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Not only is Social Security on the chopping block in order to respond to Republican extortion. So is Medicare.

But Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Medicare offers a means of reducing these costs — if Washington would let it.

Let me explain.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There’s not much money in physical therapy.

Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you’re back there within a month. You wouldn’t be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don’t nurses do home visits to Americans with acute conditions? Hospitals aren’t paid for it.

America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.

Meanwhile, administrative costs eat up 15 to 30 percent of all healthcare spending in the United States. That’s twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.

Trying to slow the rise in Medicare costs doesn’t deal with any of this. It will just limit the amounts seniors can spend, which means less care. As a practical matter it means more political battles, as seniors – whose clout will grow as boomers are added to the ranks – demand the limits be increased. (If you thought the demagoguery over “death panels” was bad, you ain’t seen nothin’ yet.)

Paul Ryan’s plan – to give seniors vouchers they can cash in with private for-profit insurers — would be even worse. It would funnel money into the hands of for-profit insurers, whose administrative costs are far higher than Medicare.

So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.

Let me say it again: Medicare isn’t the problem. It’s the solution.

[This is drawn from a post I did in April, also before current imboglio]

Robert Reich served as the 22nd United States Secretary of Labor under President William Jefferson Clinton from 1992 to 1997. He shares many of his thoughts and columns at Robert Reich, where this post first appeared.

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83 Responses for “Why Medicare Is the Solution — Not the Problem”

  1. Dr. Mike says:

    I believe that Mr Reich might have something to add to the discussion, however, his liberal use of medical myths will most certainly overshadow everything else. When will people learn – you can’t tell a lie to try and convey truth.

    “Medical costs are soaring because our health-care system is totally screwed up.”

    This is false. Our medical system has its problems, but it is they way in which healthcare is paid for that is screwed up, not the hospitals and physicians.

    “Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.”

    This is false. The majority of physicians, contrary to popular liberal legend, do not profit from the tests they order. The major drivers of unnecessary medical testing are unrealistic patient expectations, especially at the end of their lives, fear of malpractice, and over utilization of the Emergency room due to lack of disincentives for the patients to do so and lack of primary care.

    “You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There’s not much money in physical therapy.”

    This is false. Again, very few physicians profit from testing such as MRI’s, and it is illegal if they profit from referral to another physician. The reasons for excessive use of laminectomy are many, but it is too simplistic and thus false to lay all the blame on greed. “Not much money in physical therapy”? There is for the therapists.

    “Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you’re back there within a month. You wouldn’t be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don’t nurses do home visits to Americans with acute conditions? Hospitals aren’t paid for it.”

    Home health agencies are tasked with home visitation. Why is it that they received cuts in the most recent health care legislation?

    “America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.”

    This is just a silly mixing of unrelated facts. Part of the reason is that other countries don’t even know or admit they made the errors, and their inaccurate statistics are compared to our more accurate ones. Most medical errors occur and are fixed in the same institution – having their records “continuously re-written” has nothing to do with it.

    “Meanwhile, administrative costs …. twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money”
    Do you really think that billing and collecting from Medicare costs me less than from other sources? Really?

    “A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.”

    False. A third of nurse hours are spent in CYA documentation. Thats not to say that documentation for reimbursement purposes is insignificant, but it’s a little disingenuous don’t you think to omit the fact that the rules for documentation are entirely driven by what Medicare requires.

    The are enough true examples of the deficiencies of our system that is baffling why any one would resort to untruths, especially someone who has at their disposal people to do a little basic research for them.

    • Allow me to add to this excellent list that those “other countries” also “keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers” and this doesn’t “spell error” any more than the alternative, and therefore doesn’t explain anything, even partially.

      I am a liberal, perhaps even a flaming liberal (if you ask Nate), and I do believe Medicare for all is a great idea, but there is no need to provide faulty arguments for this concept. There are plenty of valid and good ones.
      And the government and its advocates are making a huge mistake by casting a wide net of profiteering, greed and unethical behavior to cover all physicians. These are the people you need on your side if you want to accomplish anything of any substance in health care.
      Besides, when you live in a glass house you should be careful even with the first stone….

    • Craig "Quack" Vickstrom, M.D. says:

      Will have to agree with Dr. Mike’s post. This is not one of Mr. Reich’s better efforts. This one is shot through with holes.

    • steve says:

      “Do you really think that billing and collecting from Medicare costs me less than from other sources? Really?”

      It does for me. Quite a bit less. I am the president of our 50 provider group, and know our expenses quite well.

      Steve

  2. Nate Ogden says:

    “Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.”

    This propoganda has been disproven and discredited so many times no one spouting it is taken serious. Life Expectancy doesn’t have anything to do with healthcare spending and neither does infant mortaility.

    if this is the best you can come up with it proves medicare is not the solution but the problem, that and propogada like this

  3. Nate Ogden says:

    For a good debunking of this junk science and a list of a few of the liberals peddling this BS;

    http://www.nationalcenter.org/NPA547ComparativeHealth.html

    Clearly shows how its a flawed argument from the beginning. Nothing scientific or accurate about it.

    • Nate Ogden says:

      Yet the United States has the highest GDP per capita in the world, so why does it have a life expectancy lower than most of the industrialized world? The primary reason is that the U.S. is ethnically a far more diverse nation than most other industrialized nations. Factors associated with different ethnic backgrounds – culture, diet, etc. – can have a substantial impact on life expectancy. Comparisons of distinct ethnic populations in the U.S. with their country of origin find similar rates of life expectancy. For example, Japanese-Americans have an average life expectancy similar to that of Japanese.10

      A good deal of the lower life expectancy rate in the U.S. is accounted for by the difference in life expectancy of African-Americans versus other populations in the United States. Life expectancy for African-Americans is about 72.3 years, while for whites it is about 77.7 years

    • Nate Ogden says:

      But infant mortality tells us a lot less about a health care system than one might think. The main problem is inconsistent measurement across nations. The United Nations Statistics Division, which collects data on infant mortality, stipulates that an infant, once it is removed from its mother and then “breathes or shows any other evidence of life such as beating of the heart, pulsation of the umbilical cord, or definite movement of voluntary muscles… is considered live-born regardless of gestational age.”16 While the U.S. follows that definition, many other nations do not. Demographer Nicholas Eberstadt notes that in Switzerland “an infant must be at least 30 centimeters long at birth to be counted as living.”17 This excludes many of the most vulnerable infants from Switzerland’s infant mortality measure.

      Switzerland is far from the only nation to have peculiarities in its measure. Italy has at least three different definitions for infant deaths in different regions of the nation.18 The United Nations Statistics Division notes many other differences.19 Japan counts only births to Japanese nationals living in Japan, not abroad. Finland, France and Norway, by contrast, do count births to nationals living outside of the country. Belgium includes births to its armed forces living outside Belgium but not births to foreign armed forces living in Belgium. Finally, Canada counts births to Canadians living in the U.S., but not Americans living in Canada. In short, many nations count births that are in no way an indication of the efficacy of their own health care systems.

      The United Nations Statistics Division explains another factor hampering consistent measurement across nations:

      …some infant deaths are tabulated by date of registration and not by date of occurrence… Whenever the lag between the date of occurrence and date of registration is prolonged and therefore, a large proportion of the infant-death registrations are delayed, infant-death statistics for any given year may be seriously affected.20

      The nations of Australia, Ireland and New Zealand fall into this category.

      Registration problems hamper accurate collection of data on infant mortality in another way. Looking at data from 1984-1985, Eberstadt argued that, “Underregistration of infant deaths may also be indicated by the proportion of infant deaths reported for the first twenty-four hours after birth.”21 Eberstadt found that in the U.S. and Canada more than a third of all infant death occurred during the first day, but in Sweden and France they accounted for less than one-fifth. Table 3 shows that the pattern still holds today.

