it's quality of care in the future (which we're beginning to see as noted by the Britons interviewed in the previous article and in the skynews link.)  Nationalized healthcare doesn't address costs, it simply shifts them. 

But ATQB, you might say, it's taking the profit out of healthcare which allows healthcare to be a fraction of what it costs here.  According to Public Citizen  (in a very sympathetic report entitled "Hefty Pharma Company Margins Dwarf Other Industries"), profits for the pharmaceutical companies were $36B in 2002.  Healthcare costs were $1.3Trillion.  That's just over 2% attributable to drug company profits (nevermind the positive incentives that profits provide to produce better treatments and more cures.)

How many people die because they can't pay under our system? How many people have to wait until their illness gets so bad that they go to the emergency room, which raises costs for everyone?

I don't know, but I can't imagine a survey among doctors so dismal as the NHS one.  So the situation we really are in is that we need to address costs.  People leave the NHS because of care conditions (which have deterioriated due to the shifting of high costs) and they leave our system due to high nominal dollar costs. 

The Committee for Economic Development recently released a report entitled "Quality, affordable, healthcare for all:  moving beyond Employer Based Health Insurance."  Their core findings on costs were:

http://www.ced.org/docs/report/report_healthcare200710.pdf

First, there is cost-unconscious demand … we have created a system in which most people have little personal interest in making the most cost-effective health care choices. 

Second, expenditures are increased by the extensive deployment of new medical technologies that benefit people’s lives … People want them, doctors want to provide them.

Third, there has been a large increase in the prevalence of chronic disease and our ability (and expenditure)  to treat it.

Fourth, most health care delivery is local, and there are local insurer, hospital or system monopolies. 

 So how to address costs?  Our system is doing a poor job as well all know.  You won't find me among it's advocates.  What we must realize is that it's not this system or socialism.  There are other routes.  I attempted to address that in another diary. 

Some comments on healthcare.....

The cost of healthcare is out of control precisely because there isn't a market mechanism working...and with government paying for 45% of the healthcare in this country, we already have a socialized system.  To borrow from John, free market capitalists are inheriting the wind in this fight.

I think we have to get to a point where we're introducing markets back to healthcare, and I don't think this mix and match that we're currently doing that even approaches it.  It's not just a government problem though, employee sponsored health insurance has really screwed things up. The HMO Act of 1973 required that all but the smallest employers offer healthcare and that those costs would be tax deductible.  That tax deduction and the requirement that employers offered the insurance sealed the illogical coupling of a job and health insurance for the next 20+ years. 

These plans don't serve the interests of the consumer from a cost perspective.  They are often low deductible plans which do not give the employee any incentive to act responsibly in their healthcare purchases.  This is one form of a moral hazard in insurance terms.  Naturally, inflated demand for healthcare gives rise to inflated prices for healthcare....so much so that consumers and doctors often don't know what basic procedures cost (if you're insured, when's the last time you looked for a better price?)  Unfortunately, the uninsured are left holding the bag from a cost perspective. 

 

What would I do?  First off, eliminate the favoratism to business in terms of the tax incentive to offer insurance.  I believe it should be achieved by giving private citizens the same tax break and removing the incentive for business altogether. 

Additionally, I think the Whole Foods model employed by John Mackey could work as an overhaul.  I would offer HSA's and high deductible plans at the Federal level instead of the current medicare system.  This would bring market economics back to healthcare at the low end, and I think I can say with confidence that you don't have the same sort of moral hazards for more serious medical matters.  Finally, I would look at (though not committ) providing catastrophic coverage at the Federal level for free.

Easily, the most important part of this plan would be to get insurance out of the picture routine procedures.  That's what will help keep a lid on costs, yet still provide incentives for the healthcare profession to continually become more efficient and better serve the consumer.

 

 Here's some background on what John Mackey has done at Whole Foods.

WHOLE FOODS EMPLOYEES GO BARGAIN HUNTING FOR HEALTH CARE

High-deductible insurance policies that require the insured to pay thousands of dollars before insurance covers their care may be the key to lowering costs and putting people in charge of their health care, says ABC News.

Five years ago, the grocery chain Whole Foods Market switched to a different kind of health insurance, a policy that puts patients more in control:

• Whole Foods has an insurance policy with a high deductible; that means an employee must pay about $1,000 before their insurance kicks in.
• If they get cancer or heart disease, their insurance covers it, but if they have a sore throat or a sprained ankle, they pay.
• To help workers pay, Whole Foods puts money into an account for them.
• Some employees got $1,500 this year; if they don't spend it on medical care this year, they keep it and the company adds more next year.

Most companies call these accounts Health Savings or Health Reimbursement Accounts. The company saved money, too. "Our costs went way down," says CEO John Mackey.

Still, some employees were angry about the plan. They said they wanted their full coverage back.

"When you go from a system where people are very dependent and now you're telling them, 'Hey, you have to take more responsibility for your own health.'  And that was frightening to them," Mackey said. "Because they were going to have to be responsible for themselves, they weren't going to be taken care of any longer."

Source: John Stossel, Gena Binkley and Patrick McMenamin, "Health Savings Accounts: Putting Patients in Control; Whole Foods Employees Go Bargain Hunting for Health Care," ABC News, September 14, 2007.