Biggest Problems: Medicare

Part of a series on the Five Biggest Problems Facing America:


5. Unnecessary wars

4. Inequalities in public education

3. Corporate tax loopholes (Tuesday)

2. Medicare (Wednesday)

1. Money in politics (Thursday)

Conclusion (Friday)

Our healthcare system is broken.  Super broken.  IMHO, the only thing more broken is our politics, and we’ll talk about that tomorrow.

Healthcare is broken for a number of reasons, but if we’ve got to pick one, it’s got to be Medicare.  Yesterday, an Op Ed in the StarTribune reported that an orthopedic surgeon in the U.S. charges twice as much for that procedure as doctors in other Western countries.  That doctor charges what he does based on what Medicare will reimburse him for that procedure.  The calculation is usually this: take what Medicare will reimburse, upcharge 65%, and send that bill to the insurance company or, in the worse case scenario, to the uninsured patient.

So we’ve got an odd public-private thing going on in medicine in America.  The health care system is run by private, often for-profit, corporations, but it is regulated by the federal government.  Whether you think that regulation is light or heavy depends on your perspective.  But, I think that both-and solution doesn’t work.

The free market does some things well.  Computers, for instance.  But health care it does not do well.  That’s because when people are buying a computer, they’re usually in a good state to make a major purchase.  But when they need to make medical decisions, they are most often ailing, and not in good stead to shop around.

But, even worse, is that Medicare is going bankrupt — a lot faster than Social Security.  We cannot pay as a society for what we have promised.  The costs of Medicare are vastly overtaking its revenue, and this reality is crippling our economy.

I realize that I disagree with some commenters here, like Patrick, whom I respect greatly.  I do think that the government does some things better than the market.  Health care is one.  Thus, I’m for, dare I say it, a socialized health care system in the U.S.

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  • jamie

    I’ve never quite understood this logic. You realize Medicare is socialized healthcare right, just for older people, right? It’s a single payer system for those over 65.

    If it’s going bankrupt now, what makes you think it should be maintained in its current form, let alone extended to the rest of the under 65 population?

    • Rick Bennett

      It is partially socialized. The private sector still plays a large part.

  • jamie

    and the first sentence should only have 1 right. grammar=my ancient foe.

  • Rick Bennett

    I do not think the government is actually the best place for health care. However, it is preferable to the present system in which there is a huge profit motive for companies to withhold services to people and increase their bottom line.

    I believe the best place for health care is 1) nonprofits that are dedicated to people, not profits, but can be run as efficiently as businesses, 2) if companies, they need to be the type of company that is completely dedicated to the human good (like B Corporations-

    If these organizations cannot do health care, then the government is better than the bottom line (although still terribly flawed). There are organizations that share health care expenses and this is a great model.

    Like Tony, I feel a profit motive is good for many (if not most) goods and services. However, those things that people need for survival should be taken away from the traditional profit motivation (food, health care, shelter- I am talking basics on a hierarchy of needs) and moved to B Corporations or non-profits (because greed is never good in such instances).

  • There are places where public/private mixes work. France, for example, has a single payer system, basically your health insurance comes from the French government, while all of the providers are private. They get much better results for quite a bit less money than we do.

    One “small” thing that I could really support is a one price for everybody policy. Hospitals and doctors should not be able cut special deals with insurance companies just because of the insurance company’s market power. If we could reduce the price of treatment for everybody down to what insurance companies pay it would go a long way to reduce the bite of being uninsured. I had a surgical procedure a few years ago, the “list” price was around $35,000, the insurance company paid a little over $15,000.

  • Patrick

    Tony, you know I love, respect and admire you, but this simplistic, naive description is not up to a man of your intellect and questioning nature.

    Why is health care screwed up? What caused it? It is because government is so deeply involved. There can be no other answer.

    Government actions have consequences. When FDR decided he didn’t want people to get raises during WWII, companies reacted by leaving salaries alone and paying for employee health care (they figured out a way to get around a stupid law, which thankfully happens all the time). So that’s how we got companies choosing – not being mandated – but choosing to offer health care.

    Fast-forward 20 years and government decides to get more deeply involved in health care by creating Medicare. Fast-forward to today and the promises made by politicians can’t be paid for. Which is what so often happens when government gets involved (housing, ethanol, green jobs, Social Security, gov’t employee pensions, etc. etc.).

    One of the reasons docs and hospital systems charge so much in the US is because of the false rates, based on almost nothing, created by the federal government aren’t high enough. So they have to cost shift, charging you and me more to pay for all the folks they serve that have government insurance.

