March 22, 2010

Is health care spending a black hole?

By Randolph Brandt
For RacinePost

One of the “givens” in the late health-care reform debate was broad acceptance that spending for health care eats up a tremendous portion of the nation’s GDP – now about 16 percent – and promises to consume more and more of the nation’s productivity over the next decades.

Indeed, part of health-care reform was framed as a means of slowing this otherwise inexorable progression, and that’s probably good.

Despite our Rep. Paul Ryan’s scary charts, the non-partisan Congressional Budget Office made a clear case for how health-care reform will save more government expense than it costs over the next couple decades.

But, let’s say, that turns out not to be the case, and somehow it winds up costing more.

What’s wrong with a country spending a larger portion of its GDP on health care for its citizens? Is it worse, for example, than spending more of our GDP on, say, more cars, or more refrigerators or more televisions or cell phones, especially since so many of those products are now made overseas?

It’s not like the money spent here on health care just goes away.

For one thing, the investment presumably makes our people healthier. As anybody who’s ever gone to work with a head cold already knows, you’re not very productive, innovative or effective when you’re sick.

When you’re very sick – or even disabled by an otherwise preventable chronic illness – it gets even worse. Your productivity then falls to zero.

When he was home secretary of Great Britain in the early 20th century, Winston Churchill famously said that the best investment a country could make was putting milk into babies. It ensured a healthier, more productive generation, capable of working harder to create a better future for everyone.

A sickly, unhealthy generation could only do less. (Fortunately the ‘milk-into-babies’ generation was strong enough to help us beat Hitler.)

It’s hard to figure how putting milk into babies is akin to pouring it down the sink.

Nor is it any easier to figure how spending money on health care is pouring dollars down the sink.

Typically, the local hospital is one of the community’s largest employers. Often, it is the largest. It pays very high salaries and wages to doctors, to nurses, to highly trained technicians – not exactly dead-end jobs at the local fast-food joint.

And it’s not like these good jobs can be exported overseas; they need to remain right here, making our local communities and their people better, stronger.

Indeed, it’s the other way around. We actually import people for the privilege of studying and working in health care here.

Intelligent, capable people from around the world study years for these jobs, helping to maintain this country’s premier position as the world’s destination for advanced study in the field of medicine. Similarly, it ensures the nation’s first-place status among all countries for advanced medical research and development, with Wisconsin very much in the forefront in that regard.

The health-care reform bill is about to bring better health care to 30-40 million people, likely even more. To do that, we’re going to need to train thousands, probably tens of thousands more doctors, nurses, medical technicians, office administrators, support staff, researchers, drug-developers, scientists … the ripple effect for our economy will be nothing less than enormous.

Americans value life so much, we even put it in the Constitution, as in “life, liberty and the pursuit of happiness.”

It’s sometimes said that other societies value life less, though I don’t necessarily believe that. It’s enough to know that we value life a lot.

So, we’re willing to invest in it.

From now on, when I see comparison GDP figures from different countries, I’m not going to ask why we seem to spend so much more for health care for our citizens; I’m going to ask why others invest so much less.
Randolph D. Brandt is the retired editor of the Journal Times.


  1. Excellent point of view. It seemed so obvious. I'm wondering why we didn't concluded this before. Thanks for sharing.

  2. I agree. It's like conserving energy. We have more productivity to use if we have our health than if we do not have it.

  3. I'll tell you why you have never come to this conclusion, through out history, socialism Never works. The reason you can't come to this make believe conclusion is you have NO example to model over.

    If conserving energy is about conservation, then why is it our rates keep going up and not down? It's because energy companies raise rates when use is down to continue to make the same profit and at the same time, produce less.

  4. Tim the Shrubber3/23/2010 7:33 AM

    I a wary of using the term 'investment' in regards to health care. It is a clever rhetorical device, but probably inaccurate.

    If health care spending is an 'investment' then we would have to start considering the ROI for our health care expenditures. Not only would we consider if a treatment is effective, but we would also have to decide if a person deserves the treament based on their value to society. A harsh idea, but if we are really going to treat health care spending as an investment we would have to include these considerations.

    If health care spending is an 'investment', then we should have no problem not spending on unprofitable members of society.

    Sorry, but there is a lot of health care spending out there that is a bad 'investment', and I am not arguing against it. But, this indicates that we cannot dress up health care spending as an 'investment' to make it look more economical.

  5. Tim the Shrubber3/23/2010 7:36 AM

    "It’s not like the money spent here on health care just goes away."

