28 March 2011

Health care finance is a worldwide problem

A Wall Street Journal article discusses the problems in Europe:
Reformers want to reduce the state's role in health-care delivery and introduce a competitive element. Those against change are adamant that a health-care system without state involvement is health care without a heart. Good for the rich, calamitous for the poor. It is an issue heavily clouded by emotion. But many feel that without innovation, crumbling state-backed systems will collapse as they struggle to cope with aging populations, soaring overheads and, more recently, mounting budget deficits.

The statistics paint a bleak picture. According to the Organization for Economic Cooperation and Development, the European Union will see an increase in health expenditure of 350% by 2050, whereas at the same time the economy is only set to expand by 180%...

...in Germany alone between 2020 and 2030 there will be a huge spike in the number of elderly people alongside an enormous drop in young and working-age people. "This will mean a dramatic increase in individuals' payroll tax contribution rates to health care to 20.7% in 2030 and over 23% in 2040," he says. This compares to just 11.4% in 1980...

Britain is not the only European country having to make tough choices to tackle soaring deficits. Other countries in Europe, including France and Spain, are also dealing with huge deficits...

"In 1995 the cost of a hip replacement was the equivalent of buying a flat-screen TV in Germany," he says. "In 2008 you could get 10 flat-screen TVs for the amount of money you paid for a hip replacement."


  1. The last statistic is particularly misleading since the price of flat screen televisions has fallen dramatically in that time while the price of health care has soared.

    Two variables were intentionally confounded in order to make the point more dramatically at the expense of the truth. This could have easily been expressed in percentage change or inflation adjusted dollars (or euros) which would have made things much clearer.

  2. These statistical arguments ignore a basic question: has "the market" (i.e., the people at the top buying legislation) the right to deny health, education, and safety to selected people in order to protect the proceeds of their gambling ("investing")and to preserve their accustomed standard of living? Or can the average person, who gives "the market" most of their labor and their money, expect their share of life, liberty and the pursuit of happiness whether "the market" likes it or not?

    All this wailing about the deficit would mean more to me if the wailers weren't (1) dumping billions of dollar into three wars (2) avoiding paying most if not all of their share of taxes and (3) demanding an even smaller percentage of the tax burden so as to protect their precious lifestyle.

    Personally I believe decent health care is a right, while living on the backs of the majority whilst charging them for the privilege is immoral.


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