Why Healthcare Is Killing America
Healthcare is the biggest segment of our economy. In the debate over who should pay for what or, increasingly, for whom, most people don’t stop to understand just how large a portion of our society’s money is dedicated to healthcare.
For some perspective, as a share of GDP, the U.S. spends about twice that of other advanced nations. This is an important reason why the U.S. is increasingly uncompetitive in global manufacturing. It is, for instance, the most important factor (besides poor management) that General Motors and Chrysler are going bankrupt.
Going forward, the situation is guaranteed to get worse. The Obama administration is committed to major reform to cover the 40 million people not now covered by insurance. Once everyone has insurance, with many paying nothing at all for coverage, patients won’t care what it costs, and the system will quickly spin out of control.
And it’s already out of control. I recently spent one day in the hospital due to a broken arm, which cost on the order of $100,000. Remarkably, that eye-opening amount still doesn’t include the ambulance, the doctors, the x-rays, the CT scans, or the anesthesiologist. I’m still getting bills. The system is far more broken than is widely understood, unless you have had a recent bad experience.
Projections for healthcare are particularly problematic because of the demographics of so many people born just after World War II. Soon, there will be less than three people in the workforce for each retired person. That will result in huge taxes on the few workers to supply the expensive end-of-life medical care for the retirees (and it is in the latter years where medical expenses really begin to rack up).
This bubble was predicted and a government trust fund was set up. Unfortunately, as is typically the case, the government couldn’t keep its hands off the money, and so it has already been spent. The outlook is not good. In fact, in just over 10 years from now – by 2020 – the demands on the government for Social Security and Medicare will get so high that they cannot be met. And it gets worse from there.
It’s a safe bet, based on history, that the government will once again try to print its way out of the problem – but all that will do is further destroy the dollar and drive interest rates up even more. Just to be clear, this is not just about a government program gone awry, but as much or even more so a demographic problem – which makes it all the more intractable.
Don’t wait to be saved by the government; take your life – and your asset protection – in your own hands. For example, by playing one of the most obvious and inevitable trends and Bud Conrad’s favorite investment for 2009. Click here to read the full report.
60 percent of medical costs go to insurance overhead costs, including the interest that medical professionals pay on money borrowed to meet payroll, while waiting, up to 2 years, to receive payment on claims. As one of America’s 45 million self-insured individuals, I am regularly offered discounts of 40 to 60 percent, because I am able to pay at time of service. For xrays, I was offered an 80 percent discount. I realize, that even with discounts, the un-insured subsidize the insured (not the other way around as claimed by insurance companies seeking more profit). Self-insured individuals rarely use emergency rooms for treatment. 83 percent of ER patients have government insurance (medicare or medicaid,…). Less than one percent of ER visits are made by the un-insured.
Instead of forcing the self-insured to buy insurance, how about requiring the insurance companies to pay claims, without all the delays and run-arounds and buck passing. They ought to be required to service claims quickly, and pay the requested balance in full, if not handled within 30 days.
Pretty good post. I just came across your blog and wanted to say
that I have really enjoyed browsing your posts. In any case
I’ll be subscribing to your feed and I hope you post again soon!
I’ve talked to a number of hospital administrators who tell me that over 1/4 of each hospital bill is costs shifted from illegal aliens (who refuse to pay their bills & cite HIPAA, etc, as their justification for not paying). Over 1/4 more is costs of insurance paperwork – sheer administrative costs, not time-value of money. How many more could afford their medical bills or insurance if the costs were cut by 50% or more? It is purely government malfeasance and insurance companies’ obfuscations that cause high medical care costs. On a pay-your-own-way basis, medical care costs would be slashed substantially. The more government “protects” us, the more it costs us and the less protection we actually have.
$100,000 for a broken arm???
I’d like to see that bill. What in the world did they have to do to fix you up that cost six figures?
Cool post, just subscribed.