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Obama's Health Care Problems

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2009-01-29 15:13

Picka
Colorado Springs, CO

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In the Jan 10th Newsweek article, Obama's Unhealthy Choices, by Robert J. Samuelson, misconceptions about heathcare costs in the USA are discussed. Some findings:

In 2006, all U.S. health spending totaled about $2.1 trillion.

The total healthcare related costs in the 2007 Federal budget was about $700 billion out of total federal spending of $2.7 trillion.

The US heathcare povides much splendid care but is so costly that 15 percent of the population lacks health insurance.

Our mixed private-public insurance system drives up costs through high administrative overhead. Claim forms create a paperwork morass; marketing expenses add to the burden. Overhead costs in the United States are more than double the level in other countries. But the effect is modest, because all administrative costs account for a mere 7 percent of total health costs. Even halving administrative costs would offset only about six months of the annual growth in health spending of 6 to 7 percent.

The same is true of the alleged overuse of emergency-room care: another common scapegoat. In 2006, all emergency-room care cost $75 billion, about 3.5 percent of total health spending. That's too small to explain overall trends.

What really drives health spending is that Americans receive more costly medical services than other peoples do, and pay more for them. On a population-adjusted basis, the number of CT scans in 2005 was 72 percent higher in the United States than in Germany; U.S. reimbursement rates were four times higher. Knee replacements were 90 percent more frequent than in the average wealthy country and are growing rapidly. In 2005, there were 750,000 knee and hip replacements, up 70 percent in five years, reports the journal Health Affairs.

There is no major constituency for controlling spending. Because most patients don't pay their medical bills directly, they have little interest in using less care or shopping for lower-priced services. Providers (doctors, hospitals, drug companies, equipment manufacturers) have no interest in limiting care. What others call "health costs" are their incomes—wages, salaries, profits.

Another problem for Obam'as hit list.

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