NationStates Jolt Archive

...and got away from being a personal responsibilty. A piece of history I did not know until this morning.

How to Cure Health Care
By Milton Friedman
Archived Issue - Winter 2001 (http://www.thepublicinterest.com/archives/2001winter/article1.html)


II. Why third-party payment?

Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party - an insurance company or employer or governmental body. The second is that nobody spends somebody else's money as wisely or as frugally as he spends his own. These statements apply equally to other OECD countries. They do not by themselves explain why the United States spends so much more than other countries.

No third party is involved when we shop at a supermarket. We pay the supermarket clerk directly. The same for gasoline for our car, clothes for our back, and so on down the line. Why, by contrast, are most medical payments made by third parties? The answer for the United States begins with the fact that medical-care expenditures are exempt from the income tax if, and only if, medical care is provided by the employer. If an employee pays directly for medical care, the expenditure comes out of the employee's income after income tax. If the employer pays for the employee's medical care, the expenditure is treated as a tax-deductible expense for the employer and is not included as part of the employee's income subject to income tax. That strong incentive explains why most consumers get their medical care through their employer or their spouse's or their parents' employer. In the next place, the enactment of Medicare and Medicaid in 1965 made the government a third-party payer for persons and medical care covered by those measures.

We have become so accustomed to employer-provided medical care that we regard it as part of the natural order. Yet it is thoroughly illogical. Why single out medical care? Food is more essential to life than medical care. Why not exempt the cost of food from taxes if provided by the employer? Why not return to the much-reviled company store when workers were in effect paid in kind rather than in cash?

The revival of the company store for medicine has less to do with logic than pure chance. It is a wonderful example of how one bad government policy leads to another. During World War II, the government financed much wartime spending by printing money while, at the same time, imposing wage and price controls. The resulting repressed inflation produced shortages of many goods and services, including labor. Firms competing to acquire labor at government-controlled wages started to offer medical care as a fringe benefit. That benefit proved particularly attractive to workers and spread rapidly.

Initially, employers did not report the value of a fringe benefit to the Internal Revenue Service as part of their workers' wages. It took some time before the IRS realized what was going on. When it did, it issued regulations requiring employers to include the value of medical care as part of reported employees' wages. By this time, workers had become accustomed to the tax exemption of that particular fringe benefit and made a big fuss. Congress responded by legislating that medical care provided by employers should be tax-exempt.

Interesting.

Also, THANK GOD!

Given how medical care is so expensive, its just as well that people don't have to pay for it themselves.


Its funny though, in Britain, when we were finished with WW2 we got a full NHS, not a measly little healthcare plan.

Strange. :shock: :shock: :shock: :shock: :shock: :shock:

Strange. :shock: :shock: :shock: :shock: :shock: :shock:

Who...me or Spoffin?

Interesting.

Also, THANK GOD!

Given how medical care is so expensive, its just as well that people don't have to pay for it themselves.


Its funny though, in Britain, when we were finished with WW2 we got a full NHS, not a measly little healthcare plan.

Oh? But they do pay and as a society they pay even more than what can be seen. When full transparency is kept from your sights the dependent (on government) can continue to be misled. There is no such thing as a free lunch, so, while your eating it, you would be wise to do some critical thinking.

Interesting.

Also, THANK GOD!

Given how medical care is so expensive, its just as well that people don't have to pay for it themselves.


Its funny though, in Britain, when we were finished with WW2 we got a full NHS, not a measly little healthcare plan.

Oh? But they do pay and as a society they pay even more than what can be seen. When full transparency is kept from your sights the dependent (on government) can continue to be misled. There is no such thing as a free lunch, so, while your eating it, you would be wise to do some critical thinking.And the Vorgans will suck your brainwaves if you don't wear a tin foil hat.

The NHS is payed for by other people's vices. Smoking? the tax on that alone pays a third...

It is the only rational choice.

Interesting.

Also, THANK GOD!

Given how medical care is so expensive, its just as well that people don't have to pay for it themselves.


Its funny though, in Britain, when we were finished with WW2 we got a full NHS, not a measly little healthcare plan.