      Inconsistent measurement explains only part of the difference between the U.S. and the rest of the world. Were measurements to be standardized, according to Eberstadt, “America might move from the bottom third toward the middle, but it would be unlikely to advance into the top half.”22 Another factor affecting infant mortality Eberstadt identifies is parental behavior.23 Pregnant women in other countries are more likely to either be married or living with a partner. Pregnant women in such households are more likely to receive prenatal care than pregnant women living on their own. In the U.S., pregnant women are far more likely to be living alone. Although the nature of the relationship is still unclear (it is possible that mothers living on their own are less likely to want to be pregnant), it likely leads to a higher rate of infant mortality in the U.S.

      In summary, infant mortality is measured far too inconsistently to make cross-national comparisons useful. Thus, just like life expectancy, infant mortality is not a reliable measure of the relative merits of health care systems.

  4. Nate Ogden says:

    What year is it? This post from Robert is like a Flashback to the 90s he throws out every dishonest misleading and strait out lie every uttered.

    “For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). ”

    Medicare is not 3% and its dishonest to show it as a percent, paper and salaries are not paid as a % of premium, dishonest liberals use this argument becuase the higher claims cost of Medicare mask the higher administrative cost.

    Why don’t you use hard dollars Robert? 3%, bogus number, of $7000 is $210. 5% of $3000 is $150. Self Funded plans are $60 cheapers, useing your bogus numbers. Please explain how spending an extra $60 is saving money? Why is Medicare as low as it is, they skimp in admin and thus have a ton more fraud, 10% times $7000 is $700 lost to fraud. Theres some real savings.

  5. Barry Carol says:

    To add to Nate’s comment regarding infant mortality rates, roughly 40% of all births in the U.S. are paid for by the TANF segment of Medicaid. It’s likely that the infant mortality rate among this low income subset of our population is comparatively high because of factors, including personal behavior, related to poverty, not healthcare system quality.

    As Dr. Mike’s comment suggests, this post from Robert Reich has an unusually high concentration discredited liberal talking points. It’s unfortunate that someone of Dr. Reich’s intellect and stature continues to cling to them and, worse, to publicize them.

  6. Deron says:

    Mr. Reich’s post was very disappointing. The longer we keep rehashing the same faulty arguments, the longer it’s going to take to fix things. By making it political, we take the most effective solution off the table: addressing the health of the population. Why? Because it is not a good political move to tell your constituents they are part of the problem when, in fact, they are the biggest cost driver of all.

  7. Nate Ogden says:

    This was pretty much a repost of the exact same post he made in April of 2011. In the comments it was debunked with the same facts that Robert apparently chooses to ignore. Think of the lively conversation from a few days ago if someone knowingly continues to publish the same lies and mnisinformation how should the debate deal with them? Obviously Mr. Reich has no interest in resolution or honest factual debate, do you just continue to argue against them in comments hoping 20% of people see the truth or do you aggresivly discredit them and draw attention to them so they exit the debate or start using real facts not talking points?

    I am sure Mr. Reich will continue to peddle these bogus arguments until he has no creditibility and probably even long after that.

  8. bob hertz says:

    I thought that Robert Reich was an excellent Secretary of Labor, but boy, he really did miss the train on current health care reform.

    If the great flaw of Republicans has been reforming without a heart, then the great flaw of Democrats has been reforming with no attention to numbers.

    There are about 130 million adults in America who are not on Medicare or Medicaid or in the army or in prison. (I am ignoring children for the moment.)

    If every one of them received full Medicare, the cost would be no less than $5,000 each and could be much more.

    At $5,000 each, the total bill is $650 billion, and then you have to add something for children.

    So we are pushing $800 billion.

    Total payrolls in this country are between $5 and $6 trillion.(and they sure are not growing very fast if at all.)

    So Medicare for all would require a new payroll tax of about 15%.

    This is perfectly in line with what one sees in Germany, France, and Canada —-but it is wildly out of line with what is possible in the American political system today.

    It is distressing that prominent Democrats just glide over this. I also admire Dennis Kucinich, but he said for years that Medicare for all would cost only 7% in taxes.

    Incidentally, one of the best posts I have ever read on Medicare financing was by Nate Ogden in The Health Blog around September 2009, in back of an excellent article by Joe Flower on what actually works in cost control.

    Just thought I would mention it.

  9. MD as HELL says:

    Half of everyone in the ED so far today is on Medicare. It is Saturday. They have come in like they are going to a yard sale. They have all seen their doctors in the last month. They are here on an impulse. Thre is nothing different about them. they simply had no reason not to come in.

    This country is going broke because people are looting it.

  10. MD as HELL says:

    And I don’t mean doctors. It is the citizens (and others) just getting theirs.

    I am for balance billing and collecting.

  11. Nate Ogden says:

    There use to be a time, in many people’s memory, when you could go to the doctor and pay for it out of pocket. You could go years without every fileing an insurance claim. How could we reset the system, back to when we didn’t need government or insurance?

    Can we pick a date and say as of 1/1/2014 its 1964 again.

    Or do we need to wind back to the way it use to be? I din’t think this would be possible, I would think we would need to freeze the present and let the past catch up.

    Would affordable healthcare, fewer uninsured, and no pending bankruptsy be satisfatory or are we still chasing utopia?

  12. BobbyG says:

    And, would you care to enlighten us as to just how more limited were diagnostic capabilities and clinical procedures and therapies during that Swell Romantic Norman Rockwell era?

  13. “How could we reset the system, back to when we didn’t need government or insurance?

    Can we pick a date and say as of 1/1/2014 its 1964 again. ”

    Nate, could you please check your numbers and see how many Americans had health insurance in 1964?

  14. MD as HELL says:

    His point is that no one needed insurance in 1864.

  15. steve says:

    Let’s see. We had (almost) no ICUs in 1964. No NICUs. No CT scans or MRIs. No US IIRC. We just didnt do that much surgery on older patients as we paternalistically told them they were too old (our diagnostics and monitoring sucked also). There was certainly a lot less need for insurance.

    Steve

  16. indium says:

    seen great, It does for me. Quite a bit less. I am the president of our 50 provider group, and know our expenses quite well.

  17. Barry Carol says:

    Steve –

    How does your group’s revenue break down today between commercial payers, Medicare and Medicaid and do you have much uncompensated care? By how much would the group’s revenue increase or decrease if you received Medicare rates for all patient encounters and how much would expenses decline by? I’m just looking for some real world experience here and to get a sense for whether your group’s experience is fairly typical or unusual in some ways.

    Separately, perhaps you could give us a guesstimate of the percentage of the cost of all the healthcare utilization decisions driven by your group’s doctors that are due primarily to defensive medicine as opposed to medical necessity or an attempt to satisfy patient expectations.

    • steve says:

      Real commercial insurance is largely gone. Our private insurance, I live in PA, is dominated by the Blues, a collection of other private entities like Aetna, Medicare and Medicaid. We run about 45% Medicare, 10% Medicaid (we work at the hospital on the wrong side of the tracks) and the rest privates. We run about We run about 2% self pay, but have about an equal number of “insureds” not pay.

      If we had all Medicare patients, our billing costs would, my best estimate and also that of my MBA practice manager, would be cut in half. Total billing expenses are about 7%. Total income would drop. How much would depend upon whether it was a local event or a national event. If it happened just at my hospital, we would likely see a smaller drop as we have to be able to offer market rates to hire docs. We would just charge the hospital a fee for coverage. If we suddenly went to a national Medicare plan, so everyone was affected, I would expect the larger decrease.

