Yessssssssss. We want the last dollar!

Paul Krugman writing in the New York Times has a great article about the supposed benefits of the private health insurance industry. Ostensibly as part of defense of the movie Sicko, it’s a very good read.

The persistence of that myth puzzles me. I can understand how people like Mr. Bush or Fred Thompson, who declared recently that “the poorest Americans are getting far better service” than Canadians or the British, can wave away the desperation of uninsured Americans, who are often poor and voiceless. But how can they get away with pretending that insured Americans always get prompt care, when most of us can testify otherwise?A recent article in Business Week put it bluntly: “In reality, both data and anecdotes show that the American people are already waiting as long or longer than patients living with universal health-care systems.”

A cross-national survey conducted by the Commonwealth Fund found that America ranks near the bottom among advanced countries in terms of how hard it is to get medical attention on short notice (although Canada was slightly worse), and that America is the worst place in the advanced world if you need care after hours or on a weekend.

Hip replacement surgery in the US is more available than in Canada. But, there’s a little catch you probably didn’t know.

On the other hand, it’s true that Americans get hip replacements faster than Canadians. But there’s a funny thing about that example, which is used constantly as an argument for the superiority of private health insurance over a government-run system: the large majority of hip replacements in the United States are paid for by, um, Medicare.

That’s right: the hip-replacement gap is actually a comparison of two government health insurance systems. American Medicare has shorter waits than Canadian Medicare (yes, that’s what they call their system) because it has more lavish funding – end of story. The alleged virtues of private insurance have nothing to do with it.

Here’s one of his examples of health-care treatment through an insurance company;

This can lead to ordeals like the one recently described by Mark Kleiman, a professor at U.C.L.A., who nearly died of cancer because his insurer kept delaying approval for a necessary biopsy. “It was only later,” writes Mr. Kleiman on his blog, “that I discovered why the insurance company was stalling; I had an option, which I didn’t know I had, to avoid all the approvals by going to ‘Tier II,’ which would have meant higher co-payments.”

He adds, “I don’t know how many people my insurance company waited to death that year, but I’m certain the number wasn’t zero.”

One of the little discussed issues with private health insurance discussed is the cost it adds to businesses in the US. Countries with state health care allow businesses to pocket that expense directly, or add a supplementary insurance option for things that are not covered via universal coverage. In Soviet Cannuckistan, my employer offers medical benefits of pharmaceuticals and dental care. All my other needs are met by the universal medical care. And those costs are a fraction of the cost of complete health care. How much does a business save when they don’t have to foot the bill the government could and probably should? You may not like this source, but the facts are strong.

In 1988, Chrysler’s CEO Lee Iacocca reported that each car his company produced in the U.S. cost $700 in health benefits alone, while the same car produced in Canada by Chrysler cost only $233 in health benefits.

The situation hasn’t changed much since then. In 2005, General Motors of Canada’s CEO Michael Grimaldi reported that each U.S.-produced car cost $1,500 in health benefits, compared to less than $500 in Canada. And in 2006, the Conference Board of Canada reported that in the U.S., health care and pensions add between $1,400 and $1,800 to the price of each vehicle – a major reason Toyota cited for building its newest plant in Ontario.

The carmakers aren’t the only ones bearing the burden. Wal-Mart’s annual bill for health benefits is $1.5 billion, even though fewer than half of the company’s 1.3 million U.S. employees are actually insured.

One of the top advocates for public health care in the U.S. is Howard Schultz, the chairman of Starbucks. He has been outspoken about the “moral responsibility” of businesses to provide health coverage. But he also knows that this is one of the best ways for companies like his to retain employees. Given that 45 million people in the U.S. have no health coverage whatsoever, even a low-paid job slinging coffee is desirable if it includes health benefits.



  1. Mister Mustard says:

    >>Social security. If you think that Social Security is not bankrupt
    >>then you are truly out to lunch.

    Well, I hate to ask you to take your head out of your ass, Tommie, but it is NOT bankrupt.

    In fact, Social Security currently takes in MORE than it pays out. The current and future financial woes of SS are due to the fact that rather than leaving the money collected in the SOCIAL SECURITY TRUST FUND, where it belongs, Dumbya checks out a couple of hundred billion every now and then to pay for his trophy war, Dick Cheney’s Halliburton retirement fund, and much much more. If it were truly a stand-alone program, as it was intended to be, it would be fiscally sound for the rest of our lifetimes, and with a little tweaking, probably forever.

    I’m sorry to have to say this, ZugMeister, but it is YOU who are clearly lost. Go back to school. Get that GED. Get out and travel a little. Then come back and see what you have to say.

  2. Misanthropic Scott says:

    #136 – Mister Mustard,

    I almost totally agree with your post on social security. However, even our current illustrious leader has not yet managed to take a dime out of social security, though I’m sure he’s trying. What has been done is selling treasuries backed by it. So, the net effect is that the social security fund is holding a boatload of treasuries. Want to know what the bond market uses as an example of a zero risk investment? U.S. Treasuries.

