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Friday, January 2, 2009

Healthcare Reform

There has been much debate as to whether the US should switch (completely) to government-run universal healthcare. Supporters of such a system often cite that many countries (actually all of them) with socialized medicine spend less per capita for
healthcare than the US.

Per Capita Healthcare Spending in US$ (Public + Private)

#1 United States:4,271
#2 Switzerland:3,857
#3 Norway:3,182
#4 Denmark:2,785
#5 Luxembourg:2,731
#6 Iceland:2,701
#7 Germany:2,697
#8 France:2,288
#9 Japan:2,243
#10 Netherlands:2,173
#11 Sweden:2,145
#12 Belgium:2,137
#13 Austria:2,121
#14 Canada:1,939
#15 Australia:1,714
#16 Finland:1,704
#17 Italy:1,676
#18 United Kingdom:1,675
#19 Israel:1,607
#20 Ireland:1,569

At the same time, the US lags behind many other countries in terms of infant mortality and other indicators. These facts are presented as an open-and-shut case for socialized medicine. Let's dig a little deeper to see if there isn't more to the story.

In 2000, the World Health Organization gave this list as ranking of all countries in terms of healthcare quality. The US took 37th place. However, if you check, you'll see that Canada is 30th and Germany is 25th. And there are many nations with socialized medicine such as China that have a much lower ranking. If we look at the top-ranking nations, we see that they are also among the world's wealthiest. This leads to a rather unsurprising conclusion: wealthy nations have better healthcare than poor ones. Well, derrr, they have more money to spend on it. It is true though that the US is near the bottom in healthcare quality when compared to other wealthy nations.

OK, so why is the US's ranking so low when so much money is being spent on it? Well, part of it might have to do with the high cost of medical lawsuits. With this many lawyers involved, you can be sure there are armies of math geeks doing their damndest to spin the numbers, but here is a factsheet from the docs that says basically the same thing. Well, looky here: Harvard says 40% of medical lawsuits are hot air. According to this article, the legal cost of medicine is actually quite small, and the higher costs are attributable to doctor's salaries and the price of drugs.

So, the US system could use some tweaking. Are the people who want universal healthcare be willing to pay $8.62/gal for gas? OK, only part of that tax money goes to healthcare, but to pay for it, many other commodities must be taxed. And let's not forget that the insurance industry is not going to agree quickly to shut down and give up billions of dollars in profit.

In brief, the US healthcare system is a giant clusterfuck, so take care of yourself and buy good insurance.

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