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Other Financing Systems

Obamacare by mandate, providing Medicare Advantage and Medicaid to uninsured Americans as an entitlement for the poor will enrich insurance companies and Big Pharma and bankrupt our economy.

Medical Informatics

Medical Computing

ObamaCare

Healthcare Reform

Roger H Strube, MD

The American Health Care Financing System

Health care for more than half the citizens of the United States is taxpayer funded. Federal taxes pay for health care delivered to members of Congress, their staffers and all federal employees. Our taxes pay for all members of the armed forces, their families and veterans with service connected disabilities. The federal department of Health and Human Services (HHS) oversees several agencies that provide health care funding for large blocks of American citizens. Perhaps the largest block may be those covered by the Center for Medicare and Medicaid Services (CMS). CMS administers funding (taxpayer dollars) for Medicare and, in partnership with the states, Medicaid. The federal Indian Health Service, a department within HHS, functions like Medicare for the original Americans. Tax dollars pay for health care delivered to inmates of the Federal Bureau of Prisons, an agency within the Department of Justice (DOJ). This is not a complete list but you get the idea.

Working Americans pay for the health care delivered to more than half the population through programs like those above. Most also pay for their own health care insurance through payroll deductions for employee benefits, principally health insurance. Because health care providers shift the cost of care from those who do not pay to those who do, insurance premiums are inflated to cover the uninsured. The American taxpayer, through insurance premiums and taxes, pays for everyone’s health care.

The present American health care financing system is an expensive, dysfunctional methodology for transferring wealth from the working class to the privileged class (health care providers). In the American Medical-Industrial Complex, for-profit indemnity insurance companies manage the risk and system finances. For transferring this wealth, Shylock takes much more than his pound of flesh in profits for shareholders and egregious bonuses for corporate executives. Providers are grossly overpaid for delivering mediocre and unnecessary medical care. The American Health Care System is in crisis because both financing and care quality are broken.

Shylock costs Americans two or three times as much would be needed to administer a single purchaser (taxpayer as buyer), multiple private claims adjudicator (not-for-profit Administrative Services Only [ASO] companies) wealth transfer system. But many Americans have consumed too much Red Kool-Aid served up by those on the far right. Our politicians are unwilling, based on ideology, or unable, based on political reality, to establish a health care reimbursement methodology as equitable, fair and cost effective as Universal Health Care.

Other First World, industrialized western democracies have embraced universal health care by one means or another. All these nations have provided health care to their entire population at much lower cost and with better results on virtually all quality metrics. The World Health Organization ranking of the top ten countries by population with all the top ten by WHO rank are presented below.

 

WORLD HEALTH ORGANIZATION RANKING

OF FIRST WORLD COUNTRIES

The first spreadsheet lists the top ten countries by population. I also wanted to include most of the WHO quality ranking top ten, even if their population placed them down the complete list. These other countries in the top ten by quality of care follow the biggest countries and are also ranked by size. Note the WHO quality ranking in the first column. The total cost of care by country is found in the fifth column, “GDP...” The percent of GDP spent on health care in 2008 is represented in the sixth column. The total dollars spent per person is found in the seventh column. Total dollars spent on health care by each country in found in the eighth column. Note, America’s total is $2.2 trillion dollars. The ninth column provides the number of physicians per 10,000 population. The tenth column lists the number of licensed doctors per country. The eleventh column contains the average number of dollars each physician in each country spends each year. Note American doctors, on average, spend over three million dollars each caring for their patients.

Three countries are highlighted. France is highlighted in YELLOW. The WHO ranks them number one in the quality of care delivered to their population. The Netherlands is highlighted in GREEN. Their health care reimbursement model may have been used as a model for our health insurance regulation overhaul. America is highlighted in an embarrassing puce. We are ranked number 37 by the WHO based on metrics that assess the quality of basic health care delivered to the population.

The following is the same data organized by the health care cost generated by each physician. This was determined by dividing the total health care expenditures by the number of physicians. This spreadsheet compares the dollars the average health care provider spends in each delivery system. The dollars in the last column represent the average physician earnings plus all multiplier effect dollars.

Health Care Financing Models

The Rest of the Civilized Western World

(Tables are in descending order by adjusted US dollars spent per physician)

Western democracies have developed Health Care Systems that provide medical goods and services to all their citizens, with the exception of the United States. The PURCHASERs or buyers are the taxpaying citizens who form a “self insured group” made up of all citizens. The fiscal intermediary (claims PAYOR) may be a governmental agency or private Administrative Services Only (ASO) companies. Since the entire population of the country is a “self funded” group, these claims PAYORs do not manage risk. They are paid to perform an administrative task.