      As to defensive medicine, that is mostly influenced by individual practitioner decisions. As a group, we are very influenced by practice guidelines and evidence based medicine. However, some of my older docs still order way too many tests and I know from conversations that defense is their motivation. We dont make any money off of the tests. I have never tried to quantify this.

      Steve

      • Nate Ogden says:

        is that because Medicare iw easier to bill or becuase you would only have 1 place to work with. What if all your business came from my TPA for example would Medicare be cheaper or is it the number of psyors?

        • steve says:

          A few reasons. First, every insurer has their own forms. Secondly, they change their rules fairly often. This creates ongoing costs as we need to pay for expert advice to make sure we dont miss any of those changes. Thirdly, every 6-7 years we still miss a major change. If we miss a change in our favor, we lose out if we do not find the error in time. If the error was in our favor and we have to repay, we incur lawyer fees and admin time, mostly mine. These changes have cost us well into 6 figures. Last of all, all my people need to be credentialed with every facility where we work. Now, we also need to be credentialed with every insurance company who pays us. It has reached the point where I have an office person who devotes about 20-25% of her time to credentialing issues. They love to send out these credentialing requests giving us just 2-3 weeks to respond, and some of my guys like to occasionally take vacation.

          These costs could all be greatly reduced through the use of universal billing forms and universal credentialing, but I guess that smacks of collectivism.

          Steve

          • Nate Ogden says:

            Your still billing paper and not EDI? I thought most hospitals were using EDI.

            “Now, we also need to be credentialed with every insurance company who pays us.”

            I think you mean BUCA, we don’t credential any providers. And this is a problem providers brought on themselves. They give BUCA discounts so much better then anyone else groups have no choice but to contract with BUCA, this in turn gives BUCA so much market share they can dictate to you how you bill. The way to resolve these problems is give equally good discounts to smaller players that don’t have so many rules so they can take business back from BUCA adn thus deminish their clout.

            Credentialing only applies to PPO contracts, do away with the PPOs no more need to credential. Or change the law so PPOs aren’t liable for the doctors in their network. Would have been a good point to discuss in our legal system has no problems post few weeks back.

          • steve says:

            Three of our insurers still require paper bills last time I checked.

            Steve

          • Nate Ogden says:

            which is illegal under HIPAA and has huge fines, why haven’t you pressed the issue? And when I say illegal I mean federal law big time illegal not like hey you shouldn’t do that illegal.

  18. Barry Carol says:

    Nate –

    If 1964 healthcare technology were all that was available to me in 1999 when I needed a CABG, I probably wouldn’t be alive today. Modern prescription drugs were also enormously helpful in managing my heart disease. Those weren’t available in 1964 either. Sure healthcare was cheaper then and there wasn’t as much need for insurance but there wasn’t nearly as much that medicine could do for us either. Prior do World War II, there was even less that medicine could do for us and the farther back in time you go, the less it could do.

    I applaud advances in medical technology. My problem is with often unreasonable patient expectations, especially with respect to end of life care, a medical tort system that pushes doctors to practice defensive medicine, a lack of price and quality transparency, and a payment system that rewards volume instead of value. There are strategies available to address all of those but powerful interests that benefit from the status quo need to be taken on and overcome.

  19. Peter says:

    Unless we get control of destructive life style health factors, no system, private or public, will be able to afford the cost. Compare the obesity rates (and associated chronic diseases) in 1964 and now to get an idea why healthcare cost us less in 1964. This link shows where the smoking gun is:
    http://www.ehd.org/health_obesity.php

    But since obesity is a money maker for the healthcare and food industries don’t look for much action to change the trend. Live free and die fat.

  20. Nate Ogden says:

    Yes technology was less advanced in 1964 then it is in 2011. But if you think through the argument technology was far less advanced in 1917 then it was in 1964 so I don’t give that argument much credit. Would we have all of the same technology as we do today if there was sliughtly less captial invested, probably not but that also isn’t where most of the money is going. What percent of medcial care is labor vs capital cost, how have wages in healthcare inflated compared to other industries.

    If 30% of healthcare is wasteful then that means we could cut 600 billion with no negative consiquences. Take us back to 1.4 trillion and that changes everything. Eliminate insruance for routine services and have people pay direct, they would reduce cost and lower cost even more.

    An argument can be made its how we deliver healthcare in this country that makes it so expensive, that argument starts around 1965. If people are really interested in finding a solution, in really fixing healthcare in America why are we not allowed to discuss the failure of Medicare and government involvement in healthcare in general? Its a taboo discussion we are not allowed to have, maybe thats why things never get better, we can’t discuss the problem.

  21. It’s not a taboo question and it absolutely should be discussed.
    Can we analyze and project what would have happened between 1964 and now if we didn’t have Medicare/caid during this time? Would cost of care per capita (for those that were able to afford it) be higher or lower? Would we have witnessed large numbers of folks expiring from simple diseases that are 100% curable? Would the social fabric of this country have been unraveled a long time ago? What other things would have been set in motion?

    • Nate Ogden says:

      http://content.healthaffairs.org/content/14/4/62.full.pdf

      Very interesting take on the passage of Medicare by one of the Socialist/Liberals responsible for it.

      The most important thing I take away from this, besides how completly opposite everything turned out from what they intended, is how political even the left admits this was. This was all about politics, it has been since 1916, Medciare was nothing but a means to and end. Despite its terrible failure and budget busting they still chase the utlimate goal of universal healthcare.

    • Nate Ogden says:

      http://blogs.wsj.com/health/2009/08/26/health-reform-looking-back-at-lbj-and-medicare/tab/article/

      There was a big fight — and LBJ suppressed the true projected costs of the program as he pushed it through Congress, according to an NPR interview with James Morone, a Brown political scientist.

      Morone wrote a book on presidents and health policy, and listened to tapes LBJ made of his phone conversations during the Medicare debate. He concluded that “if the true costs of Medicare had been known — if Johnson hadn’t basically hidden them — the program would never have passed,” Morone said.

      That kind of behavior would be difficult today, because there are stricter rules about projecting the costs of new programs and figuring out how to pay for them, Morone said.

    • Nate Ogden says:

      http://www.ssa.gov/history/pdf/mills2.pdf

      G: Should there have been something built in to control things like doctors’ fees?

      M: We didn’t think so at the time. We didn’t think so; we never foresaw what did happen: hospital costs going up. What happened, every hospital had to have this expensive equipment–maybe they’d use it one day out of a week–in place of all the hospitals in a community going together and having it in one hospital; that would reduce the importance of the other hospitals, they thought. So they all had to put that in. And then the minimum wage came into effect, which upped the costs of hospitalization tremendously all of a sudden, the year after, I think, we passed Medicare and Medicaid. All of those things together had a lot to do with it, as well as the increase in inflation and things of that sort that went along. No, we never foresaw that the costs would go like they did, doctors’ fees would go up like they have. And we didn’t foresee all these damage suits against doctors, you know, that caused them to have to pay such exorbitant premiums, that necessitated the increase in the visit charges. A lot of things like that we just didn’t foresee; nobody did. The actuaries didn’t foresee it and none of the rest of them.

      And then Johnson had his remarkable election in 1964, and that was a campaign issue. I thought then the time had come to enact something, and he recommended that we take care of the hospital costs only of people over sixty-five under Social Security, in connection with Social Security.

      And as we went into it and as it developed, we realized that that would take care of about 25 per cent of the total costs of the elderly, medical costs and things. So we knew that if we passed it–and I told him this–I said, “If we pass your program, Mr. President, and the American people find out we’re taking care of 25 per cent of them, we’re going to be the laughingstock of the country. We’ve misled them, they’ll think. And it’ll react seriously on us.” “Well, do what you want to do about it, then, and develop it as you want to develop it.”

