US Healthcare leadership—an oxymoron (part 2)
by Miki SaxonI constantly hear people say that they’d like what Europe has, but don’t want to pay the increased taxes, business or individual, necessary to provide it.I asked a friend who lives there and she says that it’s not that simple.
She explained that in fact, taxation in the US is higher in absolute terms, Healthcare costs are one of the highest costs for a US employer, but are ignored in terms of taxation.
She says that when considering Europe’s taxes you need to consider that in Europe no business pays healthcare.
From an individual perspective, no one pays for health or for education, including higher education.
Of course, many US corporations, such as GE, pay little to no taxes anyway.
“Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003.
In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion (see box). These companies’ “negative tax rates” meant that they made more after taxes than before taxes in those no-tax years.”
Then, late last night I received the following email. The sender is an executive with a major insurance company. He apologized for requesting anonymity, but said that his comments could cost him his job.
I think what he offers is of vital importance to this discussion.
“Firstly, increasing tax on business is obfuscation of the issue. Providing universal healthcare is a question of prioritizing the enormous tax revenues that the government receives. We can choose to prioritize healthcare and education, or we can prioritize military spending that makes it difficult to do business internationally at the tune of $18 billion per month.
Now, it is clear that the level of taxation in the US is not significantly lower than in countries that have universal healthcare. What differs is that healthcare costs are significantly higher per capita in the US than in all other nations. In addition, the results of healthcare in the US, as measured by infant mortality or life expectancy, is lower than in all comparable nations. Infant mortality and life expectancy is as low as former Soviet republics such as Latvia or Slovenia. It cannot compare with Western Europe, Canada or developed Asian nations. Clearly, since the costs in the US are higher than in any comparable nation and results are lower, it is possible to both improve healthcare for all Americans while reducing the expense. This, however, will affect the profits of very powerful interests.
Rather than focusing the discussion of taxes, maybe we should focus the conversation on why it costs more to deliver less in the US.”
I think that focusing this discussion on who pays may be missing the boat. Maybe along with who pays we need to look at what we’re paying for and why it costs so much. What do you think?
Your comments—priceless
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February 12th, 2008 at 7:08 am
You have a few questions to answer before trying to make a comparison with other countries:
is it opt-in, opt-out or mandatory ?
how do you want to finance it (federal tax, medicare style tax, payment to an administrative body…) ?
what do you want it to cover (everything, only major procedures, hospital visits but not doctor visits…) ?
In France for instance it is mandatory, paid to an administration from your salary and it covers everything (but you may have a copay). This translates into a very expensive bill for young working adults and a very cheap one for families. It also translate into a feeling of entitlement which sometimes leads to abuse of the system. Finally prices are regulated for hospitals, doctors and drugs which means that healthcare professionals are also tempted to cheat the system to maximize revenue.
Of course in the US, there is no need to cheat the system because insurance and pharmaceutical companies own it.
February 12th, 2008 at 10:44 am
Denis, I don’t have those answers, but I do know that doctors and other healthcare professionals, even the most highly paid frequently cheat the system. And because they have no clout the un- and under-insured are screwed far more often. I won’t state my own thoughts on the insurance and pharmaceutical companies because it’s family-friendly and the only blue allowed is the color scheme.