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.
Depressed says:
Ok, now what the fuck do we do? Will there be blood?
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9th January 2013 at 6:34 pm
llpoh says:
Looking at that second to last chart, it is obvious that God intended us to drop dead at 55. Unless of course you are self-funding medical expenses, when it is clear that God intended you to live forever.
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9th January 2013 at 6:44 pm
AWD says:
Health insurance companies are completely out of control. The same old story: they own politicians (HMO’s wrote Obamacare, remember?). United Healthcare has 70,000 employees; doing what? figuring out ways not to pay claims. They raise premiums every year even though they are paying out less in claims than last year. They’ve gotten away with it year after year because employee/employer contributions are tax deductible.
Health insurance is the biggest scam there is. You pay and pay, and when you try to use it, good luck. The number one cause of bankruptcy filings every year is medical costs, and the majority of bankruptcy filers HAD HEALTH INSURANCE. They can get away with anything, because people are too stupid and scared to do anything about it.
Obamacare is the final nail in the coffin. Medicare is on it’s last legs, and geezers and boomers are sucking every last dime out they can before it collapses with all the free shit they get. The end of life thing is a nightmare. Since families/geezers have to pay nothing, they run up million dollar bills and threaten lawsuits if you don’t do everything. Some day, geezers will be limited to $20k a year, end of story. They rest the family will have to pay. They’ll be changing their tune in a heartbeat if they have to pay for grandma to live another two weeks.
Until something is done about the monopolistic Health insurance companies and tort reform, the HMOs/corporations and lawyers will keep sucking money out of the system and rendering no value.
When a society has zero value on health, and 100% value on consumption, it is going to pay and pay dearly.
Blue Shield Of California To Hike Insurance Rates Up To 20%
Good thing there is no inflation, you know, except in every single thing every single American needs to buy to survive that is! The hits just keep coming for California, America’s very own Greece. Remember the article I posted a couple of days ago titled: Payday Loans in California: School Districts Owe $1 Billion on $100 Million Borrowed.
Now we find out from the LA Times:
Health insurer Blue Shield of California wants to raise rates as much as 20% for some individual policyholders, prompting calls for the nonprofit to use some of its record-high reserve of $3.9 billion to hold down premiums.
In filings with state regulators, Blue Shield is seeking an average rate increase of 12% for more than 300,000 customers, effective in March, with a maximum increase of 20%.
That should be a real boon for California’s economy. Meanwhile…
Some other states limit how much surplus can be held by nonprofit health plans. Other regulators press nonprofit insurers to return more money to consumers and the community overall since their stated mission is to serve the public good. Washington’s insurance commissioner has said the two big nonprofit Blue Cross and Blue Shield plans there hold enough surplus to allow a portion of it to be used to reduce rates.
Wait a minute. This is a “non-profit?” It is truly amazing that whenever I think this ghetto economy we have couldn’t be more screwed up, it immediately proves me wrong.
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9th January 2013 at 8:32 pm
underfire says:
There is plenty of good, and good people, in the USA, but there are too many cancers draining the life out this country. The health care debacle is just one of them, we’ll be saying “what a perfect storm, everything is hitting us at once”. But it’s all growing out of the same root.
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9th January 2013 at 8:55 pm
Steve Hogan says:
I used to state that the government sucked at everything, but I was wrong. In addition to mass murder and squandering resources, Uncle Sam is unrivaled when it comes to creating moral hazards that divorce risks from consequences.
Health Care is Exhibit A. The recipe is simple: hide costs from consumers of health services while coercing providers to accept all comers, throw in the specter of malpractice and a mountain of financial chicanery, and they have effectively created the mother of all moral hazards.
The result? Skyrocketing prices, a shitty product, and crushing unfunded liabilities that will obliterate the American middle class.
None of this is particularly surprising, and is in fact easy to predict for people that understand a little economics and human nature. But this knowledge doesn’t win elections, and that’s all the cretins in Washington care about.
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9th January 2013 at 9:45 pm
teset says:
Radiologists make the most because, on average, they die the youngest. All that radiation isn’t good for you even when you’re hiding behind a lead shield.
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9th January 2013 at 10:20 pm
Eddie says:
Well said, admin. I wish more people were reading this and could begin to see the big picture on healthcare. I agree with every one of your points.
Well said AWD, too. Health insurance truly is the biggest scam there is.
I’m dreaming of a cash practice, where patients get decent treatment and the doctor gets paid a decent living.
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9th January 2013 at 10:28 pm
Makati1 says:
My bout with a touch of pneumonia a few years ago: I was an out-patient.
Specialist doctor visit – $ 15.
2 chest X rays – $ 10.
2nd doctor visit – $ 12.
US mfg. antibiotic – $126.
2 chest X-rays – $ 10.
Follow up visit – $ 12.
Total cost. = $ 185.
That was in the Philippines at a US approved hospital.
( P.S. YOU keep your X-rays. Not the hospital. )
Those were TOTAL costs. I have no medical insurance here or any other ‘deductible’. That is the ‘off the street’ cost for anyone. I cannot imagine the costs for the same in the Us.
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9th January 2013 at 12:05 am
Makati1 says:
BTW: That $12 fee also covers the doctor’s expenses (office, secretary, phone, etc). But, even so, she was trained in the Us and was very good and if she nets even 30% of her fees, she makes as much as any Us doctor in a year.
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9th January 2013 at 12:08 am
Administrator says:
Makati1
Those services in the U.S. would cost at least $2,000.
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9th January 2013 at 8:00 am
Concerned Millenial says:
Jesus, when will this stop? These charts are ridiculously scary.
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9th January 2013 at 8:17 am
Makati1 says:
Admin. Yes, I would guess that they would. I can get a root canal and porcelain crown for $250 here. My last one in the US, 6 years ago, cost me $1,300. as I did not have dental coverage.
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9th January 2013 at 9:29 pm
sangell says:
Before you grab your passports and go racing abroad to have your next procedure done here is an excerpt from the Telegraph of what the British NHS is experiencing.
The full extent of the danger presented by foreign doctors working in the health service can be revealed.
New figures from the General Medical Council (GMC) show that the vast majority of doctors who have been struck off were trained abroad.
The revelations will add to concerns that NHS patients are not adequately protected from health professionals from countries where training is less rigorous than in the UK, and from those who are unfamiliar with basic medical practices in this country.
The figures, disclosed for the first time and obtained by The Sunday Telegraph using freedom of information laws, show:
• Three quarters of doctors struck off the medical register this year were trained abroad.
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9th January 2013 at 9:44 pm