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Health policy IS fiscal policy.

Posted May 20 2011 8:00pm

  • When 21%% of our entire annual budget goes to healthcare,

And the biggest recipient of those dollars is the Federal government;

  • When 1/3rd of all the dollars we spend are dollars we do not have,

And most of those borrowed dollars go to bureaucrats;

  • When more than two trillion dollars went last year to healthcare,

Almost half of which did not go to health care;

  • When they say that health care is a right,

And then they cut the services we need;

  • When they encourage unhealthy behaviors,

And then complain about the costs of obesity,

Health policy IS fiscal policy.

Because the former is sick, the latter could be terminal.

According to the Center on Budget and Policy Priorities, the big three Federal health insurance programs – Medicare, Medicaid and CHIP – consumed more money in 2010 ($732 billion) than either Social Security ($707b) or Defense and Security ($705b).

The U.S. spends more per capita on healthcare than any other nation on earth.

Spending on Healthcare, by Country (2007)
Spending: U.S. Canada Germany U.K. Italy Japan
Per capita $7,290 $3,895 $3,588 $2,992 $2,688 $2,581
% GDP 15.9% 10.1% 10.4% 8.4% 8.7% 8.1%
U.S.=United States. U.K.=United Kingdom.
Source: Office of Economic Cooperation and Development.

In 2010, the U.S. spent a total of $3.5 trillion: $2.2 trillion came from Federal tax revenues and $1.3 (37%) trillion was borrowed. Twenty-one billion dollars went to debt service, which is more than twice what the Federal government spends on education. If we keep spending more than we have, then having to borrow to cover the shortfall, debt service will eventually squeeze out all other expenditures. One need only look at Europe right now – viz., Greece, Spain, and Ireland – to see where that policy leads.

The PPAHCA (Patient Protection and Affordable Heath Care Act) will cost an estimated $2.7 trillion. This will require borrowing on top of borrowing. Healthcare policy as fiscal policy – viz., spending money we do not have to feed a healthcare bureaucracy we cannot afford – is accelerating our rush toward Chapter 11 or even 7!

The distinction between healthcare and health care is critical, literally and figuratively. Health care as two words refers to services and products intended to maintain or restore individual health. Healthcare as one word refers to a system that is supposed to facilitate health care and promote the health of our populace. Of the more than $2 trillion we paid into healthcare in 2009, 40% did not produce health care in any form.

Almost one trillion of the dollars that went into healthcare were consumed by the ‘middle.’ In contrast to the popular belief that this ‘middle man money’ goes to insurance company profits, the vast bulk of middle money goes to the Federal bureaucracy. Just take one look at the Federal organizational charts of agencies that regulate healthcare and you will agree. To add insult to injury, PPAHCA adds six entirely new agencies to the already bloated bureaucracy.

Our politicians repeatedly cry that healthcare costs are too high, and then they pay their minions – the bureaucracy – the largest share. Politicians also say that health care (note it is now two words) is a right. Then they “save money” by cutting Medicare reimbursements by 21%.

In Massachusetts, less than half of all internists can afford to accept patients who are supported by Commonwealth Care – the Bay State’s universal health care financing system. Medical payments in Massachusetts, just like Medicare reimbursements, are below doctors’ cost-of-doing-business. Saving money by reducing reimbursements to providers effectively reduces services.  How does this produce “Affordable Health Care” (as in PPAHCA)? How does this protect a patient’s ‘right’ to health care?

Recently testifying before the Senate Armed Services Committee, Defense Secretary Robert Gates asked for $118 billion to prosecute the wars in Iraq and Afghanistan. When asked where the money would go, he replied that almost half – $53 billion – would pay the healthcare costs for 10 million active duty personnel, retirees, reservists and their families. When instructed to pare down his request, Gates asked: Should I reduce benefits to the military dependents or cut fighter jets and other weapons from the Defense budget?

Our Representatives in Congress ‘represent’ their supporting lobbies more than they represent us. How else can you explain Federal subsidies to tobacco farmers and to Big Food, who spend massive amounts of advertising money to addict us to unhealthy foods and behaviors?

People in Congress who supposedly have our health and welfare at heart actually make us sick. They spend our money to make us obese and to promote lung disease. It follows that we need more health care services and have to put even more money into healthcare (money we don’t have), almost half of which goes to…them, not providers.

Their ‘health’ policy makes us ill not only medically but also financially: 21% of the whole budget goes to healthcare; half of the cost of foreign wars goes to healthcare; medical bills are the #1 reason for personal bankruptcy; costs of medical care for preventable disease accounts for one third of all healthcare spending; business leaders have said that the greatest impediment to national competitiveness is the U.S. healthcare system, which is of course not a system for health.

The U.S. is currently sick, both medically and financially. We cannot cure the fiscal illness until we begin to treat the healthcare cancer, starting with its morbidly obese bureaucracy and our unhealthy ‘health policy.’

For more on this, read “Uproot U.S. Healthcare.”
System MD

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