(This is a transcript of a presentation first given at the On Top of the World Democratic club, Clearwater, Florida, May 14, 2015)

Very few Americans realize how big and overpriced our healthcare is.

We spend $3 trillion every year on healthcare.
If our healthcare was an independent economy, it would be tied for 5th place in the world with the United Kingdom. It would be bigger than all of France and only about $400 billion smaller than all of Germany.


20% of GDP or $1 out of every $5 spent in the U.S. is spent for healthcare.


Lately, it’s growing at about 4% a year. At that rate compounded Health care will DOUBLE in only 18 years to $6 trillion.


Worst yet, with baby boomers retiring during the next 15 years, that growth rate will probably jump. We will be heading for that $6 trillion figure sooner.

Today, $3 trillion averages out to about $10,000 per person! If we ever hit the $6 trillion level that will be about $20,000 per person.

This will never happen. The country can’t afford it. We are going to see more and more rationing of healthcare with higher insurance premiums, higher employee contributions, higher copays and higher deductibles. The bottom third to half in income will have either no insurance at all, hard to use Medicaid or near unusable high deductibles. This exists today for the bottom third.

Obamacare will not be able to stop or reverse this. There is almost nothing in Obamacare to deal with rising costs. The objective of Obamacare is to increase coverage with subsidies for insurance to be paid for with borrowed money now and taxes later.

There are many causes for our runaway healthcare costs. Today, we will cover one of them– how we pay for healthcare. We can cover the others at a later presentation.

The main reason for our huge overspending is our use of the Healthcare Insurance Corporations (HICs). The U.S. is the only major developed nation that pays for healthcare through a menagerie of profit driven Healthcare Insurance Corporations.

Nations like Canada, the UK, France, Italy and Japan spend half per person than we do and they cover everyone. In most of these countries they live about the same or a few years longer than we do.

These countries have what is called “single payer” financing of healthcare. Their governments collect the revenues and pay directly to the doctors and hospitals. No middlemen. Medicare started out this way.

 Single Payer vs Health Care Insurance

This chart shows how the countries with Health Insurance Corporations compare to countries that have single payer financing. All of these numbers are about 3 years old and are about 12-15% higher in 2015 making ours about $10,000 per person this

You can see on the chart that the U.S. towers over the rest of the advanced nations. The next two most expensive per person healthcare nations are Switzerland and the Netherlands. Both also have healthcare insurance companies financing their healthcare. The implications are obvious.

Germany has government regulated non-profit insurance companies. Theirs could be a possibility here, but non-profit and government regulated won’t fit Republican ideology.

On the lower end of the scale, Canada, France, Sweden and Australia are basically single payer.

The UK is true socialized medicine with the government owning and running the hospitals. Doctors and nurses are employed by the government.

There are no studies that show we get better medical treatment and results for how much more we spend. No major country copies our use of Healthcare Insurance Corporation financing.

This chart shows that half of what we spend is wasted. That’s $1 ½ trillion out of the $3 trillion spent on healthcare.

How much is $1 ½ trillion dollars?


$ 1 ½ trillion dollars is an almost incomprehensible number. To put it into perspective:

If our healthcare waste alone, were a separate economy, it would be equal to all of Canada and a few $100 billion short of all of Italy. That’s all money being spent and getting nothing for it.

Our military budget including:
Our Air Forces’ aircraft and missiles
Our Navy’s Aircraft Carrier Task forces, submarines, and other ships
Our Army’s tanks, helicopter gun ships and armored personal carriers
Our Marine corps tanks, and small air forces
All the salaries and benefits of all personnel

Our military budget adds up to a whopping $600 billion per year. Healthcare waste is 2 ½ x that.

Hurricane Katrina in September 2005 did $128 billion in damage: Our overpriced healthcare waste does 12x the economic damage of Katrina each year. 12 Katrinas per year!

There is an illusion in this country that healthcare insurance is free if employers pay it. It’s not free at all. Healthcare insurance comes out of the employers benefit package for employees that includes:

Healthcare Insurance

Employees pay for health insurance indirectly. The more spent on healthcare; the less that is left for salary. A major reason salaries have been stagnant for over a decade is because healthcare premiums are rising eating away at paychecks before they are printed.

