Tuesday, May 12, 2009

How much does $2 trillion really help?

The news of the day is that current health care providers including insurers have agreed to shave $2 trillion off expected increases over the next four years. Wow! "What a deal," the sages seem to be saying. Personally, I have been struggling with that. What does that mean?

They are not, to my knowledge talking about cutting what is now paid for health insurance. That stays, plus the expected increases over the next four years less about 1.5 percent. (I think I have all that right as to the percentage and the time. It is something like that, anyway). I have been waiting for somebody to say what that really means, but, no; no one is saying anything except about the savings plan. What I want to know is what is going to be done about current health care costs?

For example, I spent one day in a local hospital recently and the bill to the insurance was over $8,000.00. What they are talking about now has nothing to do with that. It has something to do with that cost escalating to maybe $12,000 over the next four years rather than $13,000 (just for talking purposes).

In all this one has to question why costs might go up 40 percent in the next four years. Why would that be? Cost of product? Cost of manufacture? Cost of labor? Cost of profit? Whoa. Profit? Yes, profit is usually turned into a planned or expected increase. Isn't it? I think so. And the profits are spread over all areas considered from the origination to delivery phases. Yes.

So, what I am saying is no one is addressing the real problem. All they, the media and the administration, are talking about is a savings of $2 trillion, and they are making that sound like a really good deal. Well, is it?

$2 trillion divided by 300 million people amounts to about $7,000 per citizen over a year's time (if we were just talking about citizens, which we are not). Put that way, it does not sound like a lot, actually. But if that is so, how about what is left? Come on, now! Lets get real about the cost of health care and stop just talking about someone's expectations of where it is going.

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