US healthcare

So now that the US healthcare debate has resulted in a bill being passed, and hopefully the rhetoric subsides, I wanted to take a broad look at what this bill is really all about.  What I will contend is that this bill extends healthcare to nearly all Americans, and it levels the playing field between those with and those without insurance in terms of costs.

Any Canadian or British (or European) person will tell you that they look on in horror when they see the high prices that Americans are forced to pay for healthcare and are thankful that they don't have to endure those types of expenses.  On the other hand of course, the US has some of the lowest tax rates on income in the world ( - despite what most Americans think) and instituting a single payer tax system would definitely cause those taxes to rise.  But given that healthcare is probably the most important thing in our lives, there are many who think this is the "first best" alternative.  What I think most Americans fail to realize is that in Canada and Britain (and elsewhere), the government doesn't take over healthcare - it basically takes over the insurance roll in the system.  British doctors set up privately in practices, and although their rates are set by the government, they can see patients privately if they wish, and indeed there is a thriving private medical insurance scheme in the UK as an alternative to the National Health System (NHS). 

So what was passed last week?  In my opinion it was a bill that extends private health insurance to nearly every American and therefore lowers the cost of healthcare for us, the population.  It is a "second best" option, but it is better than what we had, and for good reason.  How?  Well as one of my friends recently told me: "I was in hospital for 4 days and the bill came to $28,000.  Once I had handed over the bill to my insurance company, they negotiated it down to under $7,000.  I ended up paying my deductible of $200".  Now for that particular incident , look at the potential costs: if she had been an uninsured patient she would have been on the hook for $28,000; but as she was insured she ended up paying $200 - more than 100 times smaller bill for the hospital stay.  Although noone is refused treatment in a public emergency room, those people who do not qualify for medicare or medicaid can quickly face bankrupcy if they don't have insurance, and sometimes even if they do have health insurance.  Hopefully the bill will fix some of the limitations on insurance and more tightly regulate coverage. 

So what didn't the healthcare bill do?  Several things:

First, for any American who has been to a doctor in Britain or in Europe, what is most surprising is that when you walk into the doctor's office, there is much less of a front office.  There is no triage, and rather shockingly, the doctor usually walks to the waiting area to meet you after calling your name.  So the doctor's offices in Canada and Europe tend to be much more efficient - but why is this so?  It's partially due to the fact that medical lawsuits in the US have frightened doctors into checking for everything.  This bill changed nothing in this arena - and yet there is still a lot of saving to be made by curtailing lawsuits and this would mean much less costs in what is now an obviously bloated system.

Second, it didn't curtail the health insurance industry, and if anything it gave them more business.  Next time around I think we should either get rid of the healthcare insurance companies and have a single payer system or heavily regulate them like we do banks. 

Third, it didn't cover all small businesses.  I really don't understand why small businesses with less than 15 employees are exempt - their employees should be covered in my opinion, and some kind of voluntary pools should have been set up to ensure that every American can get reasonably priced health insurance.  These are the people that will still be left out, so we are not going to stop hearing horror stories about people having trouble paying their healthcare bills and facing bankrupcy, but hopefully we'll hear them much less!