Healthcare insurance is like a tax paid to the insurance corporations, but it is called a “premium”. It is paid directly by the employer but indirectly by the employee.

An American single payer, Medicare-for-all, would work almost the same. A Medicare tax or premium would be paid by the employer. But it would cost the employer less because the following costs caused by the HICs would be eliminated:

There would be no more costly sales forces and advertising for all the plans that ration healthcare.
There would be no profit. Single payers like the original medicare are non profit.
There would be no outrageous CEO bonuses and high management salaries. Civil servants make far less and will be limited by law.
The very expensive burden of the paperwork from all these corporations would be eliminated from hospitals and doctors offices.

If they are burdened by only ten insurance companies with
four or five plans with different networks, deductibles and
copays that adds up to 40 to 50 sets of forms and rules.

It can be higher! That costs a lot. Single payers have
only one set of forms and rules. The savings are obvious.

HICs cost us $300-450 billion every year. That’s up to 3 ½ Hurricane Katrinas or ¾’s of our military budget.

It is important to emphasize that HIC and single payer systems are only methods of payment. They have nothing to do with quality of care. Both will pay good doctors and hospitals and poor doctors and hospitals. Quality of care is a separate issue.

HIC paperwork eats up a lot of a doctor’s time. Eliminating their paperwork will allow a doctor to spend more time with patients and see more patients per day thus shortening waits to see a doctor.

Wait time to see a doctor is going to become critical in future years as there is already a serious shortage of primary care physicians. About a third or more will be retiring in the next 15 years.

There are many misconceptions and lies about single payer financing:

Single payer is not socialized medicine. Doctors and hospitals are independent. The UK has true socialized medicine with government owning the hospitals and doctors are paid well. They cover everyone for half what we spend per person.

There are many who mislead about single payer by finding faults with one system and using that to prove that all single payer systems are no good.

For example, some Canadian provinces have long wait times for non emergency surgery. Some higher income Canadians come to the US to self pay for the surgery.

This is a problem that some Canadian provinces have. It needs to be fixed. If your car has a flat, you fix it. It does not mean your car is no good. It also does not prove that Canadian and other single payers are no good. Conservatives mislead this way all the time.

Even with these flaws, these countries have superior healthcare. . Our healthcare has hundreds of thousands dying every year from medical errors. Tens of thousands die from adverse drug reactions every year. Our media ignores this.

We still have 13% or so with no insurance. To that you can add a similar number with almost unusable high deductibles and Medicaid that many doctors won’t accept because of it’s very low reimbursement rate.

With all these faults we still spend twice what we should.
The faults of other systems are minor compared to ours.
If we have the best healthcare in the world as John Beohner
and other ignorant Republicans say, why doesn’t anyone else in the world copy ours?

The Democrats have their hearts in the right place. They aspired to cover everyone at any cost with Obamacare. The Democrats saved millions from suffering and death. So be proud to be Democrats. It’s better to do SOMETHING imperfectly that to do nothing perfectly like the Republicans.

Obamacare is a disaster for Democrats.

Voters are angry.
They are angry about losing their doctors which is really the fault of corporate policies and their networks.
They are angry about rising penalties for no insurance and being forced to buy it
They are angry about the overall deterioration of our healthcare that Obamacare is only partly to be blamed for.

2010 Obamacare passed
2012 Democrats lost the House and almost the Senate
2014 Democrats lost the Senate and had deeper House losses
2015 The first penalties for no insurance took effect.
2016 There will be larger penalties for not buying insurance.

Democrats are in big trouble.

We are now on the verge of chaos. In the next month or two the Supreme Court will probably undermine the Federal exchanges. The wording of the law prohibits them. Jonathan Gruber, one of the chief architects of Obamacare, is on video from 2010 saying the intent was to force the states to create their own exchanges. It will be a surprise if Obamacare stays intact.

The Republicans are profiting from all of this even though they have only ideological nonsense to offer. They don’t care about lower income citizens suffering and dying. Yet, they claim to be “Christian”.

Democrats must pick up the fumble and go on the offensive. We must promote Medicare-for-all single payer that will cost much less and cover everyone. Give the voters something to vote for, not against.

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