Andrew Sullivan posted the following chart, which he found in National Geographic, and he noted, with considerable justification, that this was evidence of an insane and inefficient healthcare system in America.
The chart shows that America spends a lot more than other nations without a concomitant increase in life expectancy. Let’s set aside whether the right side of the chart is a bit misleading because American life-expectancy numbers are influenced by things that have nothing to do with the quality of the healthcare system, such as highway fatalities, homicides, and obesity, and focus on Andrew’s claim that Obama’s proposal will make things better because of its “cost-control measures.” Since the Administration’s own experts have predicted that Obama’s proposal will increase total healthcare spending, one can only wonder what he’s talking about. Does he actually think a new government entitlement program will lead to lower costs, when all the evidence suggests otherwise?
If he really wanted a chart that captures what’s wrong with America’s healthcare system, he should have gone to the Centers for Medicare and Medicaid Services’ national health expenditures data website and downloaded the figures showing how rampant third-party payment has resulted in consumers directly paying for less than 12 percent of healthcare costs. And when people are purchasing something with (what is perceived to be) other people’s money, it’s understandable that they don’t pay much attention to cost. My homemade chart does not compared to the one produced by National Geographic, but it does identify the real problem. Sadly, Obama’s plan (like Bush’s Medicare expansion, and everything else politicians have done for the past 50 years) will exacerbate the third-party payment problem and lead to even higher costs and more inefficiency.
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] of third-party payer, which is also what’s screwing up the healthcare system. More on that issue – as it relates to higher education – later this […]
[…] To elaborate, not only do jurisdictions such as Hong Kong and Singapore enjoy impressive growth, they also get very high scores for infrastructure, education, and health outcomes. […]
[…] To elaborate, not only do jurisdictions such as Hong Kong and Singapore enjoy impressive growth, they also get very high scores for infrastructure, education, and health outcomes. […]
[…] “third-party payer” system basically means market forces are absent. Consumers have very little reason to focus […]
[…] about cost and providers have no incentive to be efficient. And since government figures show that nearly 90 percent of health care expenditures are financed by someone other than the consumer, this is a major problem. One that I’ve written […]
[…] about cost and providers have no incentive to be efficient. And since government figures show that nearly 90 percent of health care expenditures are financed by someone other than the consumer, this is a major […]
[…] about cost and providers have no incentive to be efficient. And since government figures show that nearly 90% of health care expenditures are financed by someone other than the consumer, this is a major problem. One that I’ve written […]
[…] about cost and providers have no incentive to be efficient. And since government figures show that nearly 90 percent of health care expenditures are financed by someone other than the consumer, this is a major problem. One that I’ve written […]
[…] about cost and providers have no incentive to be efficient. And since government figures show that nearly 90 percent of health care expenditures are financed by someone other than the consumer, this is a major problem. One that I’ve […]
[…] Heck, they should also address the other programs and policies that have messed up America’s healthcare system and caused a third-party payer crisis. […]
[…] Heck, they should also address the other programs and policies that have messed up America’s healthcare system and caused a third-party payer crisis. […]
[…] matrix to understand the shortcomings of the US health care system. Way back in 2009, I opined that the most important chart in health care was the one showing that American consumers directly paid for less than 12 percent of health […]
[…] I wrote yesterday (and have pontificated about on many occasions), the main problem with America’s healthcare system is that various government interventions […]
[…] matrix to understand the shortcomings of the US healthcare system. Way back in 2009, I opined that the most important chart in healthcare was the one showing that American consumers directly paid for less than 12 percent of health […]
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] again in 2009, some people on the left shared a chart displaying that nationwide expenditures on health care in comparison with life […]
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] back in 2009, some folks on the left shared a chart showing that national expenditures on healthcare compared to life […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] Before sending a team of medical attendants to cart me off to a sanitarium, allow me to elaborate. I’m not saying Obamacare is good policy. After all, I’ve written over and over again that it is a budget-busting boondoggle that will exacerbate our real healthcare crisis of third-party payer. […]
[…] las arregló para combinar los males del tercer pagador , dependencia del gobierno , el despilfarro fiscal y la política monetaria irresponsable en […]
