Econ4 on Health Care

Econ4, which is a group of heterodox economists, has produced a series of videos for laypeople on major political/economic policy issues. Their latest release is on healthcare, or more accurately, our broken healthcare system.

From their statement:

The United States ranks first in the world in health care spending per person, but only 45th in life expectancy. The average American sees a doctor less often than the average Canadian, the average Briton, or the average resident of most industrial democracies. The average life expectancy of white Americans without a high school degree has fallen since 1990 by three years for men and five years for women.

This paradoxical combination of first-class costs and second-rate performance is a result of a multi-payer health care system whose enormous administrative bureaucracy absorbs nearly one-third of our health care dollars. The aim of this private bureaucracy is to police patients and doctors, not to add value or protect human health.

A further result is that nearly 50 million Americans today lack health insurance. Millions more have coverage inadequate to prevent bankruptcy or financial disaster in the event of a serious illness.

Some claim that the best way to improve health and extend coverage is to subsidize private insurance. But rather than controlling costs, subsidies multiply the economic waste in our health care system.

Some claim that government-funded health care means “rationing” access to health care. They ignore the all-too-painful rationing that occurs every day when private insurers deny coverage and when families can’t afford to go to a doctor or buy medicines.

We oppose treating health care as a commodity to be rationed on the basis of purchasing power or a privilege to be rationed on the basis of political power.

We call for a national health insurance system that provides universal access to essential health care.

We call for insurance for all Americans in a single risk pool – the efficient model already used by Medicare and the Veterans Administration – a system that can save billions of dollars while improving health and well-being.

We extend our support to all who are working to build an effective and accountable health care system that puts public health before private profit and secures health care for all regardless of income, age, or pre-existing conditions.

Readers will no doubt notice that the myth of American exceptionalism is so deeply entrenched that the producers of the video felt they had to spend a considerable amount of time describing how poorly our healthcare system performs relative to those in other advanced economies. I can’t tell you how many times I’ve run into people who see themselves as well informed, yet are stunned when they have to have emergency care abroad and find it to be at or better than what they’d get here at a vastly lower cost. But take it back, we are exceptional, just in a bad way.

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  1. Optimader

    The US helthcare system is the global equivalent of the excceptional bus

    I can’t tell you how many times I’ve run into people who see themselves as well informed, yet are stunned when they have to have emergency care abroad and find it to be at or better than what they’d get here at a vastly lower cost. But take it back, we are exceptional, just in a bad way.

  2. Ep3

    Yup yves, I got hit with a bill yesterday for a test I had a couple months ago. No explanation why I owe the money (your deductible is this and I owe more than the deductible). Just a statement saying what test I had and what I owed for it. Now I am guilty (owe the bill) until I can prove I am innocent of actually having insurance to cover the costs. Which yes I do have insurance. Did I mention I pay $300 a month for a work policy?

  3. leftover

    We oppose treating health care as a commodity…
    We call for a national health insurance system…
    We call for insurance for all Americans in a single risk pool…

    We extend our support to all who are working to build an effective and accountable health care system that puts public health before private profit and secures health care for all regardless of income, age, or pre-existing conditions.”

    They’ll say everything except what they need to say:
    Single Payer!

  4. Deb Schultz

    So many factors are at work in most Americans’ refusal to believe that ‘their’ health care system is not superior in comparison with those systems of other countries. Xenophobia, a perverse sort of patriotism, ignorance — these are just a few of the things that stand in the way of dispassionate, objective understanding of the realities of our system and that of other countries. And we should not overlook the role played by the mainstream media in failing to provide timely, honest, and continual reporting on the actual nature of our system, its costs, its quality, its uneven availability, and the inequities inherent in pretending health insurance can function fairly and efficiently as a ‘market’ product. And while I’m at it and because after all, it IS Christmas Eve, we should give a tip of the hat to our so-called religious leaders for their consistent refusal to speak out forcefully for the poor, the disenfranchised, the suffering, the uninsured.

    1. Susan the other

      And what is the Cat Food Congress doing? Well one proposal they are looking at to cut costs and raise revenues at the same time is eliminating the deduction for employer contribution to healthcare “insurance.” So that “benefit” becomes taxable income. That is, it is no longer a benefit. But then, that does make sense since here in Murka there is no real healthcare. And we’ve always paid for things we have never received, right? Like a good education, fair treatment under the law, equal access to the goods and services of society, jobs, etc. One really good solution to all these ills is the time-honored Murkan practice of offshoring all these purveyors of the goods and services we are not receiving. Let us spend our money not in this country, but in a decent country.

