Historical Per Capita Health Care Costs

The chart above is my second favourite chart (I showed FDL'ers my favourite chart last time I wrote here. Hopefully I'm not being too forward.) It's a chart of per capita health expenditures over the last forty odd years and what I want you to look at is Canada and the US. You'll see that at one point Canada actually spent more per capita than the US, then over less than a decade our costs dived to about 2/3rds of yours and then started paralleling your costs again.

What happened in that time period is that we went to single payor universal health care. Since then our metrics have been as good, or better than the US, with the exception of waiting times for optional surgery.

Now this isn't actually a post about healthcare, it's about language.

Specifically I'm sick of the idea that “the US doesn't have any simple problems.”

Actually, many of the US's problems are simple, and health care is just one of them.

The problem is the use of simple as a synonym for easy; and hard as a synonym for complicated.

See, losing weight is hard. It's not easy. But it is simple – eat less and exercise more and don't eat too many empty calories. The formula isn't a secret and it isn't complicated at all.

That doesn't mean it isn't hard. It's hard as dickens, which is why most people fail to lose and keep off weight. But it ain't complicated.

Same thing with, say, stopping smoking. It's hard. But it isn't complicated. All you have to do is… not smoke.

Now a lot of US problems are like this and health care is one of them. The US spends about 16% of its GDP on healthcare, clocking in at 2 trillion. Changing to a single payor universal system will slash about a third of that. Savings: about 650 billion dollars. Everyone knows this who isn't paid not to know it – every other country in the world that has universal health care pays about a 1/3 or less than the US and when Canada switched, its costs dropped by a third.

This isn't complicated. But it is hard. It's hard for the same reason that quitting smoking is hard, or that losing weight is hard – that 650 billion dollars extra is something the US is addicted to. That money pays for jobs and profits at insurers, drug companies and to hospitals and to some doctors.

That's a lot of money, and the people who are currently making a living, or a huge profit from it, don't want to lose it. So they'll fight tooth and nail to not end the gravy train. The 20% to 30% administrative margins in health insurance companies as opposed to the 2$ to 3% margins in Medicare are money that someone is getting. The price is that 50% of bankruptcies are caused by medical costs; that 43 million Americans are unemployed and that American companies like Ford and GM have huge medical costs that companies like Toyota don't have.

So it's not complicated to fix US healthcare – just go to single payor, probably modeled after France or Germany (who do as well or better on practically every metric), and voila – no more uninsured, much fewer bankruptcies, improved competitiveness and 650 billion dollars in profit and administrative costs that could actually be used for productive enterprise. Hard, because a lot of people make a lot of money from the status quo. But not complicated.

The US has a lot of problems like this. The debt and the deficit can be fixed by simply increasing tax rates and closing loopholes. Raise marginal rates on the rich, who can definitely afford it, end preferences for unearned income (which is taxed at half or less the rate of your paycheck) and make it so that corporations and people are taxed at the highest applicable tax rate on all their income so they can't try and hide some of it overseas and get a lower rate, and you'd be back on track.

Or – to put it even more simply, don't spend more than you bring in. It's simple, and the Bush administration, after the Clinton administration had put the budget back on track, simply decided to max out the credit cards to give the rich tax breaks.

Social Security – simply get rid of the cap on contributions at 100,000 and it'll be in the black. Heck, even without doing that it'll be decades before it can't pay. This one isn't even simple, it's just “there is no problem”.

Prison Incarceration – the US has more people per capita in jail than any other nation, edging out Russia back at the turn of the century. This is largely a result of draconian anti-drug laws, yet drug consumption hasn't gone down, indeed, quite the contrary. When you do something for 30+ years and it doesn't work, the answer isn't to do it harder, the answer is to stop doing it. Get rid of mandatory sentencing requirements, 3 strikes laws and stop putting people away for possession of any but the worst drugs. Legalize marijuana. Legalize most opiates. Legalize mild forms of coca so people can get their kick without crack or cocaine. The prison population will drop, drug use won't go up significantly, and the steady assault on your civil liberties will slow down (the war on terror was just the war on drugs on crack, really.)

One could go on like this for quite a while, including in foreign policy (stop supporting authoritarian regimes because you're scared of regimes with popular support) and economics (restructure the economy so that making things makes more money than playing securities games) and education (don't tie school money to property taxes). The solutions in many cases are clear and they aren't complicated. But they are hard because many people benefit from the way things are done now. But one shouldn't confuse hard and complicated and one shouldn't think that just because someone is mainlining pork today they have a right to mainline pork forever.

When I look at America what I see isn't a nation with problems it can't solve, instead what I see is a nation with problems it won't solve and what I see is a lot of people to whom the status quo is really good (including most Congresscritters) who try and sell Americans that there's nothing they can do.

Politics is about fixing problems. Anyone who tells you that simple problems are complicated and can't be solved, but only managed, needs to be kicked out of office. Because the one thing I'll tell you is this – problems you don't actually try to fix, don't get fixed. Losing weight is hard, but if you never try, you'll never succeed.

Cutting health insurance companies and drug companies off the gravy train will be hard. But if you don't do it, you'll never have good universal healthcare.

Your choice really. America has everything it needs, still, to choose life and a renewal of the American dream. But I wonder if it will, or can. Every great nation has its period in the sun come to an end, and in almost every case, it's internal rot that brings them down. America has renewed itself in the past, does it have the guts and the integrity left to renew itself one more time?

Related posts:

  1. Only the Insurance Companies Want a Level Playing Field
  2. The Max Tax: Baucus Plan Fails to Control Growth of Insurance Premiums
  3. Health Care: Pete King is Out of Touch with Long Island, New York, and America
  4. More for Health Care, Less for Insurance Execs? Rockefeller Demands 90% Loss Ratio
  5. Mike Ross: Covering for His Big Money Donors, Yes; Covering the Uninsured, Not So Much