FT95: “Yes the VA is successful national health care…if you call NOT covering 93% of the population universal coverage.” -Old Pithy

Posted by PITHOCRATES - December 9th, 2011

Fundamental Truth

Since the Vietnam War Congress has made some VA Hospitals little more than Third World Hospitals

There are about 3 million people serving in the military.  This includes active duty and reserve personnel.  The current U.S. population is just over 300 million.  So if you do the math that’s approximately 1% of the population.  That’s a very small sliver of the population.  And yet they offer to sacrifice everything – including their lives – for the other 99%.  Wow.  Talk about selfless duty to country.  And to their fellow Americans.

Unfortunately some of these men and women suffer wounds serving their country.  Some severe wounds.  They receive state of the art medical care within hours of their wounding.  At the Landstuhl Regional Medical Center in Germany.  And later at the Walter Reed National Military Medical Center.  Then they return to civilian life.  The Veterans Administration (VA).  And the VA hospitals throughout America.  That aren’t as nice as the Landstuhl Regional Medical Center.  Or the Walter Reed National Military Medical Center.

Since the Vietnam War Congress turned against the military.  Gutting military budgets to pay for a burgeoning welfare state.  To buy votes.  Ronald Reagan put a stop to that.  Rebuilt the military.  But Congress did a lot of damage.  They made some VA hospitals little more than third world hospitals.  A second tier of health care that was good enough for the people that they didn’t like.  Even as late as the Eighties some VA hospital had a higher mortality rate than a comparable hospital in the private sector.  Sadly, a VA hospital was a place to put veterans.  And forget about them.

The VA System is a Pretty Small Health Care Program and Small Programs are easy to Fund and to Run

Thankfully, things changed.  The quality of VA health care today is much better.  Thanks to a surge in defense spending that paid for a lot of wars since the Eighties.  But things are changing again.  And Congress is scheduling more cuts in defense spending.  So Congress can use this money to pay for their ever burgeoning welfare state.

Currently the VA is about as good as it gets.  And those who love a good welfare state point to it as a fine example of a well-ran national health care program.  They say, see?  We just need to expand this system to cover all Americans.  All we have to do is to scale up the program a bit.  Of course this all depends on how large ‘a bit’ is.

The VA’s successes are in large part due to its size.  It’s small.  For we don’t have that many veterans.  Currently they are only about 7% of the total population.  Which is less than our black population (which is about 10%).  So the VA system is a pretty small health care program.  And small programs are easy to fund.  And to run.  Not like a large national program.  Such as Medicare.  Which isn’t even universal.   But it is full of fraud and waste.  Just like any program will be that expands from serving 21 million to serving 300 million.  That’s an increase of 1300%.  Which would be like taking the existing VA system and building another 13 just like it.  All funded by guess what?  The mother of all tax hikes.  And do we really want to give government that kind of money with their record of reckless spending and deficits?  Because you know what will happen.  They’ll eventually use some of that money elsewhere.  To pay for other unfunded parts of the burgeoning welfare state.  Requiring higher taxes to fund national health care.  Or further rationing.

A VA-Type System won’t Work because you can’t Raise Taxes enough to give the Other 93% the same Quality of Care

The health care crisis is government made.  Going back to the wage controls of World War II.  When employers couldn’t offer higher wages to attract the best workers.  So they started offering benefits.  Which got around the government’s regulation of the private sector.  And gave us employer provided health care.  And the heath care crisis.

Health care costs grew because other people paid for our health care.  There wasn’t a problem before other people started paying.  When we paid health care was affordable.  Because there were market forces in health care.  Now there are fewer.  And those who favor a big welfare state want to remove all market forces.  Which will only continue the trend of increasing costs.  And when the government doesn’t have the tax revenue to pay these escalating costs they’ll start rationing services.  Because it will be the only thing they can do.  Just like other nations with national health care have done.

The VA is a success story for the 7%.  Because 7% of 300 million is a much smaller number than 300 million.  A VA-type system just won’t work for the other 93%.  Because you can’t raise taxes enough to give the other 93% the same quality of care.  So that leaves one option.  Lowering the quality of care for everyone.  Including the 7% who paid for their care by spilling their blood.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , , , , , ,

LESSONS LEARNED #67: “Free health care is very expensive.” -Old Pithy

Posted by PITHOCRATES - May 26th, 2011

Romneycare

In 2007 Romneycare took effect in Massachusetts.  A precursor to Obamacare.  Though not by design.  The new health care requirement included an individual mandate.  You either bought health insurance or they penalized you.  Ditto for employers.  They either provided health care or they penalized them.  It included subsidies to help the less wealthy pay for their mandated insurance.  And added a new and powerful health care regulatory board.  Finally, an example of what compassionate Big Government could do.  And how successful has Massachusetts been in providing free/affordable health care to everyone?  Well, as of 2011, not a single state has followed their example.

It has failed to provide universal coverage.  It has failed to control health care costs.  It has cost more in taxes than originally projected.  Health care has become more bureaucratic.  There is less choice.  Medical bankruptcies went up.  And there’s talk about implementing price controls.  And, of course, rationing.  Everything the critics warned about in a universal health care program.  And everything the proponents poo pooed.  Because those things only happen when everyone else tries universal health care.  But everyone else isn’t them.  They know how to do it right.  And their plan will not only not have those problems.  It will provide universal, quality health care at affordable prices while reining in health care costs without new and higher taxation.  Of course they were wrong.  And the critics were right.