    2. psychohistorian

      Those so-called religious leaders are trying to save your SOUL not your human body.

      Never mind that one exists and the other doesn’t have a scientific basis in fact.

      Think about how healthy our bodies could be if ALL the money that went to save our non-existent souls went into our physical selves.

  5. rob

    The modern american healthcare system is like a mob run protection racket.
    Everybody is getting shaken down.Whether they know it or not.
    Single payer is THE ONLY way to go.Cut out 1/3 of the cost right off the top, by not having to file all these insurance claims.Then there is all the timethe doctos save by not having to fill out those stupid questionaires.
    While technology has vastly improved medical science,current treatment is still many times,dubious at best.The fact is each patient is just a person.Get the insurance/payment time out of the way, and let the healthcare system function as it could.
    Why are americans so willing to accept a substandard healthcare system?That is a good question.

    1. Carla

      “The modern american healthcare system is like a mob run protection racket. Everybody is getting shaken down.”

      In this respect, our healthcare system is precisely analogous to our financial system. The point cannot be made too often, nor too loudly, nor by too many people.

  6. JB McMunn

    I can hardly wait until the federal government, which so handily vanquished poverty and drug abuse, fixes health care.

    War on Poverty- poverty won.
    War on Drugs – drugs won.
    War on Disease – ?

    1. TK421

      The “war on poverty” cut America’s poverty rate by a third.

      And sarcastically listing “war on disease” is silly, considering that focused efforts have eradicated diseases like polio and smallpox. As for health in general, we know for certain that single payer provides better health care. This isn’t a guess–we know it with as much certainty as anything can be known.

      Oh, and ask Hitler if America’s government can solve a problem.

      1. G.G. Allin

        JB McMunn is obviously one of these pseudo-libertarians–so it’s just as obvious you won’t be able to convince him by means of rational argumentation.

  7. JB McMunn

    @rob: The administrative overhead for doctors is going up with ObamaCare. They are forcing doctors to use electronic health records, thereby turning them into the world’s most highly paid data entry operators.

    The software is expensive and decreases productivity. If you see a doctor who uses EHR note how much time is spent on you vs the computer. Many doctors now hire “scribes” to enter the info. So at the margin doctors now pay $10/hr or more to deal with the productivity decrease of the EHR burden.

    The real agenda of EHR is government data mining. I have never seen doctors fail to implement something new and better on their own (I have, however, seen them adopt something new and no better as well ;-) ). The fact that the government is using coercion to enforce EHR use should tell you something.

    They are also pushing for a new set of diagnostic codes for billing (ICD-10) that will make it even more complicated than before.

    From Wikipedia:

    “Characters 1-3 (the category of disease); 4 (etiology of disease); 5 (body part affected), 6 (severity of illness) and 7 (placeholder for extension of the code to increase specificity) .[17] Not only must new software be installed and tested, but medical practices must provide training for physicians, staff members, and administrators. They will also need to develop new practice policies and guidelines, and update paperwork and forms. Practices should also create crosswalks that will convert their most frequently used ICD-9 codes to the ICD-10 equivalents.”

    So that should be a lot of fun, both in terms of implementation and when you see a patient with half a dozen problems to be coded.

    68,000 codes.

    1. spooz

      JB, it seems to me that coding would provide data necessary to come up with a best outcomes approach to health care. Knowing the likely outcomes based on case based data could help eliminate things like unnecessary MRIs, for instance, and streamline health care to make it more affordable for everybody. Histories would be available to all providers, eliminating duplicate paperwork. There would most likely be a “learning curve” in implementing it, but like most things would eventually become easier, imo. And providing jobs to “scribes” isn’t such a bad thing either, if it frees up the doctor’s time for providing care and helps with the unemployment problem.

      “The real agenda of EHR is government data mining. I have never seen doctors fail to implement something new and better on their own (I have, however, seen them adopt something new and no better as well ;-) ). The fact that the government is using coercion to enforce EHR use should tell you something.”