      Sounds like they knew from the beginning we couldn’t afford it.

      We were underestimating. Let me give you an example of what I mean, on Medicaid. We were told by Bob [Meyers], the actuary, that the cost of Medicaid over Kerr-Mills in the first year would be $250 million, nationwide. It was $250 million in New York State alone.

      We started off with a 7/10 of 1 per cent rate to finance Medicare, and actually it was 9/10 that we needed desperately. The President talked me into the 7/10 because Gardner Ackley, he said, had told him that if we went to 9/10 of 1 per cent we’d have a depression. Seven-tenths of 1 per cent wouldn’t cause a depression; 2/10 of a per cent–I said, “Mr. President, that’s ridiculous.” He said, “Well, I just don’t want a depression. You know I don’t, and you don’t either. Can’t you start it at 7/10?” So we started it at 7/10, and we should have started it at 9/10. But we corrected that later on, before I ever left.

      G: The actuarial soundness of the Social Security Act itself seems to have been a major consideration of yours throughout this period.

      M: Well, we never had any trouble with it. What happened, what got us off, was that COLA [Cost of Living Adjustment] deal. It was never properly financed.

      G: The Senate version of the bill provided for longer hospitalization and post-hospital home care.

      M: Yes. Actually, it was almost

  22. Nate Ogden says:

    We would still have a problem with catostrophic illness, prolonged illness, and nusrsing home care. It use to be family took care of their elders. This obviously comes at a cost, if your supporting grandma you can’t be buying more expensive cars and eating out as much. On the other hand the break down of the family has been blamed for a number of our current social problems.

    Wages would obviously be much higher.

    I think the cost of an office visit and routine care would be much lower then it is today, I don’t think we would have insurance company anything like we do now, I think it would have stayed a more catostrophic coverage that was seldom used.

    “Would we have witnessed large numbers of folks expiring from simple diseases that are 100% curable?”

    This wasn’t happening in 1964, I don’t see any reason to think it would be happening now without Medicare.

    “Would the social fabric of this country have been unraveled a long time ago?”

    Or would it be much better? First we have the issue with families taking care of elders, Japan doesn’t seem harmed by this. Next what if patients didn’t feel entitled to physician care becuase they have insurance, what if doctors and patients had better relationships? If a doctor is doing you a favor by giving you a huge discount or delaying payment would they listen to the doctor better and follow instruction?

    How much has the government spent on CMS in the past 50 years?

  23. Barry Carol says:

    “If 30% of healthcare is wasteful then that means we could cut 600 billion with no negative consiquences.”

    Nate –

    Nobody would love to see this happen more than I would. There are plenty of challenges, though, including the following:

    1. How do we identify unnecessary care at the individual patient level BEFORE services are rendered?

    2. It could include unnecessary imaging or other tests that doctors order to protect themselves from lawsuits. Sensible tort reform is needed to start to address this.

    3. It could include services, tests, procedures and drugs that patients demand / want even if their doctor thinks they’re unnecessary or will do no good including futile end of life care. More patient out-of-pocket exposure to the actual cost of their care might help here.

    4. It probably includes cardiac stents, back surgery and other profitable procedures that certain patients who get them won’t benefit from but they produce revenue for doctors and hospitals. We probably should have more utilization review with sanctions for providers who perform too many unnecessary surgeries and interventions.

    5. It includes nursing homes which are quick to send a resident to the hospital because she fell even if she’s not injured. You need to get checked out; better to be safe than sorry. Both tort reform and utilization review are probably needed here.

    6. Excessive use of emergency rooms for minor issues drive lots of testing because ER docs are under pressure to “treat ‘em and street ‘em” as quickly as possible, the docs need to protect themselves against lawsuits, and hospitals get paid for all the testing.

    If it were easy to attack all this waste, we presumably would have done it a long time ago. It will be interesting to see if new payment models from bundled pricing for surgeries to capitation for primary care to global payments for ACO’s will begin to make a dent in the issue. I’m hopeful but skeptical.

  24. Nate Ogden says:

    Individuals paying for their own care are the best stewards. If Individuals had to pay for each lab test I can guarantee you they would be more likly to ask the doctor why they need to repeat the same test.

    The problem with the argument that they would also skip test is they do now anyways, They advocate we keep a flawed system instead of replaceing it with a less flawed system.

    “If it were easy to attack all this waste, we presumably would have done it a long time ago.”

    Who would have attacked? We have done the exact opposite, out of pocket has declined. We know utilization is a problem and we have fostered higher utilization.

  25. Barry Carol says:

    Nate –

    I read your link to Robert Ball’s 1995 Health Affairs article on the history of Medicare and came across something interesting that I’ve never seen or heard before despite voluminous reading on this general subject over the last five years. Specifically, Ball noted that the U.S., along with Japan, has the highest life expectancy in the world for people who reach the age of 65. Access to quality healthcare is probably more important for the elderly than for other age groups when it comes to life expectancy. Death from accidents, murders, suicides, drug and alcohol abuse, smoking and the like account for a significant amount of premature death among the younger population, all of which have little to do with access to quality healthcare. Diet is also a significant behavioral factor which varies considerably not just among countries but regionally within a country, especially one as large and as culturally and ethnically diverse as the U.S.

  26. Nate Ogden says:

    Its long been known but seldom reported that the difference in US life expectancy is docial differences, murder, car accidents, etc, and demographic, minority populations and nothing to do with healthcare. If you look hard enough some real scientist compared the life expectancy of Asian americans to asians, african americans to africans, etc etc and they match, or are better in the US then their native country, disproving this whole argument.

    It would be nice for Mr. Reich to either come on here and defend these arguments he continues to make every couple months or admit he was wrong and stop repeatling this falllacous argument.

  27. Maggie Mahar says:

    This is not about “minorities” skewing the numbers.

    Studies that look only at whites in the U.S and compare them to white people in other developed countries, find that both our rates of infant mortality, and our rates of maternal mortality are higher than in other developed countries. Even if comparisons are limited to white Americans, we trail other OECD countries. Among Caucasians, when it comes to infant mortality we rank 22nd. If you look at the percentage of white mothers dying during childbirth, we place 19th. In terms of life expectancy, when compared to men in other developed countries white men in the U.S, rank 22nd,, white women, 19th.
    For the numbers, from the U.S. Dept. of Health Statistics, see
    http://www.healthbeatblog.org/2008/05/whatever-happen.html

    These are well-known facts.. That no one else bothered to intrude on this thread’s group fantasy (promoted by a “group” of roughly 2 1/2 people) simply demonstrates that informed readers no longer take THCB seriously.

    In too many cases, THCB now serves simply as a billboard for the rantings of a few very, very angry people.

    The very best posts and threads on THCB remain excellent and offer solid infromation coming from a wide audience. But they are becoming few and far between. And when 2 1/2 bullies take over a thread it dissolves into
    something so meaningless that no one cares to respond.

    • Nate Ogden says:

      more of your games Maggie. You can’t have an honest argument to save your life. Ethnic background effects length of life expectancy, measurements effect infant mortality. No one ever claimed ethnic background effected infant mortality.

      The spaces between sentences are called paragraphs, they seperate thoughts and FACTS. Speaking of arguments you should stop making them up to argue against, its called starmen and is just one of your constant dishonest techniques.

      What I do find odd is how you totally ignored the argument that was made, that different countries measure infant mortaility differently which means its an inaccurate study if not adjusted for, why did you ignore this actual argument to make up your own Maggie?

