"Mike H." made a great point (probably the best point in the last 40-50 years of blogging) in an earlier comment to the effect that, when comparing our tax burden to other countries, we should adjust the figure to reflect the privatized costs of healthcare.
As I said before, taxes constitute 26.8% of GDP (for 2005). See http://www.oecd.org/dataoecd/44/41/39494985.pdf. Health care accounts for 16% of GDP (for 2006, and the figure is due to steeply rise in the near future). See http://www.cms.hhs.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp#TopOfPage. Of course, some of that medical spending is government spending, so we have to adjust this figure to avoid double counting. According to HHS, the government accounts for 40% of U.S. medical spending (in 2005, perhaps the figure is a bit lower today). Id.
So our "adjusted" tax burden as a share of GDP is 0.268 + (0.16 * (1 - 0.40)), or about 36.4%. This means our tax burden is essentially equal to Canada's "adjusted" tax burden as a share of GDP: 0.334 + (0.107 * (1 - 0.698) = 36.6%. See http://www.who.int/whosis/database/core/core_select_process.cfm?strISO3_select=ALL&strIndicator_select=nha&intYear_select=latest&fixed=indicator&language=english and http://www.oecd.org/dataoecd/44/41/39494985.pdf.
Of course we're paying all that extra money for a garbage system. See http://www.who.int/whr/2000/en/whr00_annex_en.pdf p. 155. And the burden of these additional costs are mostly borne by whoever happens to need medical care, not society at large on the basis of income or wealth. Further, as Josh mentioned to me the other day, this figure understates the cost of our crappy system, because it doesn't reflect the cost of health care that is not provided because people can't afford it. Remember that 15.8% (in 2006) of our population has no health insurance and far more are "underinsured." See http://www.census.gov/prod/2007pubs/p60-233.pdf p. 18.
Nice work, "Mike H." If anyone else thinks of other adjustments that we should make (i.e., the cost of services provided by the government in other countries that we have to pay for privately here), let me know.
Subscribe to:
Post Comments (Atom)
I'm sure you could "adjust" your way up to a quite high effective tax rate. But it doesn't change the underlying difference between the US system and that of countries with national health care. The US provides choice, the others don't. I can contribute my 16% (toward purchasing some health insurance presumably), or I can spend considerably more than that (if I choose to go "naked" and get caught out in the cold needing major surgery), or I can spend considerably less (going cheap on health insurance and getting lucky).
ReplyDeleteI won't defend our healthcare system because I agree that it is broken. We do need some form of national healthcare. But my version would only provide certain "necessary" services, and my definition of necessary would be rather strict so as to keep the program reasonably affordable. Supplemental insurance would be required (if desired - thus choice) to pick up things that aren't "necessary".
I'm also a big free market guy. While I'll concede that our system is "crap" overall as you so eloquently note, it produces the best medical technology, medicine, and doctors on Earth. Keeping a little choice in the equation should help to ensure there is still incentive to continue this development.
First, I think the “adjustment” is perfectly appropriate. It reflects the fact that, in other countries, they get these services in exchange for their tax dollars, where we do not.
ReplyDeleteSecond, the system I support, and that they have in Canada, is a single payer system, not socialized medicine. The distinction is that in a single payer system, the government acts as the universal insurer, but not necessarily the actual provider of medical services. Hence the phrase, “Medicare for everyone.” Medical service providers (hospitals, doctors, etc.) would still be mostly private and would be free to compete for patients, and conversely patients would be free to seek out and select health care providers of their choosing. So what I support does retain “a little choice in the equation.”
Under this system competition between health care providers remains but competition between insurers is eliminated. Bear in mind that the “free market” in health insurance has led to economic efficiency and blatant injustice. Administrative costs account for 31% of our healthcare costs; administrative costs are far lower in countries with single payer systems (16.7% in Canada). See http://www.pnhp.org/publications/nejmadmin.pdf, p. 768. Canada’s national health insurance system has administrative overhead of 1.3% (see above) and Medicare here in the U.S. has administrative overhead of 2%. See http://news-info.wustl.edu/news/page/normal/4981.html. So market competition between insurance companies is clearly less efficient than government insurance. And this is to say nothing of the injustice of private insurers denying individuals coverage for preexisting conditions, arcane exclusions, and of course the fact that 16% of our population has no health insurance at all.
Also note that our system is the least “affordable” in the world, as measured by per capita health spending. So anything along the lines of what I’m talking about would be far cheaper overall than what we’re doing now.
And I’m sorry, but I have to ask what makes you so sure that “we have the best medical technology, medicine, and doctors on Earth.” According to the CIA World Factbook and a recent study, we don’t have particularly strong life expectancies, infant mortality rates, or preventable death rates. See https://www.cia.gov/library/publications/the-world-factbook/rankorder/2091rank.html, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html, and http://content.healthaffairs.org/cgi/content/abstract/27/1/58?ijkey=05uD000683MNE&keytype=ref&siteid=healthaff. We only ranked 15th in “Overall Goal Attainment,” whatever that means exactly, in the 2000 WHO World Health Report. See http://www.who.int/whr/2000/en/whr00_annex_en.pdf, p. 13. What makes so many people keep saying this? Just the fact that we spend the most? I don’t get it.
Regardless, I see no reason whatsoever why a single payer system would compromise either consumer choice or system effectiveness. In fact, I'm pretty confident it would provide more of both.
When I get a chance I'm going to try to figure out an adjustment for higher education expenses as well.
ReplyDelete