Health Costs and the Competitive Edge in Business

One issue seems to get lost in the ongoing healthcare debate in America.  The high costs and low returns of American medical services are a serious drain on corporate and worker resources, and if the trends continue, America will become a less competitive place to do business than some other countries with marginally higher tax rates.

As of last count, U.S. medical expenses consumed about 17% of GDP.  Of course, this number was based on early and optimistic reports of the 2008 GDP numbers, so the actual cost may already be a higher percent of our total income.  Left unchecked, the trend toward higher costs will mean as much as 20% of GDP will be consumed by medical costs by 2017.

Suddenly, the taxes in Europe don’t sound so bad.

Currently, Americans spend about 36% of GDP on government costs.  When 17% of GDP is added in to healthcare, Americans are already spending more than half of their income for the services provided by other governments.  So yes, some places in Europe spend 50-55% of their GDP on government and medicine, but they also manage to cover everyone and maintain a healthier population.  This means for the exact same cost, we could have a business environment where workers are protected from the catastrophic effects of ill health.  By 2017, the combined costs of government and medicine in America will pass even the most liberally spending of the European states.

No Good Excuse Against Universal Coverage

Government death panels?  Rationing?  Bull@&^! talking points.

Universal healthcare doesn’t require a single-payer system.  A multi-payer system can guarantee coverage to everyone while allowing those who want to purchase private services to do so.  This is why “socialist France” has so many customers for private medical insurance plans.

Businesses – especially smaller ones –  benefit from this coverage because they know their employees are covered.  Total costs are actually lower because problems are detected and fixed early.

Instead, Congress appears ready to put some more of our money behind the status quo by dropping the public health-insurance option.  This wouldn’t have even provided universal coverage, but it would have been a bit of competition in a strongly anti-competitive industry.

Political Intent

The ultimate doom for American competitiveness isn’t medicine or a particular bill in Congress, its the political culture of corruption that has become so entrenched that we have come to accept it.  As long as the federal government is treated like a treasure vault to be raided by the victorious party, the social services that make society possible will continue to decay despite rising costs.  As certain connected corporations reap the benefits, they’ll force more of their competitors underwater and eventually the surviving businesses will flee to some land of real business opportunity.

Think I’m just being uneccessarily pessimistic?  Try taking a look at what our government actually spends the money on, or compare the returns of our 55% of GDP spending to France’s.  Businesses aren’t the only ones who have to compete in the globalized world:  Governments themselves must compete, and ours is showing that it is not up to the challenge.

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  1. The joys of health insurance while self-employed

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