The charts in this article are truly disturbing. When you take into account the decrease in jobs, stagnant wages, skyrocketing college tuition, zero return in the stock market since 1999, tripling of gas prices since 2000, relentlessly higher food costs, and astronomical increases in health insurance costs and premiums, you realize why the middle class has been wiped out in the last twelve years. When the median household income is $50,000 and the average family of four has to pay $21,000 per year in healthcare costs, that doesn’t leave much money for everything else.
Our healthcare system is severely broken and Obamacare does absolutely nothing to fix it. Giving more control to government bureaucracies, health insurance conglomerates, and powerful drug companies will surely reduce costs. The chart that shows the average compensation of doctors ranging from $150,000 to $300,000 proves they are not the problem. That is a reasonable compensation level for the amount of education and cost they incurred to become a doctor. Is a Wall Street shyster really worth $2 million per year when an oncologist gets paid $250,000 and puts up with all the crap from Medicare, Medicaid and the health insurance conglomerates?
The real problem is the complete disconnect between the patient and the cost of a service. With the Federal government insurance system and the monster insurance companies between the patient and the doctor, the cost of services becomes warped. The patient pays a premium, or their employer pays a premium, so they don’t care about the cost that is charged for a test or procedure. Everyone along the chain needs to game the system to get their fair share, driving the costs sky high. The organizations that profit are the public insurance companies, the drug companies, hospital corporations and the medical instrument makers. The American middle class taxpayer gets screwed twice. They get screwed by the high premiums they pay for lousy service and they get screwed as Medicare blows a hole in the national budget and results in massive budget deficits and higher taxes.
The amount spent in the last couple years of life is off the charts. How much of this is due to hospitals and insurance companies milking the system versus families choosing to keep parents alive with machines, even though their quality of life is zero?
No matter how you dice it, this picture is unsustainable. There is no money left to sustain this delusion. It will all come crashing down because math is hard and reality bites.
2012 – The Year In Healthcare Charts
By: Dan Munro
There were a few charts that made the radar this year. In some cases, the data is older than 2012, but all too often, the data hasn’t really changed or improved with age.
First up is our National Healthcare Expenditure (NHE). According to the Deloitte Center for Health Solutions, this number has been historically underreported – by a significant amount. In their report (The Hidden Costs of U.S. Health Care), they cite two important components that have not been included in tradtional calculations. The first is out-of-pocket spending by consumers on professional services and the second is the “imputed value of supervisory care provided to a friend or family member.” Using a conservative annual growth rate of 4% (from Deloitte’s baseline year of 2010), here’s what Deloitte suggests is our real NHE.
Next up is the 2012 Milliman Medical Index – which eclisped $20,000 for the first time this year. According to the index, every U.S. family of 4 is paying the dollar equivalent of a new Chevy Cruze in healthcare costs. Every year. Without financing.
The largest single component, of course, is the underlying cost of health insurance. The Kaiser Family Foundation (KFF) released this chart to highlight just that growth. One clear takeaway (when compared to the Milliman Index above) is the corresponding increase in out-of-pocket healthcare expenses.
The Kaiser Family Foundation also provided a comparison of cumulative increases in health insurance premiums – relative to Workers’ Contributions, Inflation and Workers’ Earnings (from 2000 to 2012).
Another annual chart is Medscape’s Physician Compensation Report: 2012 Results (slide #2 – 2011 data). I wasn’t that surprised by those on the lower end, but it was surprising (at least to me) to see Radiology as the highest (average) compensation.
For those that may be relying exclusively on the transformative effects of PPACA (Obamacare) – this chart highlights the nominal impact of PPACA reform on our National Healthcare Expenditure. It’s from a Commonwealth Fund Issue Brief (May, 2010) – The Impact of Health Reform on Health System Spending (Exhibit #3 – page 5).
This next one was orignally assembled by Carnegie Mellon University professor Paul Fischbeck – and reported by Mark Roth of the Pittsburgh Post-Gazette (December, 2009) – and highlights our Per Capita Healthcare Costs by Age as compared to four other countries (Germany, the U.K., Sweden and Spain).
This last one from Mary Meeker’s landmark report – USA, Inc. (slide #111) – is definitely not new but it is foundational. It compares per capita costs and life expectancy across all 34 OECD member countries using OECD data from 2009.