Too Much, Too Soon - my Achilles Tendon Rupture

I was flicking some pages on this site and came across people discussing their health care and costs (see “Healthcare for the uninsured”). One person quoted about $12,000 for his treatment after about 6 weeks post Op.

I have no idea what my costs are to date but I live in the UK and so there is no issue regarding being covered or draining my cover. Since I was bored I did some poking around on Wikipedia.

The UK health system is funded out of taxes (if you earn above a minimum then about 11% of your gross goes to National Insurance, this entitles you to unemployment payments and health cover; the employer also pays an amount equal to about 12% of your gross, so about 23% in total).
Every UK citizen gets full health cover, including unemployed people.
But the UK health system is not the best example; it needs restructuring but this is difficult since many parties like the freedom or the rewards of the current out of date structure, or just dont want to change or know how to get change done and a few are even glad to see the NHS struggle thus promoting the case for private health care.

Germany also has a national health system, but it has limited involvement by private companies. I lived there for 4 years and received 1st class immediate service when I had to spend the night in hospital and get follow up treatment. Germany actually has higher taxes than the UK (max about 45% of gross income, just income tax; the welfare tax is on top). But the country has a much higher standard of living. So a national health system clearly works as a concept as long as it is implemented properly. The only fault told to me by Germans was that Doctors milk the system; when you go with a headache they will also examine your foot, “just in case” and claim money for that on top. If this could be stopped then the cost of healthcare there would be further reduced. The facilities and services are excellent, even GP surgeries (family doctors) have basic X-ray machines, ultrasound and surgical facilities. There is also great choice, you can go to any GP practice without having to register first (just show your insurance card or pay cash).

Some data (USD$): -

Table 1

Note: the total percenatages for healthcare do not add to 100%; I assume the difference is due to losses from non-payments?

…………………….GDP_(nominal) 2007       GDP_(nominal)_per_capita
Country              RANK GDP USD$M           RANK   GDP USD$

United_States         1     $13,815,008           11      $45,865
Japan                      2       $4,368,822           23      $34,323
Germany                 3       $3,292,793           19      $40,270
United_Kingdom     5       $2,757,792           13      $45,298
France                    6       $2,545,848            18      $41,696
Canada                  9        $1,388,172            16      $42,395
Australia              15           $873,414            17      $42,069
Sweden                19           $443,787              8      $49,551

Table 2

Table 2 shows GDP for 2007 both in total and divided by country population (per capita). But it does not take account of the local value of USD$; $1 in USA would buy more than $1 in UK, so although the USA/UK GDP per capita are about the same the USA amount is of higher value (i.e. the USA is richer per capita in cash value terms).

To account for this difference in currency local buying power the raw GDP figures are adjusted in what is known as Purchasing Power Parity (PPP); the PPP data is shown in Table 3.

…………………….GDP_(PPP)_per_capita
Country             RANK    GDP (PPP)           RANK     GDP (PPP) per capita

United_States        2       $13,831,675        6          $45,812
Japan                     3         $4,287,779       25          $33,567
Germany                5         $2,789,845       23          $33,944
United_Kingdom    6         $2,118,657       22          $34,780
France                   8          $2,049,198       26          $33,223
Canada                13          $1,236,681       15          $37,521
Australia             18              $751,577      19          $35,813
Sweden                31             $331,703      18           $36,205

Table 3

What is interesting is that private healthcare (i.e. USA) is the most expensive by a long way (which makes sense since profit has to be made, advertising bought, employment of claim advisors paid for, etc.)

Update-1 13 Sept. 2008

USA Private healthcare is significantly more expensive than nationalised healthcare based on percentage of GDP, by about 5% in these examples.

That means if the USA switched to a nationalised system it would save about 5% of its GDP every year and at the same time give everyone access to full healthcare. What would this mean for the USA as a whole?