Oh? But they do pay and as a society they pay even more than what can be seen. When full transparency is kept from your sights the dependent (on government) can continue to be misled. There is no such thing as a free lunch, so, while your eating it, you would be wise to do some critical thinking.And the Vorgans will suck your brainwaves if you don't wear a tin foil hat.

Interesting thing about taxes and what they pay for.
I'm glad that we have subsidised health here. There are people who
would try and make it so that we have to pay for all of that, so they get to pay less tax, or have it go elsewhere.
Here in New Zealand, we have ACC, which is funded by taxes (I BELIEVE), and if someone has an accident, they tend to pay for most, if not all, of the medical costs, and they also pay for rehabilitation in quite a few cases.
When whiners come out saying stuff like "we should get a tax break and not have ACC, etc", I REALLY hope that Karma rushes out like a little oompa-loompa and kicks THEM in the nuts! i.e. Let's see what happens to THEM if they have an accident! Paralysed? Can't move yer legs? Good luck getting rehabilitation, buddy! :lol:
And to those who don't want their taxes to go to healthcare, well, where do you want them to go? I'd rather my tax dollars went to a decent healthcare system and education, than to line the pockets of some fatcat a :shock: hole in office, where the money does no good whatsoever.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.

Well, in Australia we did have a decent health system until the government tried to shift responsibility to the private sector and slashed the public budgets. It's also shifting people to private health insurance which always seems to increase every year. We don't have enough doctors, nurses or specialists and drug prices are increasing (main supplier, the US).

Now the government is putting back the money it stole to buy our votes back.

Aussies pay 1% of their taxable income to the health system.

Personally I see the right to life as a fundamental human requirement and thus something that should be paid and provided for by the state (or by citizens through the form of taxation). One of the purposes of the state is to protect its citizens so I see no reason why that protection should not encompass the provision of healthcare.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.And they tend to get less cover than the NHS as well.

Personally I see the right to life as a fundamental human requirement and thus something that should be paid and provided for by the state (or by citizens through the form of taxation). One of the purposes of the state is to protect its citizens so I see no reason why that protection should not encompass the provision of healthcare.There we go, a logical viewpoint. Anyone care to argue?

About 7% of the British GDP goes to the health service. I think US spending on health is about 12% of their GDP.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.And they tend to get less cover than the NHS as well.

It is illogical. Surely it would be more comprehensive and business sound to have an NHS in the United States. They would be paying less per year in taxes than if they stuck with the insurance scheme. People would have roughly an extra two and a half thousand to spend on products the economy makes, result would be an increase in profits for Corporate America. In addition, healthier workforces are more productive.

A revision on the figures. The average Briton pays around $1400 and the average American pays $4200, I underestimated both by $200, my apologies but the argument still remains.

Some people just cannot think outside of the box.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.And they tend to get less cover than the NHS as well.

It is illogical. Surely it would be more comprehensive and business sound to have an NHS in the United States. They would be paying less per year in taxes than if they stuck with the insurance scheme. People would have roughly an extra two and a half thousand to spend on products the economy makes, result would be an increase in profits for Corporate America. In addition, healthier workforces are more productive.

A revision on the figures. The average Briton pays around $1400 and the average American pays $4200, I underestimated both by $200, my apologies but the argument still remains.

Some people just cannot think outside of the box.Well, the other thing is that the balance of the bill gets transferred to the people with the most money, which Americans have historicly been against.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.And they tend to get less cover than the NHS as well.

gee i dont know about that...
my british friend got a cataract in his eye, he had to wait over a year to get it treated, he had to take the bus to the hospital and find his own way home. its been way over a year wait to treat his second eye.

when my mother got a cataract, it was taken care of the next week after diagnosis, both eyes, they came to her house, picked her up and returned her.

id prefer the US system.

i havent looked recently but we (my fam) pay less than $2500/year for insurance.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.And they tend to get less cover than the NHS as well.

gee i dont know about that...
my british friend got a cataract in his eye, he had to wait over a year to get it treated, he had to take the bus to the hospital and find his own way home. its been way over a year wait to treat his second eye.

when my mother got a cataract, it was taken care of the next week after diagnosis, both eyes, they came to her house, picked her up and returned her.

id prefer the US system.

i havent looked recently but we (my fam) pay less than $2500/year for insurance.

