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Saturday, March 2, 2013

Why our healthcare is so expensive

      Time magazine last week had a very extensive look at why the health care costs in the United States are so high.  We have a crazy patchwork system that is created to maximize profits for health care providers from hospitals to drug companies.  As the article points out we have two economies in the United States.  One is the health care economy that consumes almost 18% of our total economy and growing.   The country with the highest percentage is the Netherlands at 12%.  The average of other developed countries is between 9 and 10 percent.  With private health care insurance paying for much of our health care bills consumers are not price sensitive as the are in the other parts of our economy.  It is not likely that we will shop around for lower cost providers when our insurance is paying.  Contrast that with how we travel extra miles to save a few pennies on a gallon of gas.
     
    As the Time report states:

       "According to one of a series of exhaustive studies done by the McKinsey & Co. consulting firm, we spend more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia. We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy. We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office. We spend two or three times that much on durable medical devices like canes and wheelchairs, in part because a heavily lobbied Congress forces Medicare to pay 25% to 75% more for this equipment than it would cost at Walmart."

    "The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington. That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington."

    The report is long and will take some time to read but you will learn a great deal of what it will take to repair our broken system.


P.S.
   With the Horizon Foundation working to reduce our use of sugar I thought it might be interesting to see visually how much sugar is in certain drinks.

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