Wednesday, March 31, 2010

why the US healthcare budget is now almost 20% of GDP and rising much faster than inflation

mar 31st, 2010

pharma and doctor greed, overprescription.
http://nyti.ms

they are turning people into pill-poppers. 

true reform would reward doctors for *results*, not *procedures*. the current incentive -- and the same is true for obamacare -- is to run more tests, give more medication, so that they get more money for each procedure, regardless of whether the patient gets better. for instance, a doctor who tells a potential diabetic to improve diet and exercise regimen gets no payment; but if the patient gets diabetes and has to have his leg amputated, he'll get money. 

so what do you think the doctor does? no prizes for guessing it's not advice on diet and exercise.

actually there's one more culprit, the agri industry, pushing high-fructose corn syrup down everybody's throats because of corn overproduction which they get paid to do because of government subsidies.

i think the US healthcare system is not going to improve. it's doomed, unless it's radically reoriented towards health outcomes. the US spends far more on healthcare and gets much worse results than many other nations.

tangentially pepsi is trying to now sell 'healthy' junk food. http://www.economist.com/business-finance/displaystory.cfm?story_id=15772138

To that end, on March 22nd she unveiled a series of targets to improve the healthiness of Pepsi's wares. By 2015 the firm aims to reduce the salt in some of its biggest brands by 25%; by 2020, it hopes to reduce the amount of added sugar in its drinks by 25% and the amount of saturated fat in certain snacks by 15%. Pepsi also recently announced that it would be removing all its sugary drinks from schools around the world by 2012.

Although Ms Nooyi talks about the need to "cherish" employees, and once wrote to the parents of her senior managers thanking them for bringing up such wonderful offspring, she rejects the notion that these goals are soft-headed or decorative. She argues that they are necessary to prevent food companies from going the way of tobacco firms, which are perennially held responsible by governments for the health problems associated with their products, and penalised accordingly. As it is, several countries in Europe and various localities in America have banned trans fats, a particularly unhealthy ingredient in much junk food.

indians should stop drinking colas and eating mcaloocheeseburgers or whatever other monstrosities these guys sell.

6 comments:

Pagan said...

Well it goes all the way to farm subsidies. But if we are to focus on healthcare reform, two measures are urgently needed - 1. caps on medical litigation claims 2. increasing the number of seats in med-schools (discouraging malpractice claims will induce more youngsters to take up medicine, which is a super lucrative profession in the US).

I wonder why Democrats are against medical malpractice reform - trial lawyers dictating terms?

Arvind said...

agree with inferno. add permitting purchase of insurance across state lines and creating undergraduate medical degrees to the list. artificial laws drive up prices by squelching the market.

having said that, let us be clear that the american system with all its faults is vastly superior to the european, canadian and indian systems both in terms of access and quality. remember that vp singh, mgr, etc., flew to the us for treatment. now the systems in canada and uk are so bad and their waiting lists are so long that people in those countries are flying to asian countries for treatment!

a few weeks ago, the premiere of newfoundland went to florida for heart surgery. this guy is a staunch supporter of socializing healthcare.

i don't agree with those who use the 16% number for two reasons - first when government is involved, the prices are arbitrary and this number includes healthcare in public schools, veteran's hospitals and arbitrary prices in the private sector achieved with the help of excessive government regulations. secondly, if it were, say, just 5% of the GDP, the complaint will be that other countries invest more in healthcare while usa neglects the sector!

and finally, every country depends on usa for innovations in healthcare and uses american manufactured equipment.

nizhal yoddha said...

i think the US healthcare system is not to be emulated. it costs too much and its results are poor. its main achievement is in keeping old people alive in a semi-vegetative state for a long time, with poor quality of life. at stupendous cost.

funny thing is, even with all its faults, the life expectancy in kerala esp for women is almost on par with the US, at a healthcare cost that is 1/50th of what americans pay. kerala women live to be 78 yrs old on average, white women in the US live to be 79 yrs old, if i remember the numbers right.

the US healthcare system is a cartel created by the doctors, the pharma companies and the insurance companies.

it is a gigantic transfer of wealth from the public to these people's pockets.

Pagan said...

Glad you brought up India -- T R Reid's book The Healing of America is like a commercial for Ayurvedic healing. The author goes all over the world but is finally healed in India. The Indian tradition of not commercializing healthcare should be preserved. Charitable institutions like Narayana Netralaya and Shankara Netralaya help reduce the burden on govt. The Church doesn't do any such work in the US, maybe due to mal-practice litigation. The existence of alternative systems of medicine in India also helps.

From Amazon review:
Reid checked himself into the famous Arya Vaidya Chikitsalayam, an institution that he describes as the Mayo Clinic of traditional Indian medicine. After weeks of this treatment, Reid lost nine pounds and became a very mellow man. He also discovered that the pain in his shoulder was gone and that he had much greater mobility in his arm. The cost of this therapy came to $42.85 per day -- far less than that of the invasive total-shoulder anthroplastic surgery recommended by Reid's American doctor, who couldn't say what replacing his shoulder might cost after the various insurance adjusters were done.

sansk said...

US healthcare system is designed to be inefficient by:

1. Restricting the supply of doctors that can be trained within US.
2. Ambulence chasing lawyers who are funamentally parasites on the system by creating a culture of lawsuites.
3. Insurance companies which have in turn used purchased congressmen to save their fiefdom.
4. Pharmaceutical lobby which instead of investing in research in life saving technology, prefers to invest in Viagra etc.
Despite this, they manage to do some good work.
5. Doctors who are (as in India) bribed by pharma lobby for the desired prescription, and who would prescribe any amount of needed drug to any MJ or Elvis.

A simple look at this confirms it is anything but free market. It is
worst form of cartel that feeds on misery of patients.

Arvind said...

agree the us healthcare system is not to be emulated and that it is not a free market. that is the problem with the us system. look above for the improvements i suggested.

my point is this - the american system is certainly rigged and needs to be improved but every other country's system is worse than the american system. these are times when socialists use every excuse they can to nationalize healthcare. everyone knows how the nehruvian system was horrible and how india improved dramatically with the introduction of a free-market system.

as for kerala's life span, i wouldn't credit it to the hospitals. not everyone knows the reasons for long average life span among some races, but the most likely answer to that is that the major component is genetic.

again, i want to point out that canadians and brits are flocking in droves to india of all the places. so they pay double - first they pay taxes and then they are forced to pay the brokers/doctors in india to actually treat them. i am not surprised. this is what india used to have before the market system came in force.