Reason for a New Age

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    What you will expect to see here are discussions of politics and tangentially economics. This blog will do its best to present a rational look at the world of today, how the modern world came into place, and the issues that are currently being discussed in the public realm.
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The Cost of Health Care – Part 3

Posted by publius2point0 on 2010/01/06

Continuing to list and examine some theories for health spending:

The US gives more care to the old
The elderly, by a significant factor, accounts for most of all health spending. It has been theorized that the US, having no public oversight, is more willing to see to the care of the elderly and prolong their lives past what would be considered by a government financing group to be non-economical.

The US is, however, not the only country with private insurance. At least Switzerland, Israel, and Japan leave the majority of their health care to private insurers. That all of these countries have health spending of roughly half as much as ours indicates that it is unlikely that this sort of freedom to “needlessly” spend money is the cause.

Here are some graphs of spending by age group from different nations (US, Japan, Canada, and New Zealand respectively):…ges/f1-4-1.gif…p06-01-037.gif

Differences in ranges that are collated prevents me from being able to specifically look at the comparative spending on the elderly by age. But the age ranges of the young (people in their 20s) is fairly flat and allows us to compare there.

If it was spending on the elderly that was expanding the US’s spending then you would expect our spending on the young to be equivalent to that of other countries. But, just like our overall average, our spending is double. This indicates to me that whatever factor it is that double’s our spending is systemic and not linked to a particular age group.

Thievery, embezzlement, and skimming
This theory isn’t eh…something that is generally seen in print but I’ve heard it a few times. Basically the idea is that Bad People, Greedy Capitalists, or Corrupt Politicians or someone are skimming away money that should be going to health care.

This can’t really be quantified since, if it could you’d see people being thrown in jail.

But, let me attempt to show why this is quite clearly not the case.

The average amount of money spent on health care, per person per year is about $6100. With Around 300 million Americans, that totals out to $1.83 trillion dollars. The amount that is proposed as being stolen is half that, or $915 billion.

I would argue that a value this great could not be stolen by a disorganized amalgamation of corrupt officials and other greedy people without evidence having been discovered.

You might say that if one person (Bernie Madoff) could have stolen $64.8 billion then certainly an official organization like the US government or a concerted effort on the part of greedy insurance companies would be able to accomplish the theft of a much greater amount. But the thing is that Mr. Madoff was acting largely independently and only since the 1990s. Health spending in the US started to separate from other nations starting around 1976, judging by this image.

While there certainly have been conspiracies (i.e. secret plans by an organized group) in the past, the chance that the existence of this conspiracy will stay secret is entirely a function of the size of the group and the amount of time that has passed. The existence of secret prisoners being held by the CIA in 3rd world nations and tortured under the Bush regime was immediately rumored. Project Jennifer was being threatened to be exposed by the mass media practically the day they started. The Manhattan Project was being spied on by 1941, while the decision to go ahead with it was still in committee. The Iran-Contra Affair was planned in 1985 and discovered in 1986. The first attempt to use gas as a method of mass murder during the Holocaust was in December 1939. By September of 1940, Witold Pilecki had already heard of these and volunteered to go in and confirm the information.

If you are to argue that there has been a concerted effort to skim money starting in 1976, then I would say for certain that this would not be a secret by this time and date. No conspiracy of the size required would last this long.

If you argue that individuals are perpetuating this theft all on their own, then you are saying that Americans are far more likely to commit theft than people of all other nations.

Neither of these seems likely in even the slightest. While I’m sure that somewhere, somehow, some money is being skimmed by bad people, I can’t think of any reason to assume that it would be particularly more than in any other industry. And given that this is a region of financing where money stolen is being taken directly from the ill and dying, I would argue that of all money that might be stolen, this is perhaps the least likely.


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