    2. steve

      “I have never seen doctors fail to implement something new and better on their own”

      Wins the internet today. TY for the good laugh. Over 40 years in medicine, 27 as a doctor, and it is very common for docs to not implement something until forced to do so. Just recently, we have the central line initiative, pre-op antibiotics and anti-coagulation for A-fib patients. People are still fighting over the pre-surgery checklist and timeouts. Yes, we also adopt some stuff quite willingly, the whole change to laporoscopic surgery as an example, but it is really a mixed bag.


    3. optimader

      you describe an issue of execution, not a failure of concept. How about more global codes that automatically capture existing treatment protocol that are currently kicked to death with code minutiae. The coding itself is gamed to pad billings because the payment system is dysfunctional. In any case,why should the medical profession be a Luddite island of 19th century cryptic notation stored in manila files?

      The data entered will be a resource for consistency and optimization of treatment -as well transportability of files. Patients SHOULD have the right of access and transfer their medical treatment history without it being equivalent to a tooth extraction from the provider. In addition, the larger digital data base SHOULD be available to evaluate treatment outcomes.

      That said, the cost of building and maintaining digital records SHOULD be recognized in the whole cost analysis of healthcare delivery. If it is a procedural requirement for all providers, it becomes a systemic cost and no provider has a relative advantage. What is important is that this cost anowledged and recognized against it’s benefit -which will presumably be improved and more consistent and improved efficacy of treatment.

      1. optimader

        As far as MD’s having to consume their uniquely valuable time, Well maybe they need to learn how to text as fast as a typical 15YO??

        Digitally documenting what you do?? Welcome to Professial life in the 21st Century.
        I suspect a root cause analysis would lead us to the conclusion that there are too few freshly minted MDs annually, not that the existing population dont have enough “time”.
        Strip away the noise and ego, MOST MDs are nothing more than highly trained (and for the most part uninnovative) technicians in a perhaps the most heavily controlled trade Guild in this Country.

        The AMA controls teaching hospitals, and has traditionally used that as a mechanism to limit the number of MDs in practice, presumably to support artifically high remuneration.

      2. LucyLulu

        I did training of both nurses and physicians back in the mid to late 90’s in use of the early EHR’s. The obstacle is that people don’t like change. The young nurses who were recently out of school loved the EHR and found it time saving. Well-designed software SHOULD save time by offering frequently used charting inputs as default options or among a menu of choices. It also should encourage more thorough charting that satisfies insurance (reimbursement) requirements. The older nurses were far more resistant to using the EHR’s, many had no computer experience. The docs were the most difficult to work with of any group. Not only did you deal with the resistance to change, but also the arrogance that they have special status that should exempt them from doing things other than how they want to. Often software trainers would refuse to work with the doctors. I liked working with them. I’ve always enjoyed challenges. I didn’t take it personally if they ranted at me. I learned early on that some docs are a**holes and not worth getting upset over, but most are good people and fun to work with. One perk that comes with maturity.

        As people become more computer literate they will become better with using EHR’s. My family doctor has been using one for several years now and loves it. He’s probably about 50 but types very quickly and is obviously comfortable with computers. There is an upfront investment cost but it should ultimately make the health care system more efficient as different systems become able to communicate and reduce errors. Medication lists for example can be transmitted electronically if one is hospitalized, or recent diagnostic tests and results so they aren’t repeated, to name a couple. Tracking down and verifying this information can be labor intensive the way it is currently being done.

    1. ginnie nyc

      Yes, dear. ICD was introduced in California under Governor Ronald Reagan, as a way to attach diagnoses and procedures to revenue.

  8. Rich R

    But, you know the situation is hopeless, right ? The biggest recipients of a single payer system (Medicaire) think Obama is a Socialist (or, even the AntiChrist !) for even suggesting the idea that more Americans at least have access to our corrupt system.

    The idea of actually fixing this abomination (Single Payer) is way beyond the threshold of plausibility…call back in about 50 years, when most Americans are living a 19th Century existence (with corresponding 19th century life expectancies).

      1. Rich R

        Isn’t that what they have in Europe ? Aren’t they all Socialists ? Aren’t they all bankrupt from spending too much on their people, rather than on defense (like they should be doing, if they actually cared about freedom and stuff)….I actually don’t know what I’m talking about…I’m just repeating what I hear from Fox News, Hannity, Glen Beck, Wall Street Journal, NY Times….what used to be called “the news”

        1. Rich R

          Better to let the “free market” more efficiently handle this…and have a profit maximizing, politcally entrenched oligarchy manage this…that’s what the Founding Fathers would have wanted.