Those inefficiencies are the result of mismanagement by the government especially with the highly wasteful 'patient choice' scheme. I work for the NHS and all it does is bloat the size of the waiting lists.....

id prefer the US system.

Ah yes, is that the system where people die on trolleys because they cant afford the prices? where people end up going bankrupt because they have to fork out huge ammounts of money because they have a long term illness or a terrible accident? Where children from poorer families have to suffer because their parents cannot afford to treat them?
I could go on and on.

I prefer the British system, it is in need of an overhaul, since it hasn't been moving with the population increase, and the years of Tory Goverment underfunding

Yes ... very strange :shock: :shock: :shock: :shock: :shock: :shock:

About 7% of the British GDP goes to the health service. I think US spending on health is about 12% of their GDP.
Source?
Also, what is the wait time for, say, an MRI scan?
A revision on the figures. The average Briton pays around $1400 and the average American pays $4200, I underestimated both by $200, my apologies but the argument still remains.
Source?
Also, what are the comparative wages for health care employees?

My source?

Inter-national comparisons on health-care costs come from Robert H. LeBow, Health Care Meltdown, published 2003.....

About 7% of the British GDP goes to the health service. I think US spending on health is about 12% of their GDP.
Source?
Also, what is the wait time for, say, an MRI scan?

http://www.heartland.org/Article.cfm?artId=11521

As of 2001, health spending was $1,424.5 billion. That's 1.4 trillion, or about 14% of the US GDP. Even higher than my guess.

The 7% figure on the UK is on the BBC News website (http://news.bbc.co.uk/1/hi/health/default.stm) somewhere. I can't remember the exact article, but is has the figures in there somewhere.

EDIT

Found it - http://news.bbc.co.uk/1/hi/health/3690465.stm

http://www.jobs.nhs.uk/cgi-bin/advsearch

See for yourself regarding wages.

Interesting figures;

The average Briton bays around $1200 in taxes per year to the NHS in comparison to the average American who pays $4000 in medical insurance annually.

$4000?..really..My company takes out $25 a paycheck...$50 a month total...over 12 months, that's less then $1000...I pay $10 co-pay if I go to my Primarcy Care Physcian...$25 to got to a Specialist..$50 when I go to the ER. Seems to me I pay less then the average Briton..that same scale is applied to the over 3500 employees of my company...and that is hardly the exception.

id prefer the US system.

Ah yes, is that the system where people die on trolleys because they cant afford the prices? where people end up going bankrupt because they have to fork out huge ammounts of money because they have a long term illness or a terrible accident? Where children from poorer families have to suffer because their parents cannot afford to treat them?
I could go on and on.

I prefer the British system, it is in need of an overhaul, since it hasn't been moving with the population increase, and the years of Tory Goverment underfunding

No one who goes to an ER is denied treatment..it's Federal Law...and should the State continue to treat citizens at the expense of other citizens who aren't in that situation?

And if children from poor families suffer it's not my fault or the States but the child's parent's...in which case you should notify the local Division of Youth and Family Services to investigate....

No one who goes to an ER is denied treatment..it's Federal Law...and should the State continue to treat citizens at the expense of other citizens who aren't in that situation?

And if children from poor families suffer it's not my fault or the States but the child's parent's...in which case you should notify the local Division of Youth and Family Services to investigate....

No! You can't seriously be advocating personal responsibility from individuals and parents. :wink:

In fact, why stop at health care..let's ask for the other needs such as food, shelter, and of course all forms of entertainment too. :P

Did any Lefty here actually read the original post?

No one who goes to an ER is denied treatment..it's Federal Law...and should the State continue to treat citizens at the expense of other citizens who aren't in that situation?

And if children from poor families suffer it's not my fault or the States but the child's parent's...in which case you should notify the local Division of Youth and Family Services to investigate....

No! You can't seriously be advocating personal responsibility from individuals and parents. :wink:

In fact, why stop at health care..let's ask for the other needs such as food, shelter, and of course all forms of entertainment too. :P

Heaven forbid I expect individuals to exhibit a sense of personal responsibilty for their own actions or their financial straits...oh that would be positively wrong of me to expect that.