    So, while it’s not true that treasuries are literally zero risk, it is true that if the federal government defaults on treasuries, social security will be the least of our worries.

    Incidentally, the year in which social security is, according to this page, forecast to begin to lower its payout is 2042. Can you name another program that is funded reliably for the next 35 years? I can’t. And, not much tweaking should be required to keep it going beyond that, given that the only talk is a reduction in payout. I’d think they could just raise the cap at which social security maxes out and keep this going indefinitely.

    http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

    So Thomas, I think it is likely you that are missing and presumed fed.

  3. ECA says:

    137,
    Sence the Opening of SS, into the general fund, about 30 years ago…
    It is estimated that the US gov. OWE(IOU’s written to replace funds, WITH interest) Upto 80 trillion dollars..Thats the LAST report I heard about 3-4 years ago.

    A reduction in PAYOUT, would have to be placed on the RICH, and Government employees. ANd forcing ALL employers to pay SS, for even the UPPER/higher paid positions, EVEn tho they probably wont get it.
    Myself, Am getting about $750 per month, after 8 years and a avg 3% increase per year.

  4. Mister Mustard says:

    Point taken, Misanthropic Scott.

  5. Thomas says:

    Simple question: do you think you can live solely off Social Security when you retire? If not, then it is a weak retirement plan. That also means you have to contribute more to SS *and* something else to make up for the short fall. If given a choice, I’d rather contribute entirely to a single retirement plan that *will* allow me to live of that savings when I retire. It is still clear to me that SS would have come out much better if instead of implementing the system, the Federal government merely mandated that the States provide a retirement plan for their citizens. That way at least one State might have devised a solution which will not be depleted even in 2042. Instead we have the worst of all worlds now. We have a half ass solution that does not really work as a retirement plan, gives no choice to the individual and is mismanaged.

  6. Misanthropic Scott says:

    #140 – Thomas,

    You miss the point of social security. It is to provide a minimal amount of money to those less fortunate than yourself. For those with the ability to provide for their own retirement, FICA can be considered pretty much a straight tax. It just so happens that later, if you live, you’ll get something back from it.

    However, taxes, including FICA, are not levied for the benefit of the taxed. Else, they’d leave you with your money in hand, duh.

    I don’t understand your standards for mismanagement any better than I understand your standards for bankruptcy. Please try this exercise:

    1) List all of the stockpiles of cash and cash-equivalents of the world where the total amount of the stockpile is 2 trillion dollars and the investment has as low a risk as U.S. Treasuries.

    2) List the subset of these you consider bankrupt.

    3) List all of the state and federal programs you can think of that are well funded for the next 35 years.

    4) List the subset of these you consider to be mismanaged, or more accurately, more mismanaged than most other government programs.

    I suspect your lists for 2 and 4 will each contain just a single entry, social security. I further suggest that this is because you have bought into some serious propaganda from the major corporations that have been trying to kill social security since the date of its inception. Luckily, they have failed, providing many people with just a bit of help in their old age.

  7. Thomas says:

    The Social Security Act was also known as the “Old Age Pension Act.” It was originally conceived as a retirement plan and only in recent history has become a “safety net” because of the small payouts. If helping the destitute is truly the goal then I’ll bet there are better ways to implement the system that would be cheaper. In other words, if it is truly meant as a welfare program, then far more people are getting benefits than they should and it is costing far more than it should.

    There have many times since SS was created when its solvency was in jeopardy. The early 1980’s come to mind. The simple fact of the matter is that if Social Security goes belly up *everyone* gets screwed instead of just people from one or more States. Even if they restructure it so that it “only” screws the current generation, it screws *everyone* in the current generation instead of just people from certain States. Basically, anything implemented at the Federal level that fails is like a line of elephants going over the cliff.

    At the end of the day, by far the biggest reason for implementing things like retirement plans and health care coverage plans at the State level is that it gives the Federal government less money with which to be tempted into spending on who knows what (e.g. wars, NEA..) Basically, SS puts this huge pile of cash right under the noses of the politicians in Washington and tells them “don’t spend it.” I think we’ve all seen how well that has worked. I’m not saying that giving money to State politicians is any better but at least there is the potential for isolation to smaller groups of people.

    RE: 1
    Name *any* “stockpile” of 2 trillion dollars that exists anywhere.

    RE: 2
    Name any stockpile of money controlled by a government where that government did not spend it on something other than its intended purpose *ever*.

    RE: 3
    Name *any* government program that was ever planned to be funded for 35 years or more. Just so we understand each other, technically Social Security is not funded for the next 35 years; it is *projected* to be funded for the next 35 years. That’s not the same thing. If contributions stopped today, it would be depleted far before we hit 35 years. Those projections of course assume a rosy future where nothing goes wrong.

    RE: 4
    Fundamentally, whether it is mismanaged or not is not the point. The point is that it should not be managed by the Federal government. I’m sure there are Federal programs that are managed well and State programs that are managed poorly. It is not relevant. It comes down to system design and risk management. It is much riskier to assume a single government program on which everyone relies will be well managed than it is to assume it will not be. By diverting control to the States you spread the risk amongst many more entities.