Sound familiar?  The proponents of Obamacare have said the same thing.  In fact, Obamacare is pretty much Romneycare at the national level.  Interestingly, Mitt Romney, the architect of Romneycare, opposes Obamacare.  As a Republican candidate for the 2012 election, he promised to repeal Obamacare.  Probably because if they do at the national level what he did at the state level it would ruin the U.S. economy.  Because nothing went as planned in Massachusetts.  So there is no reason to believe that Obamacare will not be the train wreck Romneycare was.  Even if the ‘right’ people finally take a crack at it.

Medicare

In the U.S., federal tax revenue (i.e., federal income taxes) averaged about 18% of GDP between 1970 and 2010.  So if the government’s budget was balanced, federal spending would also equal 18% of GDP.  When it’s not balanced and they spend more than this 18% of GDP it results in deficits.  Which the government has to finance either by raising taxes, borrowing money or printing money.

In 1970, Medicare outlays were about 0.7% of GDP.  By 1980, that number increased to 1.2% (a 71.4% increase over the decade).  By 1990, it increased to 1.9% (a 58.3% increase over the decade).  By 2000, it increased to 2.2% (an increase of 15.8% over the decade).  Or a total increase of 214% in only 30 years of the program.  And that’s the good news.  The projections are far worse.  By 2020, it will be 3.6% of GDP (a 414.3% increase from 1970).  By 2030, it will be 4.9% of GDP (a 600% increase from 1970).  By 2050, it will be 6.7% of GDP (an 857.1% increase from 1970).  By 2075, it will be 9.6% of GDP (a 1,271.4% increase from 1970).  At which time it will consume more than half of all tax receipts.  And equal the size of the 2010 federal deficit.  And this is for Medicare alone.  It doesn’t include Social Security.  Defense.  Or interest on the debt.

These numbers are huge.  Growing.  And out of control.  It’s the biggest piece of all entitlement spending.    And it’s the biggest single item of the federal budget.  It is without a doubt some of the worse number crunching the federal government ever did.  Not only did actual costs exceed their estimates, they were three times higher in only 30 years.  One thing is clear.  The federal government doesn’t know the first thing about running a health care system.  And yet here they are.  With Obamacare.  Which will be a lot like Medicare.  Only bigger.  Because Obamacare won’t just be for the seniors.  It’ll be for everyone.

Cubacare

To borrow a medical term, Medicare is circling the drain.  It won’t be around for the kids of today.  Unless they enjoy paying a flat tax of 100% of their earnings to continue to fund it and the rest of government.  Of course, that won’t leave anything for food, utilities, rent or the other necessities of life.  In other words, they will work.  But they won’t get paid.  Reduced to involuntary servitude.  Life will be pretty bleak.  But there will be health care for everyone.  But not in the utopian way the government planners are promising.  It will be more like in Cuba.  Where it’s illegal to criticize the government.  So most don’t.  And they abort babies when it looks like they may not live through infancy.  Thus giving them a low infant mortality rate.  A sign of a first class health care system.  But the hospitals are dirty.  And filled with out of date equipment.  Much of which doesn’t work.  And there is a wholesale lack of medicine.  Because they are just too impoverished to buy any.

We have to fix Medicare.  If we want to keep having Medicare.  It can’t stay as it is.  It’s just too costly.  As all universal/free health care tends to be.  And a declining birthrate compounds the problem.  Baby boomers are retiring.  And making the system top-heavy.  The consumers of health care are growing faster than the payers of health care.  What’s worse is that it borrows from one generation to pay for another.  As they tax the young more for today’s retirees the young will have less to save for their own retirement.  So not only will they not have Medicare when they retire, they will have saved less than today’s retirees.  Making their retirement truly a bleak and impoverished picture.  How bleak?  Cuba bleak.

And continually raising taxes isn’t the answer.  Because there’s a limit to how high you can raise taxes.  Massachusetts has apparently reached that limit.  For they are now considering price controls and rationing.  Which will make things worse.  Not better.  The UK and Canada are in earlier stages of price controls and rationing.  Cuba is in a much later stage.  And you can see the progression of quality.  Of these four countries, which would you choose for your health care needs?  Most probably would choose the United States.  Many, though, no doubt, would choose Canada or the UK.  But one thing for sure.  No one would choose Cuba over the other three.  Sadly, based on the numbers, that’s where Medicare is heading.  Of course, it probably won’t ever be like Cuba.  For it probably will cease to exist long before it gets that bad.

Costs will Continue to Rise

If we learn anything in life it needs to be these two things.  Nothing is free.  And government is horrible at running things.  Providing quality yet affordable health care to everyone are two conflicting goals.  You can provide high quality health care.  But not to everyone.  And you can provide health care to everyone.  But it can’t be high quality.  Universal health care, because of its cost, has to make limited resources cover more people.  That is to say, they will have to ration resources. 

When the government is picking up the tab for health care, there will be no more private rooms in hospitals.  Or semiprivate.  There will be crowded wards.  So doctors and nurses can carry higher patient loads.  To keep costs down.  And to allow fewer resources cover more people.  They will ration high-cost treatments.  Not everyone will get dialysis.  Or chemotherapy.  There will be fewer machines.  And less medicine.  Because of costs.  Only the few meeting the government’s criteria will get these treatments.  Or those with pull.

Even then the costs will continue to rise.  And the more the government takes over, the more health care costs will be transferred to the taxpayers.  Who will pay ever higher taxes.  And get ever less in return.  But they will have universal health care.  It will just be horrible.  As their lives will grow to be.

www.PITHOCRATES.com

Share

Tags: , , , , , , , , , , , , , , , , , ,