Small Business—Be Prepared
The National Coalition on Healthcare reports that healthcare expenses in the U.S. for 2008 were $7,900 per person. Compare this with the Veterans Health Administration (VHA) who provides health care to 7.85 million patients at a cost of $5,669 per patient. These are historical numbers, and they are probably fairly accurate.
On the other hand, Congress’s cost “goal” for healthcare reform is around $900 Billion over 10 years, or about $90 Billion per year average, to cover 46 million additional people. This equates to around $1,956 per person, or about 35% of the cost of a VHA patient…and about 25% of current U.S. per capita costs. If we drop individual health costs from $7,900 per person to $1,956 per person—what kind of care will be provided? This amount is nowhere near adequate, so obviously, the $90 Billion ($900 Billion over 10 years) per year number is not realistic.
Yes, (you are saying) but what about all the money that is going to be saved by reducing administrative costs and increasing efficiency of Medicare, and improving the way private insurance is administered? Well, here is what Dr. Ezekiel Emanuel, the President’s Healthcare Czar, had to say about increased efficiencies in the healthcare system:
“Vague promises of savings from cutting waste, enhancing prevention and wellness, installing electronic medical records and improving quality are merely ‘lipstick’ cost control, more for show and public relations than for true change.” (Dr. Ezekiel Emanuel, Health Affairs, February 27, 2008)
Apparently, Dr. Emanuel does not believe there is any substantive savings to be realized in the current healthcare delivery systems.
I would think that the 46 million additional insured should get healthcare at least as good as what the VHA offers, shouldn’t they? So, if the cost per additional person covered under the new healthcare plan was only equivalent to the VHA cost of $5,669 per person—not the $7,900 per person of today’s actual cost—wouldn’t the total bill for the additional coverage of 46 million people be somewhere around $261 Billion per year, or $2.6 Trillion over 10 years?
Here’s a recap:
- Current U.S. per capita cost for healthcare is $7,900.
- Veterans Health Administration (VHA) per capita cost is $5,996.
- New proposed healthcare cost for those currently uninsured is $1,956 per person.
- Reduction in healthcare operating costs would only be cosmetic PR steps, with no true change in cost. (Per Dr. Ezekiel Emanuel.)
- To bring the new coverage for the 46 million up to VHA standards would cost the U.S. taxpayers about $2.6 Trillion over the next 10 years.
Leaving out all the politics, lobbying, and high dudgeon at the Town Hall meetings and rallies, it is obvious that the new healthcare bill (whatever it ends up to be) is going to cost every American business, and wage earner, one helluva lot of money. The choice will be to raise taxes or pass the burden onto American businesses. Unfortunately, since small businesses make up over 99% of all U.S. businesses, these are the folks that will take the brunt of the new healthcare costs—so be prepared!
Of course, there is one other possibility—lower the standard of care of currently insured persons to reduce the $7,900 per person cost by two or three thousand dollars, and apply that savings to the cost of healthcare reform. Then we could all have poorer healthcare, even though it would still be expensive.
Any other ideas, or comments?
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