  9. Marcie

    “Some claim that government-funded health care means “rationing” access to health care. They ignore the all-too-painful rationing that occurs every day when private insurers deny coverage and when families can’t afford to go to a doctor or buy medicines.”

    Although raising important points why doesn’t the author address that the FDA, the CDC and the NIH are controlled by pharma and that most treatments, scans and drugs do more harm than good?

    I’m high risk for ovarian cancer (30%). In 2002 a new diagnostic technology came out called proteomics. It was going to revolutionize diagnostics and could be used to detect any disease in its earliest stages. It is highly accurate and non-invasive only requiring a drop of blood. To make a long story short the company went bankrupt, the FDA decided to regulate it as a medical device depriving thousands of women of an accurate, non-invasive test for ovarian cancer. Three or four doctors left the NIH to compete with the company using the technology but not for detecting disease only to treat the tumors.

    So I recently found out that the test is available for women about to have surgery on an ovarian mass and its 92% accurate combined with ultrasound, so I ask my doctor, can I get this test? I’m BRCA mutation positive. Because I have one of the few doctors in the country that is actually a traditional doctor but very good at what she does she agrees with me and orders the test. But why aren’t women being offered this tool in the detection of ovarian cancer. The cost is around $600, not cost prohibitive like some scans. I’m glad to report the test came back low but I still need the ultrasound to confirm and will have that shortly.

    Disclosure: I was poisoned by gadolinium based contrasting agents. They recommended that I get annual MRIs with GBCAs and unfortunately I had the worst brand, GE’s Omniscan. This has cost my self-insured employer sponsored plan close to $300K so far and I’m totally disabled from the bolus injections of gadolinium based contrasting agents. Any discussion of health care costs must include the predatory providers and treatments that maim and kill with impunity.

  10. Ché Pasa

    The sad thing is that the very basics of the health care system in America are explained in the simplest possible terms, yet millions have no idea how wretched the system is overall because they think their own health care is “good enough.”

    They don’t see how it could be better, or how making it better would benefit them. Propaganda is still a powerful disincentive to doing the right thing.

    ‘Single payer’ is still a mystifying term to many Americans. That’s probably why it’s not used in the video.

    1. leftover

      The term wouldn’t be so “mystifying” if the intelligentsia that produces those types of videos used it. It’s like describing the color of the sky without saying “blue.”

  11. Benedict@Large

    This is standard “Let’s bash the insurance companies” tripe.

    Do the math, folks. Here’s the basics. …
    Insurers eat 20% of your healthcare costs. Healthcare cost twice as much as anywhere else. That means that at best, if you could completely eliminate all insurance cost (you can’t), you’d STILL be left paying 60% MORE than elsewhere. That means that waste in the system OUTSIDE of insurance costs is GREATER than the waste of insurance costs. More of your money is being stripped out of the system by healthcare providers than by insurers.

    Heathcare providers OBVIOUSLY don’t want you thinking about that.

    1. spooz

      So, I did the math, and eliminating the insurer’s 20% would leave us with health care expenses at 13.8% of GDP instead of current 17.6%, a little closer to France and Germany’s 11.6% and Canada and Switzerland’s 11.4%. But of course there are a lot more savings under single payer than just elimination of insurers fees. Some discussion about other differences that make our health care more expensive:


    2. kj

      Benedict: As Yves says, nakedcapitalism hopes to increase critical thinking. Perhaps you could go back to the drawing board here and analyze your thought process. For example, there appears to be an assumption that once there are costs in any approach/system, those costs are justified. And another that cost is the same as price. And a third that ignores the purposes of the 20% insurance companies spend — namely, as the video makes clear, to avoid covering people instead of covering people. And so on.

      By your logic, any time one approach is grossly more inefficient and wasteful than a second approach, any attempt at reform will run afoul of your ‘math’ and be ‘proven’ to be a useless exercise.

    3. Marcie

      Yes I agree with you. I wish I had not jumped through the hoops to get annual MRIs with gadolinium based contrasting agents because they destoyed my life. I allowed myself to be fear mongered into thinking I needed them when my sister got breast cancer in her early 30s. We both think it was the high dose estrogen birth control pills that caused the cancer not our mutation. Keep in mind that genetics loads the gun and environment pulls the trigger but we never look at the many ways we are being poisoned by pharmaceutical companies and other industrial and GMO we are being exposed to. I think the health insurance companies are playing an important role going forward in stopping the poisoning of the patient population but perhaps it’s a pipe dream.

