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Why America's Medical System is Failing It: Part V

Posted on: 23-Jul-2007

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The sources of why Americans pay more for healthcare and get less: The cost burden being shouldered by corporations
The burden of paying for health care in America is largely shouldered by corporations. This creates a multitude of distortions that hurts Americans in numerous ways.
The idea is behind corporations paying for healthcare is largely a historical result of the emergence of unions in the first half of the last century. At the time, it was rare to have any form of institutionalized health care coverage. Unions fought and got coverage for work related injuries and ultimately full coverage. Europe started universal healthcare after World War II and it was universal coverage by government. In both cases, the concept that there is a societal benefit when some party other than individuals is responsible for paying is pretty much universal. Economic growth is dependent on a healthy population.
One huge issue with corporations paying is that large numbers of people are left without coverage. In the United States, that number is estimated at 42 million. One reason behind America’s abnormally high infant mortality rate results from this because the segment of the population that has children is generally younger and is underinsured on average. It’s also why communicable diseases like Polio are reemerging, as many of the underinsured can’t afford to vaccinate their children. That results in higher medical costs as disease spreads, not to mention the emotional and economic disruption.
A second factor is that when corporations pay, via an insurance based system, the market mechanisms to control prices breaks down. So, health care gets more expensive, making it more difficult for the underinsured to pay. Of course, many get care anyway, as medical providers cost shift the burden over to corporations. So, corporations wind up paying even more.
But it is a myth to believe that corporations are really paying for this. Either the costs are passed on via higher prices or lost jobs. For example, when you buy a cup of coffee from Starbucks, more goes to pay for the worker’s healthcare than to the coffee needed to make the cup. Meanwhile, American autos cost about $1500 more to pay for healthcare. Because foreign companies don’t have to pay for healthcare, they can sell for less. The result is that America’s auto industry is losing market share. As it loses it costs American’s jobs.  An alternative is for American companies to outsource more work overseas, where they don’t have to pay for healthcare. Either way, American’s lose jobs. As more work goes overseas, America’s trade deficit rises, causing it currency to weaken.
The bottom line is that American’s still pay for their healthcare. So, it is a hidden tax that is far more expensive than if health care were paid for in a so called single-payer system, such as the government.
The issue here is that a single-payer system is virtually impossible, given the political system. It gets tagged as socialized medicine and anything tainted with this adjective never goes far in America. Despite this, many areas of government are socialized, such as the military, police, and fire protection. No one ever argues to privatize these parts of America’s infrastructure. It is important to recognize that government already covers more than half the population, since more half the population either works for the government or is on social security benefits with medicare.
So the issue is not so much that a single-payer system is socialism in disguise as it is that the idea upsets the existing infrastructure. It is too politically threatening to make such a radical change. A single-payer system is a threat to doctors, pharmaceutical companies, and even individuals. It is a huge threat to insurers and their employees, as they could be put out of business with many losing their jobs. The current system may be a bad card game, but everyone understands the rules. The majority is unwilling to change the rules, much less upset the apple cart.

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About weQuest:
weQuest's are written by G Dan Hutcheson, his career spans more than thirty years, in which he became a well-known as a visionary for helping companies make businesses out of technology. This includes hundreds of successful programs involving product development, positioning, and launch in Semiconductor, Technology, Medicine, Energy, Business, High Tech, Enviorntment, Electronics, healthcare and Business devisions.

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