    I dunno...maybe it depends on who is spending the money on health care. Some organizations are particularly good at making money just go away.

  6. Mentally retarded or ill - I'm happy to pay for their care

    Disabled - I'm happy to pay for their care

    Many others - I'm happy to pay for their care

    People who have lived for years on a diet of cigarettes, jelly doughnuts and coffee, have never exercised, in some cases have beautiful homes and dependable cars, and actually have a retirement fund - and who now want free care - NO WAY!

    People who crawl into the Rhino Bar at noon to smoke and drink all day - NO WAY!

    Many others - NO WAY!

  7. . . . and yes Tim, many times the money just goes away. I can't wait until some 70+ year old who is in fantastic shape and runs every day breaks his ankle - and is told that the "life potential calculation meter" has him ranked lower than the twenty five year old welfare mom who has six kids and wants fertility treatments so she can have number seven

  8. The Country is broke, There is no more money!..........No money no investment

  9. 7:43 thats a rediculous comparison just put out there to frighten some. When will those that opposed healthcare reform come to the realization that you are paying for healthcare but because many who do not have insurance wait until their illness is an emergency they get their care in the emergency rooms. We have seen our costs escalate for hospital care simply because they are passing on the expense for those who cannot afford to pay. There are no solutions that satisfy everyone and the recently passed heathcare reform may not be perfect but it is a start. The right had many opportunities to address the issue when they were in control but did nothing, now they are going crazy because the Dems have.

  10. Thank you Randy. Now please, please, please just shut the h**l up and let others comment. Your work is done!

  11. "People who have lived for years on a diet of cigarettes, jelly doughnuts and coffee, have never exercised, in some cases have beautiful homes and dependable cars, and actually have a retirement fund - and who now want free care - NO WAY!"

    Yup, that's Randy. He lives in the lap of luxury while imagining he is fighting in the trenches.

  12. And those of us in the trenches resent his lies about us.

  13. Every dem I have seen interviewed on the healthcare bill said they basically don't like the version they voted for but a bad bill is better than no bill. The funding sources even the CBO says aren't correct in fact clearly indicate over $500 billion is double counted in the Medicare "savings." To me, and many others, it would have been better to start over, include GOP ideas and come up with something that neither party would need to be bribed to support.

    When the dems had to be bribed to support the bill you know it is bad. No one has given an acceptable answer why there was such pressure to pass what many in both parties say is a bad bill. I was always taught if you think something is bad don't do it, your judgement is probably correct.

    The president promised the GOP 4 - 6 weeks to present an alternative. The next day he drove this ugly legislation and process to conclusion without even honoring his 4 - 6 week promise. The congress and president have lost all credibility in this process.

    I agree with those who say that November will create a whole bunch of unemployed memebers of congress. The ugly Chicago style politics will come back and bite Obama badly.

  14. Healthcare reform can only work if there is a public option. All this bill does is give the insurance companies a few years to raise rates to their max on those that already pay.I have yet to read about insurance compies being limited on how much they can raise their rates. Our liberal elite government and there billionaire buddies just scored another victory for transfering wealth from the everyday man/women to their own pockets.

  15. Can't argue with Dan, but the public option would never pass and this is a beginning. Those that say start over forget that Republicans have said that no matter what President Obama proposed they will oppose. The republicans forget they lost the election and have not answered the question, "why didn't they do something during all those years they had control"?

  16. Tim the Shrubber3/23/2010 12:01 PM

    "have not answered the question, "why didn't they do something during all those years they had control"?"

    Because in the past the Democrats were the "Party of No", and the Republicans had only slight majorities.

  17. The Republicans did pass Medicare Part D, also with some pretty strong-arm parliamentary procedures. It's worked out better than expected, though, and the new health-care reform bill ultimately will close the donut hole.

  18. Maybe at that time they had more important to focus on. I do seem to recall unemployment at record lows and treasury receipts at record highs, but that only lasted until harry and nancy took over.

    Now answer me this question, Is it even legal to force a business to provide insurance or suffer the consiquences?

  19. Tim the Shrubber3/23/2010 12:26 PM

    Does anyone else find Racine Post a strange venue for Mr. Brandt's ramblings?

    Why is this the place for his commentary about national politics when the site is dedicated to local news?

    The discussion is a bit fun, but is it way off-topic for the site.

  20. Tim the Shrubber3/23/2010 12:33 PM

    " I do seem to recall unemployment at record lows and treasury receipts at record highs, but that only lasted until harry and nancy took over."

    Um...the record low unemployment and record high treasury reciepts ended quiet awhile before 'harry and nancy took over.'

