Tag Archives: American exceptionalism

Prologue to a Diary of the Second Addams Administration 13.

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            The Agenda: Why does health care cost so much? 

One theory is that, traditionally, medicine could not really do much for the sick and injured.  For almost all of human history, science and medicine knew nothing of many things.  Anesthesia and antiseptics for example, or what was a “normal” blood pressure or heart rate.  “Doctors” could be “real” or they could be “quacks” and you couldn’t tell the difference.  Surgeons could lop off arms or legs with a fair chance that the patient would survive.  They could do nothing about deep puncture wounds to the thorax.  They could administer heroic doses of laxatives and they could “bleed” patients to restore the balance of humors in the body.  As for psychiatry, Ben Franklin once helped out his sister by paying for her disturbed son to be chained up in a farmer’s barn to keep him from harm. 

Then, from the mid-19th Century onward, a medical revolution occurred.  It was just as dramatic—and probably more important—than the various political revolutions that have enlivened journalism over the same period.  Invasive surgery became safe and commonplace.  Drugs treated many diseases.  Vaccination warded off a host of terrible killers.  Then, in the second half of the 20th Century, still greater marvels appeared.  However, these ones were vastly more costly than the earlier innovations.  Organ transplants and fertility treatments, for example, are very costly.  Chronic illnesses in a population with an extending life-span is a new development.  In sum, modern medicine is just really expensive.  The best solution is to socialize the costs through government taxation and payments to providers. 

Another theory is that none of this is the real explanation for high health costs.[1]  It isn’t ALL medical costs that are so high.  It is only AMERICAN medical costs that are so high.  On a per capital basis, health care is about twice as expensive as it is in other advanced countries (i.e. Western Europe, Japan).  European doctors with comparable education and skills earn about half of what American doctors earn.  Members of the administrative hierarchy in hospitals and medical networks earn high salaries.  Medical tests, surgeries, and prescription drugs are far more expensive in the United States than they are elsewhere. 

According to this second theory, if you want more affordable medicine, you’re going to have to take it out of the incomes of the health profiteers.  This means everyone from your GP to the pharmaceutical companies.  Trying to compress incomes to cut costs for consumers (patients) will involve battling powerful entrenched interest groups, everyone from the American Medical Association to Big Pharma. 

In all of this, the health insurance industry plays the Bad Guy.  They’re the ones who interact with customers/consumers/patients.  Often they bring bad news.  Some charge is denied, or you still haven’t exhausted your out-of-pocket obligations, or you need to get your doctor to re-authorize some prescription that you’ve been taking—and will be taking—for years.  In truth, health insurers make a profit that is less than half of the average profit for corporation on the S&P 500. 

It is interesting that none of this has come up in discussion of Secretary of Health and Human Services nominee Robert F. Kennedy, Jr.[2]  What could/will Trump force through? 

[1] “The reason health care is so costly,” The Week, 27 December-3 January 2024, p. 14. 

[2] “RFK Jr. softens positions amid Senate scrutiny,” The Week, 27 December-3 January 2024, p. 4. 

Rant.

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In terms of GDP the United States has the largest economy in the world: $17 trillion. China’s GDP is $10 trillion, with 2-3 times as many people, so China’s per-capita GDP is pathetic compared to the US.[1]

In terms of after-tax household income, the US just wipes the floor with other countries: the US average is $41,355, while the median for Organization for Economic Cooperation and Development (OECD) countries is $27,630. So the US is like 50 percent higher than the median. That means that it drags the median upward by its high household income, so most OECD countries have family incomes even lower than in the US. .

People are quick to point out that American success is all quantitative, rather than qualitative. Americans work way more than do “normal” people: an average of 46.7 hours a week. They get less sleep, have less family time with their ingrate kids, have wives who have let themselves go, and about 35 percent of Americans are obese.[2] American society may be rich, but it is very unequal, which may be a factor in high poverty rates. Also, there are signs of “moral decay”: Americans trail only Mexico and Chile in pregnancy rates among 15-19 year-olds. Then there is all the violence: only Mexico has a higher murder rate per 100,000 people—and Mexico has drug gangs run amok. Only 74 percent of Americans, Serbs, or Egyptians felt safe walking alone at night.

Is there an alternative model? Yes, either Scandinavia or Central America. Panama, Belize, and Costa Rica all out-pace the US in reports of “daily positive experiences such as smiling and laughing, feeling enjoyment, and feeling treated with respect each day.”[3] More concretely, Scandinavians (Danes, Norwegians, Swedes) accept paying much higher taxes generally than do Americans in return for a comprehensive social safety net.[4] Top earners pay 57 percent, but—and this will freak-out Democrats—middle-income earners pay up to 48 percent of their income in taxes.[5] Consequently, the price of consumer goods is higher and the purchases of consumer goods are less. On the other hand, if you’re playing by the rule that “the one with the most toys when he dies wins” or if you listen to economists who argue that the great American demand for consumer goods is what drives the world economy, then you have to hate the European approach.

Regardless of what European leftists insist, the American definition of happiness isn’t just about quantitative measures over qualitative measures. Americans value individual freedom and choice more than do people elsewhere, and this makes them insist on the importance of individual self-reliance and accountability more than do people elsewhere. Americans believe that progress in life, measured in economic terms, validates an open society and a competitive economy. This is why the “recent [economic] unpleasantness” has been such a trial for Americans. It is astonishing that most of the Republican presidential candidates can’t see this.

See: https://www.youtube.com/watch?v=q49NOyJ8fNA

[1] “How America rates,” The Week, 27 November 2015, p. 11.

[2] Only 4 percent of Japanese are obese and that’s including all those sumo wrestlers.

[3] This explains all the reports of Yankees getting caught trying to cross into Mexico. See: https://www.youtube.com/watch?v=0-N9L3ZXWPA

[4] Actually that term is deceptive. Americans mean that they have to catch and carry the screw-ups. Scandinavians mean a system for enabling each person to live a productive and socially-useful life. These different meanings reflect different beliefs about human character. Jury is out in my view.

[5] So, good-bye “middle class tax cuts” beloved of both parties and the Obama confirmation of 98 percent of the George W. Bush tax cuts looks politically expedient without being fiscally prudent.