Originally posted by jhskiier:
So basically, health care spending has been increasing above the rate of inflation and GDP growth for about 40 years.
The easiest way to understand that is to say,
If you make 5 dollars a year, and the price of a cup of coffee is 1 dollar. Your spending 20% of your income on that cup of coffee.
If you increase your earning to 6 dollars a year, but the price of a cup of coffee goes up to 2 dollars, your now spending 30% of your income on the same cup of coffee.
Over the long term Medicare is the largest component, by far, of the nations deficit. In addition, the US spends about 17% of its GDP on Healthcare, which is about double the percentage that comparable countries (Rich Democratic Social Welfare States) spend on Healthcare. Whats more striking is that in terms of health outcomes, i.e., life expectancy, infant mortality, etc.... we lag behind those same countries. Now to be sure, we are still #1 at the high end, meaning advanced surgery, cancer treatment, etc. But despite our ability to do amazing things medically, it has not affected the actual outcomes in terms of making people healthier on the whole.
So the basic idea is that we have to cut the amount that we are spending on Healthcare.
Obamacare does several things to address this.
1. Mandate that everyone buys health insurance.
- The purpose of this is to force the uninsured to by health care. Which accomplishes two things.
a. It puts more young healthy people into the insurance pool, which because they are younger and healthier brings down costs for everyone, since they are often not inclined to buy insurance until they are older.
b. It prevents what is a massive free rider problem. If someone gets sick, like very sick, and goes to the emergancy room, the hospital is required by law to provide stabalizing care even if that person doesnt have health insurance. That care is charged to medicare, partly, and also passed on to the consumer in terms of higher hospital costs.
2. The famous DEATH PANEL...
- This is actually a panel of experts set up to advise on medicare payment standards, as well as the new minimum coverage standards under Obama Care. The idea behind this is to cut procedures that dont actually make people healthier. And mandate those that do. So for example, preventive care, meaning primary care checkup, physicals, blood work, etc, are mandated with zero out of pocket costs. The reason for this is that it is much cheaper for you to visit a doctor and find out that you have type 2 diabetes and treat it early, then to have you treated at an emergancy with no insurance after your liver has failed. Its basically a committee set up to define best practices and use the purchasing power of medicare to push those standards out to providers.
3. A series of Taxes aimed at controlling the growth in healthcare spending.
So the basic idea of a tax is to bring in revenue. But it also modifies investment behavior. Meaning that if you were to make 2 dollars selling your cup of coffee, but were taxed 50 cents, you would only make a 1.50 in profit. So the degree to which you would invest in selling more cups of coffee would be relatively less. One of the largest problems our health system has, because it is private, is that, like other private enterprises, investment is directed to the areas that are most profitable. Thats the reason your local hospital as a new cancer and orthopedics wing, but not an expanded primary care clinic. The problem is that profitability does not co-inside with people being healthier. Its a lot like a national park. The government might be making a lot of money on concession stands in Yellowstone, but that doesnt mean that it is a good idea to start bulldozing bear habitat to sell more candy bars.
A good example is medical device tax.
Medical devices are incredible, great products. The problem here is that because they are so profitable, the health care system over invests in them relative to their positive affect on public health. The tax itself wont have any great affect on that industry, but the revenue will be used to invest in the type of preventitive care where their has been severe underinvestment.
Finally, and I think its very important to note, Obama care is too liberal. Democrats, I know I am one, have a tendancy to put too much faith in the ability of bureaucracy to manage things. The most effective government reforms, at least up until the 2nd Bush administration, were products of conservative think tanks.
1. Cap and Trade was developed by the Bush administration and the heritiage foundation to control admissions for Sulpher Dioxide. Which was causing acid rain.
2. Obama Care is really just a copy of Romney care, which was based on the Heritage foundations conservative response to Hillary Clintons healthcare plan in the 90s.
But for a moderate democrat that cares about defecits, rising health care costs meant one of two things was going to happen. Either it was going to get so expensive that nobody could afford it and medicare was going to have to be dismantled, or we were going to do something to create a universal system that brought costs somewhat in line with other Western countries.
Critisism of the law is fine, welcomed in fact, but if your voting for people that dont have an idea about how to address the issues the bill is meant to confront, then your missing the forest for the trees.