      Take the hint, people are standing for your dishonest partisian hackery anymore. Your strawmen killing bogus study citing days are over, learn to use facts or give it up.

      But infant mortality tells us a lot less about a health care system than one might think. The main problem is inconsistent measurement across nations. The United Nations Statistics Division, which collects data on infant mortality, stipulates that an infant, once it is removed from its mother and then “breathes or shows any other evidence of life such as beating of the heart, pulsation of the umbilical cord, or definite movement of voluntary muscles… is considered live-born regardless of gestational age.”16 While the U.S. follows that definition, many other nations do not. Demographer Nicholas Eberstadt notes that in Switzerland “an infant must be at least 30 centimeters long at birth to be counted as living.”17 This excludes many of the most vulnerable infants from Switzerland’s infant mortality measure.

      Switzerland is far from the only nation to have peculiarities in its measure. Italy has at least three different definitions for infant deaths in different regions of the nation.18 The United Nations Statistics Division notes many other differences.19 Japan counts only births to Japanese nationals living in Japan, not abroad. Finland, France and Norway, by contrast, do count births to nationals living outside of the country. Belgium includes births to its armed forces living outside Belgium but not births to foreign armed forces living in Belgium. Finally, Canada counts births to Canadians living in the U.S., but not Americans living in Canada. In short, many nations count births that are in no way an indication of the efficacy of their own health care systems.

      The United Nations Statistics Division explains another factor hampering consistent measurement across nations:

      …some infant deaths are tabulated by date of registration and not by date of occurrence… Whenever the lag between the date of occurrence and date of registration is prolonged and therefore, a large proportion of the infant-death registrations are delayed, infant-death statistics for any given year may be seriously affected.20

      The nations of Australia, Ireland and New Zealand fall into this category.

      Registration problems hamper accurate collection of data on infant mortality in another way. Looking at data from 1984-1985, Eberstadt argued that, “Underregistration of infant deaths may also be indicated by the proportion of infant deaths reported for the first twenty-four hours after birth.”21 Eberstadt found that in the U.S. and Canada more than a third of all infant death occurred during the first day, but in Sweden and France they accounted for less than one-fifth. Table 3 shows that the pattern still holds today.

      Inconsistent measurement explains only part of the difference between the U.S. and the rest of the world. Were measurements to be standardized, according to Eberstadt, “America might move from the bottom third toward the middle, but it would be unlikely to advance into the top half.”22 Another factor affecting infant mortality Eberstadt identifies is parental behavior.23 Pregnant women in other countries are more likely to either be married or living with a partner. Pregnant women in such households are more likely to receive prenatal care than pregnant women living on their own. In the U.S., pregnant women are far more likely to be living alone. Although the nature of the relationship is still unclear (it is possible that mothers living on their own are less likely to want to be pregnant), it likely leads to a higher rate of infant mortality in the U.S.

      In summary, infant mortality is measured far too inconsistently to make cross-national comparisons useful. Thus, just like life expectancy, infant mortality is not a reliable measure of the relative merits of health care systems.

  28. “the U.S., along with Japan, has the highest life expectancy in the world for people who reach the age of 65″

    So does this mean that Medicare is providing darn good medical care?

  29. bob hertz says:

    Over the last 18 months I took care of my 90 year old father until he passed away.

    He had a number of diagnostic tests, which in retrospect were quite useless. All that they proved is that he was very old and was failing.

    But the vast bulk of his expenses were for nursing care, i.e. changing adult diapers and lifting him so that he could go to meals.

    His wife was equally old and tried to help as long as she could, but she was
    physically unable to continue.

    His children could have taken over but, thanks to Medicare and the VA in this case, we did not have to.

    Someone once said — I think it was a friend of Bobby Kennedy’s who wrote Feeling Better but Doing Worse ,I cannot remember his name –
    but his point was that whenever the family is replaced by paid labor, the result is something very expensive.

    Chopping away at Medicare payments for individual items of care is worth doing, but it will not change the fact that saving lives is a costly
    proposition.

    (Incidetally, saving young lives in India and Pakistan by better crops and better public health at childbirth has also been costly.)

    In other words, don’t blame the American elderly. When Medical technology saves liives, it does not increase the incomes of those who are saved. (It may incease the incomes of doctors, but that is not enough.)

    David Cutler had a proof in about 2008 via theoretical economics that saving lives has made America richer.

    Judging from personal observation alone, I think he is wildly wrong.
    American is full of people who are made poor by longer life spans.
    I would welcome any comments on this.

    My father’s life was saved several times. That did not increase his income, as he had long since retired, nor did it incease my inome or the taxes that i pay.

    Saving lives is a luxury, economically. When America’s wealth was growing steadily from 1950 to 1980, roughly speaking, we could pay for this luxury and not really notice it.

    Today America is much more on the ropes, economically, and we may have to cut back on the medical care that we give to non-producers.
    When Poland was a ‘worker’s state’, people over 60 did not receive dialysis…i.e. why bother? This may be our direction too.

    Not because we are mean or because Paul Ryan is cruel. Just because of economic reality.

    Bob Hertz

    • Bob,
      If you think that a 15% increase in taxes is “wildly out of line with what is possible in the American political system today”, then let me assure you that taking 60 year old people out to the backyard and putting them out of your (not theirs) misery is even more “wildly out of line” with what America really is.
      And Paul Ryan is not cruel. Cruelty requires deliberate thought given to the victim. Mr. Ryan, to the extent that he is capable of thinking, is only thinking about himself.

  30. akash says:

    The Department of Human Services is responsible for the development of service delivery policy and provides access to social, health and other payments and services. It Internet Marketing Expert was created on 26 October 2004 as part of the Finance and Administration portfolio. The Human Services Legislation Amendment Act 2011 integrated the services of Medicare Australia, Centrelink and CRS Australia on 1 July 2011 into the Department of Human Services.

  31. Barry Carol says:

    Margalit –

    Medicare is a PAYER, not a provider of healthcare. Medicare Advantage covers 25% of seniors and rising while 9 million people are eligible for both Medicare and Medicaid.

  32. Nate Ogden says:

    Maggie;

    “That no one else bothered to intrude on this thread’s group fantasy (promoted by a “group” of roughly 2 1/2 people) simply demonstrates that informed readers no longer take THCB seriously.”

    7 people clearly said Mr. Reich’s arguments will disproven and outdated propoganda. A couple of whom fall on the left side of the spectrum, what do they call this in DC, a bipartisian debunking of Mr. Reich.

    What does it mean to be informed? Someone who agrees with you and Mr. Reich’s erronous statements is informed and anyone that disagrees is angry?

    “The very best posts and threads on THCB remain excellent and offer solid infromation coming from a wide audience. But they are becoming few and far between. And when 2 1/2 bullies take over a thread it dissolves into
    something so meaningless that no one cares to respond.”

    Reading through the comments a number of people were having a very nice and respectful exchange of ideas until you joined calling names and riling everyone up. I’m being to think you just like to antaganize people, come on insulting people, cite made up arguments you know aren’t true then watch everyone respond them attack them for being angry and responding. Actually you didn’t even wait for a responce before attacking.

  33. Peter says:

    On infant mortality from Wikipedia.

    http://en.wikipedia.org/wiki/Infant_mortality#Comparing_infant_mortality_rates

    “UNICEF uses a statistical methodology to account for reporting differences among countries:
    “UNICEF compiles infant mortality country estimates derived from all sources and methods of estimation obtained either from standard reports, direct estimation from micro data sets, or from UNICEF’s yearly exercise. In order to sort out differences between estimates produced from different sources, with different methods, UNICEF developed, in coordination with WHO, the WB and UNSD, an estimation methodology that minimizes the errors embodied in each estimate and harmonize trends along time. Since the estimates are not necessarily the exact values used as input for the model, they are often not recognized as the official IMR estimates used at the country level. However, as mentioned before, these estimates minimize errors and maximize the consistency of trends along time.”