    Of course, the real lesson of the past 10 years is that without divided government Republicans spend like drunken sailors and Democrats spend like crackheads.

  21. The GOP party bosses talk about big swings toward the GOP in Nov. I have to say I am more likely to vote for a Dem now because they had the courage to vote for this.

    If the GOP wants my independant vote, maybe they should craft some supplemental legislation that adds more to the party, rather than bellyache about the Dems win.

    You want tort reform? Purchasing over state lines? Something more? Craft a bill or shut up. You sound like sore losers.

  22. Robin Vos knows full well that while the Senate bill includes the LA purchase and the Cornhusker deal that the reconciliation bill removes those reprehensible things. Even Obama agrees they must go. And they did.

    His purpose in writing to AG Van Hollen is to rile the troops to even more disgusting actions.

    If the Republicans don't knock off the awful language and actions (spitting, name calling, babykiller!) they are likely to cement for more people they are not fit to lead. Dems aren't perfect but the GOP seems really screwed up more. It all is very desperate.

  23. For your reading enjoyment Tim

  24. Tim the Shrubber3/23/2010 1:24 PM

    Plenty familiar with that Dan. The simple fact of the matter is that the most recent record low unemployment was in 2000...that is the only time since the 1960s that the rate was below 4%.

    In 2006 the unemploement rate got as low as 4.4%, with an annual average of 4.6%. In 2000 the rate go as low as 3.8%, with an annual average of 4%.

    It is an exaggeration to say that 2006 was a record low when is was averaging 0.6% higher than just a few years before.

    The unemployment rate was good, but not a record low.

  25. Most economists would agree that unemployment at 4 or 5 percent would be considered "natural unemployment" in an otherwise full-employment economy. Some people are always between jobs or looking for jobs, so it's natural; it's about optimal. If it goes much lower, though, you get into the ranges of labor shortage.

  26. Can you blame Nebraska for wanting a special deal? Two years ago Nebraska was ranked the least corrupt state in the union. Yes, I know that some of the parameters were a bit subjective, but I think it shows something. Nebraska was also one of only six states that were in the black at the time, no coincidence there. Why should a state that has its house in order get drained to pay states like Wisconsin that are irresponsible and reprehensible?

  27. Anon, 1:40,

    Actually, Wisconsin is right alongside Nebraska in the ratio of federal taxes paid vs. federal dollars returned to the state in aid and appropriations. Probably because of Wisconsin's relative lack of military installations.

  28. Why are only the rich elite allowed to write commentary for the Racine Post?

  29. Randolph - and this has to do with what? Certainly not how money is spent, how much corruption there is, or how much money is spent on corruption. You did manage to get a dig in on the military though, I guess.

    Anon 2:49 - I'm sure anyone can write a guest opinion piece. Does anyone have any evidence that anyone ever wrote an article that was turned down (unless it was poorly written) because it wasn't from a "rich elitist"?

  30. Anon, 3:46,

    Maybe I misunderstood. I thought the question was why Nebraska shouldn't get more money because Wisconsin does. Both states get about 44 cents back for every federal tax dollar they send in. Wisconsin's historically eschewed military bases, so it doesn't get that money like a lot of other states. By that measure, then, the two states would be even.

    I don't know about which state may or may not be more or less corrupt.

  31. By another measure - federal spending per person by state - Nebraska gets about $6,700 per person, while Wisconsin gets about $5,730 per person. So, I guess Nebraska makes out there.

  32. Sorry - I just meant that Nebraska has successfully stayed solvent and now will be expected to bail out states that are less than solvent. This seems unfair to many people in that state and many watching from outside.

    What are the federal cash outlays in Wisconsin vs Nebraska? I would be willing to bet that Wisconsin wins hands-down in welfare and other federal assistance progras but where does Nebraska make up the diffference?

  33. I didn't get your initial point, I'm sorry.

    I don't know about your other question. The two data points would suggest Nebraska has fewer people, but they're richer and thus pay more income tax. Or there's more people there on the federal government's payroll, or more military, though I'd imagine most missile bases are closed down by now. Maybe we can dig around a little further.

  34. ... better guess - but still just a guess: More farm subsidies.

  35. Nebraska actually outspends Wisconsin per capital on welfare, but not by much: $1,132 for Nebraska; $1,296 for Wisconsin.

    But farm subsidies are way, way, way bigger in Nebraska: $1.4 billion vs. Wisconsin, at $553 million.

    So, maybe the difference is all that federal welfare for farmers.

