Putting Sicko Behind Us Once And For All

Okay, lets wrap up this Sicko thing. It might be (okay, it will be) a longer post, but that beats dragging this horse into a fourth day. If you haven’t read the last two posts, you may want to before reading this one. Go ahead, I’ll wait……..

When we last left off we were talking about the costs of healthcare in the U.S.. According to “Health Care Spending in the United States and OECD Countries” (see link at end of post), health care costs increased at 4.4% from 1980 to 2003, and 3.6% from 1990 to 2003. Lets meet in the middle, and say that since 1980, healthcare has increased about 4% per year. Remember yesterday I talked about my first new car? During the same period of time that healthcare increased 4%, automobile prices increased at just over 5% annually. And what about housing. I know I live in an area (California) where housing costs have risen faster than average, but between 1996 and 2006, houses here increased at over 12% annually. That’s THREE TIMES the rate that health insurance increased.

So why aren’t we talking about national housing? Or national transportation coverage?

Okay lets talk about those evil pharmaceutical companies. In 2002 (the last year I have figures for) the thirteen largest U.S. pharmaceutical companies allocated their sales revenue to particular objects of expenditures and profits as follows: cost of goods sold, 25.3 percent; selling and administration, 32.8 percent; R&D, 14 percent; taxes, 7.3 percent; and net after-tax profits, 20.6 percent.

Now I know a lot of companies would love to have 20% annual profits. Then again, this would be a huge drop for other companies. And how much profit should these companies make. 5%? 10%? Really, I have no idea, tell me. Lets say that we decide they should only make 10% profit. And lets say you have a horrible disease that requires $600 a month in med’s. Now it’s only $540 a month. Does that make a huge difference? No. Sure, it helps, but we have people saying these drugs should be basically free. The problem is, few people are going to continue to develop drugs that cost them $500, and then charge $20.

Consider this: These days it takes 15 years and over ONE BILLION DOLLARS (yes, that’s billion with a “B”) to bring a new drug to market. Roughly 20% of that cost is in pre-clinical (developing the drug),and 80% of the cost is in post-clinical (testing the drug). Lets say on the average that the first five years are spent developing the drug, and then 10 years testing (in reality, it’s usually a bit longer to test a drug). Suppose we relax the FDA rules a bit, and now we cut that testing time in half. But that would cause thousands of unnecessary deaths? Would it?

How many of these drugs are tested hundreds of times in the first five years with zero problems, only to be proven fatal at the last minute? Probably not a lot. And don’t you think that trimming $400 million off of that one billion would lower the cost of a drug? Also, consider this. Lets say that I run a drug company, and I come out and say “Hey, here’s our new drug Xythphobical, and this drug will save 20,000 lives a year.” But lets say that the trial we just finished shows no different results than the trials we finished five years ago. That means what I, as the spokesperson SHOULD be saying is this: “Hey, here’s our new drug Xythphobical, and because the FDA required us to overtest this drug, 100,000 people we could have saved have died, and not as many of you that we can help will be able to afford this drug.” Think about it.

“But Bob” you say, “That means that unregulated and lethal drugs will sneak onto the market” Maybe, but remember that I am not advocating abolition of the FDA, just injecting it with a little common sense. And think about this, even with the outrageous testing required today, some bad drugs slip through. Also, lets go back to Sicko for a minute. Remember how all of those insurance companies will vilified in the movie for letting people die because they wouldn’t pay for experimental treatments. Well what exactly do you think those experimental treatments are? They are treatments that are still in the FDA testing process.

Look, I’m probably not going to take an untested drug for my heartburn, but lets say I have leukemia, and I have a month to live, and there is a drug company that has a new drug that might save my life, but it won’t be ready for human testing for three more years. Screw that, I don’t have three more years. Why not let me, at my own risk, try the drug. Worse case is I die, but hey, that was guaranteed to happen anyhow. But lets say it works. Not only is that great for me, but how many millions of dollars have I saved the drug company, and maybe helped bring a valuable drug to market a year or two sooner, saving thousands of lives.

Look, take lawyers out of the equation, and you can probably slash medical costs by 50% in a single day. But no, that’s not even a focus of the politicians, especially the democrats who are firmly in the pocket of the trial lawyer association.