    To say that our health care system is really screwed up so the only possible answer is turning the whole thing over to the one entity that absolutely can’t do it well is silly. When government gets involved they don’t do what is best, most efficient, effective or needed. Instead, they do what is politically acceptable. And it doesn’t matter what party is in charge.

    I wish I could understand how people can say the greatest health care system in the world – ours – should be chucked in favor of a government-run system. Government-run schools are failing, government-run mortgages companies (Fannie, Freddie) are failing, government-run VA hospitals are failing our veterans. Can we acknowledge that the bureaucrats aren’t mean-spirited, but that government is not capable of doing this stuff?

    To those that think its a good idea, would you want a government-run system to be designed and implemented by George Bush, Karl Rove, Tim Pawlenty, Michelle Bachmann and Ron Paul?

    • Patrick

      Please, no flames suggesting I think Tony is dumb and I’m smart. He isn’t and I ain’t. I just think he hasn’t used his considerable talents in this case. And I probably chose my words poorly.

    • Charles

      Sorry, Patrick, you can have your opinion but the facts don’t support your hypothesis. The U.S ranks 14th in the world in preventable deaths, 24th in life expectancy, 2nd in highest cost (behind The Marshal Islands), 72nd in overall health performance, and 37th in general rankings, this is from the the World Health Organization. Ask Medicare recipients about Medicare… they love it.

      • Patrick

        Of course Medicare recipients love it, they are getting a hell of a deal. They get great care for next to nothing. For us, we get to pick up their tab. And ours. And our kids get to pick up their tab, our tab and their own. Nice deal.

        As for the rankings, I looked up the study that the ‘overall health performance’ was based on. Suffice to say I disagree that a top three measurement is ” to ensure that poor households should not pay a higher share of their discretionary expenditure on health than richer households, and all households should be protected against catastrophic financial losses related to ill health.” And we should all be tucked in to bed at night. Good grief. I just want people to get better.

        • Pat, I take no offense at your comment(s). As you could even tell in the post, I expected it.

          Here’s what I know doesn’t work: when the government is half-assedly in charge of something. Exhibit A is the US Postal Service. The federal government expects the USPS to run like a for-profit, yet handcuffs it on certain matters (like unions, pensions, etc.).

          I’d say Exhibit B is Medicare, in which the government manages health care for people 65 and older, the disabled, and dialysis patients, and it pays for that with my current payments.

          But neither of these examples proves that the government cannot manage anything. They just show the when the government tries to be partly involved with something, it doesn’t work.

          Ultimately, I agree with you that the government is not the ideal solution of managing our health insurance system. But where we disagree is that I think the free market would be worse. And that may boil down to an honest difference between us about the inherent goodness of people and of corporations.

          • Patrick

            Thank you for coming up with the most obvious example I forgot – the Post Office – and highlighting exactly how poorly the government would run health care.

            When trying to be efficient, the Post Office decides to close down some outposts. But the question isn’t about closing down the most inefficient, it is about how closing a Post Office will impact a town. Then and Senator gets involved to protect his constituents and get a little publicity and threatens to hold up an appointment or a bill the President wants. Remember when the auto companies wanted to shut down a bunch of inefficient dealerships and the political outcry that came about?

            With government, everything becomes a political question. When that happens, who do you think wins? Whomever has the most votes. When you extrapolate that, ultimately Minnesota is a loser and California, Ohio and South Carolina win. And that goes double for health care. Minnesota has high quality, low cost health care. If ObamaCare is implemented, the rest of the states will not come up to Minnesota’s level. We will go down to theirs.


        • Charles

          I see, Patrick, then you are better informed than the World Health Organization – wow!

          • Patrick

            That ain’t saying much…

  • Tony, the US stands alone in viewing health as a privilege , not as a human right. We are the only industrialized country that does not have universal health care for all its citizens.

    We spend the most per person (in the world) on health care, yet we do not get the best for all that money; most other industrialized nations get better, faster and cheaper health care. Every year, our broken healthcare systems forces 700,000 Americans into bankruptcy each year because of medical bills.

    As a person struggling to follow God in a Jesus way, what disturbs me most are the disparities in life expectancy for richer and poorer Americans, paralleling the growth of income inequality in the last two decades.

    The profit motive does not typically drive the common good, but instead glorifies winners over losers. A healthcare system premised on the profit motive makes life & death choices based on access and wealth.

