It's worth remembering during this time, that health care companies are not General Motors, but they are judged by the same free market standards. The failure to keep this in mind has set up and fostered the majority of the ideological and policy conflicts about health care reform.
The cost of health care in the United States jumped 47% from 2000 to 2006, but that didn't buy Americans the longest lifespan. With a life expectancy of 78 for a person born in 2007, the United States trails at least 27 other countries among 193.
The reason our health care system is in such terrible straits is that it is set up to generate profits, not to provide care. We rely on hundreds of investor-owned health insurance companies that profit by refusing coverage to patients and limiting services to others.They also cream off about 20% of the premiums for profits and overhead (including big fat salaries and bonuses for corporate heads). Furthermore, these health insurance companies are exempt from the federal anti trust laws.
Our health care system is directed toward maximizing income, not maximizing health. Private health insurance companies are profit-making institutions and your treatment is their cost. Health care cannot be marketed like TVs or cars. Consumer choice is nonsense when it comes to health care. You cannot rely on experience or comparison shopping when it comes to health care. In sum, health care just doesn't work as a standard market story.
There are no examples of a successful health care system based on the principle of the free market.
In contrast to private health insurers, Medicare doesn't have to spend millions on marketing, advertising and Washington lobbyists. On top of that, private insurers must generate profits for their shareholders, beyond the overpaid salaries and bonuses to corporate executives. But it's not just the cost of marketing, advertising, lobbying and providing profits for investors and bloated salaries and bonuses that makes private insurer's overhead so much higher.
Health insurers also have higher administrative costs because they are constantly enrolling and disenrolling customers as people change plans. In contrast, Medicare patients stay put. For private insurers, your healthcare is their cost, and the more healthcare is needed or required, the less profit they make. They do not like that!
And for those who think Medicare is less efficient because its oversight is lax and thus millions are lost to fraud, you can find numerous similar cases where healthcare providers have cheated private insurers. If anything, private insurers may be more laid back about this, because they can pass the costs associated with fraud onto their customers in the form of higher premiums. Medicare has a much harder time finding funds to cover fraud.
If more people were on Medicare, Medicare would begin to exercise its clout as the nation's largest payer, the way other governments do, negotiating with drugmakers and device-makers for lower prices. (The high cost of drugs and devices is a major reason why our hospital bills are so high-drugs and devices account for 15% of the $2 trillion-plus that we spend on healthcare each year. Private insurers are less likely to bargain because they can always pass the cost along to their customers. In just the last five years the cost of an average insurance premium has risen 75%.)
The US has some of the best doctors and best medical technology in the world, but there are too many other fingers in the pie. Over 1500 health insurance plans easily consume 20% of our total costs and limit patient treatments where they shouldn't. As a result, the US has the most expensive healthcare in the world.
The insidiousness of labeling any and all positions on health care reform that deviate from free market fundamentalism has been tarred with the brush of "socialized" medicine. This name calling has been around for awhile and is among the most potent of the bogey-men in American political culture. None of the universal coverage proposals that were debated in the United States, nor the health care bill that was approved, can be characterized as socialized medicine. None calls for government ownership or control over U.S. hospitals, drugstores or health agencies, or for making doctors employees of the federal government.
To the extent that any private health insurance scheme involves spreading among members of society the financial risk of getting sick, all insurance "socializes" the risk. This is, of course, not what people mean when they level charges of "socialized medicine." This term is never used in reference to police protection, fire departments or highways -- all of which are provided by government.
Politics may be full of hype, exaggeration or partisan bickering, but here should be no place for overt deception. The current debate about the healthcare reform act requires that we eliminate comments whose only purpose is to mischaracterize and misinform.
Exhibit A as to why health insurance should not be distributed using a for-profit motive: