“In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial medical insurance complex. The potential for the disastrous rise of misplaced power exists and will persist.” –Dwight D. Eisenhower
Spending on Security: US Military Spending 3.5% of GDP, US Health Insurance Spending 7.9% GDP (with approximately 11% of Americans still uninsured), Medical Providers and Pharmacy 9.6% GDP
There are thirty countries in the world that have a longer life expectancy than the US. Most of these countries practice nutrition first. Our food pyramid is upside down. Here and here. Medical practice uses drugs and surgery as the first line of defense against disease. This works very well for acute maladies, but for chronic disease, it is a terrible practice. Symptoms of chronic disease are treated without the root cause being remedied.
How have we come to an understanding that is not science, but government policy? “It’s the economy, stupid,” says James Carville. This desire for a healthy economy has driven us to a population that is ill with chronic disease and obesity. This is great for the medical economy and health insurance economy, but very bad for the health of the individual. Government has made policies that support the economy and not the health of the individual.
Who is the primary driver at fault in this car wreck that is crushing our health and economy? It is the medical insurance industry. Now, that sounds like a jump, but this institution is wrecking us and government is going along so as not to crash the economy. The medical economy has led us to a huge national debt and the insurance companies are the primary driver. Why the insurance companies?
In 1928 my mother and father were having their first child. The doctor rushed to our home as is typical in a country environment; babies were birth at home. There was no insurance. My father paid the doctor directly for his services. He gave the doctor two hams, a twenty-five-pound bag of flour, and twenty dollars. This translates into about five hundred and forty dollars in today’s currency. Now we pay the insurance companies and the insurance company pays the bill. Of course, minus deductibles and co-pays which we still have to pay directly. We do have better healthcare for birthing with prenatal care, postpartum care, and neonatal care. Adding up all the medical cost surrounding a new baby gives us a cost of about $8,800 today.
My research has found that up to half of medical expenses are administrative fees. Most of that belongs to the insurance companies. Best approximation is that of every dollar you give to the insurance companies only fifty-five cents comes back to medical providers and pharmacy. Without the insurance companies’ involvement, the cost of a new baby should be about $5,000 or about ten times the cost of 1928. This is approximately what medical providers actually get. The rest of the money goes to insurance for “health security.” The operation of medical insurance agrees with most business’ theory, that a company has forty percent internal cost, forty percent external cost, and twenty percent gross margin. After general, selling, and administrative, there is about a five to seven percent profit margin with the government getting as large portion that in taxes.
As with any company, the growth of market size is critical to the health of the company. As the disease state of Americans goes up, the medical spending increases and the cost of insurance increases proportionately. Now hospitals are struggling as insurance companies drive up the cost of insurance to employees and play games with reimbursements for managed care. As the prices of pharmaceuticals and managed care increase, so does the cost of insurance. This never ending loop of increases is rushing us forward into economic doom where we will no longer be able to support our national debt. Hospitals have merged so as to have better leverage on the insurance companies, and this has only led to less competition in the market place. This is to say nothing of the Affordable Care Act (ACA) which does not fully kick in until 2017. Now we see many insurance companies already opting out of the ACA. It is not our fault scream the medical insurance companies. In effect, it truly is the problem of government policy corruption.
I remember well March 2010 when President Obama was in the process of signing the ACA. I had gone home for lunch and flipped on the TV not knowing that it would cause me indigestion. There on CSPAN was a reporter that stuck the microphone into the face of the new Chairman of the Ways and Means Committee. Charles Rangel had just stepped down after being charged with corruption and Sander Levin was the acting chair.
“Has the committee consider single payer healthcare insurance?” the reporter asked. There wasn’t even a pause.
“I don’t think the country could stand the loss of five million jobs in the present economy,” Levin responded. He snapped around in a military square and marched off before any follow-up questions could be asked. This began my research into medical cost that arrived at the above conclusions. I quickly imagined the median salary for medical insurance employees at about $70.000/yr. The annual loss of $350 billion dollars in jobs to the economy would be hard road to follow. If you used the same method as was used in accounting for the ACA, that would be a ten-year loss of 3.5 trillion to the economy. After all, the industrial segment of the economy had been decimated, the housing market was a disaster, and we had just bailed out the banks. We certainly would not want to damage the economy with a change in medical insurance.
Government policy in the healthcare market segment has driven us to disastrous results. Don’t get me wrong. I am a capitalist and don’t believe in the government taking over general business. However, when you combine giving the medical insurance companies state monopolies, when government practices poor policy for food, when you guarantee increased market size with the ACA, and when the HHS practices markets before mandates (your health suffers so that the economy can be sustained), you end up with a large ill-health market that the general population cannot afford. Now that the Supreme Court has declared penalties for not having insurance as a tax, it is not too great a leap to declare all medical insurance as a tax. That would make our taxes-well-just stupidly high.
I now believe that the ACA was a mechanism to ward off the insurance companies lobby in the hopes that medical insurance would collapse into single payer like the rest of economically similar countries. We currently have one of the highest tax rates in the world. If we look at Canada where healthcare is taken from their taxes, why is our healthcare cost almost double that of Canada. When you add in health insurance as a tax, it truly is an unappealing number with a tax rate that is about double the rest of the world. Whatever happened to common sense?
And then there is the suffering of chronic disease that is extremely high in the US. Consider heart disease in Japan and Greece that is five times less than the rest of the world. You know our scientist are smart enough to figure out why (sulfur deficiency and vitamin D). Japan, Greece, and Iceland all have very low heart disease rates believed to be from the abundance of sulfur in the soil as each sits on volcanic riffs.
Markets before mandates is killing us both physically and from an economic perspective. If we don’t start practicing nutrition first and correct medical insurance, the US is doomed. What happened to the days when you paid the doctor directly with a couple of hams, a bag of flour, and a few bucks? Bring on medical insurance that is national and not a state monopoly, and give the population medical bank accounts that pass through from generation to generation without taxes. Expand Medicaid for the less fortunate as it already has under the ACA. Medicare should not be handled by a third party (more government corruption), the insurance companies. Of most importance is to get the science right for chronic disease in the practice of medicine. It might be a short term correction for the medical industry, but let the markets decide without government interference. Certainly I would not have suffered for three decades with pain from chronic disease. Decades of pain brought on by bad government policy and greedy insurers that require me to give up health freedom for security or else. Collectively, we have arrived at Ben Franklin and Dwight Eisenhower’s warnings. –Pandemic Survivor
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” –Benjamin Franklin