Government Accounts for 44% of all Health Care Spending

Discussion in 'Healthcare/Insurance/Govt Healthcare' started by Toro, Jun 17, 2009.

  1. Toro
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    Toro Diamond Member

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    Since healthcare has become a topic of high interest as of late, it is important to have as many facts as possible before we come to a good conclusion.

    These figures a bit old but things have not changed much in the past five years. It should be noted that the government at all levels is the single largest payer of health services, with the government accounting for 44% of all expenditures.

    [​IMG]

    http://www.cdc.gov/nchs/data/hus/hus05.pdf#page=380

    Private health insurance is 36%. Out of pocket expenditures - what people pay themselves - is 16%, and all other private expenditures - primarily charity - is 4%.

    50 years ago, over half of all payments came from out of pocket. Now, $1 out of $6 is actually paid for by individuals.

    Thus, the government already is a large player in health services.
     
  2. Oddball
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    Oddball BANNED Supporting Member

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    O.K....So gubmint has become a larger and larger payer in the marketplace, and costs have only gone up??

    Now, absent rationing, how is a total takeover supposed to bring costs down, again??
     
  3. Toro
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    Toro Diamond Member

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    Government healthcare would not stop prices from rising. The main reason why healthcare costs are rising is because the marginal cost of extending life is disproportionally high. However, a large part of a doctor's or hospital's resources goes to dealing with many different insurance companies, more so in the US than anywhere else, I believe. Economies of scale will lower the growth rate somewhat, all else being equal. Of course, its never all else being equal.
     
  4. Oddball
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    When the primary player in said economy of scale involves an entity that pays no economic penalty for inefficiency or ineptitude (guess who), then the model is of dubious merit, at best.
     
  5. Toro
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    Toro Diamond Member

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    It depends.

    Most countries are generally happy with their government-subsidized healthcare and pay far less than America.

    [​IMG]

    http://www.kff.org/insurance/snapshot/chcm010307oth.cfm

    There are a number of reasons for this, of course, but generally, the healthcare system has to respond to political pressure if people are unhappy with the system because they will vote the politicians out if they don't respond.
     
  6. Oddball
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    A lot of what Americans pay is because we still can.

    Take out the elective procedures, and I'll bet you a dollar to a dog biscuit that the "most expensive health care in the world" rhetoric is exposed for the bullshit that it is.
     
  7. Toro
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    Toro Diamond Member

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    Elective procedures are part of it, but only part. The paperwork is huge. The number one reason why Canadian doctors in America go back to Canada is because of the amount of time and resources they have to spend on back office nonsense dealing with insurance companies. Another reason is the 15% ROE that healthcare insurers have to earn.

    But a big part is also that much of the cutting edge research in healthcare is capitalized in the US first, and once developed to scale, is purchased in larger quantities outside of the country. For example, when Avastin first came out, treatments cost $20,000, which medical insurance outside the US would not pay. But these early-stage treatments are critical to establishing a market so that economies of scale can lower the cost of the product. Once Avastin established a market and Genentech grew more profitable, they were able to lower the cost for Avastin. When costs are lowered, countries outside the US started purchasing the drug in greater scale. Thus, the rest of the world benefits from the US's ability to absorb the costs of early-stage development, and there is a transfer of wealth from the US to other countries.
     
    Last edited: Jun 17, 2009
  8. Oddball
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    Uh-huh....And what percentage of those costs are involved in the exorbitant expenses it takes to pass FDA muster??
     
  9. Toro
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    The cost of developing a new drug is something like $300-$400 million.

    But you have to weigh that against potential lawsuits without the FDA. Lawsuits have risen into the billions of dollars for drugs that have passed the rigorous process of FDA approval. There would be multiple times more without the FDA, and probably hundreds of billions more in claims against drug companies.
     
  10. dilloduck
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    There are countries that can actually get rid of shitty politicians ?????

    You're pulling my leg right ?
     

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