    UNICEF comparisons here:

    http://mdgs.un.org/unsd/mdg/Metadata.aspx?IndicatorId=0&SeriesId=562

  34. Barry Carol says:

    Maggie –

    I think you know the data as well as anyone. As Steve Schroeder noted in his Shattuck Lecture a few years ago, health outcomes are determined 40% by personal behavior, 30% by genetics, 20% by environmental factors and socioeconomic status and only 10% by the quality of healthcare one has access to. Even if you compare white Americans with whites in other developed countries, this doesn’t change. Diets vary widely even within the U.S. – ore fried food (and more obesity) in the South, for example. Many more people in some European cities ride bikes to work. We generally drive or, in big cities, take mass transit. Poverty plays a significant role as well both in terms of life expectancy and infant mortality. You cannot cite these relatively poor U.S. rankings and imply that it’s due mainly to inadequacies in our healthcare system despite the enormous amount of money we spend on healthcare.

    • Nate Ogden says:

      “You cannot cite these relatively poor U.S. rankings and imply that it’s due mainly to inadequacies in our healthcare system despite the enormous amount of money we spend on healthcare.”

      Why does this standard not apply to education? We spend more then every other or almost every other nation on education and have terrible results but are told the solution is we need to spend more.

      • steve says:

        Not so big a difference when you look at teacher pay as a percentage of GDP per capita.

        Steve

        • Nate Ogden says:

          do you have a link to those figures?

        • Nate Ogden says:

          numbers don’t add up

          “American teachers spend on average 1,080 hours teaching each year.”

          Average school year is little under 180 days and 6.7 hours for total time in school of 1206 hours. Teachers don’t teach a full day and also get vacation, I don’t see any way they can be close to 1080 hours. Looking online I see a ton of CBAs that only require 5 50 minute classes and schools trying to get 6 classes out of them. 6 50 min classes is 5 hours times 180 days is 900, and that would mean no vacation.

          “The average public primary-school teacher who has worked 15 years and has received the minimum amount of training, for example, earns $43,633, compared to the O.E.C.D. average of $39,007.”

          This number looks like salary ignoring all benefits. Throw in benefits and 70K plus is the right number

          Public school teachers in Wisconsin earned an average of $49,816 in salary plus $25,325 in benefits for a total of $75,141.

          The GDP comparison is meaningless, one has nothging to do with the other. Wheat or other commodities don’t change price based on GDP

          • steve says:

            “This number looks like salary ignoring all benefits. Throw in benefits and 70K plus is the right number”

            This is a comparison with other OECD countries. They all get benefits there which at least equal those of American teachers. Probably better since education is free in some of those countries. What this shows is that other countries pay their teachers better than we do when you adjust for the relative wealth of the countries.

            ““American teachers spend on average 1,080 hours teaching each year.”

            I assume they include prep time.

            Steve

          • Nate Ogden says:

            I can’t think of single OECD country that offers health insurance any where close to the average teacher plan. Remember our poor rankings in comparisons are from government plans driving up cost and poor and uninsured not having coverage. All the way on the other end of the spectrum are the cadilliac plans and teachers are at the top of the list.

            I believe our pensions are also better then those.

            THis site says we pay more and they work less then most….

            http://www.worldsalaries.org/teacher.shtml

            Compulsary deductions are lower then most as well

          • Nate Ogden says:

            this blog post says the way OECD gathers the data is suspect as well

            http://jaypgreene.com/2011/06/28/flawed-comparison-from-oecd/

  35. Nate Ogden says:

    I was trying to solve some questions in my head last night with little success. Are we trying to design a healthcare system sustainable in the broad meaning, measured by the life of mankind, or a system sustainable for the life of our government?

    A universal healthcare system could work if you were only trying to design a system to last as long as the government that supports it. Governments tend to have a short life span so all the flaws inherent in them die when the government collapses.

    Only a truly free market healthcare system can survive during and through the collapse of government. The collapse of government usually comes when they overextend themselves into the daily lives of the population, i.e. socialized healthcare.

    While socialized medicine has delivered more equitable care it’s never delivered better care. When the government supporting it does collapse though healthcare takes a huge hit, i.e. eastern Europe. Do we want to replace a good system with slightly inequitable care, by some standards, that can last forever with a more equitable but no better system we know has a short life expectancy? How do you justify the years of turmoil and rebuilding and what it will do to those generations for a marginally easier time today for a small margin of society?

    What’s Greek Healthcare going to be like when they collapse?

    • steve says:

      Except that there is no functional free market health care model anywhere in the world. Get some of your red states to try it out for us.

      Steve

      • Nate Ogden says:

        define functional for me and get your blue states to stop dictating failure to us and we would be happy to.

        Its been a year since your God Obama and his blue state duddies got all up in our semi free market and told us what sort of plan we had to sell, who we had to cover, how to charge for it and everything else.

        There is no functional social healthcare system in the world either

  36. tim says:

    Nate,
    When you argue with Mr. Reich, you are “angry, angry, angry”. When you agree with him, you are “informed” and “reasonable”. This is just name calling. This, from the people who decided that conservatives suffer from “epistemic closure”. In actual sophisticated circles, ad hominem arguments are a sign of intellectual breakdown.

    Both sides of the political debate have their echo chambers.

    By the way, I’m one of those MBA practice managers, and I can tell you that the laws of economics have not been repealed in medical billing, any more than they have anywhere else. To talk about the simplicity and efficiency of Medicare to cherry pick the transaction for the parts you like. They are easier to deal with, in the same sense that the menu at The Billy Goat Tavern is simpler to order from. Cheeseburger, or cheeseburger? You don’t negotiate with CMS, you don’t argue with CMS, you don’t appeal to CMS, and that their rules are uniform and simple is not meaningful. As a provider, you pay for it, and then some.

    Medicare may be good for patients — that’s a different discussion — but to argue they represent good business practice for providers simply indicates you don’t understand your own business.

    • Nate Ogden says:

      Thanks for the perspective Tim, it sounds like pratice management is like healthcare, 20% of the population responds to tight managment like Kaiser, apparently those people are more comfortable having Medicare tell them exactly how to do everything and 80% prefer some choice and control in life

  37. Peter says:

    “What’s Greek Healthcare going to be like when they collapse?”

    http://www.nytimes.com/2010/05/02/world/europe/02evasion.html

    Nate, by your definition the Greek economy should be thriving given the amount of tax they pay. Republicans should be envious of the Greek capacity to avoid taxes.

    • Nate Ogden says:

      Peter do you even desire to say something useful even once in your life or do you relish your roll as a byte waster? It wouldn’t be so annoying if you were at least good at it. But you can’t even read and build a sliver of truth into your comments to make them funny.

      If you really want to play another round of point out how stupid Peter is then fine lets play;

      “Greek economy should be thriving given the amount of tax they pay.”

      Based on what Peter, no where in the article does it say how much tax they pay. With the information you provided they could be paying higher per capita taxes then anyone else on the world and we wouldn’t know it. Just because their shadow economy is 25% that doesn’t give us the ability to calculate what they do pay in taxes, they might pay 70% on the 70% of income they do claim.

      “Republicans should be envious of the Greek capacity to avoid taxes.”

      Why? Its democrats that design a tax system so susceptible to cheating and its Democrats most likely to take advantage of it.

