Healthcare for Profit

Approximately 85% of our health care costs in this country are for physician and hospital care. This is by far the largest bulk of our expenditures on healthcare. In the US we spend an average of $7960 per person per year on Health care. The world average is $2342 so we spend 339% of the international average on health care. Yet… we rank 37th on the World Health Care Organization’s ranking of national health care systems; right between Slovenia and Costa Rica who spend $2084 and $1059 respectively according to WHO for 2009.

The United States remains the only industrialized nation without a public health care system. Let’s look at why our costs are so high….

Doctors compensation
US General Practitioner- $161,000 Rest of the World- $78000
US Specialist Doctor- $230,000 Rest of the World- $107,000
While both of these are over 200% higher than the rest of the world this is not the whole story either…

Let’s start with our insurance system. Most Americans get their health insurance through a carrier that works with their employers. This was basically set up originally because the government helped subsidize it by offering tax breaks for employers who provided health insurance. The insurance companies liked it because it tied the insurance to people who were working and therefore less likely to have serious health issues that would cost a lot of money to treat. This has led to a system wherein the vast majority of Americans who have health insurance purchase it through their employer. Health insurance is just like car insurance in that it takes a lot of people who don’t file accident claims to pay for those who do. In effect, younger healthier employees who don’t file claims help balance out the system for the older employees who have more health problems.

Therefore, there is a large pool of employees paying into plans that do not file a lot of medical claims and therefore make this a profitable business for private health care insurance companies. However, as soon as these people retire or reach the age where they start to have more health problems they are no longer on the roles of the private health care carriers and become the problem of the government Medicare system. This is exactly why our system does not work and public health care systems do. A private health care carrier gets the benefit of receiving premiums for the part of our life where we don’t really need a lot of health care and then turns us over to the Medicare system when we do. By this time, the profit from a large pool of healthy people is in the pockets of a private health care insurer and the government is stuck with paying for all of our health care when we need it most.

In 2008 Wellpoint (one of the ten largest health care carriers in the country) reported total revenue of $61,579,200,000. From this total they reported a 4.07% profit. This comes out to $250,627,334 for one company. If we assume there are ten other companies with this same level of profit we are talking about 250 billion dollars in profit for health care companies that would go a long way towards solving our deficit problem because we could eliminate this by going to a public health care system. We must remember that privatize actually means profitize.
While some may claim that private companies are more efficient actual numbers in health care show this is not true. The average administration cost for private health care carriers is around 13% while the average administrative cost of Medicare is less than 2%. It is much simpler to administrate a system where everything is covered as there is no time spent trying to decide what is covered and what is not. Canada’s public health care system has similar administrative costs as do those in Great Britain and France.

How hospitals work…

Most public hospitals (including my local hospital) are now 501C non- profit corporations. They also get special dispensation from the Federal Government for providing community services such as free health care for indigents and uninsured. These dispensations mean they pay no income tax, no property tax, and no sales tax. They are also eligible for special loan rates and bond issue rates as a part of these dispensations.

Let’s look at what they actually do. Most hospitals average around 5-7% rate of people who either cannot pay for treatment or do not pay although many of the larger systems actually have knocked this rate down to around 2% and still maintained their tax exempt status. If you added up the taxes they are exempt from you would easily come up to the 45-50% range that they would be paying if they were not tax exempt so a 5% loss is very acceptable as they are in effect producing a 45% savings for their board of directors by providing free health care.
Hospitals have what are called “master charge” or “billable” rates that are used to calculate these numbers. Unfortunately, these “master charge” rates have little to do with actual costs. For example, if you go to the hospital without insurance and have a colonoscopy you will be charged from $6000 - $8000 dollars for this procedure. Blue Cross often settles these claims for less than $1000 (this just happened to my daughter). Plainly, the hospital cannot accept less than $1000 if the actual cost of the procedure is $8000 and stay in business so there is something very wrong with the math.

