Healthcare in a nutshell

This chart says it all. I saw something similar once when I was reading a book on education by Thomas Sowell. The more I think about it there are lots of parallels. While the NYC Public School System was larger than the Catholic Parochial System, the two could be compared as a percentage. The amount of administrative staff for the Catholics was a number less than 5% as a percentage of total employees. The number for the government school system was substantially over 50%.

Whatever field the government operates in, it will soon be bogged down in bureaucracy. Healthcare was I was a kid in ’64 was Doctor Aunspaugh. She had an office in her home and a secretary. That was it. She was also on staff at a hospital in the city, but she was the “town doctor“. That was the year before LBJ “saved” healthcare with the ‘Great Society’. Medicare and Medicaid. Doctors since have not only said what the effect of the increased paperwork was, they’ve demonstrated it.

Figures like 75% of their costs have been floated as having to deal with government requirements. There was a system of urban clinics that successfully operated on a ‘cash only’ basis. They were able to do that even with the most destitute of clients because they did not deal with any 3rd party payers. Insurance, Medicare & Medicaid.

That was the other death knell of healthcare, the insurance industry. Once you remove someone paying directly for a service, you remove all price controls because “they’re not paying for it”, in their mind. As was explained to me “health insurance” wasn’t even a thing until towards the end of the 60’s (when the impact of government sticking its nose into healthcare started to be felt). Insurance was first offered to executives as a benefit because tax law put a real hurt on executive salaries.

So this way a company could benefit the exec without tax consequences. Then as the impact of the ’65 act became more and more detrimental to costs, unions got into the act and started bargaining for it for their employees. Then it was Katie bar the door. The roof was blown off and they never looked back. The lobbyist industry took off for both hospitals and Big Pharma, and the big payday came in for Congress. That’s all she wrote.

When you try to tell people that people before ’65 paid cash for their doctor or hospital visits, they think you are nuts or a liar. But its the God honest truth. About 1963 or so a semi-private room at a hospital cost about the same as a hotel room. People would laugh at you today and call you a liar. Having a baby didn’t cost $15K. And that’s not even with an overnight stay! 60 years ago a 5 day stay wasn’t unusual. Now they kick ’em to the curb that day a lot of times.

That 3,200% increase in administration staff in the chart above, explains everything about the rise in costs.

Published by Iowa Life

Experiencing life in Iowa.

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