Some Recently Published Eye-Openers About U.S. Health Care (Joe Rothstein's Commentary)

August 29, 2009

By Joe Rothstein
Editor, EINNEWS.COM

I know. I know. You've been on vacation. Or, you haven't been on vacation, just stewing about having to stay at work. Or you're too busy looking for a job. Or you've got your hands full getting the kids back to school.

So you may have missed some of the following fun facts that may help you get through the end-game of the health reform debate.

For instance, while Congress has been out of session this August/September half a million more Americans have lost their health insurance.

And, on that point, veteran Washington Post reporter T.R. Reid had an informative article August 23 pointing out that the U.S. is the only developed country in the world where people go bankrupt because of health care bills. He estimated the number of health-related bankruptcies this year at 700,000. Many researchers peg that number closer to a million.

Reid's article has a number of other eye-openers. Such as:

---In many ways the U.S. has a more "socialized" health care system than other developed countries. For instance, almost all Americans sign up for government insurance (Medicare) at age 65. In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life. Meanwhile, the U.S. Department of Veterans Affairs is one of the purest examples of government-run health care anywhere.

--In France, which reform opponents love to vilify, patients can go to any doctor, any hospital, any traditional healer. There are no U.S.-style limits such as "in-network" lists of doctors or "pre-authorization" for surgery.

---In Japan, waiting times are so short that most patients don't bother to make an appointment.

---U.S. health insurance companies have the highest administrative costs in the world; they spend roughly 20 cents of every dollar for non-medical costs, such as reviewing claims and marketing. In France that number is 4 percent.

---Japan spends about $3,400 per person annually on health care; the United States spends more than $7,000. The Japanese control costs so well that an MRI scan there costs only $98, compared with $1,500 in the U.S.

Moving on to drug costs...

On July 23, Steve Wilson, an investigative reporter for Detroit's TV Channel 7, broadcast results of comparison shopping he did at local pharmacies for a number of popular prescription drugs. Some examples that most of us would find astounding:

---Celebrex, 100 mg, consumer price for 100 tablets: $130.27. Cost of general active ingredients: 60 cents.

---Claritin, 10 mg, consumer price for 100 tablets: $215.17; Cost of general active ingredients: 71 cents.

---Lipitor, 20 mg, consumer price for 100 tablets: $272.37; Cost of general active ingredients: $5.80.

---Prozac, 20 mg, consumer price for 100 tablets: $247.47; Cost of general active ingredients: 11 cents.

These are just a few samples from the pharmacists' medicine case. Costco was the only distributor who wasn't charging such outrageous markups.

For more about this go to http://www.snopes.com/medical/drugs/generic.asp

Finally, I'd like to call your attention to an August 25 article in the New York Times by Joe Gabel, a researcher who studied past congressional reform battles and cost projections made by the Congressional Budget Office.

The CBO has uncorked some high projected costs on the various reform bills now struggling their way through the House and Senate, and these costs have become serious obstacles to comprehensive reform.

But are the numbers right? Gabel suggests that if past performance is any guide, the CBO has mispriced the reform plans. By a lot.

For instance, with the most recent addition to the government health line up, Medicare Part D, which covers prescription drug costs, the CBO estimated costs would be more than $200 billion. Actual totals are 40% less.

In the 1990s, the biggest change in Medicare came with the Balanced Budget Act of 1997, a measure the CBO forecast that, from 1998 to 2002, would reduce Medicare spending by $112 billion. The very first year after enactment, savings were 50% more than the CBO projection. The next year savings were 113%.

The message Gabel intends for us is not that the CBO is incompetent, but rather that health behaviors are difficult to predict when the rules change. To be safe, forecasters dig down deep on the conservative side.

So, if you've been away from the health reform debate for a while, here are my conclusions from recent summer reading: 1) The rest of the world has this all figured out way better than we do in the U.S. 2) The drug companies are ripping us off worse than we even imagined, and 3) CBO projections shouldn't get in the way of passing a good health care reform package.

(Joe Rothstein can be contacted at joe@einnews.com)