The only people who ever pay these “master charge” rates or those who do not have insurance or are indigent. In other words, the vast majority of them are not paid but are used by the hospital to estimate their loss to get their losses in the 5% range. However, the Federal Government has what are called DSH (Disproportionate Share Hospital) plans. These are funds that are available to reimburse hospitals for their losses through free health care. There were around 43 Billion dollars paid out on this plan in 2003. There are only two requirements that a hospital has to meet to receive these funds.

1) At least 1% of a facilties total in patients must be Medicaid patients
2) If the hospital offers obstetrical services, the hospital must provide at least two obstetricians with staff privileges who agree to serve Medicaid beneficiaries.

If the hospital meets these requirements they are eligible to receive up to 100% of their shortfalls due to Medicaid, Medicare, and uninsured patients.
Medicare typically pays 91-93% of all medical costs. Medicaid typically pays 45% of all medical costs with the rest made up by the states and DSH payments. However, since hospitals cannot collect 100% of their costs through these two programs they typically add a 38% fee to all private health care carrier bills to make this money up (even though it is usually totally reimbursed by DSH payments).

It is easy to see why our health care system is broken. We don't have a lack of insurance problem we have a cost of healthcare problem. Between insurance providers, doctors, and health care providers (hospitals and nursing homes) we have a system where it is impossible to track actual costs. This has led to the bloated, ineffective system we all struggle with when we need healthcare. Anyone who doesn't have healthcare insurance is one illness or accident away from bankruptcy. Anyone who does have healthcare insurance is paying through the nose for it and it will only increase as time goes by. We cannot solve the problem with more insurance. We have to get costs under control before we can even make a dent in it.

It really is quite simple. As long as we have a profit based system we will have healthcare that concentrates on the most profitable areas of healthcare; hospitalization, surgery, and major illness treatments. This is basically the reason that our healthcare system in this country does not resemble that of any other industrialized nation. It is also the reason why we are all at the mercy of insurance providers and hospitals. Last year, my mother passed away after a long stay in the hospital. She was in an automobile accident and later died from complications from that accident. The bill for the first month of her stay was over 600,000 dollars. You might want to keep that figure in mind if you think you can save enough to cover your own healthcare without Medicare under the current system. The plain and simple truth is that this is impossible for all but the wealthiest among us.

The next time you drive by your local hospital and notice the gleaming new buildings and constant expansion you might want to think about this post. The truth is that a large part of our national wealth and most all of our private wealth is eventually going into the coffers of insurance providers, doctors, and health care providers. They are sitting there just waiting because they know something you don't. If you live long enough, you will give them everything you have worked for your whole life in the last few months of your life.

To Carry a Gun

I honestly don’t know what is happening in the world around me sometimes. It seems like I go along for extended time periods thinking that I understand people’s motivations and actions and then suddenly realize that I not only don’t understand these things, I don’t even have a clue about them. I was raised by a father that that was a certified weapons instructor. From the time I was very small, I was taught gun safety and how to use a gun proficiently. By the time I was eight years old I was a very good shot with a rifle. My father taught me sight image and squeezing the trigger, which are the two keys to accuracy with most guns. He shot competitively in pistol target matches and I spent a great deal of time with him at these events. Having five kids in a one job family didn’t exactly lend itself to expensive hobbies so my father subsidized his hobby with work. He did taxes for gun shop owners for trade in guns and reloading equipment. He reloaded ammo for accuracy that was customized to specific gun barrels. He smelted bullets from expended rounds with line type from the local newspaper and old tire weights my brother and I gathered at junkyards. I gathered brass from people who didn’t reload and dug old bullets out of dirt banks behind the targets after matches. I understood the culture of these men and numerous other police officers he worked with as well as hunters and other gun hobbyists.