      From Daily Beast on a review of politician tax cheats

      Turns out Republicans have the bigger names—Jack Abramoff, Randy “Duke” Cunningham—but Democrats have the most tax scandals by a margin of 18 to 7

      From another article

      The IRS says stores accepted false W-2s and faked data to get clients the earned-income credit for the poor. The amount underpaid through returns prepared by 125 stores was estimated at $70 million.

      Who do you think claims the majority of those credits?

      From Politico

      Legislation that would force government and Hill staffers to pay back taxes or lose their jobs was pulled from House committee markup today after Democrats hit the brakes.

      Thanks for the insightful and intelligent contribution Peter, keep up the good work

  38. Nate Ogden says:

    maybe you can have your wife explain this to you Peter but more important then the amount is the rate or %. Ideally you would pay a very small percent of a very large amount in taxes. In Greece they pay a very high % of a very small amount and thus all the cheating

  39. Maggie Mahar says:

    Nate , Margalit and everyone

    Nate: We’re not simply talking about infant mortality. We are talking about
    maternal mortality as well. OECD statistics show that when you look at “whites only” the U.S. ranks 19th among 28 OECD countries for maternal mortality. How do you explain this?

    We are also talking about life expectancy for all adults. When you look at life expectancy from brith white women in the U.S. rank 23rd, when compared to women in 28 other countries, white men rank 19th. (28th represents the lowest life expectancy. 1st represents the longest life expectancy.)

    As Dr. Steven Schroeder, a professor in the Department of Medicine at the University of California, San Francisco wrote in the New England Journal of Medicine in 2007:
    “it is remarkable how complacent the public and the medical profession are in their acceptance of” our low ranking when it comes to life expectancy, “especially in light of trends in national spending on health, ” “One reason for the complacency may be the rationalization that the United States is more ethnically heterogeneous than the nations at the top of the rankings, such as Japan, Switzerland, and Iceland. But,” Schroeder pointed out, “even when comparisons are limited to white Americans, our performance is dismal (see table below) And even if the health status of white Americans matched that in the leading nations, it would still be incumbent on us to improve the health of the entire nation.” (My numbers come from the table he refers to)

    Overall, when it comes to life expectancy,only Cuba, Cyprus, Ireland and Portugal trail the U.S.
    See the chart that money-manager Barry Ritholtz posted on his financial webblog, The Big Picture– here http://bigpicture.typepad.com/comments/2008/01/odd-chart-of-th.html
    He labels the chart “the most embarassing story never told.”

    In fact, OECD numbers show that if you look at life expectancy after age 65, Americans do somewhat better, but compared to women in other OECD countires, white women in the U.S. rank only 10th (living 19.8 years past 65, while Japanese women live 23years) and white men in the U.S. rank 9th living 16.9 years past 65 while men in Iceland live 18. years/)

    We do better when you look at longevity from age 65 rather than from brith because in the U.S. wealthy people live much longer than the poor.
    A great many poor, white Americans don’t make it to 65. In the U.S. poor people die 8 years sooner than the rich, and the “longevity gap” has been widening in recent decades.
    In the countries that outrank us, the gaps between rich and poor are not as great.
    Citizens of countries that don’t tolerate as much inequality enjoy longer lives. According to numbers from the Census Bureau and the National Center for Health Statistics, a baby born in the United States in 2004 will live an average of 77.9 years. In the U.K., an ’04 baby can expect to live 78.7 years; in Germany, 79 years; in Norway, 79.7 years; in Canada, 80.3 years; in Australia, Sweden, and Switzerland, 80.6 years; and in Japan, a newborn can expect to live 81. 4 years.

    )

    • Nate Ogden says:

      “OECD statistics show that when you look at “whites only” the U.S. ranks 19th among 28 OECD countries for maternal mortality. How do you explain this?”

      Different record keeping?

      More single moms giving birth alone?

      http://www.turner-white.com/pdf/hp_jan01_fetal.pdf

      “Yet a general underreporting of deaths and lack
      of consensus about how to define maternal mortality
      hinder efforts to understand and address this topic of
      growing import.”

      “Other major institutional groups
      and investigative panels have proposed further refinements.
      Moreover, many countries interpret the classification
      schemes differently, an inconsistency that complicates
      data collection and interpretation even more.”

      According to this study White women don’t rank behind that of 18 other countries, in fact I can’t find any study that puts us anywhere close to that.

      “We are also talking about life expectancy for all adults. ”

      And you have yet to explain how auto accidents, murder, and diet are a reflection of our healthcare system, all of them have more to do directly with life expectancy then the healthcare system.

      “white women in the U.S. rank only 10th (living 19.8 years past 65, while Japanese women live 23years) ”

      Why would you compare white women to Japanese women, are you trying to be unscientific? Why not compare Japanese women to Japanese women?

      “white men in the U.S. rank 9th living 16.9 years past 65 while men in Iceland live 18. years/)

      Iceland, they eat a lot of fried food there don’t they? Smoke a ton to? You just don’t get the difference between causeation or corelation. Our healthcare system didn’t feed white southern men fried food their entire life. Nor force them to smoke or cause auto accidents. Your doing a flawed comparison. Did you even read the link on how to set up a proper analysis and what is requireD? Obviously not so let me provide it to you again.

      Measuring Health Care Systems

      Any statistic that accurately measures health-care systems across nations must satisfy three criteria. First, the statistic must assume actual interaction with the health care system. Second, it must measure a phenomenon that the health care system can actually affect. Finally, the statistic must be collected consistently across nations.

      Under the first criterion, the phenomenon being measured must be one in which the individual actually has contact with the health care system. More specifically, he must have contact with a health care professional, be it a doctor, nurse, lab technician, etc. A statistic measuring the rate of cancer survival satisfies this criterion, since diagnosis and treatment of cancer requires health care professionals. By contrast, a statistic measuring the rate of car accidents would not satisfy such a criteria since health care professionals are not essential to identifying car accidents.

      Some statistics may assume interaction with the health care system, but the phenomena they measure are not ones on which the health care system can have any meaningful impact. Take, for example, the rate of cancer incidence. While this statistic assumes interaction with the health care system (an incidence of cancer cannot be known without the diagnosis of a health care professional), there is little a health care system can do about the rate of cancer. Rather, cancer incidence is affected by factors such as genetics, diet, lifestyle, etc., over which the health care system has no control. Thus, to be an adequate measure of the effectiveness of a health care system, a statistic must measure a phenomenon that health care professionals can actually affect.

      Finally, a statistic must be collected consistently across nations. While this seems simple in theory, in practice it is quite complicated. Nations use diverse definitions of health phenomena. This leads to some nations excluding a segment of their populations from the collection of a statistic while other nations include those segments. In such circumstances, cross-national comparisons are largely meaningless. Thus, for health care systems across countries to be meaningful, there should be little to no variation in how statistics are collected.

      As shown below, both life expectancy and infant mortality are poor measures of a health care system because each fails to satisfy at least one of the above criteria.

      • Nate Ogden says:

        We’re not simply talking about infant mortality. We are talking about
        maternal mortality as well. OECD statistics show that when you look at “whites only” the U.S. ranks 19th among 28 OECD countries for maternal mortality. How do you explain this?

        http://www.medicalnewstoday.com/releases/80743.php

        A rise in the number of caesarean sections — which now account for 29% of all births — could be a factor in the increased maternal mortality rate, some experts said. According to a review of maternal deaths in New York, excessive bleeding is one of the primary causes of pregnancy-related death, and women who have undergone several previous c-sections are at particularly high risk of death.

        Some studies have found that race and quality of care also factor into the maternal mortality rate. The maternal mortality rate among black women is at least three times higher than among white women. Black women also are more susceptible to hypertension and other complications, and they tend to receive inadequate prenatal care. Three studies have shown that at least 40% of maternal deaths could have been prevented with improved quality of care.

