With all the debate surrounding both of President Bush's domestic policy goals, it is surprising what is not being discussed. While Social Security eventually needs to be reformed, it has not yet reached a crisis. However, the United States has reached a crisis in another domestic issue: healthcare. Medicare spending alone is increasing at twice the rate of the GDP. According to Medicare's chief actuary, Medicare is facing a $62 trillion shortfall, nearly six times the shortfall Social Security is facing. To worsen matters, over 20 million Americans have no health coverage of any kind. Perhaps, it is because of the boondoggle of HilaryCare that Republicans and Democrats alike have been afraid to touch it.
It would be easy for critics to blame the lack of universal healthcare on cheap Republicans, however that simply is not the case. According to the World Health Organization, in 2001 the U.S. government spent $2,168 per capita on healthcare. Germany, in comparison, spent $2,113 per capita. However, the amount the U.S. government spent covered only 44 percent of the total dollars spent on health, while Germany's spending accounted for 75 percent of all healthcare costs. One of the questions we must answer in order to reform healthcare is why Americans are spending twice as much as their European counterparts on healthcare.
One answer is that Americans demand a lot more from their healthcare coverage. Many aspects of American "lifestyle" healthcare are not received by our European counterparts. For example, Americans receive far more knee and hip replacements per capita than any other country. These are not absolutely necessary procedures; instead they are quality of life surgeries. In fact, Americans expect their quality of life to be so high that even Viagra is covered by Medicare.
However, it is not just unnecessary medicine that drives up our costs. Many Americans remember the day when insurance companies were mutual. That is, the insurance company was "owned" by its policy holders. In turn, the policy holders did not care about profits, they simply demanded the best care that could be provided. Today, most insurance companies are profit-driven stock companies. No longer is patient care the top priority; instead the top priority is making money.
Another major cause of the cost of healthcare is the rising premiums doctors must pay for malpractice insurance. Between 2000 and 2002 alone, a physician has seen his premiums increase 15 percent.
Lastly, we must also acknowledge that Americans pay a high price for prescription drugs. The pharmaceuticals are making their profits off of American healthcare while the rest of the world enacts price controls. Today, to win FDA approval for a new drug, a company must invest on average between 12 and 15 years and $800 million in research and development before the drug reaches the market. As the Washington Times puts it, "Americans pay some of the highest prices for drugs in the world ... because of our free market and our willingness to shoulder most of the global costs of new drug development." In fact, Americans pay 67 percent more for prescription drugs than our neighbor to the North.
While it is easy to point out the problems, it is a much more difficult to uncover a solution. The solution most commonly suggested by liberals is government-provided healthcare. However, there are numerous reasons why socializing medicine ultimately will not solve the healthcare crisis. State-provided healthcare is often characterized by long waiting lists, inadequate opportunities for treatment, and a brain drain.
One needs only to look at the healthcare system in Britain as an example. The "brain drain" is so pervasive in Britain that Tony Blair has declared that 10,000 foreign physicians are needed to continue the system. In Britain, the waiting lines are so long that as many as 40,000 residents leave the island to receive care elsewhere.
The "brain drain" problem should be particularly disconcerting to an America that has seen medical school applications decrease 21 percent in recent years. This decrease could not come at a more inopportune time. The baby-boomers are beginning to age and will require more care than at any other time in our nation's history.
Proponents of state sponsored healthcare will likely argue that Britain simply is not spending enough money on Healthcare. And this is true: Britain spends half as much of their GDP on healthcare compared to the United States. So, why doesn't the United States pool the money they are already spending and provide universal healthcare? The simplest answer is it would require a new and significant tax. However, it can be argued that we are already paying the costs of healthcare, just not in the form of taxes.
For the majority of Americans, their place of work provides them with health insurance. Personally, I doubt that if corporations are relieved of the need to provide health coverage, they will pass the savings along to the workers in the form of a pay increase. So, universal health care would actually hurt the average worker because their income would remain the same, while being burdened with a significant tax increase.
One viable solution is to allow the re-importation of prescription drugs. An additional action we can implement to reduce the cost of healthcare is tort reform. The cost of malpractice insurance is ruining the quality of medicine while also increasing its costs.
While there is no easy answer to America's healthcare woes, we should also remember that most Americans receive much better healthcare than the rest of the world. The bigger question, though, is at what cost? It is time the government tackles an area that truly needs reform.
Michael Schrimpf is a senior majoring in Political Science
