While scanning this piece about the unpopularity of the Romney-Ryan plans for healthcare, one figure jumped out at me. The total Medicare bill: $549bn, roughly £338.5bn. This programme covers 48m Americans – 40m of whom are over 65, and 8m are people with disabilities. That’s a cost per capita of roughly $11,400 or £7,000. Compare that to the NHS. For ease of comparison, these are the England-only numbers. The whole population of 51.8m was covered in 2010 for a total of £105bn, just over £2,000 per capita.
Now, clearly Medicaid covers a section of the US population that is much more expensive to care for, but we have some information about the NHS costs specifically for treating people of retirement age. This Parliamentary research paper says that in 2007-8 the value of NHS treatment to retired households was about 85% higher than the value to non-retired households, and, from that same paper, the retired are about a sixth of the population. A spot of simple maths gives us a rough NHS cost for the non-retired of £1749 a year and £3236 for the retired (again on a crude assumption that the average household size of each group is the same). Note: I’ve not factored out the higher costs for caring for people with disabilities, either, so the comparisons above will also be inaccurate to the extent that those costs diverge from the costs of care for the over-65s.
So let’s say the Americans had a rush of socialist blood to the head and set up a NHS along pre-Coalition lines. What might the budgetary implications be, aside from the setup costs?
Let’s assume treating those on Medicare would cost the UK retired figure, and treating the 260m Americans who aren’t eligible for Medicare would cost the UK non-retired figure. The Medicare crowd would then be covered for about £123bn ($200bn) – a saving of $349bn, Republicans please note – and everyone else would be covered for £455bn ($738bn). At a total cost £578bn (or $938bn) all 260m Americans would have healthcare free at the point of use, just 70% more than the current cost of caring for fewer than a fifth of them.
But Medicare isn’t the only government health programme LBJ left our American friends. Medicaid was established as a medical safety net for those on low incomes, and in 2008 it cost about $338bn, roughly £208bn, to cover a further 60m Americans, albeit with plenty of costs for those poorer citizens still to bear. No doubt the 2010 figure was higher, but even assuming not, that takes total federal expenditure to $887bn, or £547bn.
So, to conclude: America – you’re spending $887bn to provide healthcare to 108m people, little more than a third of the population, but you could spend less than 6% more, just a further $50bn, and cover the whole country. In fact, your total costs are already almost three times more than that when you factor in private expenditure, from companies and individuals – a whopping $2,600bn. Sure, some of that wouldn’t be covered by your shiny new National Health Service, but the savings would be truly enormous.
No-one would pay a penny when they got sick except a small flat charge per prescription that the Medicaid and Medicare crowd would be exempt from entirely (this is a comparison with England: in Scotland, Wales and Northern Ireland you wouldn’t even pay that). No more fear of losing insurance. Hell, no more insurance.
Cut wasteful spending. Save the average family $20,000. Put money in the pockets of the middle class and the working class alike. Economic benefits, not least because people might dare to start more businesses rather than clinging to an employer’s health insurance. This is nothing less than a fiscal conservative’s dream. Even Obama’s baby step in this direction isn’t unpopular anymore. Just don’t mention Bevan, Attlee and Beveridge.
#1 by Smylers on September 28, 2012 - 1:49 pm
Your suggestion seems to be predicated on the belief that not having to contribute towards the cost of ones own health care would be a good thing; while it shows how it could be done, I’m not sure it would persuade some of those against free health care that it should be.
At a B&B in Canada we found ourselves in a breakfast conversation on paying for health care (as you do) with our hosts and other guests. The American woman present was horrified by the thought of free health care, because it means even a dropout who hasn’t paid anything into the system still gets free health care. She actively saw people not being entitled to health care they haven’t contributed towards as an advantage of the American system — something your post completely fails to address!
A couple of other points from that conversation I found interesting:
* The B&B owners were Dutch, and spoke highly of the Canadian health care system, pointing out that when immigrating they were covered, for free, from the moment the plane touched town, and that in the Netherlands they’d had to pay €100 a month.
* Everybody else present — American, Dutch, and Canadian — thought about health care through the prism of insurance, phrasing questions along the lines of “In England the state pays your health insurance for you?” The idea that health care provision only required doctors, nurses, and so on, and could exist without insurers, was so far from their experiences that it simply hadn’t occurred to them as a possibility.
#2 by BM on September 28, 2012 - 3:53 pm
If the US got itself an actual NHS, then it would get itself a Johann Lamont determining that they can’t afford such a something for nothing culture.
#3 by Angus McLellan on September 29, 2012 - 6:41 pm
It’s no secret that the US spends a very large amount on healthcare. See, for example, this OECD paper: http://www.oecd.org/unitedkingdom/BriefingNoteUNITEDKINGDOM2012.pdf – “Health spending per capita in the United Kingdom remains at a level little over 40% of that in the United States”.
Looking at the first graph in the briefing note, Americans seem to be paying twice over for healthcare. Government spending isn’t wildly different from the OECD average in terms of GDP share, while private spending adds as much again. Great stuff.
Why anyone would think that the US has anything to teach us about running a healthcare system – apart from “how not to do it” – is one of life’s deepest mysteries.