Now lets talk about coverage. We already know that health insurance costs way too much, and while the politicians give that lip service, what they really are screaming about is the need for 100% of Americans to be covered. So how many people don’t have coverage right now?

Well, according to the latest poverty data, 47 million people in America are without insurance. But lets look at those numbers a little more closely. The median household income in the U.S. is $48,200. Were you aware that 38% of the uninsured – almost 18 million people – have incomes higher than $50,000, with 20% of all uninsured making $70,000 a year. I don’t know about you, but I don’t think we need a government welfare program for folks making $70,000. Is it really a good idea to tax working people to subsidize those who refuse to pay for a necessity they could easily buy? The answer, of course, is no.

One other breakdown of the data is instructive. By far the group with highest share of uninsured is Hispanics. Some 34.1% of all Hispanics lack coverage. That latter piece of data is alarming. Drilling even deeper, one finds that fully 27% of all the uninsured in the U.S. — that's 12.6 million people — aren't even citizens. Now I know I have friends that disagree with me on this, but I do not feel that we should be paying for insurance for those in this country illegally. I know Mr. Moore doesn’t think it’s a crime for Americans to go into Canada and lie to get health care, but the bottom line is that any American doing that is breaking the law, and any undocumented person in the U.S. is also breaking the law.

So far we have identified 30 million of that 47 million who are either able to pay for their own insurance, or are in this country illegally. We are down to 17 million people without insurance in America. And it is estimated that 20% of those 17 million uninsured are between jobs, meaning they are only temporarily without insurance. Now we have 13.6 million unemployed. Add to that the fact that as many as a third of those 13.6 million are eligible for public health programs don’t even bother to apply.

So now we’re talking about somewhere around 10 million uninsured. Sure, that’s a lot of people, and we need to address a way to help those people, but the bottom line is we are talking about 3.3% of the population. So we are willing to totally destroy and (hopefully) rebuild a system to help 3.3% of the population. And the bottom line is that the cost to do so will be probably 100% more than if we just gave the 3.3% full insurance benefits. Ludicrous.

If I had to point to one thing in Sicko – and in almost every liberal discussion of nationalized healthcare I have read – is the use of the word “Free”, as in “Oh no, healthcare here is free”. Hey Rainbow McDolphin, let me clue you into something – IT AIN’T FREE. We are all paying for it higher and higher taxes.

Last Sunday my local paper ran a story about a women who has kicked a meth addiction, and is getting her life back together, and more power to her. I’m thrilled that this women beat this awful drug, and it’s a story we don’t hear often enough. But consider this line, which a quote from the story: “She has worked at the deli at Von’s Supermarket for 16 months and gotten off all government assistance, except Section 8 housing assistance and Medi-Cal government health insurance.” Oh, is that all? And how many thousands of dollars a year is that?

Look, I’m not picking on this women, hers is truly a wonderful story. But the fact that this writer, and way to many on the left, simply toss this off as no big deal, means a great deal. If you have to pull that cash out of your pocket, you know what you are spending. If that cash never makes it to your pockets, you haven’t a clue what the real cost is. Every time I hear one of those Canadians or French in Sicko say “Oh no, it’s free” I cringe. It’s like hearing a battered woman say “Oh no, he really loves me and I know I can change him.” Sure, the two have nothing to do with each other, but they are equally clueless.

Like I said yesterday or the day before, I don’t rule out that national healthcare could work, but I can’t give you a solid answer on that because no one has bothered to lay out a detailed plan that shows all the costs involved. And like I said, even if we don’t nationalize health care, we still have a lot of work to do to correct the problems. Where to start? Well, it was Shakespeare who said “First, we kill all the lawyers.” A little harsh Bill, but I think you’re on the right track

U.S. Health Care Spending In An International Context: http://content.healthaffairs.org/cgi/content/full/23/3/10

The cost of bringing a drug to market is over a billion dollars: http://www.unav.es/english/news/105.html

Health Care Spending in the United States and OECD Countries: http://www.kff.org/insurance/snapshot/chcm010307oth.cfm