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The feeding trough of health care

Health care now 16%, heading to one quarter of GDP

Who knows, who cares what the bill is?

OK, what have we got? In HIV∫AIDS, maybe a few billion dollars a year, max, a few hundred thousand unknown lives blighted or ended early, a million people in far away lands misled into taking obnoxious drugs to no purpose. Tops. What’s the big deal?

In the grand scheme of things, and more particularly, in the context of health care spending in the US, this is a mere drop in the trough, as it were, nothing serious compared with the grand total spent on health care, which is heading from almost a sixth now toward one quarter of GDP by 2030.

According to Making Health Care the Engine That Drives the Economy by Gina Kolata today (Mon Aug 22) in the Times health care is the biggest gravy train in the economy, something that Americans are willing and able to pay almost anything for. And one of its chief characteristics is that no one knows what the bill is most of the time.

We have a friend who put his aged aunt in the hospital recently and took a serious interest in the billing process when he found out that she wasn’t eligible for Medicaid for nursing care after 100 days unless she was reduced to penury first. He examined her surgery bill (it came with a hospital six day stay bill of $45,000, luckily paid by Medicare) and found a surgeon’s cavalier personal charge of $9000 for a three hour hip operation had been reduced by Medicare to $1380. Meanwhile the nursing home is now charging her $408 a day because Medicare stops after 100 days, which works out at $12,320 a month. She will have to sell everything she owns before Medicaid will come back in.

No wonder people used to go bankrupt mainly because of a sudden illness. Now they can’t even go bust. They have to pay forever if they have any income at all, since the bankruptcy law changed early this year. Their income, life savings and property are all attached. Meanwhile, the new law last year bans Medicare from forcing down the price of drugs.

Where does AIDS science figure in all this? Not very large. It is the system equivalent of stealing tips. No wonder Washington doesn’t take much interest in whether it is all kosher or not.

Besides, America helping out with much needed lifesaving drugs is good international pr which is cheap at the price.

What’s happened is that the scientists discovered what doctors have always known – sell a patient a bill of goods about what is wrong with him/her and you can milk them for a lifetime.

AIDS has thus grown into one of the bigger pigs feeding at this enormous health care trough. The dissidents can pull at its tail as hard as they like, they ain’t gonna budge it one inch.

What they need is a two by four.

But why bother? The nation can afford it, as the economists in the article say.

Making Health Care the Engine That Drives the Economy:


The New York Times

August 22, 2006


Making Health Care the Engine That Drives the Economy


Angus Deaton, an economist at Princeton, had a hip replacement last year. And while he was happy with the outcome, he wondered how much it had cost.

He got a few answers. His hospital room was $10,000 a day. “Telephone and television were extra,” he said.

As for the total cost, there were so many charges associated with one service after another — anesthesia, pain management, physical therapy, the surgery itself — that he was never able to figure out how much each of them cost. “Maybe if I devoted my life to this for six months I could find out,” Dr. Deaton said. “The price that is paid is the price an insurer negotiates, and that is kept in a vault somewhere.”

All he knows for sure is that insurers say they pay, on average, $50,000 for a hip replacement.

Dr. Deaton’s story is the sort that makes people cringe. The United States already spends nearly 16 percent of its gross domestic product on health care, and it is almost impossible to know where all that money goes. Projections are that health care will take up even more of the G.D.P. as the population ages and as more expensive drugs and medical devices are developed.

But a new economic approach to health care expenditures views costs in a very different light. Economists agree that huge increases are coming. But some say that may be just fine.

By 2030, predicts Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, about 25 percent of the G.D.P. will be spent on health care, making it “the driving force in the economy,” just as railroads drove the economy at the start of the 20th century.

Unless the current system is changed, most health care costs will continue to be paid by insurance, especially Medicare, which means that the taxpayers will foot the bill. But Dr. Fogel says he is not alarmed. Americans can afford it, he says, because the nation is so rich.

“It takes so little of household income to satisfy expenditures on food, clothing and shelter,” he explains. “At the end of the 19th century, food, clothing and shelter accounted for 80 percent of the family budget. Today it’s about a third.”

Other economists agree.

“We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.

In a paper published in The Quarterly Journal of Economics, Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: “As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. “Take a typical person aged 45,” he said. “They will spend $30,000 more over their lifetime caring for cardiovascular disease than they would have spent in 1950. And they will live maybe three more years because of it.”

He added, “Are you willing to do that? Yes, it costs a lot, but we’re rich enough where the alternative use of the money isn’t as valuable.” Still, Victor R. Fuchs, also an economist at Stanford, notes that buying health care is fundamentally different from buying a television or a car.

