America’s health care spending is breaking the bank. From Charles Hugh Smith at oftwominds.com:
That good health is insanely unprofitable was highlighted by a staggering statistic in the recent research paper The Concentration of Health Care Spending (via B.C.):
Mean annual spending for the bottom half of (the American population) distribution was just $236 per person, totaling only $36 billion for the entire group of more than 150 million people.
We don’t know why the 150 million people did not consume much in the way of “health services”– they might have been healthy and had no need for healthcare beyond routine tests, or they might have needed care and been unable to afford it, despite the Orwellian-titled Affordable Care Act (ACA).
But let’s assume that the 150 million people–roughly half of America’s 317 million residents–were healthy and had no need for health services beyond minimal prevention and a few low-cost tests.
The total cost of their care was $36 billion–just over 1% of the nation’s $3.2 trillion bill for healthcare and healthcare insurance. Let’s assume that 90% of the populace was healthy, and the remaining 10% were very ill and needed 100 times as much care as the healthy.
The total cost of caring for the 285 million healthy people would be roughly $67 billion, or just over 2% of the $3 trillion we currently spend on healthcare. The very ill 32 million would need $23,600 each, or $755 billion.
The total cost for a largely healthy population and 32 million ill people who required 100 times more care than the healthy would be $822 billion, or roughly 25% of the $3.2 trillion we currently spend annually.
Here is an example of the insanity of U.S. healthcare costs. One of our European friends was doing post-doctorate research at a major U.S. university. His son suffered a minor burn in the kitchen, and on the doctor’s recommendation, the parents took the toddler to a hospital a few days later to have the dressing–basically a piece of gauze taped over the burn–changed.
Naive to the absurdities and costs of U.S. healthcare, the parents followed these instructions rather than just changing the gauze themselves.
Their punishment for foolishly asking the medical establishment to spend 5 minutes changing a small piece of gauze: a bill for $875. The list of similar charges is equally absurd. Among those known to me first-hand: $120,000 for a few days in a hospital, no operation, not intensive care; $6,000 for 20 minutes sitting in an observation room after a minor outpatient surgery on the patient’s big toe–the list is essentially endless.
To continue reading: Being Healthy Is Unprofitable
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