The problem with health care costs isn't Medicaid and Medicare. It's medical care. More specifically, it's the price of that care.
Our prices are by far the highest in the world. Reducing or scrapping Medicare and Medicaid would not lower prices. It would raise them.
Shifting the payment of these high prices from the public to private sector would eliminate the cost containment practices of the public plans, and prices on many procedures and medications would then trend even higher.
Before moving to cut or scrap Medicare and Medicaid, first we need to get prices under control. If we do that, there will be no need to change Medicare and Medicaid.
But we seem unable to see the obvious: the 800-pound gorilla or, put another way, the elephant in the operating room.
As economics writer James Surowiecki put it in the May 2 New Yorker magazine: "Discussions of health care in the U.S. usually focus on insurance companies, but, whatever their problems, they're not the main driver of health-care inflation: providers are."
Our prices are the highest anywhere and our "fee-for-service structure insures that we use more of them, too. It's really just math: most of our health-care dollars go, in one way or another, to health care providers, so if we want to restrain the growth of health-care spending, less money will have to go to them."
An expert in looking at this math is George Halvorson, president and CEO of the Kaiser Permanente integrated health plan. His analysis for last year:
We spent $2.7 trillion on health care, 18 percent of our GDP. Seventy five percent went for chronic illnesses; 25 percent for acute care. One percent of the population cost 30 percent of the total. Ten percent account cost 80 percent of the total. Diabetes accounted for 32 percent of Medicare expenditures. The average family insurance premium was $14,000; the minimum wage was $14,000.
Our cost for care was at least two to three times the cost in other countries. The highest bypass surgery cost in Europe was $20,000; ours was up to $150,000. Baby delivery in Canada was $500, France $1,300, here from $2,400 up to $4,800.
If our prices were at those of the next highest country, we'd cut expenditures from 18 to 12 percent of GDP, and the health care cost problem would be solved.
For specifics on cutting medical costs, check out the video of Halvorson on C-Span online, the first 14 minutes of "Health Care Executive Panel, April 4, 2011, World Health Care Congress."
He lists four aspects to attaining affordable care.
1) Coverage for all; 2) improving care, such as reducing in-hospital infections and increasing earlier, preventive care; 3) general cost cutting; 4) improving health.
These four are not mutually exclusive. Obviously the healthier we are, the more our medical costs go down. Significantly reducing Type 2 diabetes, for example, could save Medicare.
The main causes of this preventable disease that didn't exist 70 years ago are, according to physician/author Kevin Peterson, cheap processed food and less physical activity.
So we the people can play a role in cutting medical costs, by eating better and getting a bit more physically active. Halvorson recommends walking, as little as one 30-minute or two 15-minute strolls most days.
He also recommends paying for health care by the package rather than for each piece of care, and having transparent pricing, so consumers are informed before treatment if at all possible.
And he is against insurance deductibles and for fair price limits for care, with prices above this limit billed directly to the consumer. This would allow market forces in to pull prices down toward the fair price limit.
Not everyone in the audience was pleased with Halvorson's presentation. At the nine minute mark of his talk, the camera panned the audience and stopped briefly on the glummest looking man you'll ever see, with a pronounced upside down smile. He had to be a health care provider or administrator doing very well thank you under the current system.
Under this system, however, our medical costs are unsustainable, and they are not self-correcting. Something has to be done.
But our politicians remain focused on the pseudo-problem of Medicare and Medicaid rather than on the real problem of health-care costs: the costs themselves.
If we don't get out of Iraq and Afghanistan now, when ever will we? We'll never find a better time.
We finally got our man. And he was in neither of these two irrelevant places.
It's time to do a Reagan: declare victory, pull out and move on.
(James Lein is a community columnist for The Minot Daily?News)