    Those influenced by free marketers and Ayn Rand argue that Medicare & Medicaid aren’t just financially bankrupt, they’re “morally bankrupt.” They argue that these are funded by money stolen from hard-working, responsible Americans.

    Pres Obama offered what had been, before 2008, the moderate Repub plan for improving for profit healthcare. While the realpolitic of that plan was admirable, the impact was like jumping the Grand Canyon in two hops. While it is politically unpopular, I strongly agree with your conclusion that our only choice is a socialized health care system in the U.S.

    • Jeremy Loeding

      Has anybody had first hand experience with being treated with universal health care from another country? I have and comparing them both I can say I’m not fan of either system (the u.s. or universal). I had a small shard of glass stuck in my eye when I was living up in Canada…I waited almost 12 hours to be treated in the ER, all of it in intense pain…but it was free. My aunt is waiting for beauracratic approval to recieve major vascular surgery to repair an artery in her abdomen. She’s been waiting for 3 months now and still no word…but when she gets it it will also be free. I know people may think the U.S. system in sometime inhumane they way people are turned down for services because they can’t afford it. the truth is most countries with universal health care can’t afford it either… they try controlling cost by restricting the health care supply, I find that just as inhumane.

      Don’t believe everything you hear in the newspapers and from statistics, ask people that have experienced both health care systems.

      Ron Paul made an interesting comment once, he was a physician before the creation of medicare or medicaid and he doesn’t recall one instance when a patient was turned down because they didn’t have the money.

      Does anyone know pre medicare/medicaid of any examples where somebody was turned down for a live-saving treatment?

  • Rick Bennett

    Remember, we can trust the government implicitly to wage wars and execute people. But we can’t trust them to provide health care or deliver mail. Apparently we can only trust them to take life, not help it.

    • Patrick

      Because I think government gets stuff wrong so often, I’m against capital punishment.

      • Patrick, you seem to think that the business world gets things right more often than government entities. Is there any empirical proof of that ?

        • Patrick

          I truly don’t mean this to be snarky, but all of recorded human history is my proof.

          The incentive for markets is to provide things people want. The incentive for government is to stay in power through control of people. Capitalism brings people out of poverty. Statism puts people into poverty.

  • Patrick, what a perverse and specious proof.

    Historically, we have lived in a mixed market, sometimes free at the base, but with government oversight to address social problems.

    What people want is, at its core, a motivation for individualism and greed. Capitalism no more pulls people out of poverty than the government does. Communities help people attain more dignity, be that financial or psychological.

    The last 10 years have show the hyper-capitalism we live in to be a facade. Taxes were cut to historic lows, 2 of every 3 corporations pay no taxes, regulations have been slashed, the income inequality is widening, upward mobility is a sham. And the effect of this – no jobs created, poverty spiking, an economic collapse near the level of the Great Depression.

    Be very careful of the blid trust you put in the free market – as Wendell Berry wrote in “The Unsettling of America”:

    “By now the [commercial] revolution has deprived the mass of consumers of any independent access to the staples of life: clothing, shelter, food, even water,” Air remains the only necessity that the average user can still get for himself, and the revolution had imposed a heavy tax on that by way of pollution. Commercial conquest is far more thorough and final than military defeat.”

  • Patrick

    In order for your statement to be true, I would think you would have to use as your proof the wonderful living conditions in statist and non-capitalistic Cuba, Venezuela, Russia (or the Soviet Union), North Korea, Libya, China, Yemen, anywhere in Africa etc..

    My trust in a free market isn’t blind, its informed by history. Show me a statist country – at any time in history – that would be preferable to live in than the USA or any true capitalist society. And if you can, please add all the statist countries that have true freedom of religion.

  • Ayn Rand popularized the term statism, the strawman argument that man’s life belongs to the state. The resurgence of Rand’s influence is, to me, a hallmark of the individualism and greed I noted.

    Faith communities have been a counter-weight to these extremist views on individualism and greed. One of the great tragedies of contemporary Christianity has been the corrosive impact of the prosperity gospel, replacing communal transformation with a false god of capitalism.

    Again, historically civilization has been a mixed market, sometimes free at the base, but with government oversight to address social problems. You listing of counties like Cuba, Venezuela, Russia (or the Soviet Union), North Korea, Libya, China, Yemen are indeed an example of the failures of politics and economics.

    It is telling to me that you swing to an ad hominem argument, rather than take responsibilities for any of the excesses of hyper-capitalism. Communities help people attain more dignity – not the almighty free market or the all-powerful government.

  • Patrick

    And what form of government allows those communititwa to exist and flourish? (FWIW, I’ve never read Ayn Rand.)

