File: c:/ddc/Angel/Papers/HealthcareCrap.txt
Date: Sun Aug 31 20:16:36 2008

			  Healthcare Nonsense

We wrote in 2008:

<<<
Healthcare can be kicked around and be used for scoring political
points to no end.  The title of Krugman's "Health care defines divide
between Democrats, Republicans" is an example of a never ending stream
of nonsense.  Yes indeed: nonsense.

Lets go back in time for a second.  Employer provided healthcare
benefits were introduced during World War 2 to alleviate these
expenses in trying times.  Medicare was introduced in 1965 because
those living on social security could not afford health care premiums.
These initiatives were all well intended.

Democrats see them as favorable steps, but bemoan that 45M people are
still not insured and argue that a state run system needs to be
established that will cover everyone.

Republicans can take the extreme position that healthcare is actually
a person's responsibility and hence the federal and state governments
should not be involved.

We can write forever about these two extremes as illustrated by
Krugman.  However that hides a terrible reality.  Both parties are
responsible for creating a monstrous healthcare system in the US.
The price-tag of healthcare was 5% of GDP in 1950.  It was 16% of GDP
in 2007.  It is 8% in Japan, where the quality is better.  The US
scores in the 30-ties in international comparison.

In short, the US has developed a very expensive low quality system.
That is the real and only problem of US healthcare.

How about the uninsured?  Assume that the US has a 300M population
with 50M uninsured - to make the calculation easier.  Thus we spend
16% of GDP to serve an insured population of 250M.  If we reorganize
healthcare as in Japan we can serve a population of 500M.

Why do we keep talking about the 45M that are uninsured?

Why do we keep listening to our politicians?  Why is our press and 
media not able to demand change of a delivery system that is totally 
out of control - for which >>>both<<< parties are responsible?
>>>


After a year of vigorous debates and the Senate and the House trying
to introduce a new healthcare framework the society has still not come
to grips with the excess expenditures of $1T/year.  Politicians have
mentioned that the healthcare price-tag is too high but concrete
proposals to deal with it have been avoided.

Here is why.  Roughly one third of the nation's 16(17?)% of GDP's
expenditures is administrative overhead, which means that about 5% of
the US workforce is doing "something" with healthcare without ever
seeing a patient.  There are three parties:
- insurance companies that question claims
- providers who need approvals and who battle for reimbursements
- public sector Medicare & Medicaid administrators that do
"eligibility" 
There are no market pressures to improve processes and productivity of
any of these parties.  Healthcare is largely funded by taxes, which
obviates the need to rationalize. 

In addition, there is major over-consumption because there are no
incentives for healthy lifestyle choices by the public - but lets
ignore this nasty topic.

No politician is able to demand squeezing the fat out this system; the
prospect of rigorous streamlining (say using Information Technology)
is daunting: increasing substantially the unemployment rate cannot be
contemplated.

Sure, helping people to get insurance is a nice initiative, but not
changing a system that now bankrupts the US is grossly irresponsible.

It still remains a mystery why the press & media remain uninvolved in
dealing seriously with the deep irrationality of the US healthcare
system.