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Solutions to
the Rising Cost of Healthcare
National Health Care
is not the Answer
SOURCE: Information gathered by the American Policy
Roundtable
Compiled by Professor Charles McGowen, M.D. and Chief
Medical Advisor to the American Policy Roundtable; August
11, 2008.
It must be obvious by now
to all reasonable observers that the Federal Government’s
control of this nation’s senior citizen healthcare through
the Medicare system, the care of the indigent by means of a
state controlled Medicaid organization and the supervision
of the remainder of healthcare recipients’ medical issues by
numerous Managed Health Organizations (MHOs) have each been
a dismal failure. They were experiments doomed to
malfunction from the outset because their prospective
success was based upon the faulty premise that cheap
healthcare would be inexpensive healthcare; cheap, in some
cases for the recipient yes, but not inexpensive for the
nation’s economy, the federal budget or the business
community. On the contrary, when one is offered any
commodity at a reduced cost, the inevitable shortages
produced by the enticing bargain price cause the ultimate
costs to spiral out of control; for the less economically
informed it’s called the law of supply and demand.
Supply and demand is
perhaps one of the most fundamental concepts of economics
and it is the backbone of a capitalistic, free market,
consumer driven economy. Demand refers to how much of a
product or service is desired by the buyers at any given
time. In this case (I.e. the context of these essays) the
product is medical care. The quantity demanded is that
amount of a particular sort of medical care that people are
willing to buy at an affordable price; the relationship
between the fee for service and the quantity of medical
service demanded is known as the demand relationship;
unfortunately quality of care, as we have come to discover,
does not necessarily enter into the equation. Supply
represents how much the market can offer; in this case how
many physicians are available and how many patients each one
of those doctors can effectively see per day. The quantity
supplied refers to the amount of medical care that certain
physicians are willing to supply when receiving a certain
amount of remuneration for their service. The direct
correlation between the price (physician’s fee) and the
amount of a good or service (medical care) that is supplied
to the market is known as the supply relationship. Price,
therefore, is a reflection of supply (in this case the
number of physicians available) and demand (the number of
patients seeking care in their community). The price is
inversely proportional to the supply and directly
proportional to the demand.
Barack Obama and his
fellow, ideologically liberal cohorts currently employed by
the government are admitting the conspicuous failure of the
current systems that control (I.e. manage) our healthcare
simply by their patently obvious desire to change the way
healthcare is delivered and to create a national (I.e.
socialistic) healthcare system. They want to turn 16% of our
gross domestic product (GDP), the current dollars spent on
providing healthcare to our citizens, over to the same kind
of people who demonstrably missed the boat when they
originally declared in 1965 that the 1990 bill for Medicare
would be a “mere” 9 billion dollars, when in fact it turned
out to be an exorbitant 66 billion of the hard earned
dollars which the average, hard working citizen pays in
taxes. Our average GDP for the year 2007 was approximately
14 trillion dollars. 16% of that is two and one quarter
trillion dollars.
The late George Santayana
(1863-1952) wisely said, “He who fails to learn from past
history is doomed to repeat it.” The past history of every
country that has previously nationalized its health care
system has shown it to be a predictable, pathetic and
expensive failure. Consider our neighbor to the north;
Canada. Why do those who can afford to pay for health care
out of their own wallets flock to bordering American cities
like Buffalo and Detroit when they incur a serious illness?
The answer is certainly not because it is less expensive.
Canadian healthcare is “free.” That is, they have already
paid for it with confiscatory taxation. For example, a
citizen of British Columbia earning $97,600 pays 14.7% of
his or her wages in provincial tax and 26% in federal income
taxation. Add to that 40.7% income tax the further sales
taxes they pay on necessary commodities; they forfeit two
types of sales tax on every purchase: The PST (or provincial
sales tax) which in British Columbia is 7% and the GST (a
federal tax on goods and services) currently at 5%. The
Canadians obviously pay dearly for their “free” healthcare
and so will we if Senator Obama has his way.
