Allow Patients not Government to Reign in Healthcare Costs

by Odysseas Papadimitriou on July 7, 2009

Healthcare CostsThere has been a lot of talk about healthcare in the news recently, especially in regards to its reform.  For the most part, these discussions center around coverage: who pays for it, who will get it and what that means for those who do?  What seems to be missing from the discussion is an acknowledgment that a system that doesn’t hold the recipient at least partially responsible for the financial burden of their medical expenses is likely to fail. 

The problem with America’s current system is evident with one look at its global performance.  Though life expectancy is about the same in France, Sweden, the United Kingdom and the United States, the price of healthcare (as a percentage of Gross Domestic Products) varies greatly.   According to the World Health Organization’s 2009 report, the U.S. pays over 15%, whereas France pays 11.2%, Sweden 9.2% and the United Kingdom 8.2%.  We are paying more for what is essentially the same level of healthcare because our system encourages inflated costs.

An Obvious Way to Lower the Cost of Insurance

by Brian Johnson on June 23, 2009

InsuranceAt a time when everyone is looking for a way to make their money stretch further, one solution to curb rising insurance costs is to regulate insurance at the federal, rather than state, level.  Such regulation would require tax payers to pay for one regulatory body (rather than fifty) and would allow the insurance providers themselves to more easily and more cheaply operate at a national level.  Thus the price of insurance  would go down through increased competition.

To better understand this point, we must first acknowledge that for every business, there is inherently a cost associated with operation—whether it be the cost of raw materials, the rent on a storefront, the salary of employees, etc.  For insurance companies, part of their operation cost is related to staying within compliance of state regulation.  As insurance is regulated at a state level, rather than the federal, the various laws that govern the operations of these companies change depending where you are in the country.  It stands to reason then, that the cost of staying in compliance in Georgia, doubles if the company must also stay in compliance in Montana.  A company that offers insurance policies nation-wide must pay an increased overhead so as to simultaneously stay in compliance for all of its customers in all fifty states.  With only one set of regulations, however, any state insurer could make the transition to a regional or national insurer without having to incur additional costs.  Thus a change in regulation would increase the number of providers in the market and would lower the overhead costs for all the insurance companies.  The combination of a lower cost structure and increased competition, would bring in a better price for consumers.

Who will pay for healthcare reform?

by Brian Johnson on June 3, 2009

TaxesJanine Sahadi did a great job over at CNNMoney.com describing the current ideas being looked into by lawmakers to help the government pay for health care reform. From her synopsis, it looks as though the government is hoping to tax revenues that have, up until now,  gone untaxed. So far, lawmakers have suggested taxing, among other things, employer contributions to health care, Medicare benefits for state and local government employees, and drinks with high fructose content.

We are fundamentally aligned with the belief that everyone ought to get health care regardless of their condition as we see this as a basic human right.  However, we find it a little disturbing that all of the ideas being bandied about by lawmakers involve either raising existing taxes or creating new taxes. We are willing to do our part, of course, but shouldn’t the government be just as willing?

Facing the Economic Aftermath

by Odysseas Papadimitriou on May 12, 2009

AftermathObama has four major issues on the agenda for his presidency:  three he wants to deal with and one he inherited.   Those issues are: the current economic recession, education, health care, and energy.  All of these issues are pressing.  Massive government spending needs to happen to keep this recession from spiralling into a full blown depression.  We must maintain high standards in education so as to make sure that the next generation of American worker will be as competitive in the world stage as the previous one.  We must refigure health care for moral reasons as it is unacceptable that one of the richest nations in the world should leave millions of its citizens without health care.  Energy innovation is an issue of  both national security and economic prosperity in that it keeps America’s money at home instead of sending it abroad.

All of these projects will significantly drain the nation’s finances in the short term.  We agree that these plans are necessary but the money to pay for them must come from somewhere.  As we see it, of the four agenda items, the development of a more efficient energy source is the most likely to produce the money needed to fuel the other initiatives. 

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