In those days the rule of thumb was that you never, ever pointed a gun at someone unless you meant to kill them. Guns were the last resort and only to be used for self-defense. You did not point a gun at someone in order to control their actions. You did not point a gun at someone to prevent them from running away. The only acceptable reason to point a gun at someone was if you meant to kill them. I can well remember being sent home from an early morning squirrel hunting trip at the age of fifteen because I accidentally let the barrel of an unloaded shotgun point in the general direction of my dad as we crossed a barbed wire fence. Gun safety had concrete rules and there were no exceptions to the rule that you never point a gun at anyone, even an unloaded gun.

My dad’s instructions made a deep and lasting impression on me; one that stays with me to this day. I often think that had we kept these rules as a society we would not have the problems with gun violence that we have today. Police routinely point loaded weapons at people’s heads during arrest procedures. I never see this on TV or movies without thinking of my dad’s words. Do they mean to kill the person? If they had that thought process I believe we would see a lot less in the way of shootings as pointing a gun at someone is a guaranteed methodology for escalating danger for everyone, including the officer pointing the gun.

Our culture has undeniably changed since those days. Maybe it is our continual exposure to gun violence on TV and in movies but society as a whole seems callous to the consequences of carrying a gun; even to shooting other people. I know many people who carry handguns under one situation or another and I always wonder why. In the final analysis I wonder if these people ever think the whole situation through beforehand and I have to assume they do not because I don’t understand the value system that says it is acceptable to kill another human being unless it is a kill or be killed situation. Do people really believe that situation is going to occur on the way to the grocery store?

When I was much younger I suffered a theft of all my tools one night. I was working as an electrician at the time so my tools were the source of my livelihood. I could not make a living without them. I didn’t make a tremendous amount of money to begin with so the loss of all my tools at one time was a serious setback. I lost around $1300 worth of tools without a way of replacing them. I had to go buy more tools on credit simply to go to work that day. In retrospect I was not blameless in the theft because I left my truck parked all night at a rather seedy bar with the tools in the toolbox behind the cab. I was extremely angry at the theft and I am quite sure I would have reacted with whatever level of violence was necessary to prevent the theft if I could have caught the thief in the act. I am equally sure that I would have regretted it later. As it happened it didn’t have to face that situation but I bring it up to point out that I understand the feeling of violation and anger that goes with having hard earned property stolen by someone who it essentially taking a shortcut to get whatever it is that they want.

I have recently heard numerous conversations on talk radio and indeed with people I work around on this subject as the Second Amendment conversations seem to be on everyone’s mind these days. Without going into the Second Amendment I would simply point out those recent events have opened a window into many people’s thought processes along these lines and I find it a little disconcerting to realize my own views are so far from those of a lot of people I like and respect. I believe as a society we need to emphasize some long term perspective in these cases instead of blindly jumping on one side or the other based upon gut instincts and emotions. Unfortunately, I don't hear that discussion taking place.

For instance, if someone breaks into my house in the middle of the night there are two issues having to do with guns and home protection that immediately become paramount. The first concerns whether I have the right to defend myself and my family. The second revolves around whether it is right to shoot someone to protect my personal property. In the first case, I think we can all agree that we have the right; indeed the duty to protect ourselves and our family from others would do us harm. However, the fact remains that the vast majority of break-ins are committed to steal property that is easily converted to cash. TV’s, stereos, computers, guns, and jewelry seem to be at the top of this list of property that is usually taken in such cases. In the overwhelming majority of these cases the thieves have no interest in a confrontation with the homeowner. In fact, they would much prefer the homeowner is not on the premises when they break in. Is there not a value judgment that comes into play in these cases? In other words, is your TV worth the life of another human being? Can anyone say that with careful consideration they would kill someone to keep their TV set? I hear no conversation along these lines when this subject comes up yet this is absolutely the relative value judgment we make when we choose to shoot someone for breaking into our house as the vast majority of break-ins have the goal of gaining cash as the motive.