FINANCIAL ASPECTS

The financial aspects are clear; from the data here for year 2007 the USA GDP was $13,815,008,000,000 (nearly $14trillion!). Healthcare costs were 15.2% of GDP or £2,099,881,216,000 (over $2trillion!) for 2007. If this cost was reduced by 5% of GDP to nationalised healthcare levels it would save $690,750,400,000 (nearly $700billion!) in 2007 and similar amounts every year!

Approximately half of that saving would be made by the government directly, giving it an additional $350billion every year to play with. Could cut taxes, build more hospitals, further research & technology, etc. These benefits would be huge. Increasing research could lead to fantastic breakthroughs in medicine, science and technology that would put the USA into warp-drive and send it streaking forward.

The other half of the $700billion saved would belong to US citizens (who pay insurance companies and make direct payments); you guys would have another $350billion per year to spend folks! How does that sound?

To give this figure some perspective, the GLOBAL loss due to the subprime debacle is put at $435billion as of July 2008. Whereas the amount saved by the USA in a single year using nationalised healthcare would be $700billion; enough to save the whole world from the subprime recession.

Another way to look at it is to consider the USA national debt, currently in the region of $9.7trillion. At a saving of $700billion per year (0.7trillion) that is equivalent to over 7% of the current national debt saved per year.

PEOPLE ASPECTS

Hand-in-hand with the huge financial benefits hinted at above, adopting a nationalised health care system would provide every citizen with full health care cover, when they need it and as often as they need it. No extra costs.

I dont ignore for one second that within nationalised healthcare there are some acute cases were treatment is not delivered or delayed. No healthcare system can provide every best treatment to every individual immediately.

But a national system is effectively a private system but with the profit aspect removed. Its objective is to help people, not make a profit. It also would allow everyone access to a high level of healthcare.

This would be of immediate benefit to nearly 50million Americans without health insurance. Thats 1 out every 6 people!

But even those with health insurance would feel a huge benefit; no longer having to worry about selling their house to pay for medical treatment, working 3 jobs, or choosing partial treatment becase it is the cheapest. When sick all there would be to think about is getting better and not about the bills that may drop in the mail.

The people would be kept physically and mentally healthier. There is a good chance that in addition to making US citizens healthier and happier this would also make them more productive, since rested, happy and healthy workers often do more and faster.

SUMMARY
I was curious about different healthcare systems in various countries. Seeing the number of comments on this website related to costs in the USA made me look at the USA first. I was surprised when I saw the figures. Even if not exact their implication is clear.

The USA healthcare system has a profound impact on the health of the people of the USA but also on the strength of the USA as a country competing in the world.

The effect of the current US healthcare system compared to using a nationalised one is to divert every year an incredible amount of cash that could be spent elsewhere, or saved for a rainy day. Something like $700billion could be saved every year, while increasing the health service to include all citizens with no bills when treated.

Not only does the current private system fail to deliver full healthcare to all U.S. citizens but it is costing 50% more than some of the best national systems.

In short, the current US healthcare system is actually weakening the USA as a nation, but providing a few individuals or businesses with huge profits. Good for them but not for the country as a whole, I would say.

If the USA was a sprinter its healthcare system would be running shoes made of gold and diamonds; the US jeweller makes a mint but the sprinter may as well be wearing shoes made of lead.

A well implemented nationalised health care system would provide full healthcare for all, be 33% cheaper and free the USA to leap ahead

References: -

1) GDP (nominal) data
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

2) GDP (nominal) per capita data
http://en.wikipedia.org/wiki/Richest_countries

3) GDP (PPP) data
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29#fn_b

4) GDP (PPP) per capita data
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29_per_capita

5) Populations
IMF

6) Health Care Data
http://en.wikipedia.org/wiki/Health_care#United_Kingdom

7) Subprime Mortgages
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

.8) USA national debt
http://zfacts.com/p/461.html
http://en.wikipedia.org/wiki/United_States_public_debt

9) External Debt
http://en.wikipedia.org/wiki/External_debt

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