Assessing the Real Cost of Health Care

[Adam's Apple]

Numb3rs and Medicine: What Are the Real Medical Costs?
Michael A. Glueck, M.D. & Robert J. Cihak, M.D.
March 7, 2005

"Numbers," as every investor knows when considering a stock, must be questioned. By themselves, they tell you little. Here's how to think about the numbers presented in a recent L.A. Times story — an exercise in "Yes, but what would the numbers be if ...?"

The February 9, 2005 edition of the L.A. Times has a story on U.S. health-care costs derived from a new study by researchers at Boston University School of Public Health. Major points include:

Rising health-care costs are absorbing nearly one-fourth of all economic growth. The statistics cited to support this fact are that spending for health care this year will be $1.7 trillion, which is up $621 billion from 2000. That $621 billion increase represents 24 percent of the total GDP growth between 2000 and 2005.

By contrast, increased spending for military defense during that same period accounted for only 10 percent of GDP growth. The growth in medical spending during this period was three times the growth rate in educational spending.

U.S. health-care spending per person in the U.S. is double that in Canada, France, Germany, Italy and Britain. The study researchers argue that the $1.7 trillion annual cost of health care in the U.S. would be adequate to provide coverage for everyone if proper controls on medical costs were in place.

Doctors receive or control 87 percent of all health-care spending. This is broken down as 21 percent in doctors' fees and 66 percent in doctors' orders for drugs, diagnostic tests, hospitalization and other prescribed services such as physical therapy. The L.A. Times story offers no explanation for what the remaining 13 percent of medical costs are. Presumably, a large part of it is administrative costs.

The researchers conclude that the only way to manage health-care costs is to force everyone into a socialized medicine scheme.

Are the researchers right or wrong? Read on.
http://jewishworldreview.com/0305/medicine.men1.asp

 

[SmarterThanYou]

the only way to reduce health care costs is to avoid the health insurance companies.

 

[Adam's Apple]

Well, that's one sure way to lose everything you have should cancer or some other high profile disease come knocking at your door.

 

[rtwngAvngr]

the only way to reduce health care costs is to avoid the health insurance companies.

Not true. The sytem would be better if tort reform eliminated the need for the additional costs of insurance, people negotiated their health care in a more flexible manner, perhaps relying on a combination of insurance and tax free savings accounts. I believe the current entanglement of employers and insurance companies ( via huge company negotiated group plans) stifle strue market competition in the health care sector. Also users should get to choose the vendor for their health care products, instead of all this being controlled by the hospital. 50 bucks for gauze is a joke. But again, this gauze must be underwritten in case of lawsuits. It may well be the best gauze in the world!

 

[SmarterThanYou]

I somewhat disagree in the tort reform arena. Instead of limiting all lawsuits, a more rigid system for determining what should actually qualify for a lawsuit should be implemented.

The rest of your suggestions, thats pretty much what i'm suggesting....just doing it without insurance companies. I've talked to a few doctors, all but one have said that they would be happier working with patients outside of the insurance field. If you didn't have insurance companies dictating how, who, and when to apply treatment then the doctor could focus on his patients, not the bottom line and health care would definitely improve as well as having costs go down.

 

[rtwngAvngr]

I somewhat disagree in the tort reform arena. Instead of limiting all lawsuits, a more rigid system for determining what should actually qualify for a lawsuit should be implemented.

Most suggest limiting the pain and suffering, impossible to calculate objectively, portion to something reasonable. we just did 350,000 in georgia. If a person is unable to work after the doctor's error, they will STILL get compensated for a lifetime of wages.

The rest of your suggestions, thats pretty much what i'm suggesting....just doing it without insurance companies. I've talked to a few doctors, all but one have said that they would be happier working with patients outside of the insurance field. If you didn't have insurance companies dictating how, who, and when to apply treatment then the doctor could focus on his patients, not the bottom line and health care would definitely improve as well as having costs go down.

Insurance companies as they currently exist, yes. The concept of insurance for health purposes is still sound, though.