell Americans enough is enough? "You only get this level of care and on this timeline." We perform surgery and hospice care on uninsured patients all day every day. Its not ideal but its not Peru either.
How will you convince people who don't suffer from heart trouble that they need to allow the government to take a significant part of their paycheck. You know we live in the moment here. Congestive heart failure is everwhere in Memphis affecting all income ranges. People are getting care.
Can we produce a sane system or will it all be hype, guilt trips and government overlordship?
"Can American expectations settle for what the UK system doles out?"
Good question. The NHS is less luxurious than the US system, with more hospital beds and fewer specialists than available in the US. It's also slower, frequently MUCH slower. The NHS is a true government provider albeit largely autonomous from the actual government. There are much better ways to run a health system. But it has one major virtue; it does not force UK citizens to solve their own health needs. They can but it is optional.
"Do you trust our government to provide it?"
No. But in France or Germany 'the government' does not run the health care system - they merely finance it. In France finance is split between the government and a network of private insurers. French citizens must carry private health insurance, but the insurance providers seem to be heavily regulated to ensure that they cannot just dump all the expensive patients. The French love their health insurance system, which possibly offers even more choice than a typical US HMO will do.
Interesting discussion with 22 comments also at the [u][url=http://themoderatevoice.com/politics/conservatives/15922/is-health-care-unaffordable-or-do-millions-of-americans-just-have-other-priorities/#comments]Moderate Voice[/url][/u], where I have cross-posted this blog entry.
Perhaps I have underestimated the costs of living and normal expenses in the US, like housing, day care, car maintenance etc. And taxes probably are not much lower in the US either, despite all the typical criticism of German "socialism."
A couple of links to thoughtful articles about the competing health plans.
http://nationaljournal.com/crook.htm
http://nationaljournal.com/about/njweekly/stories/2007/1026nj1.htm
I think if health insurance is the majoe issue in 2008 it's advantage - Democrats. Yes it will cost more, and that cost will have to be paid for somehow. But what people seem to forget is the enormous cost of not guaranteeing decent helth care.
Living in the UK I don't have to worry much. Health insurance is not a consideration in deciding whether to change jobs, for example. One employer may offer 'private' health insurance, but that is a convenience at best. The NHS offers the basic insurance and that doesn't change.
UK private insurers are no better than those in the US, they will drop you on a dime. But that doesn't affect the basic coverage the NHS offers. Seems to me the US needs to offer this or something like it.
Another link to a po0st about the Guiliani comment about prostate cancer. See the comments for further intelligent discussion.
http://timesonline.typepad.com/comment/2007/11/rudy-giuliani-h.html
This is one of these returning topics that I do not really understand.
Why should Americans care whether Europeans approve of their health system or not, and why should Europeans consider pros and cons of it?
To me, the point of the discussion seems to be to shape enemy-pictures of each other.
The only way for me to understand these discussions is to view them as disguised [u]national[/u] debates; and foreign solutions are used either as good or bad examples.
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