Monday, 30 July 2018

Faux Lib bullshit of the week

From The Daily Mail:

Senator Bernie Sanders' 'Medicare for all' plan would increase government health care spending by $32.6 trillion over 10 years, according university study.

The latest plan from the Vermont independent would require historic tax increases as government replaces what employers and consumers now pay for health care, according to the analysis being released Monday by the Mercatus Center at George Mason University in Virginia. It would deliver significant savings on administration and drug costs, but increased demand for care would drive up spending, the analysis found...

Responding to the study, Sanders took aim at the Mercatus Center, which receives funding from the conservative Koch brothers. Koch Industries CEO Charles Koch is on the center's board.

OK, divide $32.6 by ten years, and then by 325 million US population = $10,000 a year per person. This would - by implication - be on top of what the US government already spends on healthcare and healthcare industry subsidies, $1.5 trillion a year = $5,000 per person.

Let's give Sanders the benefit of the doubt and assume that people would no longer have to pay for private health insurance, $2 trillion a year = $6,000 per person.

So according to the Faux Libs, the average healthcare spending per person would be $15,000 a year.

By comparison, average healthcare spending per person in Western European countries is about €4,000 a year, at least 80% of which is funded out of general taxation or "income based compulsory contributions" i.e. hypothecated taxes.

So either American doctors, pharma companies and insurers are allowed to earn ridiculous profit margins (and they do - an outrage in itself) or that report is total and utter hogwash. Or some combination of the two. And clearly, the American healthcare 'industry' is a damn' sight smarter than the poor American mugs paying for it.


PJH said...

Interesting how the number of currencies in that 4th paragraph reduced since the first draft... ;)

Mark Wadsworth said...

PJH, yup. It’s called proof reading.

Dinero said...

Well according to this link it works out to (5960 / 0.64) = $9312 per person spent currently.

Lola said...

About half that goes in med neg insurance premiums. I understand that average GP pays 50% of his revenue for PI.

And the US system is not and has never been (well, since the 1930's(?)) 'free market'. It is heavily regulated, heavily subsidised and protectionist (intra the US between States), and heavily unionised - the American Medical Association (the doctors union for example).

Bernie Sanders will make all that worse.

Sobers said...

Karl Denninger (Market Ticker Blog) keeps banging on about how the cost of US healthcare is artificially inflated by the corporate interests who are not subjected to the same anti-trust and competition rules that the rest of the economy are. He reckons that if you enforced all the existing monopoly and competition law on the US healthcare industry it would collapse the cost to such an extent that the average person could afford to pay most items out of their own pocket, and catastrophic care insurance would be pretty cheap too.

Lola said...

Sobers. My point exactly.

Mark Wadsworth said...

S, ta, that seems plausible. He's proper free markets chap is Karl.