If you just read my most recent post you know how I feel about the solution to the high cost of health care and no insurance for 47 million Americans. It is at least a disaster that is only going to get worse if we don’t act and I heartily agree with President Obama on this point. I however disagree that spending more money for health care coverage is the right approach. I think that healing the population of chronic disease is the correct approach.
Let’s think about the numbers for a moment as it seems to be a lot of misunderstanding and an unwillingness to just simply tell the people what is happening with the cost of health care. If we think of the insurance industry as any other business then you would expect about 40% external cost and 40% internal cost and then a 20% gross margin that would include in it general, selling, and administrative(where the executives big bonuses come from). What are the external costs for the insurance industry? It is the payment to the medical providers as doctors, medical facilities (like hospitals), pharmaceuticals, medical devices, and any other insurance coverage that is provided. The internal cost is the salary and wages of the employees and agents that handle your coverage and general maintenance cost of large facilities as we know theirs are the biggest. The gross margin provides for the GSA as shown above leaving about an 7-9 percent margin.
This should make you a little bit perturb as you begin to realize that you get back only about 40 cents on a dollar that you spend for health care as insurance and you protect this industry by allowing some unusual rules like intrastate commerce only and policies that will not follow you around the country like say auto insurance. Also you are not involved in the payment process of negotiating what actually gets paid to the medical provided. The insurance companies lump bills together and then beat up the medical providers by saying look how much volume of business we are doing for you. So the retail bill that you see from the medical provider is not what the insurance company pays.
So what is this in dollars? I do not know if we have reached 2.5 trillion yet but we have to be close. So we will use this number as it gives us easy math. This number represents about 18 percent of the US GDP so 2.5/ 0.18 = 13.8 trillion for the US GDP. We find from Wolfram Alfa that the US GDP estimate for 2007 was 13.78 million so we most likely have a close estimate for the medical economy. The world GDP for 2006 in US dollars was estimated at 46.66 trillion. So our medical economy represents 2.5/46.66 x 100% = 5.36% of the worlds economy. Now since we have only 306 million out of 6.7 billion people, I would say that we are rather ‘hoggish’. We are spending 2.5 trillion / 306 million about 8200 USD per capita for health care. If you take the worlds GDP and divide it by the population or 46.7 trillion / 6.7 billion you get about 7000 USD per capita. That means we are spending more on healthcare than the average of total per capita spending for the rest of the world. I would say that it is really hoggish!
If a single payer plan was implemented then we could eliminate about half of the total cost and get it more in line with say Canada (US costs x2 of Canada’s) or Great Britain (US cost x2.5 Great Britain’s). However, this would cost us about 5 million medical insurance jobs. I just do not think we have the political will for that in the current economy. If you think about how much money your senators and representatives take from the medical industry to get re-elected, I would say that President Obama is going to have a ‘tough row to hoe’ as we use to say on the farm.
So what would happen if we had a healthy population and the system remained the same? Let’s say that we could reduce chronic disease by 50%. Chronic disease represents about 70% of our health care cost. This would give us about a 35% reduction in total health care cost. Are these numbers any good? Let’s see what Dr. William Grant has to say in his work, ‘Reducing the Burden of Disease Through Adequate Intake of Vitamin D3’ for presentation at the UCSD, April 9, 2008. We find that he picked a multiple of chronic diseases but not all and estimated a reduction of 366, 000 deaths and a reduced medical cost of 199 billion dollars. He has estimated about a 20 percent reduction so I am not too far off but I am sure he has been more conservative than what will really happen considering my experience with D3.
So this gets even stickier as we consider the lives of hundreds of thousands of people every year. If you want to put it into a 10 year perspective that would be about 3.4 million people dead and unnecessary spending of 1.9 trillion dollars ( to put that into the total including insurance it would be 1.9/40% = 4.75 trillion). Interesting enough this would just about cover the increased cost of insuring the uninsured according to the Obama plan. Now it is not medical insurance people that are losing jobs but also medical professionals because total disease has been reduced. We have not considered here the amount of increased productivity from a healthy population which I am sure would be significant or the cost of supplementation with D3 which should be about 7 billion USD per year. Ah, if you were president what would you do?
I know that I would go for healing the population and let the economic numbers fall where they may. We did not give much credence to tobacco jobs because of the bad actions that industry took neither should we give credence to the medical industry because of their bad actions of ignoring the facts. The improved outlook of a healthy population would overcome any downturn in the reduced medical economy.
You know, I have ignored the abuse of not using available technology in the energy area for years as I knew it was about maintaining the existing ‘cash cow’. It appears now that energy can be had with the cost of capital. There was no death involved just more spending for energy than was necessary to generate a big economy. However, with the death and tortuous pain that millions suffer we most act and not ignore the medical facts.
We are just getting past the reticule stage and starting to enter the violent opposition stage of change so be prepared! I just cannot wait until we say it was self-evident!
A Survivor of ignoring the facts – go into the sun and be healthy!