The answer to the question
regarding the reason for their exodus southward, when a
medical problem arises, has nothing to do with what they
don’t have to pay; it has everything to do with
accessibility; and especially a timely accessibility of
health care. For example, in a 1990 study of the comparative
availability of MRI units in the United States compared to
their relative convenience in Germany and Canada revealed
the following statistics: US had 2,900 units or 11.2 per
million population; Germany 3.7 units per million
inhabitants; Canada 1.1 units per million of its citizens.
It is little wonder that the waiting period for obtaining an
MRI exam is far too excessive in Canada. Compare these other
2005 statistics chronicling the two country’s respective
managements of our nation’s number one killer; coronary
artery disease (CAD). The number of patients with CAD
undergoing investigative, diagnostic angiography was 34.9%
U.S. vs. 6.7% in Canada. Those CAD patients being treated
with the less invasive percutaneous transluminal coronary
angioplasty was 11.7% U.S. vs. 1.5% in Canada. The numbers
of CAD patients going on to have coronary-artery bypass
surgery was 10.6% U.S. vs. 1.4% Canada. Those statistics are
not a reflection of the incidence of CAD in the two nations
but instead would suggest that the procedures are being
rationed in Canada, where the patient has no out of pocket
expense. The qualifications for having those procedures
(I.e. the screening by age, symptoms, etc.) have weeded out
more people. Canadians certainly are at no less risk for
developing CAD than are Americans.
Consider this conclusion
from a 2004 study, reported in the popular medical journal
Circulation on September 28, 2004, comparing the relative
mortality from myocardial infarction (I.e. heart attacks) in
the two countries. The article was published by a
collaboration of investigators from the University of
Alberta, Duke University, Toronto University and the
Cleveland Clinic. The conclusions read as follows: “Our
results suggest, for the first time, that the more
conservative pattern of care with regard to early
revascularization in Canada for ST-segment elevation acute
myocardial infarction may have a detrimental effect on
long-term survival. Our results have important policy
implications for cardiac care in countries and healthcare
systems wherein use of invasive procedures is similarly
conservative.” The word conservative may be interpreted as
being synonymous with rationing in a socialistic system such
as that planned by Senator Barack H. Obama.
The law of supply and
demand states that, other factors being equal, the lower the
price of a good, the more people will demand that good (in
this case medical care). In other words, the lower the price
(in national health care it is zero), the higher the
quantity demanded. The amount of a good that buyers purchase
(I.e. healthcare) at a lower price (or at no immediate cost
to the patient in a national health care system) is more
because as the price of a good goes down, the opportunity of
buying that good increases. As a result, people will
naturally overuse a product that is free and which will not
force them to forgo the consumption of something else they
value more; like food, recreation, clothes or entertainment.
When the demand for medical care exceeds the medical
community’s ability to provide it (I.e. the supply),
shortages and rationing will inevitably occur; it‘s not
rocket science. That has occurred in all socialistic
economies that have provided the type of delivery system
proposed by first term senator Barack Obama. When fewer
young Americans apply for medical school because of the
institution of socialized medicine, shortages will
inescapably occur, and with those predictable shortages
rationing of health care is sure to follow.
Rationing can be
implemented in numerous ways; by reducing the number of
facilities performing a service (I.e. MRI units or heart
labs, as in Canada), by placing an age limit on those who
qualify (I.e. no renal dialysis or coronary artery bypass if
you are over age 60), or by increasing the stipulations that
qualify a person for a given treatment or diagnostic
procedure, such as age, number of dependants relying on your
employability or co-morbid diseases that might impact the
success of the treatment being requested. That is the
alleged “cure” that Sen. Obama is offering to reverse the
sick, but not yet terminally ill, state of our medical
system. If he has his way, the prognosis is not good.
Next week I will explain
why HMOs are costing so much and explicitly elucidate their
specific role in the soaring cost of medical care to both
American based industry and the citizens of the United
States. Thus we will examine another pathological process
affecting the ill health of the medical care delivery system
in the US. Remember, a correct diagnosis must always precede
any reasonable hope for a cure. Trust me when I say that a
cure is available and the patient (US Medicine as we have
known it in the past) need not die.
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