  12. 70andOut

    The “The Telegraph” ( has a long running series on the nightmare of the NHS in the UK. I will only give one recent example: people screaming in pain as they die of starvation. Hopefully the “UK model” is not your idea of the direction you think the US should be headed on national health care.

    1. binky bear

      The Torygraph would rather the poor have the good taste and decency to die screaming somewhere that good wealthy people wouldn’t have to be troubled by seeing or hearing it.
      Dickensian Christmas to you too!

    2. David Strauss

      There is no such thing as the perfect health care system. Every single country has its own “horror stories.” Even Sweden does, and they debate those issues in their domestic political context.

      The point is that the American system is absolutely worse than most others’ with every factor considered. In fact, you could argue that the British one share similar “bugs” with the American one, but the problem manifests itself in a different way (e.g. chronic shortage of doctors, long waiting list, etc.) due to the structural differences. And yes, even the “dysfunctional” British system would be an improvement.

      As Yves says, any American who has ever lived in a (rich or rich-ish) foreign country for a certain amount of time should know how hopeless the American system is. And non-Americans who don’t know how bad it is in the US are quite often shocked to learn that those Americans envy them for the “dysfunctional” system.

      I suppose, as Descartes said, you need to “live the difference” to be truly informed.

    3. LAS

      I think you misunderstood what you were viewing.

      Spend some time in an ICU. Dying people do not cry out on account of starvation and truly starving people are comotose.

    4. John

      The Telegraph has its own agenda, and its sensational reporting of exceptional cases in the NHS does not change the fact that the UK has better health than the US, for way less money e.g.

      I’ve seen a case of medical negligence in the UK involving a close relative … only to go online and find the identical issue in an expensive LA teaching hospital. Yet I wouldn’t regard it as fair to use either of those cases to characterize an entire country’s health system.

  13. Brooklin Bridge

    I’m getting blocked when I try and visit to see if Chris Hedges has written anything recently.

    Anyone know what the story is?

  14. Deloss

    Yves, I am hoping and hoping that the Rabid Ferrets (Paul Krugman’s borrowed phrase) take us off the cliff. They, and their counterparts at the NRA, have shown their faces, and I hope that the voters will see what swine they are, and begin to vote against them consistently.

    And if we go over the cliff, we will get stable taxes, and we will get “entitlements” back, but the bloated military budget will never recover. Captains and sergeants, even general officers: I hold you no ill will. I served, 1963-1969. But the defense industry is the octopus that Eisenhower, that disgusting liberal, warned us against.

    I do not want to take away the pay and benefits of soldiers–good Lord, especially not those who have been in combat, and have been wounded. (I never saw combat–but I was, insofar as one can be without knowing the event, READY.)

    But six models of the same unworkable fighter plane, paid for at citizen expense–yup, that I am against.

    Hindenburg beat Hitler 53% to 37% in 1932. I could spend a lot of time marveling that 37% of the electorate were idiots, but why bother. Democracy, given half a chance, works, and the Weimar vote belies Rabelais’ dictum that in a vote, the fools outnumber the wise men. I believe in democracy, and I believe in my country–but we have a terrible struggle ahead of us. We have fought this struggle before, and we have ALWAYS WON.

    Confusion to our enemies.

    Happy Christmas.

  15. Francois T

    Several treatises could be written about the dysfunctions, a.k.a. the intertwined cluster of f*&*s that is the US health care non-system.

    I’ll therefore limit myself to 3 links;

    1) The infamous saga of Study 329 where it’ll become obvious that some medical journals cannot be trusted…at all!

    2) On when the FDA decided to sing “I can’t hear you La!La!La!La!” and put people’s lives in jeopardy.

    3) “Covering you? What’s in it for us?” The economics of death and suffering.

  16. LAS

    I’m not so sure this a problem of convincing average people. It is a problem caused by powerful special interests dominating the politics, the propaganda and the advertising.

  17. Brooklin Bridge

    Looks like O-Betrayer’s coming back early to work on the fiscal cliff. Bless his wicked wicked little heart.

  18. Gaylord

    Webmaster, PLEASE do not put up video content with annoying AUTOPLAY. Rather, allow the user to click the “play” button when they are ready to view and hear. Thank you.

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