Healthy Debate

Posted on LiveJournal 15th October 2008

A few days ago I suggested that it was time for the Americans to think the unthinkable regarding CEO pay rates. Listening to today's final presidential debate, I decided to post something similarly unthinkable about health care.

46 million Americans have no health care coverage, meaning 46 million people in America literally cannot afford to get sick. This is a terrible situation, and everyone is agreed that Something Must Be Done. McCain's proposal is to give everyone a $5,000 tax credit, and Obama's proposal is to offer tax credits to employers instead, and, bizarrely, to fine those employers who do not provide cover. Both of these plans are running rings around the same thing - that healthcare can best be provided by several competing health insurance companies. Well, we saw how well that worked out with the banks, and now we're all down $700 billion.

Nationalise all US health care insurance!

I've made my explanation as simple and clear as I can, but even then it's a bit tl; dr. Apologies to all:

Health insurance companies are running at a profit (say X%)*, not to mention the massive advertising budgets (say $Y million)** and other costs incurred through being in competition. Let the government run the whole thing, abolish the private companies, for an immediate effective saving on everyone's premiums of X% + $(Y/254***), and that's not taking account of the fact that you could run it at loss as a public service.

How is this not a good idea?

*Total US health care cost is $1.6 trillion, so even if they're running at a profit margin of 8% (and that would be a conservative estimate), that still $128 BILLION dollars wiped off the health care insurance bills at a cost to the government of zero dollars.

**Let's have a guess at how much is being spent here unnecessarily. The numbers for New York are all I could find at short notice, but we can extrapolate some very rough national figures therefrom (if anyone can find national figures, please link me to them) The total New York city health care advertising spend is ($4.7 million for the region's health plans plus $6.9 million for the region's hospitals) $11 million. If we accept that New York's 8 million population is 2.66% of the national population, then $11 million will give us a national health care advertising spend of $412 million dollars, and that's not including major national campaigns by people like Kaiser Permanente.

***300 million, the population of the US, minus 46 million, the number of uninsured (the millions cancel out above and below the line).

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