Wednesday, October 21, 2009

Some hard numbers on health care reform you haven't heard before

I ran into a young fool on Facebook lately who wanted proof that we'd save $150B/year by having everyone in this country covered with basic health care. He accused me of playing a shell game with my figures when I mentioned this with only the comment that I could post supporting detail if anyone wanted. Well, he's young and a child of privilege and probably doesn't know anyone yet who needs health care and can't afford it; moreover, I think he actually believes what he hears on Faux News.

I wrote the following over a lunch hour. Young Master Richard Cranium didn't believe that I'd done a good job of documenting all of this, saying that I should provide him with hard links to all of my info. So sorry, a lot of this requires you to get data from a variety of places and assemble it but it isn't rocket surgery. I did point him to Barbara Ehrenreich's classic and well-documented book, "Nickeled and Dimed." Alas, I haven't yet heard back from said young fool, but I don't expect to. He sounded like a dittohead. He's big on the Teabaggers, so I encourage him to go teabag as much as he likes.

What makes this post worth reading is that I don't know that anyone has actually talked much about this in a public forum yet. Certainly the people who want to scotch any kind of health care reform are not telling you about this; they're just posting all kinds of toxins about how much health care reform will cost without once mentioning how we can save a lot of money in the process.

I believe in health care for everyone. I always have and, being married to The Babe (who was a WA State judge for the Board of Industrial Insurance Appeals for years and years) and learning just how your life can change forever through no fault of your own in seconds, I believe in it even harder now. I've heard stories, with the names and identifying marks rubbed off, of people who were happy, healthy, and functional, who had a tree fall on them or got kicked in the forehead and have permanently doubled vision, or were in a car accident or had a pipe blow up and ~poof!~ their lives were mangled forever after. Accidents happen.

So here's how you save lots and lots of money by having general basic health care. I'm going to focus on disability claims through the SSA, because it's a single, specific venue out of many that's easy to identify. (BTW, I whipped all of this up in a single lunch hour. Most of the info can be had through the website.)

There were about 250,000 disability claimants this past year. Half of these simply wouldn't be there if they'd gotten basic preventive health care when it would've done some good. (How do I know that? I hang out with a lot of lawyers who deal with SSA disability claims. Moreover, it's public information that can be obtained by digging around on Fed'l websites.) The average cost of servicing a disability claim is $750,000/claim over the life of the claim.

Assuming that all of these are approved for benefits, that's an annual encumbrance of $93.75B. But let's assume it's 'only' $50B worth that are approved to pay out $800/month max in bennies. Now, add to that the add'l costs of food, Section 8 housing, ER services, etc. This adds maybe another, oh, $17B and change to this. $67B. (Yeah, I've got a spreadsheet for the really detailed numbers, but if the best argument someone can come up with is claim that it should be $15B instead of $17B, they've lost already.)

Now add the cost of the lost taxes, because if you're on disability, you are not earning money that gets paid to the IRS and state. Figure maybe $.75B for that. Also be sure to add to this another $1.5B or so to represent the taxes that are paid by OTHER people on the money that these newly disabled people would have earned and pumped back into their local economy paying rent, buying food, gas, clothes, houses, school supplies, movies, and so on. The health of an economy is the function of how many times you can get the money to change hands, after all, and assuming these people would earn $30K/year on average if they could work, ($14/hour), the 70% of their money that's not going to taxes and FICA would otherwise be going to other people. That's about $69B.

Add in the annual costs of ER visits and local health clinic visits for the people ALREADY on disability--more money that's already being paid but that's not being accounted for. At maybe $500/month/person (ER visits, though probably not monthly, aren't cheap and the cost gets borne by the hospital), that comes to around $25B/year right there. Okay, we're up to $94B/year at this point that's already being spent because we don't have a national health care policy other than "Don't get sick."

What about local services? I'm talking about private assistance through local organizations, churches, and so on. Again, takes longer to gather this data, but that's easily good for another $5B/year to people who wouldn't be in this boat if they weren't disabled and they wouldn't be disabled if they'd gotten basic health care when it was just an infected splinter and not a gangrenous leg. $99B.

Another "small" cost is the cost for disability hearings, which runs $800/hearing, or only $100M/year, but another, easier way to look at it is this: SSA Administrative Law Judges cost around $150,000 a year. If you don't have but half the people applying, you don't need but half the judges (1000 judges at $150,000/year) plus the support staff of senior attorneys, case writers, case pullers, and all the rest. Figure you'll save a cool billion/year in salaries here, which brings us to the nice round figure of $100B/year. (Note: This will also put a bunch of SSA disability lawyers out of business, too, but, hell, you didn't care about the income stream for lawyers whose job it is representing disability patients anyway, didja?)

All of this is pretty easy to justify in hard numbers. You can find out a lot of this directly through the SSA website. If need be, you can do a FOIA request, but generally, this stuff is publicly available on Federal websites. You also can check on amortized costs of food stamps, Section 8 housing, and how much emergency medical care costs that is written off by the hospitals or reimbursed by the state or Federal gov'ts.

Okay, My goal had been to show $150B of savings. So far, I'm just talking about people who have applied for disability through Social Security and I've gotten to $100B/year. That's a mighty specific, narrow venue for money we spend already. I ran out of time on my lunch hour to describe the specifics for other venues, but the information is easily available; it'll just take a few hours of your time to track it down if you need the specifics. But let me pose the following as exercises for the reader:

* How many people don't apply for disability through the SSA because they're applying for benefits through a different venue, such as Worker's Comp, which is a much more populated venue?