[…] I’m obviously not a fan of Obamacare, but I try to remind people that our system was already messed up even before Obama was elected. As such, repealing Obamacare – while the right thing to do […]
[…] the meantime, it’s our healthcare system – which was already messed up by government to begin with – that’s incurring the damage. Which makes this bit of humor that arrived […]
[…] exacerbation of the third-party payer problem, which is the nation’s biggest healthcare […]
[…] And since it’s highly unlikely that more government is the solution to problems created by government in the first place, I think we’ll have great fun being able to highlight all the bad consequences of Obamacare and make a principled case for pro-market reform (meaning not only Medicaid reform and Medicare reform, but also tax reform to help deal with the third-party payer crisis). […]
[…] And since it’s highly unlikely that more government is the solution to problems created by government in the first place, I think we’ll have great fun being able to highlight all the bad consequences of Obamacare and make a principled case for pro-market reform (meaning not only Medicaid reform and Medicare reform, but also tax reform to help deal with the third-party payer crisis). […]
[…] Before sending a team of medical attendants to cart me off to a sanitarium, allow me to elaborate. I’m not saying Obamacare is good policy. After all, I’ve written over and over again that it is a budget-busting boondoggle that will exacerbate our real healthcare crisis of third-party payer. […]
[…] Before sending a team of medical attendants to cart me off to a sanitarium, allow me to elaborate. I’m not saying Obamacare is good policy. After all, I’ve written over and over again that it is a budget-busting boondoggle that will exacerbate our real healthcare crisis of third-party payer. […]
[…] Before sending a team of medical attendants to cart me off to a sanitarium, allow me to elaborate. I’m not saying Obamacare is good policy. After all, I’ve written over and over again that it is a budget-busting boondoggle that will exacerbate our real healthcare crisis of third-party payer. […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] Simply stated, the main healthcare problem in America is the third-party payer crisis. As explained in this video, markets are dysfunctional when government programs and other forms of intervention create a system where 89 cents out of every healthcare dollar is paid for by somebody other than the consumer. […]
[…] payer is the main problem with America’s healthcare system, and I was making that point well before Obamacare was imposed upon the […]
[…] of Obamacare and written several times about the serious problem of government-caused third-party payer – including just as few days ago while nit-picking about an otherwise excellent column by […]
[…] I assume all his facts are correct, but Samuelson is missing the point. The reason we have “spiraling health costs” is because of something called third-party payer. As the chart shows, nearly 90 percent of health care costs in America are financed by someone other than the consumer. And when folks get to consume with other people’s money, they have very little reason to care about costs. […]
[…] think Obamacare is bad policy because it exacerbates the main problem with the current healthcare system, which is third-party payer. And as a public finance economist, I’m obviously not happy about the […]
[…] think Obamacare is bad policy because it exacerbates the main problem with the current healthcare system, which is third-party payer. And as a public finance economist, I’m obviously not happy about […]
[…] pays a significant share of the cost of a product. For instance, consumers directly pay for only 12 cents of every dollar of healthcare they consume. So why care about rising prices when somebody else is picking up the […]
[…] managed to combine the ills of third-party payer, government dependency, fiscal profligacy, and irresponsible monetary policy in one […]
[…] of third-party payer, which is also what’s screwing up the healthcare system. More on that issue – as it relates to higher education – later this […]
[…] because this distorted system leads to ever-higher costs, the increase in total compensation for lower-income and middle-income […]
[…] because this distorted system leads to ever-higher costs, the increase in total compensation for lower-income and middle-income […]
[…] because this distorted system leads to ever-higher costs, the increase in total compensation for lower-income and middle-income […]
[…] because this distorted system leads to ever-higher costs, the increase in total compensation for lower-income and middle-income […]
[…] The deep flaws in the British system, by the way, do not imply that the American system is ideal. As I’ve explained, the U.S. system also is heavily dominated by government, causing a massive third-party payer problem. […]
[…] third parties, mainly insurance, covering a large chunk of the rest. The average person pays only 12% of his bill out of pocket. Since there is still a profit motive, all the negative aspects of current […]
[…] insurance. This special taxation mangle has helped emanate a very emasculate medical system and a third-party payer crisis. It is unclear, though, either this attribution taxation exaggeration is separated with a Perry […]
[…] insurance. This special taxation mangle has helped emanate a very emasculate medical system and a third-party payer crisis. It is unclear, though, either this attribution taxation exaggeration is separated with a Perry […]