“Most of it involves transfers from the young to the old,” he said. “Down the road, most medical care will be for people over age 65, and most of the payments will be from taxes on younger people.”

Dr. Fuchs calls it the restaurant check problem.

“You go out to a restaurant with a bunch of friends and you sort of understand that you will split the check,” he said. “The waiter comes along and says, ‘The lobster looks very good, and how about a soufflé for dessert?’ The restaurant check balloons, but you are not so careful because you figure everyone is splitting it.

“That’s the way medical care gets paid for,” he said.

Dr. Fuchs added, “We want to spend our money on the things that will bring the most value for the dollar. When we are spending collective money as we are in health care, then it becomes much more difficult.”

The issue, he says, is not how much is being spent but whether spending more is the answer. Are those extra dollars buying marked improvements in health or are they making any difference?

That, Dr. Deaton said, was the point of his exercise in trying to find out the cost of his hip replacement: “Is it worth spending all this money on a hip replacement?”

In London, he said, a hip replacement costs £5,000, or about $9,500.

“Don’t you think people would prefer to have it for £5,000?” Dr. Deaton said. “It is probably true that if we spent twice as much money on health care we’d be better off. But half the money we spend is wasted.”

That, Dr. Hall pointed out, is an important issue. “We all know that especially in Medicare, where more and more of the spending is going to occur, there isn’t anybody who has responsibility for making sure the money gets spent well,” he said. “Some huge improvements will have to be made as the consequences of that waste get greater.”

Still, the wasted money is, in a sense, a separate discussion, he said.

The real questions for the future of medical spending, he said, are: “Does it make sense in terms of how we value different things? What do people think a life is worth? And what do you get?”

4 Responses to “The feeding trough of health care”

  1. noreen martin Says:

    TS, we would need a sledge hammer to even make a dent in this Aids fisco. You are correct that medicine drives the economy. Take Aids for instance, it keeps doctors, pharmacists, drug employees, lab technicians, nurses, receptionists, clerks, administrative personnel and more employed. Especially, since the patient is required to pay the price every 3 months of his or her life, talk about repeat business. All this reminds me of the Vietnam War Era when most bitched about the war but hell, the money kept rolling in.

  2. Truthseeker Says:

    Thank you for your comment, Noreen. As one of the rare individuals who actually looked behind the stage to see who or what might be pulling the strings of your doctors and nurses, and decided to take the alternative view seriously, you deserve credit for independence of mind. We hope you have been following the coverage here closely enough to see now that there is no possibility that the paradigm is correct as it stands, and every reason to suppose that there was never anything in it. Nothing in it, that is, except the rapidly overwhelming advantage that it is very profitable compared to the common sense alternative explanation and medication (drugs Just say No and food Just say Yes, to put it in terms a child can understand, even if certain posters here cannot.)

    We hope that since you are in the line of fire you do not retain even a shred of credulity for the standard line, but we worry that given the overwhelming clamor of the clinking medals of science on the breasts of the generals running the scheme, and the roar of their cheerleaders in the press around the world, that you somehow cannot believe there is not something in it.

    If there is any point that you think still needs to be elucidated, let us know.

  3. Dan Says:

    yes, let’s talk about how many people are kept employed because of “AIDS”.

    I started a thread on AME a month or two ago about the lop-sidedness of “AIDS”. In Minnesota there were a mere 307 new “HIV” diagnoses in 2005. With just a casual count of the different “AIDS” organizations offering counseling, testing, advice and advocacy, I found 30 of them (most of them in the Twin Cities). That means there was at least one organization for every 9 people newly-diagnosed “HIV positive” in Minnesota . This of course doesn’t take into account how many people work at these various organizations.

  4. noreen martin Says:

    Realizing that it is possible to wipe out one’s antibodies with these drugs, may make others realize that the hoopla the Aids doctors spout when one is so-called undetectable, is nothing. This one issue was the only point that I was confused about when I was on the anti-virals. They use this ploy to make one think that the medicines are working and therefore one must remain on them. Dr. Kary Mullis confirmed that yes, the antidodies can be wiped out.

    When one goes off the meds, the antibodies will shoot right back up to normal. Of course, the Aids doctors find this disastous and one is told that one should go back on the meds. This recently happened to me. My so-called CD4’s are 191, I have no clinical symptoms and feel great! Nevertheless, they don’t seem to care or even question why I am doing so well. They are very well trained soldiers who must follow the orders of others, or better stated, their med license means more to them than the truth or the health of the patient. So much for their Hippocratic Oath.

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