Comments
GELFAND'S WORLD - I was away for barely 36 hours over the weekend, and in this new era of perpetual surprises, we got Eric Swalwell, something about the U.S. Navy blockading the Strait of Hormuz (weren’t the other side already doing that?) and the next step in the return of the military draft. That last one will go over great with the boomers, he said sarcastically.
But let’s think just for the moment about the fact that there are a bunch of problems that we hardly ever think about because (a) there is no easy fix for any of them and (b) we are already busy putting out all those other fires.
Here’s one of them that we ought to think about. The data are well known and easy to access. Start here. It’s the relative cost of health care in each country. The numbers I’d like to concentrate on begin with what it costs a modern, civilized country to provide medical care to its citizens.
Let’s start with a country that we think of as expensive, successful, and even a bit arrogant – Switzerland. Switzerland spends 11.8% of its GDP on health care. Then there is France, which is considered to have one of the best health care systems in the world. France comes in at 12.3% of GDP. The United Kingdom comes in at 11.3%, Spain at 10.7%, and Sweden at 10.7%.
Germany, which spends more than its European neighbors, is at 12.7% of GDP.
So all across Europe, country after country, the cost has been contained inside a range that is right around 10 – 12 % of Gross Domestic Product. The countries range from what we think of as mildly socialistic (Sweden) to the epitome of capitalism (Switzerland), yet they all have managed to supply something approaching universal care to an entire population, and they all do it for pretty much the same fraction of their national income.
And then there is the United States. We come in at 16.6% of our GDP. This is a lot higher, which is the part I intend to concentrate on here, but it is also an incomplete number because the U.S. does not supply health care to all of its people. There are still Americans who are referred to in that peculiar word we still use, “uninsured.”
What does it mean to us in a strictly economic sense to be spending so much more money?
What it most calls to mind is that speech that Donald Trump gave a year ago, in which he complained about our balance of trade deficit and blamed it on all those other countries abusing us and cheating us. That was the speech in which he held up a sign showing the tariffs he planned to attach to imported goods from all those different countries.
The Trump argument came down to the idea that American industry – particularly our export economy – was being damaged by those other countries doing us wrong. In a slightly simplified kind of way, you can think of the argument as those other countries putting a tax on our exports to them. Sometimes the tax is in the form of what we refer to as “non-tariff trade barriers,” which was a hot topic last century, particularly with respect to Japan.
But what of the damage we do to ourselves? That is where the health care deficit comes in. If you look at simple ratios, we are paying right around one-third more than those European countries for the national medical care bill. If you look at simple differences, you will find that the United States is spending roughly 4 – 5 % more of our national income compared to those other countries.
That’s a heavy load to place on American businesses. And I would argue that this is an under-estimate, because businesses that employ workers who have competent unions (such as the automobile industry) pay direct costs for medical insurance that are higher than what the self-employed and part time workers are willing to pay.
Just think of our health care costs as running a trade deficit compared to our international competitors, or think of it as a huge national tax that the export industry suffers. Even export companies that don’t actually offer health coverage as part of a benefit package are hindered because that “tax” effects the entire economy. If you are an export company and you buy a pickup truck or use electricity or pay for some other kind of insurance, those costs most likely include some health insurance pass-through. Think of it like this: The electric company and the utility that supplies water are supplying health insurance to their own workers, and you are going to pay for that.
I’m going to mix a metaphor here and dust off the old fish-in-water analogy. We tend to not think about this trade deficit – the one that is the result of our over-spending on health care – because nobody can think of a politically acceptable way to abolish the old system and replace it with a better system. So we just continue along, spending gobs of money, watching our neighbors go into bankruptcy over an ICU visit, and fearing the cost of an ambulance ride, and we can’t imagine doing anything about it.
And yet other countries have managed to do it, and very successfully. Switzerland is notable for preserving a system of private insurance while making sure that everyone is covered. And they do it for a lot less than it costs Americans.
So here we are, like those fish who are not aware of the water that they swim through, but in our case not even thinking about saving gobs of money on a system that fails to deliver adequately, while our current national leadership blames the trade deficit on countries that aren’t throwing away 5 percent of their national income on medical coverage. And by the way, the source I used for those cost numbers may be an under-estimate of what we actually pay. Other sources say that we are now spending 17.6% of our GDP on health care.
(Bob Gelfand writes on science, culture, and politics for CityWatch. He can be reached at [email protected])