* How many people don't apply at all who are nevertheless disabled? According to the U.S. Census Bureau's March 2008 Current Population Survey (CPS), more than 19 million working—age Americans-10.9 percent of people ages 21 to 64—have a work disability. (More information can be found here.)

* There's a powerful disincentive to reporting improvements in your medical condition because you lose your health benefits. How many people are continuing to receive disability benefits because there's a good reason to not report improvement?

* How many people are not fully disabled and don't meet the listing but are definitely working far below potential capacity, earning less money, paying fewer taxes, and--very frequently--having degrading physical health as a result?

* How many people are getting welfare/other public assistance who don't qualify for SSA disability?

* How many people aren't disabled but are simply uninsured and who soak up ER and medical benefits in a much more costly venue (cf. Barbara Ehrenreich's "Nickeled and Dimed" for examples)?

I've shown in a very documentable way that in just one visible venue--Social Security disability applicants--we are already encumbering or spending $100B every year. Had I more time to write about this, I could very easily have demonstrated some of the many additional costs, but I've got to get back to work. But even if you're dealing with just these numbers here, that's $100B that I don't believe anyone is talking about when they're claiming how much all of this will cost in "new" dollars. And that is one of the biggest things I object to about these supposed think tanks that are talking about the costs: they omit the liabilities already engendered. Certainly the Republicans are not. I also believe the Congressional Budget Office is not talking about this kind of savings; they're only focused on the hard costs, which is not the complete picture. It's not in their scope to make this kind of comparison, though, so it's not like blame should attach to them as it does to the Republican naysayers.

However, there are some additional non-dollar costs that I'd like to posit for consideration as well:

* How many deaths are acceptable to you? People who aren't getting medical care die more frequently and younger than people who don't. By the thousands. (For this, start with Janet Napolitano's office.) The published figures show some 44,000 add'l deaths a year for the uninsured population.

* How much damage is there to the communitas, the sense of self and community, by adding 125,000 people to the non-working poor? Non-working poor, people on the dole with no way off it, are sand in the social gears. They don't want to be there anymore than anyone else, but it's not like there are a lot of choices. 125,000 disability applicants/year is a town about the size of Springfield, OR with nobody who works.

* Bonus question for Christians: Isn't it a little bald and unchristian to say that you are willing to throw people aside like used condoms just because they don't have enough money to afford private health insurance? Jesus didn't demand a premium, a co-pay, and an annual deductible for healing the sick.

There's a truly enormous amount of money we're already spending on health care; I just have run out of time to write about it right now. But if your argument about health care is that we really can't afford it, I think I've done a good job of demonstrating that we can afford this, easily. For example, Gov. Rick Perry--aka "Dick"--was claiming that the health care plan would cost Texas $4B/year, and was, therefore, a bad idea. Given that Texas has about 1/12th of the US population, that's $8.5B just of that $100B that I was describing. So if he got on board with that, he'd be roughly $4.5B/year to the good just on that portion alone. For a Republican, he sure don't seem to know shit about saving money.

Oh, and if your argument is all about how this promotes "socialism" (as if anyone outside of 1957 actually gave a crap), I'm pleased that you aren't going to be collecting on your Social Security, or using Medicare/Medicaid, public schools, student loans for college, public roads and utilities, or any of the banks or auto manufacturers that ever got bailed out by the Republicans in 2008 as well. Day-umn, boy, that's really putting your money where your mouth is! Nice to see you have the courage of your convictions.

Addendum: I found a resource or two for the non-believers and jackasses. The 2008 Annual SSI Report covers a considerable amount of ground. Of note should be the projections for SSI recipients in 2032, about 9.5M people. If half of those are there only because of the need for health care early on, then that's 4.75M people who could be productive, functional members of society instead of on the dole. You do the math for how much that'd cost the country.

There's also a primer on Social Security disability insurance from the AARP.

Addendum, March 28, 2010: Please see this follow-up post about Nixon's plan for universal health care.



ladyjestocost said...

Anecdotes aren't evidence but here's one anyway.

I have health insurance. Not great health insurance, but OK health insurance.

About a month ago, one of my fingers turned, red, started swelling, and hurt to the touch. Previous experience (30 years ago) made me think I had an infected hangnail, which the college nurse had had me treat by soaking it in hot salt water, which had worked.

Well, I didn't remember the specifics. So that Friday morning at work I looked up first aid for infected fingers on the internet. The first three sites I found all said the same thing - run, don't walk, to your doctor. I called my doctor's office got an appt (on a Friday - lucky me!) and hustled over there.

During the course of the appt two things came up - one was that Friday seemed to be the day for finger infections - I was the second one she'd seen, and two - if I hadn't seen her that day, I would've certainly been in the emergency room that weekend, and possibly in the hospital.

So, I paid $40 for this (co-pay & drugs) and my insurance company paid something in the neighborhood of $140, for a total of $180.

If I'd had to go the emergency room, my co-pay would've been $150, and the insurance company would've owed (at a guess) about $350, for a total of $500, assuming no further complications from waiting too long.

Did I mention I'm an artist? Losing that finger could easily have been a career killer for me.

Sigh. Didn't these people ever hear the rhyme, "For the want of a nail..."?

Anonymous said...
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HR Mitchell said...

don;t forget about those other socialist services - police and fire.