[…] insurance. This special tax break has helped create a very inefficient healthcare system and a third-party payer crisis. It is unclear, though, whether this pernicious tax distortion is eliminated with the Perry flat […]
[…] insurance. This special tax break has helped create a very inefficient healthcare system and a third-party payer crisis. It is unclear, though, whether this pernicious tax distortion is eliminated with the Perry flat […]
[…] insurance. This special tax break has helped create a very inefficient healthcare system and a third-party payer crisis. It is unclear, though, whether this pernicious tax distortion is eliminated with the Perry flat […]
[…] insurance. This special tax break has helped create a very inefficient healthcare system and a third-party payer crisis. It is unclear, though, whether this pernicious tax distortion is eliminated with the Perry flat […]
[…] By the way, criticism of the UK’s government-run healthcare system is not an endorsement in any way of the US’s government-dominated healthcare system. America’s system is almost as screwed up, largely because government intervention has created a massive third-party-payer problem. […]
[…] If we continue on our current path, with true cost of health care being eternally shielded from the consumers of health care thanks to third-party insurance, most of which is paid for by employers, I’m not sure that we can without either serious declines in the quality of care, or rationing, neither of which anyone seems to want. I noted back in June that the core of the cost problem in health care can be found in the fact that the people who consume it have no incentive to even be aware of its costs: [We are at] the point where now just 12% of health care costs are paid directly by consumers: […]
[…] conservatism. Obama has radically expanded the role of government in a sector that already has been screwed up by government intervention. If this is conservative, I’m a […]
[…] conservatism. Obama has radically expanded the role of government in a sector that already has been screwed up by government intervention. If this is conservative, I’m a […]
[…] It didn’t always work this way. For a long time, health insurance, including insurance provided through employers, typically only covered major medical procedures and hospitalization (I remember terms like “major medical” and “hospitalization” being used to described health insurance as late as the 1970s). Over the years, though, insurance has come to cover more and more “routine” medical expenses, and consumers have become more and more unaware of the actual cost of their health care, to the point where now just 12% of health care costs are paid directly by consumers: […]
[…] don’t pretend to be an expert on healthcare, but I am firmly convinced that third-party payer is one of the big reasons for rising costs and pervasive inefficiency in the healthcare sector. When we buy goods and services with our own money, we try to get maximum […]
[…] I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants). In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted. […]
[…] I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants). In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted. […]
[…] I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants). In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted. […]
[…] their own money so they don’t really care how much things cost. As this chart illustrates, only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] so they don’t really care how much things cost. As this chart illustrates (click to enlarge), only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] so they don’t really care how much things cost. As this chart illustrates (click to enlarge), only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] so they don’t really care how much things cost. As this chart illustrates (click to enlarge), only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] so they don’t really care how much things cost. As this chart illustrates (click to enlarge), only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] so they don’t really care how much things cost. As this chart illustrates (click to enlarge), only 12 percent of every healthcare dollar is paid directly by consumers. The rest comes from third-party payers, mostly government but also insurance […]
[…] that benefits patients. Just imagine how much more there would be if patients paid more than 12% of all health care expenses. Read the whole article: Where Are the Innovators in Health Care […]
[…] Compare this with medical spending in the U.S. in general, where patients pay directly for less than 12% of all medical treatments. […]
[…] code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of healthcare costs are financed directly by consumers. And since consumers almost always are buying healthcare with somebody else’s money, it should […]
[…] code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it should […]
[…] code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it […]
[…] code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of healthcare costs are financed directly by consumers. And since consumers almost always are buying healthcare with somebody else’s money, it […]
[…] huge share of healthcare spending that already is being financed by taxpayers – and showing that only 12 percent is financed directly by consumers, the Health Freedom Meter shows that Obamacare moved America from having a healthcare system 67 […]
[…] have deviated so far from a free market that only 12 percent of healthcare costs are paid for out-of-pocket by consumers. And health insurance, rather than being […]