Medicare: Begins, Not Ends, Reform
The elderly consume a disproportionate share of total health expense. That soon forces Medicare, the "Third Rail of Politics", to get first attention in any lifetime health plan -- even Lifelong Health Savings Accounts, our central proposal.
Right Angle Club 2017
Dick Palmer and Bill Dorsey died this year. We will miss them.
In our discussion of medical finances, we assume everybody's books will balance. What about people who don't do any bookkeeping, what about taxation? Well, the vendors of medical care keep books which include payments by individuals and include expenses of running their businesses. Such items are either written off as trivial, or they are attributed to non-medical expenses, and of course, there is the black market. But let's look at medical education.
Sweat Equity. In the old days, interne and resident salaries were zero, or close to it. Student nurses may even have paid some tuition to the hospital. No great effort was made to account for the value of such training, so its effect was largely ignored. Nowadays, however, the medical students often go deeply into debt, and pay back their debt out of salaries earned a few years later, paid for either by working spouses or government training grants to the hospital. Or, more likely, they are paid back out of salaries paid by the hospital but reimbursed by Medicare. The medical school indebtedness is often as much as $150,000 per graduate, accounted for by government student loans, and the pay-back is arranged by the hospital paying salaries of at least $30,000 per year out of patient revenue, either government grants or health insurance, at least half of it government-supported insurance. It's pretty hard to say which category of patient is paying for resident training, isn't it? This is the back door by which government funding enters the scene.
Nurse training follows different but similar gyrations, making it overall pretty hard to assert these trainees are milking the system. They were once egregiously underpaid, and money fell in front of them, so they picked it up. It all comes to a lot of money, but as a rule, they did nothing underhanded to get it. In fact, if you net out the loan repayment, they are still working awfully hard to make very little. The big winners are the hospitals and the health insurance companies, big losers are the taxpayers. Take a look at the administrative salaries, and you can see immediately where the money is going. The trainees can tell you they are righting a previous wrong, merely recovering their sweat equity. The administrators have a more difficult job justifying the institution's windfall.
We could go on, pointing to government self-protection leading to DRG, and consequently to moving inpatients to the outpatient area; and the shifting of nurse's training to the university campus where they seldom see a patient. But the thrust of this section is somewhat different. It is to explain how the 50% employer-based age group appears to support so much subsidy from so little surplus. Government financing is a large new source of support, making reliance on the patients for revenue considerably less necessary. It remains to be seen whether such relief is permanent, or merely a response to the present economic recession. Since employer generosity too, is appreciably funded by taxpayers, rectification could lead to a downward spiral, leaving only the elimination of the disease by research as painless relief. Even so, let me remind the reader of the expensive longevity- enhancement implied by that solution.
All in all, it looks like revenue enhancement is the best approach, and the Lifetime Health Savings Account seems the most feasible untried approach to it. Its maxims: the best way to have enough, is to have too much. And within the limits of reasonable compassion, make every ship sail on its own bottom.
Originally published: Wednesday, June 07, 2017; most-recently modified: Wednesday, May 22, 2019