Last week’s dismissal of Healthcare as one of the subjects to watch in 2009 was met with strong retorts. Difficult, confusing, fraught with ideology, demagoguery, logomachies, it doesn’t matter, readers write back.  This is the most important topic of all, without health, nothing else counts, look at how much of the GDP gets into healthcare.
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All right, then, let’s dive into it.  Most likely with even more controversy as a result.
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First, the GDP percentage. (What follows is a very rough calculation, not to be taken too literally, just an illustration of the size/nature of the challenge.)  Take a look at this chart, you need to scroll down the page a bit past another controversial topic, Palestine.  There, we see the US spending 15% of its GDP on healthcare, versus 9% for the OECD as a reference.  Further, the public (tax dollars) share of such spending is 45% in the US vs. the OECD’s reference, 73%.  If you go to the excellent site of the US Bureau of Economic Analysis and dig around a little bit, you’ll see the country’s GDP will be somewhere around $56tn (trillion) for 2008, going down by a few percentage points, 3 to 5, we’ll have a better idea by the next release of numbers on January 30th.
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Let’s say you want a serious national healthcare program and use as a goal the OECD’s public spending share of 73% versus today’s 45%.
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15% of $56tn is $8.4tn for healthcare.  Now, moving from today’s 45% public share to the hypothetical OECD 73% is a 28 points move.  28% of $8.4tn equals $2.4tn.  Hypothetical is the operative word, we no longer speak of million or billion these days but trillion.  The $2.4 billions of millions number, that’s what a trillion is, a billion millions, should give us pause.  Where do we get that money in a context where we haven’t finished two wars and we just nationalized the financial system in order to avoid its collapse?  Our president-elect is already adding about a trillion dollars in tax cuts to the deficit.
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This doesn’t say we shouldn’t get started on the road to a universal healthcare program, just that this is going to be a third or fourth priority behind rebuilding a financial system with a goal of restarting lending to businesses and families, rebuilding the country’s physical infrastructure, with the hope of stimulating employment and, third, financing an exit from Iraq and Afghanistan.
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Second, more loaded with controversy, the continued growth of healtcare’s GDP percentage. One estimate puts it at 17.7% of the GDP in 2012, another at 20% of GDP in 2017.  This isn’t sustainable, to use a trite phrase often used to announce inaction.  I don’t see how we’ll get the political will to stop the growth and, at the same time, move trillions of tax dollars into public spending.  If you’d like, take a moment to read the introduction to Mancur Olson’s The Logic of Collective Action.  The book itself is a typical economics text, difficult for the layperson.  But the intro makes a very crisp point.  The four of us go to dinner, let’s enjoy the occasion, order what you like, we’ll split the check four ways.  You won’t see one diner order caviar and Dom Perignon while another settles for meatloaf and draft beer.  Decorum prevails because everyone’s actions are in full view, we’ll all order “reasonably”.  Now, move the dinner to a tent filled with 10,000 people and tell everyone to order as they please, each will pay 1/10,000th of the final tally.  How do I know the guy at the other end of the tent isn’t ordering caviar and expensive bubbly, why should I restrain myself and pay for his excesses?  Just in case, in order not to be cheated, everyone orders the finest fare.  You see where this is going: the logic of collective action says we get higher expenditures in a mutualized system.
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Before I started in the high-tech world, I worked for a pharmaceutical company for a couple of years, visiting doctors and hospitals, promoting good antibiotics and nonsensical tinctures (yes, an artichoke tincture for liver trouble) and an ocytocics extract of toad skin (the same kind that people lick for mind expansion, no kidding again) for obstetrical applications.  (For French-speaking readers see and search for Bufox, the name of the (legal) drug on the page.  In English, see this in Wikipedia which, interestingly, doesn’t mention at all the obstetrics application.)
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In any event, more than four decades ago, the waste and cheating in a mutualized healthcare system blew my mind.  I thought it couldn’t last.  We know the answer, it’s getting more expensive and worse at the same time.  And not egalitarian at all, nicer care for people with money and connections, to say nothing of cash under the table for noted eye surgeons.  Still, the floor level is such that everyone gets basic care regardless of income or pre-existing conditions.  But, again, to think the political will exists to move to a similar system in the US is delusional, a sorry thought considering the number of people without health insurance, a number that is likely to grow with the recession/depression.
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But there is more.
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Third, our combined (illegal) drug and prison problem. The same stats URL as above tells us (and rants, unfortunately hurting credibility) about the US prison population.  Something like 2.3 million people behind bars by the end of 2007.  Even during the gulag years, the US had more people behind bars than the USSR.  Today, we feature the world’s highest incarceration rate.  Why?  Some will invoke the right to own firearms, another political hot potato, but the real answer is the War on Drugs.
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Now picture yourself as the CEO of a large company. Year after year, you submit a bigger spending plan to your Board of Directors and, year after year, your competition increases its market share.  Yes, its a tough battle, you tell your Board, we need to hire more people, we need to spend more.  How long do you think you’d last?
But, with the War in Drugs, year after year, we keep spending more, seeing more people die by bullet wounds, sending more people to jail, creating a corrupt prison industry and submitting our police to dangerous temptations.  With no end in sight.
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How long before we recognize it is not going to work -- ever?
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The healthcare consequences are atrocious: the prison population is much sicker than the rest of us, contributes to the spread of HIV AIDS, tuberculosis, STD and hepatitis, to say nothing of violent deaths. And learning criminal behavior.
I realize there is no way we’ll accept to legalize and regulate hard drugs the way we control alcohol and tobacco.  There is a 24 hour laundromat next to a 7-11 store a few blocks from our office in Palo Alto and, night and day, you see people loitering.  As one of my friends observed: Wouldn’t it be much safer if coke (cocaine) was sold inside 7-11 instead of outside.  It’d be clean, titrated (like beer, wine and whiskey, you know the percentages) and without bullets or cops.  Well, dream on.
But, in the meantime, we keep spending more, getting more violent, more corrupt and sicker.  We have forgotten Prohibition and its crimes and we put people in jail for years for growing marijuana in their backyard.
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My father was an alcoholic and died of liver cancer.  I wished he had smoked pot instead.
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Now, you see why I feel hopeless when looking at the healthcare mess. —JLG
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