    Capitalism isn’t without fault. It’s just vastly superior to any other form if government.

    I admit I don’t know what ‘free at the base’ means nor ‘hyper-capitalism.’ We sure don’t have that here.

  • Patrick, your point about capitalism is telling. While it has traditionally been an economic system, in the West it has become a form of government.

    Hypercapitalism has genrally been described as a system where companies have taken the place of nation-states. Companies battle it out with other companies, fighting for laws and regulations that favor them and disadvantage their competitors. Such pressures make it more difficult for citizens to have a meaningful say in public policy.

    • Patrick

      While I don’t agree that companies have taken the place of nation-states (Citi can’t compel me to bank with them), you may be surprised to know that I mistrust big business as much as I mistrust big government. And when they get together (ObamaCare, Dodd-Frank, green energy, agri-business), their interests are not the same as your and mine. Sadly, our politicians pass bills they think will increase competition, but, like so many other government policies, the opposite occurs (Bank of America forced to purchase Countrywide, for example, or the consolidation occurring as a direct result of ObamaCare).

      If you have a moment, I’m still curious what “free at the base” means. Thanks.

    • jeremy loeding

      In defense of patrick I don’t think that’s what he is advocating. Your definition of hyper-capitalism is what I call corporatism. Neither word accurately portrays free-market capitalism. Companies that work behind the scenes with the government that give them a distinct and unfair advantage over their competitors helps no one but make the rich richer. True free-markets are themselves self-regulated, because the consumer has all the power. The consumer determines which company is successful. This approach to our health care problem could work.

      • Dan Hauge


        I’m honestly curious as to how a completely free-market approach would work for health care, in the sense of the consumer having “all the power”. Consumers having that kind of power depends on their having a huge amount of transparent information about costs, and the benefits and drawbacks of different medical procedures, in order to evaluate what different doctors are telling them. In other words, every citizen would need the equivalent of an MD. When you have an emergency health conditon, which you don’t have comprehensive knowledge of, how can you make an informed decision about which health care provider, and which procedure, will be the best deal for your money? And is it at all realistic to expect this of most citizens when they are in a catastrophic emergency health situation? (Wait a bit on that ambulance, honey, I’m going to call a few different hospitals to price my stitching procedure while my arm bleeds out)

        I could see how this could happen in more long-term care issues (I have type 1 diabetes–I could put more work in than I do to research different endocrinologists in my city, and how much they bill for checkups and blood draws and other laboratory procedures). But when there is as huge a knowledge disparity as there is in medical care (understandably), and when health care is most often a necessity rather than a desire (‘choosing’ to be taken care of after a stroke is not the same as ‘choosing’ whether to buy a new car or keep riding my 20 year-old sedan), I just don’t believe that a complete free market model can produce results that are fair for most people in this area.

  • The examples you list of corp & govt getting together are quite consistent, Patrick – all under Obama. When George W shoved thru a drug extension to Medicare ($1 trillion), pursued a war of choice in Iraq that made our world less safe ($3 trillion) or cut taxes for the wealthy & corporations ($1.3 trillion) – those were all examples of the govt respecting the free market ?

    In terms of Dodd-Frank – the law aims to rein in abusive lending practices and high-risk bets on complex derivative securities that nearly drove the banking system off a cliff. The market does not police itself, as the area of de-regulation under Clinton & W. Bush bear out.

    Since the Industrial revolution, most historians have seen the base of the economy system as predominately free enterprise. There are examples of socialism & communism, tho in the longer view they are exceptions.

    • Patrick

      Green energy silliness has been around since at least Carter (solar panels) and the agri-business stuff has been around since FDR. If it helps you understand my point is not limited to Obama, please include Sarbanes-Oxley, signed in 2002 by Bush.

      On that point, if Sarbanes-Oxley — and the entire SEC, Treasury and Fed — didn’t see the mortgage crisis coming, why do we think more government will be able to predict and prevent the next one? To illustrate: let’s say someone in government did see the problem coming. What would the reaction have been in 2006 if they said “all these mortgages are crap, we are going to make them all illegal”? What would our elected leaders have done when a constituent said they were turned down for a loan just because someone in government said there was a problem coming — but not here yet?

      Also, I’m sure I’m missing something, but I don’t know of any industry that has been deregulated since Ma Bell, airlines and the railroads in the ’70s and ’80s.

  • Patrick, the WSJ and BusinessWeek both have reported in depth on the volume of corporate regulations that were voided or repealed during the Clinton & Bush administrations.