  8. Misanthropic Scott says:

    #142 – Thomas,

    AFAIK, there was never a time when social security was in jeopardy. There have, however, been numerous times when that claim was made by the big businesses that hate to match your FICA contributions. They have been trying scare and many other tactics to get rid of social security quite literally since its inception.

    Re: 1: The social security fund currently has 2 trillion dollars in U.S. Treasuries. As I stated, cash or cash equivalents. Most consider treasuries to be a cash equivalent.

    http://en.wikipedia.org/wiki/Social_Security_Trust_Fund

    Re: 2: Social security again. Not a single dime of the social security fund has ever been spent on any other program.

    http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
    (reposted for rhetorical reasons)

    Re: 3: OK, then name other state or federal programs equally well planned for the next 35 years. I think you’ll still find the answer to be a very short list. It may only include social security.

    Re: 4: Actually, whether it is or is not mismanaged is exactly the point. We are trying to determine whether the federal government is adequate at managing such programs. Could it be done better? Probably. Has anyone suggested any changes to social security not deliberately designed to kill the program rather than make it better? Not that I’m aware of. Allowing people to choose how their money is invested is the most common suggestion. That one has no other purpose than to kill the program. It would do so in under 10 years.

    So, I guess I’ll leave it at this. If we can get health care for everyone in the U.S., it will be such a huge win that it almost won’t matter whether it is done by all states with standards set by the fed or whether it is done directly by the fed. I simply feel that the redundancy of doing the same thing 54 times will cost a lot more for no good reason. I will, however, be happy with any reasonably implemented change that grants health care to the millions that do not have it or do not have anything approaching developed nation quality care.

  9. Thomas says:

    My point about items #1,#2,and #3 is that if we have no other equivalent programs that exist anywhere in the world we cannot draw a comparison about their management. I suppose I could have included the national debt as a “more than 2 trillion dollar stockpile”, albeit it would be a dubious inclusion.

    Why do we have State courts since we have Federal courts (and I don’t mean the Supreme Court)? Isn’t that duplication? Why does each State have their own wildlife management; their own transportation departments; their own housing development departments; their own education departments; their own justice department? The States are meant to be independent entities with the Federal government as referee or one that sets standards. It is amazing that after over 200 years people still do not really “get” that idea. This has been an ongoing battle since the Constitution was ratified (thus the creation of “Federalists” and “Republicans” (the original meaning that is)).

    There are many reasons for having the States implement such a plan and I can think of two important ones: choice and power.

    The choices that each State would make in implementing a health care coverage plan will almost assuredly differ. I mentioned some of those earlier in this thread: Should sky diving accidents be covered? Should bungi jumping accidents be covered? In whole or part? Should melanoma extraction be covered? What sort of incentives for a healthy life style should be provided?

    In addition to choice, taking power out of the hands of a single body is always a good thing. Sure, we’ll hear stories of people that manage their State’s health care program abusing their power. However, it will be isolated. We spread the risk from corruption by spreading the power. Frankly, that is worth some duplication.

    The reason I bring up the idea that the States should implement health care coverage is that there is nothing stopping people within their State from enacting some sort coverage now. It is already beginning to happen in some States. We do not need to sit around and wait for a Federal solution when the State’s could start implementing a solution now.

  10. Misanthropic Scott says:

    #144 – Thomas,

    The States are meant to be independent entities with the Federal government as referee or one that sets standards. It is amazing that after over 200 years people still do not really “get” that idea.

    I get it. I just disagree. I think it is time we became a nation. If you want to know my biggest reason for thinking so, this isn’t it. My biggest reason is that I want to have a national election. I’m tired of having residents of certain states with 3.8 times the per capita voting power. I don’t see why a resident of Wyoming is more valuable than a resident of California.

    We have already made up for any discrepancy in power of the populous areas by giving equal power to each state in the senate.

    I want to elect a president.

    The rest of this issue for me is just that I think we will pay a high price for your alleged reduced risk. To me, I see an increased risk of corruption, or worse, insufficient health care in some areas. It will be 54 times more likely that someone will receive bad coverage with your plan. I admit that the number of people affected will be lower. But, with 54 plans, it’s a near guarantee that some of them will be wildly insufficient, just like our education system is in many areas today.

  11. Thomas says:

    The discussion about the design of the government should wait for another day. It is safe to say that many including myself vehemently disagree that we should elect the President by popular election. In fact, IMO we should have never let Senators be elected by popular vote. They were originally appointed by the various State governments.

    At the end of the day, whenever you say that there are States with poor education systems I can again point out that those problems would be magnified if that were the Federal version. Balance of power and specifically division of power to the States is generally less efficient than doing it at the Federal level. I don’t question that. However, State and Federal courts, and preventing the police from being judge, jury and executioner is also inefficient but no one questions their importance. The more you concentrate power, the greater the effect of abuse.


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