Guest Post: America's Hidden 8% Tax: Sickcare
Submitted by Charles Hugh Smith from Of Two Minds
America's Hidden 8% Tax: Sickcare
The bloated, inefficient sickcare ("healthcare") system in the U.S. is in effect an unofficial tax on the entire economy.
You may think only European countries have VAT (value-added taxes), but America has one, too--it's just hidden in the sprawling "healthcare" system, i.e. sickcare. A value-added tax (VAT) is a broad-based consumption tax designed to raise tax revenues from across the entire economy. Since it's in everything you buy, you can't escape paying it unless you go to another country without a VAT.
While the U.S. doesn't have an official VAT, it has an unofficial one that we all end up paying for indirectly: the 8% difference between what we pay for our bloated, fraud-ridden healthcare system and what our global competitors pay for their universal-care healthcare systems.
The U.S. spends 17% of its GDP (gross domestic product) on healthcare, while other advanced democracies spend between 6% and 9%. At a minimum, the U.S. pays a staggering 8% more of its $15 trillion GDP for a system that arguably leaves Americans less healthy than competing systems. (That is certainly the case in terms of life expectancy, natal care, body mass index, etc.)
We need to stipulate a few things right off the bat. One is that the inadequacies of U.S. sickcare are systemic; the system is so debilitating that it is an impediment to those individuals and caregivers working within the system.
Secondly, we need to dispense with the falsehood that our advanced-democracy competitors (Japan, Germany, France, Australia, etc.) have completely "socialized" healthcare systems. On the contrary, as this chart shows, private insurance and spending are integral parts of their healthcare. The difference is in the relative proportion of total spending that is private.
To take France as an example: individuals with the means to do so buy supplementary private insurance that offers coverage above and beyond what the state system provides.
Note that Japan provides care for its populace for a mere 36% of what the U.S. spends per person. Germany and France spend about half of what the U.S. spends per person.
The incredible disparity between what America spends and what other nations spend is easily seen in this chart:
Meanwhile, the U.S. outpaces the world in another category: body mass index (BMI), a broad measure of obesity. Yes, a few body-builders manage to have high BMIs based on bulked-up muscles, but for 99.9% of humanity a high BMI indicates a spectrum of obesity which is highly correlated with a range of chronic diseases.
American sickcare is sick for a number of reasons. One is that it is highly profitable to manage chronic lifestyle diseases such as heart disease and diabetes, while it is essentially profitless to encourage healthy lifestyles based on diet, fitness and positive mental health practices.
As a result, sickcare has zero interest (other than lip-service) in fostering (or emphasizing) prevention or in providing an integrated system of health which starts with what we do and eat every day.
This chart describes a few of the causal factors:
It's also highly profitable to turn people into couch-potato media addicts who are also hooked on sugary, fatty, salty snacks, fast food and packaged food. Convincing people a handful of pills is all they need to restore health is also highly profitable.
The U.S. has seemingly intractable lifestyle-related health issues that sickcare simply isn't dealing with effectively; it can even be argued that sickcare is actively making the problems worse in a multitude of structural ways. 86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.
If you don't think chronic ill-health and the 8% sickcare VAT is a threat to national security, please consider this slideshow map of the U.S. which depicts the obesity epidemic on a state-by-state basis:
Centers for Disease Control, U.S. Obesity Trends 1985-2007
Here's the key question: what else could we do with the $1 trillion that we currently squander every year on fraud, paper-pushing, duplicate/useless tests, highly addicitive prescription drugs, etc.? That $1 trillion is the 8% sickcare VAT. That's enough to reduce the Federal deficit to a manageable level.
The second question is: is there a more effective way to spend the other $1.5 trillion we spend on healthcare? Answer: obviously yes. We could start by understanding health is integrated with lifestyle, diet, fitness and our environment, and that relying on quasi-monopolistic cartels and Federal agencies to provide "solutions" is what got us in this quagmire in the first place.
Our national security and fiscal viability both depend on radically transforming sickcare before it brings down the nation.
I have covered these issues in depth for years:
The Simulacra of Change, the Propaganda of Hope (January 20, 2010)
Can Health Care Reform Possibly Control Costs? (April 10, 2011)