There have been several high profile cases involving these same types of knee jerk rationale lately yet we never seem to get to this part of the conversation. The Trayvon Martin case is one example. Leaving aside the “stand your ground” laws or even the particulars of the case on any level, there is a judgment call that was made at the outset by Mr. Zimmerman that indirectly led to a death that would not have otherwise occurred. If Mr. Zimmerman had not chosen to take a gun with him that night on his self-appointed job of protecting the neighborhood the Martin boy would not have been shot. It really is that simple on some level. Why should a neighborhood watch volunteer have a gun on their person to begin with? Three things become possible when such a volunteer decides they need to carry a gun. The first is that nothing will happen to justify the decision in which case the decision is simply a bad decision with no noticeable result. The second possibility is that the volunteer will suddenly and without warning be confronted with someone intent on using deadly force upon them and have to respond in kind. I would put the odds on this occurring roughly equivalent to winning the lottery every day for a week in a row while being struck by lightning each night. It is theoretically possible, but only so remotely so as to be negligible in any world remotely associated with reality. The third possibility is that something will occur that will lead to an overreaction or accidental shooting. Of the three possibilities the first is by far the most likely. The second is within the realm of possibility but so far removed from probability as to be nonsensical and the third is so horrible that I don’t think any rational human being could think it through and still carry the gun. I am reasonably sure Mr. Zimmerman would not make that choice knowing what he knows now but how many other people are making similar types of decisions every day without thinking their way through the possibilities?

The second case that has recently been on the news is the case of the young lady who wound up being arrested for buying a twelve pack of water. It seems that this young lady was seen with what appeared to be a 12 pack of beer in Virginia. It was actually a 12 pack of water but agents with the Virginia Alcohol Beverage Control Board approached her thinking it was beer that she had purchased as an underage person. According to the victim she was suddenly surrounded by people who did not identify themselves as agents demanding that she get out of the car. In a panic, her and her two friends rapidly left the scene and the car ran into one of the agents on the way out. Obviously, the whole incident was a huge mistake on several people’s part but the part that bothers me the most is that guns were drawn by the agents in an attempt to stop the girl from leaving. Happily, no one was injured although the girl was later arrested when she called the police to tell about the incident for endangering the agents with her car. Charges were later dropped of course but the whole incident speaks to my point.

In what world is it reasonable for agents to draw weapons to stop an underage person from escaping with a 12 pack of beer that she had bought? All the agents involved suggested that it was her age that led to them trying to question her in the first place. Why would they then draw weapons to stop her from escaping? This is exactly the kind of reasoning that is so foreign to my understanding. How can anyone possibly believe this was a reasonable response on the part of the officers? How is it possible for a reasonable person to suggest that this was not a horribly dangerous overreaction that could have very easily led to the death of either one of the officers or the girl and her friends? In retrospect, to support their actions in a logical manner the officers would have to argue that letting her escape with a 12 pack of beer she had bought and paid for was a capital offense that she should be executed for committing. People are upset that she spent the night in jail and demanding that the incident be further investigated but I have read no discussion centered around the fact that there is a basic flaw in our system wherein officers who are ostensibly there to protect the public draw weapons on an underage drinking suspect to threaten deadly force if she does not cooperate. The fact that they are trained to do this type of thing is reflective of our lack of understanding that such actions have lethal consequences and the only reasonable way to make such judgments is to consider the possibilities that our actions eventually lead to before we decide to resort to carrying a gun.

I have come to believe that we need to have a logical discussion about gun safety in this country. Whether or not people should have the right to own guns is inconsequential to the real problem that is so lethal; the literal life and death responsibility that comes with the decision to carry a gun. The discussion needs to be based on and start with irreversible value judgments that are instantly bypassed when people choose to carry guns. In split second decision events we rely upon instinct, emotion, and training to react. I seems obvious that our training is often tactically incorrect and severely lacking in perspective. Therefore, we are left with emotion and instinct to instantaneously make what is quite literally a life and death decision when we carry a gun. The irrefutable statistics of actual gun deaths in this country is a clarion call to the fact that we are woefully inadequate in understanding the consequences of our actions when it comes to the choice to carry a gun.