Chris Graham: A funny thing happened on the way to socialized medicine
October 27, 2008 by chrisgraham
Column by Chris Graham
freepress2@ntelos.net
Read Bruce Kesler’s column, “The Fannie-ization of Health Care.”
As a small-business owner, I think I know why our country is falling behind our competitors in the rest of the industrialized world where some version of universal health care is not the exception, but the rule.
We in the business sector are still expected to include among the compensation packages that we offer our employees the benefit of health insurance. And in doing so we are alone in the industrialized world.
What does that mean to our bottom lines? Everything. First and foremost, it means that dollars that should be going to payroll and research and development and marketing and sustainability are going to a line item that our competitors in Europe and Asia and South America don’t even have to think about.
Now, for me and my small business, it’s not the international competition that is the end of the world, given that our focus is on the domestic market, not the global market. It doesn’t cost me $1,500 per new car for health insurance for the employees who work the assembly line like it does a GM that is trying to sell cars in a market with Japanese and Korean and European automakers who don’t have to pass similar costs to their customers, to cite one example of how health care impacts bottom lines. But that doesn’t make me immune to the challenges that our system provides the business sector. Because I’m competing for employees with bigger companies that can offer health benefits as an enticement to come to work with them.
For those who consider health coverage to be an essential to their quality of life, which is pretty much everybody, it can be a deal-breaker if basic health insurance is not part of the compensation package. And for me, covering the costs of health care for employees can be a deal-breaker as far as the long-term survivability of my business is concerned. So we’re bargaining with the devil in not offering health care to our employees that we’ll end up better off in the long run by committing the dollars that would go to insurance to grow our business.
Everything else about universal health care makes sense. Fifteen to twenty percent of the monies that we commit to health-care spending go to overhead that could be cut a half to two-thirds by slapping at the hands of those who charge an arm and a leg for the privilege of managing the costs of the system for us. And in the meantime, our businesses domestically and globally are made that much more competitive by taking the assumed responsibility for providing health insurance from the business sector to the public sector.
The one thing that doesn’t make sense is why we didn’t make this great leap a generation ago. Is it really that important to partisan Republicans to be able to play politics with what they like to refer to as “socialized medicine” that the rest of us should have to pay for their politics through a slower-growing economy and an artificially high aggregate health-care bill?
Here’s to hoping that they at some point in the near future truly do put Country First on health care and help our businesses regain something of an even footing with those in the rest of the world.
Chris - you have really missed the boat on this one! Let’s see - we - our businesses - can be more competitive if we can rid ourselves the cost burden of providing health care to employees by having the government provide it. Who is paying the government’s bill for the health care. We do all know it will be paid for by us, our businesses. So have businesses eliminated anything to be more competitive? No. Instead of paying insurance premiums in a free enterprise system, we will pay more taxes in a very non-free enterprize system. The bottom line on the P&L will not have gone down. The difference will be to whom the dollars were paid. Countries with socialized medicine - just look north to Canada - have less medical research (free enterprise) and thus less medical services and capabilities. Canadians come to the US for the really tough medical stuff - as do other countries all over the world. The US did not become as medically advanced by socialized medicine - Just the opposite. Does the current system need improvement? Sure, that’s not hard to see - but socialized medicine is not the fix.
But one area you’re missing, Tom, is in your assumption that I’m advocating a government-run system that costs roughly the same as the current private system. The VA and Medicare models suggest to us that overhead costs for publicly-provided health insurance are about 5 percent overhead, a far cry from the 20 percent overhead that we get currently from the private sector. So the overall cost to provide health insurance drops 15 percent. Society pays less for health care. We business owners pay less to provide health care.
Also, and maybe I’m missing something, but medical research is largely subsidized by the public sector (i.e. governments, mostly state and federal) and private foundations. Nothing changes on that end under a government-run health system.
And just to be clear, I am intentionally out there on this one. I don’t know of anyone of consequence running for office this year who wants to see the kind of system adopted and implemented that I do. Which is OK by me. I’ll be the vanguard.
I can’t refute your numbers without a bunch of research that I don’t have time to do, but I cannot believe them. There are always numbers to make or a statistic to prove a point. And then there’s the context of any number. There is no way the government is going to do anything at less cost than the private sector where prices are in competition. When the government does anything, it finds more ways to hide things (money), attach unrelated personal interest items (pork), and create bureaucracy to manage all the complexities they put into it. It will not come out costing less. When gov’t needs to hold down cost, they outsource services to the private sector. Of course the bureaucracy never gets outsourced.
Whether any of us realize it or not, we already have socialized medicine here in the US of A. The only difference between us and our Eurasian friends is that we’ve deluded ourselves into thinking that ours is something else. And we pay a lot more for our socialized medicine than we need to.
Consider …
- Who built the roads that you drove on to get home and get to work?
- Chances are you went to public schools. Right?
- We’re not about to outsource our military. (I hope.)
- Police, fire … public sector, public sector.
Point being, government does do certain things much more efficiently than the private sector could ever do. And what government does best comes in the area of matters that involve public trusts. Transportation, education, national defense and emergency services are examples where government can be and is more effective than the private sector in providing services and managing costs.
I submit that we should more seriously give a look at health care as another area where this can be done.
The blanket criticisms of government bureaucracy overlook the fact that private-sector bureaucracies can themselves be ineffective and cost-inefficient. The reason is probably obvious when you think about it - for most of the people that I know, anyway, dealing with the health-insurance industry feels much more like dealing with a monolith that is oriented toward taking as much of your money while providing as little in the way of service as possible than anything else.
And consider this - for all of the talk about government-managed health care limiting one’s choices, how many of us looking on in this forum can up and switch doctors on a whim and undergo medical procedures without the approval of some company bureaucrat somewhere far, far away stamping his approval beforehand?
Call it what you will, but that sounds like socialized medicine to me. So how about we pay 15 percent less for it, and in the meantime make our business sector that much more efficient? That’s all I’m suggesting.
True! Very True! I often wonder how many creative ideas are never brought to market because the thinker can’t afford to be without health insurance.
It now costs the average family of four $29,000 in a combination of taxes, premiums, out of pocket expenses and lost wages, to fund the current health care mess.
See http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112002420.html
And what do we get for it - the most expensive health care system in the world by a long shot, lower life expectancy and higher infant mortality rates than most of the industrialized nations and still 45 million without insurance?