        The rise in obesity also might be a factor, some experts said. According to researchers, overweight women tend to have diabetes or experience other complications that could affect pregnancy outcomes. Overweight women also might have excessive tissue or larger infants, which could make a vaginal birth more difficult and lead to more c-sections. More women also are giving birth in their late 30s and 40s, when risks of pregnancy complications are higher, according to the AP/Post (AP/Washington Post, 8/24).

        In addition, the report says the increase in maternal deaths “largely reflects” more states’ use of a separate item on the death certificate indicating pregnancy status of the woman. According to the report, the number of maternal deaths does not include all deaths of pregnant women, but only those deaths reported on the death certificate that were assigned to causes related to or aggravated by pregnancy or pregnancy management (NCHS report, 8/21). California, Idaho and Montana in 2003 changed death certificate questions,

        What does obesity have to do with healthcare system?

        C section is usually a personal choice

        nothing supports any of your arguments except you throwing the two numebrs together

        • steve says:

          Nice summation of Greek not paying taxes issue.

          http://www.ritholtz.com/blog/2011/05/kicking-the-can-to-the-end-of-the-road/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

          Here, you see is that their tax burden is not that high for the OECD.

          http://www.forbes.com/global/2006/0522/032a.html

          Better summation here.

          http://www.tax.com/taxcom/features.nsf/0/ce758cb00a0cf6dd85257737005ac0d4?OpenDocument

          I read Reinhart and Rogoff’s book on vacation. Greece has been in default about half of the last 150 years. This is a chronic problem for this country. It is the result of bad government, not left or right wing government. (While the US does not default, we lead the world in the frequency of banking crises.)

          Steve

          • Nate Ogden says:

            ” It is the result of bad government, not left or right wing government.”

            I would disagree, this is clearly a problem with socialism. A far right limited government that only provided national defence, legal system, and trade law could never develope such a problem. Governments fail, the more you trust the government to do the larger the failure. If you rely on government for everything you end up with a mess like this.

            The left in America is demnading we implement greece of 10-20 years ago ignoring the result, Greece 2011. When ObamaCare kicks in and our debt skyrockets we will be no different. Obama’s current spending already has us on the cusip.

          • steve says:

            You have just created a utopian right wing government, but that is not really how governments anywhere function or have functioned. Bad right wing governments become authoritarian just like bad left wing governments. They spend too much on defense or interfere too much with business. They create police states and pick winners and losers in their economies. An ideal right wing government will not default, but neither will an ideal left wing government.

            OTOH, banking crises are inimical to all governments, but trend to be more frequent amongst freer market economies.

            Steve

          • Nate Ogden says:

            how does a government that doesn’t exist equate to a right wing government? Lets use barber licensure for example, if one is not required then the government is picking winners how? Trade law would be to set rules betweent he states not to get all up in business owners neather regions for every little thing

  40. Peter says:

    “In Greece they pay a very high % of a very small amount and thus all the cheating”

    Yea, it’s onerous(that’s sarcasm), especially given the social services they get(got), especially pensions and health care.

    “The Greek public sector spends about EUR13 billion on health each year, or 5.8% of gross domestic product. If private health expenditure is also counted then the amount jumps to EUR25 billion,(10% GDP)” said Dimitris Maroulis, senior economist at Alpha Bank.

    http://www.worldwide-tax.com/greece/greece_tax.asp

    “Tax evasion, endemic among Greece’s wealthy middle classes, meant that the Government’s tax revenues were not coming in fast enough to fund its outgoings.”

    “Maybe Greece needed to wake and accept that two homes, regular holidays, private tuition for the kids, and meals out every other day must now stop.”

    U.S. rates:
    http://www.moneychimp.com/features/tax_brackets.htm

    • Nate Ogden says:

      this whole greece tax thing got me thinking, how can people claim US spends twice as much on healthcare if you can’t even measure GDP accurately?

      If people are paying doctors under the table and doctors aren’t reporting the income then all those % of GDP numbers are meaningless.

      Came across this interesting tidbit reseraching;

      “According to estimates provided by experts of the European Healthcare Fraud and Corruption Network, between three and ten percent of the healthcare budgets throughout Europe are lost because of fraud and corruption. This translates into billions of Euro in Germany”“, says Anke Martiny, member of the board of directors of Transparency International Germany, during the presentation of the updated edition of the policy paper “Transparenzmängel, Korruption und Bertrug im deutschen Gesundheitswesen. Kontrolle und Prävention als gesellschaftliche Aufgabe”.”

      Medicare is on the high side of fraud and waste, at least its not twice as bad? Actually I guess that means our criminals are slacking and should be doing better?

      “Today an employee is expected to pay 14% of their annual income to healthcare. The burden is also shared with the employer who usually covers up to half of the cost. The employee contribution is approximately 6.5% of their salary after the employer pays their share.”

      If our public employee unions we all forced to pay this much we could save billions

  41. Peter says:

    Maggie,

    The only reason you are upset with this blog is because people call you out. You come across as a know it all every time you speak. No one likes a know it all. Go back to your own blog, please.

  42. Barry Carol says:

    “OECD statistics show that when you look at “whites only” the U.S. ranks 19th among 28 OECD countries for maternal mortality. How do you explain this?”

    Maggie –

    I think the most likely answer is the greater incidence of poverty in the U.S. Just because a woman is white doesn’t mean she’s rich or middle class. As you well know, there are plenty of poor white people in America. As I understand it, the TANF segment of Medicaid pays for 40% of all births in the U.S. Presumably, a significant percentage of those are to white women.

    Even if a poor person has access to the finest prenatal care anywhere, she may continue to smoke, eat unhealthy food and not fully comply with prescription drug regimens. Personal behavior counts for a lot when it comes to pregnancy and childbirth.

    Another possible explanation might be the increasing number of women well into their 30’s and early 40’s trying to have babies as compared to other countries. Risks are far higher at those ages than for women in their 20’s.

    Poverty and inequality are separate issues from the quality of our healthcare system. Many of the Western European countries and Canada made a conscious decision to pay for a more robust social safety net and less income inequality with higher taxes, lower long term economic growth and less economic opportunity. Long term in this context means since about 1970.

  43. Dr. Mike says:

    At least here patients don’t have to bribe the doctors like they do in Japan and eastern Europe

    At least here patients don’t have to wait up to a year to get a CABG like they do in Canada where the father of one of my physician friends nearly died waiting for his.

    At least here if you have cancer on your colonoscopy you get surgery in less than a couple of weeks, unlike Australia where my mother in law just died because it took them 6 months. Oh and the bronchoscopy missed the biopsy of the 7cm pulmonary lesion and the family wasn’t told she had widely metastatic colon cancer until a few weeks ago, even though the symptoms have been present for months….

    • steve says:

      We really should not resort to anecdotal evidence. There are plenty of horror stories about US care. If you want some, I have plenty.

      Steve

  44. Barry Carol says:

    Peter and Nate –

    I don’t think Greece is a relevant comparison for anything we are discussing. According to a colleague who is married to a Greek and travels there with some regularity to visit family, the Greek economy consists mainly of a large government sector, agriculture and tourism. The remaining private sector is tiny and tax evasion is an art form. Moreover, according to my colleague, if things go wrong economically in Italy, Portugal, Spain or Ireland, they will say “we screwed up.” In Greece, by contrast, it’s never their fault.

  45. Very Informative. Looking forward to reading more.
    If you’re an U.S. expat, you should seek the advice of a professional to take a look at your tax situation. Come check out our website http://www.expatriatetaxreturns.com and we can take a look to see what you need to do. We are here for you.

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