Let’s Have a Rational Talk about Healthcare

The rage healthcare creates keeps me out of the debate most of the time. I research what companies will make money from this bill because that is my job. However, I am a member of this nation and feel it is time to place my 2 cents into the firestorm.

My attention to healthcare was sparked by how much the United States spends on healthcare. The United States spends more as a percentage of GDP than any other nation in the world. In 2007, the United States spent 16% of our GDP on healthcare; compare that to 11% by France and 9% by the United Kingdom. However, spending is not the problem, the problem is the low quality of our healthcare system. The US came in at 16 of healthcare quality in the world, this indicates a systematic problem.

If the problem is a system issue, then identifying the main cause of troubles is imperative. Government involvement in healthcare is not new. The government officials that started the involvement process were trying to help yet the system got worse. There is nothing wrong with trying to create a better system but if the government solution was to throw money at healthcare in the name of helping the poor, then they planned poorly. The result of government involvement is a nightmare of perverse incentives that has turned the system away from the patient. How much money a hospital can get out of a patient is the most important aspect of most doctors. Add in the fear of lawsuits, defensive medicine, and no competition between hospitals you get an extremely expensive healthcare system.

Monetary expense is only one type of cost this nation pays. The number of people that die from hospital born disease and mistakes is staggering. 40,000 people died last year from staph infections they acquired in the hospital; that is unacceptable. In addition, government involvement in colleges has lead to an exploding cost of college and this includes medical schools. There are not enough doctors graduating from medical school to replace retiring professionals. There is a 100% chance of a shortage of doctors in this country which will drive up costs in ways I cannot imagine.

All of these issues convince me reform is/was needed. The argument that liberals are trying to take over our country and ruin the best healthcare system in the world is a ludicrous statement. The system was already terrible and socialist.

Healthcare reform did address some much needed issues but failed to fix any of the messed up incentives, tort-reform, medical college reform, or quality issues. The bill focused on most of the wrong problems that would have addressed cost and quality. Instead, politicians argued over uninsured and government insurance plans. This nation already had universal coverage, if you walk in you get treated.

I would have hoped Republicans would have tried to get cost control issues into the reform bill rather than saying no to reform. Without line-item veto Obama would have had to sign a bill that included universal coverage and cost/quality control laws. What did we end up with? A bill that did nothing but add more people into a crappy system.


Reform is needed, and both parties have to address the real issues.


Souces: The Economist, March 20th 2010

The Exploding Cost of College

I wince in mental anguish every time my grandparents recall how much they paid for college in the early 1950’s at Colorado State University. Their yearly tuition was less than $100 per year. Yes, the 1950’s was a long time ago but the cost of college has beat in inflation by astronomical levels. According to an article in 2008 by U.S News, the average cost of attending a four year public university was $17,000 a year. $100 in 1950 adjusted for inflation equals $900 presently, how did college cost get so out of control?

Many colleges argue they offer more services to their students now than they did 60 years ago such as internet, TV, parking, computers and so on. However, does that account for the fact college is seventeen times more expensive than in 1950?

To answer that question let us look at the cost of college since 2000. Business Week released statistics on the cost of college; the average cost of college has gone up 92% since 2000. There are two main reasons for this explosion in college education.



The first reason is colleges are paying more for the retirement of their professors and faculty members coupled that with earlier retirement by most professors the costs to maintain pension plans is becoming increasingly expensive. The second main reason for college cost is the fact the federal government is giving more aid. When Washington gives out aid, colleges counter by increasing tuition and other costs and the result is a back and forth game of rising costs verses rising aid. The problem is much of the federal aid is in the form of student loans which have to be paid back and adds to the debt burden of college students.

There are several other reasons for the rise in the cost of college but it is clear these are the two main culprits. In a weakening economy many students are taking a huge gamble on going to college only to find they cannot find a job even at low paying jobs. The result is jobless grads with an enormous debt load that cannot be refinanced or defaulted on, when the students cannot pay; their credit rating suffers making the probability of getting out of debt even lower.

At some point college, even on a community college level, is going to become too expensive to justify for most middle class students. This will leave the majority of the work force without the education it needs to make the United States economy as powerful and flexible as it has been. At some point colleges need to understand they are crippling many students before they even graduate and the government needs to recognize they cannot handout aid to colleges that take advantage of government help.

I do not believe this country can take another 92% rise in the cost of education in the next decade without severe social and economic repercussions.