Some countries fund the fiscal intermediary (claims processing ASO) with a combination of taxpayer revenue and private individual contributions to the cost of administering claims. The For example, all citizens of the Netherlands are required to purchase health “insurance.” The premiums are subsidized by the government.

Private providers of health care goods and services form the bulk of the Medical-Industrial Complex in these Western Democracies. The reimbursement of medical professionals and health care institutions is a balance between the public and private health care delivery sectors. Many providers of health care goods (drugs, medical equipment, etc.) are private international for-profit companies as they are in the United States.

Summary tables of countries with health care systems of interest to American health care reformers may be reviewed below. The data are from the WHO 2008 statistical reports. The World Ranking is from the last WHO health care system report published. The countries are listed in descending order by the dollars spent per physician. I created this number by dividing the total health care dollars by the number of physicians in the country.

The table describing the US Medical-Industrial Complex is listed first so it may be compared to the other Western Democracies that follow. The American “Dollars per Physician” amount was derived by dividing the “Total Health Care Dollars” ($2,209,538) by the number of physicians (730,801). The average American physician is responsible for spending $3,023,447 dollars per year on their patient population. Some spend a lot more; most spend a little less.

No claim is paid without a doctor’s signature in America, or any other Western democracy. Our American Health Care Crisis is, “Just what the doctor ordered.”

I do not believe America is alone in the health care crisis. The world wide economic collapse has triggered concern regarding health care costs in other Western Democracies. They should be concerned. Most physicians in the West have similar educational and training backgrounds. Similar quality problems and error rates, determined by use of the global subjective memory based decision making process, should occur. The only reason for the superior system quality ranking and lower cost is the health care financing methodology. I believe this has resulted in better care for all citizens and forced a more conservative practice style by their memory based experts.

FOR COMPARISON: The United States of America [ Rank # 37 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

301,000,000

$44,070

$6,714

$2,209,538

18%

$3,023,447

The American Health Care System is a combination of private and public revenue sources that fund delivery of private and public medical goods and services. The workers of America fund all health care through payroll taxes and medical insurance premiums. Tax dollars finance the entire public sector. The public sector includes: all elected officials; their staff members; all federal employees; all members of the armed forces; Medicare; Medicaid; the V.A.; etc.. The public sector is greater than 50% of the total health care dollars spent in America.

Our workers also purchase private health insurance from for-profit medical risk managing public companies. These indemnity insurance companies are part of the Medical-Industrial Complex. The cost of care for the large number of un-insured Americans is shifter, by our providers of medical goods and services, to those who purchase insurance. Our providers of medical goods and services are part of the American Medical-Industrial Complex.

Canada [ Rank # 30 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

32,577,000

$36,280

$3,672

$149,995

10%

$2,406,714

 

 

http://en.wikipedia.org/wiki/Comparison_of_the_health_care_systems_in_Canada_and_the_United_States

Australia [ Rank # 32 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

20,530,000

$33,940

$3,122

$88,171

8.7%

$1,841,964

 

United Kingdom [ Rank # 18 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

60,512,000

$33,650

$2,784

$225,120

8.4%

$1,684,513

 

Ireland [ Rank # 7 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

4,221,000

$34,730

$3,082

$20,068

7.5%

$1,619,205

 

France [ Rank # 1 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

61,330,000

$32,240

$3,554

$318,232

11.1%

$1,535,296

 

Japan [ Rank # 10 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

127,953,000

$32,840

$2,514

$387,945

7.9%

$1,434,860

 

Austria [ Rank # 9 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

8,327,000

$36,040

$3,545

$41,068

9.9%

$1,365,837

 

Germany [ Rank # 25 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

82,641,000

$32,680

$3,328

$382,000

10.4

$1,343,061

 

Netherlands [ Rank # 17 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

16,379,000

$37,940

$3,383

$80,011

9.3%

$1,322,085

 

Singapore [ Rank # 6 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

4,383,000

$43,300

$1,228

$6,186

3.4%

$969,581

 

Italy [ Rank # 2 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

58,779,000

$28,970

$2,623

$208,250

9%

$968,606

 

Spain [ Rank # 7 ]

Population

Income per Capita

Health Care Dollars per Capita

Total Health Care Dollars (in Millions)

Health Care Percent of GDP

Dollars per Physician

43,887,000

$28,200

$2,388

$129,759

8.1%

$959,047

 

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