Vail Daily column: Impoverishing power of the health care boom
Editor’s note: Find a cited version of this column at http://www.vaildaily.com.
UNICEF figures it would cost $30 billion per year to provide a primary education to all of the children of the world who are not receiving one now. It is a big number, but not crazy for a global problem.
That is roughly what Colorado’s state government is budgeted to burn through — total — in fiscal year 2017-18. If you do the math, then that’s about $12,000 per Colorado household.
It is also the savings if Coloradans paid market rates for health care. Americans pay twice as much as other rich countries for roughly the same quality of care, whether delivered by wholly socialized or significantly privatized systems.
Singapore pays only 25 percent of U.S. prices, even though it is a much richer country, per capita.
Nonetheless, it looks like Colorado’s ski counties are in the top three areas for highest health care costs in the United States. That means we are world champs. Or chumps.
Health care is sucking $24,000 out of the average U.S. family’s income each year, according to 2014 numbers from the U.S. Department of Health and Human Services. Matching the efficiency of other rich countries means saving $12,000 per household each and every year. Maybe more.
That is life-changing money for most Americans.
There are two primary theories for out-of-control costs. Forgive me for abbreviating them, though I hope not unfairly. Each theory is sponsored by one of the two major political tribes. Remember that both parties have highly trained public relations specialists.
The first theory is that high health care costs are the private sector’s fault. Businesses are driven by profits. Government could run health care much more efficiently.
The opposing theory is more piecemeal. High costs are due to high malpractice judgments and a fragmented insurance market and maybe insufficient patient control of health care costs. Government bumbling makes it worse, goes this line of reasoning.
Neither theory fits well. The greedy business theory has three holes in its hull. First, 80 percent of hospitals are nonprofits, and about 50 percent of commercial market health insurers are nonprofits. One would think nonprofit hospitals coupled with nonprofit insurers could somehow manage to not make a profit. They don’t.
Second, the world is enormously richer than, say, 1776, precisely because it has usually harnessed the profit motive successfully. Vigorous competition among openly self-interested parties has provided low cost, high quality and spectacular choice in tires, tofu, tummy tucks and most other free-market goods and services.
Lastly, government pays for roughly 50 percent of health care. Even with such massive commercial clout, government has proven unable or unwilling to control costs.
Nor is the opposing theory very convincing. Malpractice judgments and single-state health insurance markets are important weaknesses, but they seem insufficient to bulk up health care costs to such crushing girths.
One tribe wants to expand the socialization of health care to build upon the great successes of public education, public retirement systems and welfare. The other wants to reduce the socialization of health care to avoid the great failures of public education, public retirement systems and welfare.
Curiously, neither Democrat nor Republican health reform efforts seriously try to control costs.
It is less of a head scratcher once opensecrets.org tells us that health care is the largest source of lobbying money in our weakening democracy. Last year, health care spent four times as much on lobbying as the oil and gas industry and seven times that of defense.
Politicians and health care leaders seem to have formed an alliance against the public.
Ladies and gentlemen, brothers and sisters, comrades and cowgirls: Health care providers have overpowered individuals, insurance companies, employers and even government.
How can we know? Health care costs have increased 70 percent after subtracting inflation since the turn of the century. That is money snatched away from individuals, employers and governments.
As water flows downhill, virtually all organizations expand their turf, their income and their boss’ salary until they meet resistance of equal or greater force. Health care has not yet met that resistance.
An additional theory: The deeper failure may be that organizations have seized control of health spending from individual citizens.
Politicians, bureaucrats and health care people are wonderful individuals whom most of us would be proud to have as friends and neighbors. It is not the fine individuals working in The System, as much as The System taking advantage of those who feed it.
There is a gusher of money in Colorado health care savings, bigger even than Abqaiq, that mother of Arabian oil fields. Twelve grand per household per year is plenty of money to pay off the national debt, beef up everyone’s retirement and buy an education for those desperately poor kids born into dismally run countries.
As citizens, it looks we will have to solve this ourselves. If “by the people, for the people” is more than verbal vapor, we, the people have the right to the power to fix this.
Vince Emmer is a financial analyst in Gypsum. He runs Citizens Due Diligence in his off hours. Contact him at email@example.com.
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