Friday, November 11, 2011

Where does all of the money go?

I had originally planned for my second post to be on the topic of lawyers as politicians.  I had planned for several future posts to be on balancing the federal budget.  In a few blogs that I have recently started following I have seen some posts on budget and spending, which prompted me to change tacks.

As I said in my first post, I am not trying to imply that I have the answers to the questions I ask.  I certainly have suggestions, ideas, or proposals, but my primary interest is in stimulating discussion among the readers.  I would hope that these discussions might eventually come to the attention of someone who can make a difference, or enough someones that changes can be made by our representatives.  On to the question.

I looked up how our tax dollars are distributed because I wanted to be sure of where I pointed my finger.  According to the Center on Budget and Policy Priorities (CBPP) the breakdown is as follows:

Medicare, Medicaid, CHIP            21%        $740B
Defense & Security                         20%        $705B
Social Security                                20%        $705B
Safety net programs                       14%        $493B
Federal benefits                                7%        $246B
Interest on debt                                 6%        $211B
Transportation Infrastructure       3%        $105B
Education                                            3%       $105B
Sci & Med research                           2%         $70B
Other                                                    2%         $70B
Non-security International              1%         $35B


There seems to be a lot here to discuss, so I will just start at the top and work my way down.  I think that there is enough here that I will break it into several posts.  I want to make sure that I have sufficient time for research.

I don’t want to become a pariah by suggesting cuts to Medicare, etc. but it is the largest single expense.  Perhaps cuts are in order but I don’t feel qualified to make that sort of decision (am I even qualified to type this?).  Rather than just cutting this portion of the budget wouldn’t it make more sense to attack medical costs?  Below is a link to an MSNBC article describing what drives health care costs.  In brief they are: Doctors being sued; Administrative costs of insurance; Being female (I’m not touching this); Treatment vs. prevention; More treatment for less care.

Number one on this short list is probably the largest contributor to overall healthcare costs.  I don’t think this is at the behest of the doctors, rather I see it as greed of lawyers (over time you might note my lack of respect for lawyers in general).  Even if patients that have been hurt by medical procedures were to receive exactly what they deserved the costs are jacked up by having to use expensive lawyers and insisting on excessive punitive damages (which drives up number 2, insurance).  If the doctors and hospitals were to be forced to “do the right thing” in regard to patients we would likely see fewer lawsuits.

A second problem I have with these lawsuits is that in no other field do we see the performer of a service being sued even though they gave the best service possible.  Can you imagine suing your plumber for a mistake installing a sink, even if the sink leaked?  What about punitive damages awarded to you for the pain and suffering for not having use of your sink?  If you have an ailment, regardless of if it is treatable using medication or if it requires surgery, you must be willing to accept some level of risk in your cure.  There are no guarantees in life and you certainly don’t have one in regards to your health.  If you have two choices when you go to see a doctor – do nothing and perhaps die or do something and possibly live – what exactly are you out if you try for the cure and then die.  YOU WERE GOING TO DIE ANYWAY, and I would like to add, everyone is, eventually.  Maybe we place too much value on an individual life or maybe we aren’t willing to accept risk.

Number two on the list is the cost of insurance.  I don’t see why this is so complicated to administer, in fact it seems to me that it has been made overly complicated just to justify increasing the cost.  Sure there is a lot of paperwork (what happened to the idea of paperless offices?) but I’m not sure that this tells the whole story.  I think I will pass on this and come back to it in a later post (I don’t like insurance much either).

Number three was being female and I don’t want to address that before I have done more research.

Number four is very interesting and also ties in (in my opinion) with number five.  The idea that doctors aren’t interested in prevention is probably fallacious, but they definitely make more money over the long term on treatment.  The old saw states that “an ounce of prevention is worth a pound of cure” and I think it is as true today as it was whenever it was first uttered. 

We are certainly an overweight country and it costs us in dollars and other ways.  A recent study by George Washington University suggests that obesity costs a person on average $3,762 per year, approximately $1,600 of that in medical or insurance costs ($231 per year for extra gasoline!).  Read the full report here.  Obesity is nearly 100% preventable so why are we wasting so much money on it?  One report by ABC news discussed preventable illnesses and the attendant health costs.  Of the 10 most common chronic illnesses, five of them are, or could be, linked to obesity: Type 2 diabetes, high blood pressure, high cholesterol, heart disease, and strokes (probably tied to hypertension).  I’m not suggesting that all of these ills could be completely cured simply by losing weight, but how could it hurt?

The second part of this issue is that doctors seem to spend more of their time (and thusly more money) performing tests and trying new drugs rather than in actual care of the patient.  Is this because of the fear of lawsuits?  Some of what I have read says that this is at least one of the causes, but the other may also be true.  If a patient is not in obvious need of emergency care, it could be argued that an accurate diagnosis should take precedence over a quick one.  I also suspect that many of the complaints presented are not serious, rather the patient just wants reassurance.  If the doctor can “put them off” for a while, while running tests, they get better on their own.  I am not suggesting that this is the most common case, but I suspect that it happens more than occasionally.

Back to the Medicare…I think that the increasing age of Americans is certainly a factor in the cost of healthcare, but that does not explain why the costs keep rising.  An extra year or two of expenses shouldn’t increase the costs for everyone else, should it?  And I can’t see how this affects my, or your, insurance costs.  And there should be economies of scale that apply as we increase the number of people requesting and receiving some form of care.  And…

Wow, this turned into a rant more about healthcare than about reducing expenses at the federal level.  But, maybe that is where we have to start, at the bottom, and work our way up.  If we can solve some of the smaller problems, maybe the larger ones will be solved by default.

I hope that this will start some discussions whether they are part of this blog’s comments, or you discuss it offline.  Remember, if you want to add to, or correct my logic, point out sites with more or better information, please let me know.

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