  36. Couldn't find a total cash number for both states spent on welfare, but did determine that the percentage of the population on welfare is significantly higher in Nebraska than Wisconsin. In Nebraska, it's 1.5 people per 100 persons, while in Wisconsin it's .862 (or less than one person) per 100.

    Maybe they're counting the farmers?

  37. Sorry, transposed the states in the 5:23 post. Wisconsin spends a little bit more per capita on welfare, 1,296, than Nebraska, at 1,132, but there's still a higher percentage of the population on welfare in Nebraska than in Wisconsin.

  38. Randy - where are you going to get the Dr.'s and nurses to handle an additional 30M people? What do you think is going to happen to your premiums once the 30M are added? Do you think the insurance companies will absorb the additional costs - I DON'T THINK SO! It is said the pharmacutical companies were in favor of the bill - why wouldn't they be when they are going to get 30M more customers. So you really think the government should control 1/6 of the countries money. Move to Europe if you love this plan so much. We will everything in our power to disrupt it.

  39. Anon, 9:08,

    Insurance rates go down when they sell more policies to a larger pool of people to spread the risk. That's the whole principle behind insurance.

    You're right - we're going to have to train a whole lot more doctors and nurses, not bad for our jobs situation right now, many more opportunities for young people in this growing, highly paid field.

    Unlike Europe, our health care system remains in private hands under this plan.

  40. It's troublesome when people pledge to do all in their power to disrupt the law.

    Try to repeal and replace, if you want; as the president says, "Go for it."

    But please don't disrupt the law. That's something else again.

  41. Randy - you are dreaming the addtional 30M don't have the money to purchase insurance therefore the additional costs will be spread on those that do have insurance. Secondly you just can't crank out Dr.'s and nurses to meet the timing of when this insurance goes into effect and lastly in order to increase the number of Dr.'s and nurses they will have to lower the standards to get the number needed. Therefore the quality of care will diminish. You liberal Democrats don't have a clue - as a matter of fact most have not even read the bill. And what about the one of many lies Obama said in his campaign. I will not sign a bill for 5 days so that everyone can review it. His campaign promises are one lie after another.

  42. If there is no way to stop this, this bill will ultimately turn out to be one of the worst bills in history. Obama, Pelosi and the rest of this socialisit mentality will be gone at the next election. I was always under the impression that people in office were to represent their consituents. Since over 55% of Americans were against this bill they will be gone.

  43. Got a better idea? Repeal and replace. Go for it.

  44. Randy answer 3:52 if you can!!! In addition if the Democrats didn't do every thing behind closed doors maybe others would have been able to put their mark on it. Another Obama lie - transparency. He has lied about every one of his promises.

  45. Anon, 9:41,

    I don't remember Obama saying what you claim, but if everybody didn't already know what was in the bill, they weren't paying attention.

  46. Randy you did not answer 3:52 questions because you cannot. The Democrat's left all others out of the development of the plan - so your comment about not paying attention is assinie. Lastly you are a liar in regards to Obama's transparency pledge along with the 5 days before he would sign any bill. He trumpt these two items and many more during the campaign. You and Obama are liars and you have no credibility.

    Pete and Dustin stop giving this knuclehead this venue to spout his lies.

  47. Well, the president went to talk to the Republican caucus, then he invited everyone to the White House. In Congress, each committee that wrote parts of the legislation is made up of both majority and minority members, who met on this legislation for a year. Many of the amendments that wound up in the bill were authored by Republican members. When the Republican minority signaled unequivocally they weren't going to support the bill on final passage no matter what, the Democrat majority passed the legislation with comfortable margins in both houses and sent the legislation to the president for his signature. A reconciliation bill developed by conference committee was certified and passed again, again with comfortable majorities in both the House and Senate. As I recall from my high school civics book, this is exactly what's supposed to happen. That the Republicans chose to back out well before the finish line, that's their problem. The president urged them to remain involved up to a week before he asked Congress to finally pass the bill.

    The president waited three days to sign the bill, not five. I don't recall him saying that, but that doesn't make me a liar, just I don't recall him saying that. And in the scheme of things, it's a distinction without difference anyway.

    Yelling "liar" in the face of these facts sounds pretty desperate and petty.

  48. You are a liar - promises made have been broken and the Dems made all the decisions secretly - and you know it. The people as a majority did not want this bill and the Dems did not listen. And lastly he did say 5 days, and no transperancy - is amazes me at what you will admit to and what you won't admit to. I guess that's the make up of a socialist like you.

  49. Randy and lastly, I'm done with you, you are dismissed.