Thursday, June 4, 2009

60% of US Bankruptcies Due to Medical Bills

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Whenever I do a piece on our healthcare system our foreign readers always send some aghast emails. To which I can only say... I can't really explain to you the US Healthcare system... the fervor is to the point it's hard to fight the dogma. So many jobs are in small businesses, but the price of insurance is too much to bear for small business to provide this insurance. While specialized care is the best in the world, our life expentency is 3 years lower than those "socialists" to the north of us in Canada. Even though they apparently have to wait "forever" just to get their broken arm fixed since they are "rationing" care. All I know is 40% are uninsured, and use the emergency room as their primary care physician as befitting any good 1st world country. I often say in America if you get sick at the wrong time (when you are uninsured) you go bankrupt... it looks like I will have to modify that statement. It appears even those who have insurance often go bankrupt. So to the foreign readers who live in those "socialist" countries like the United Kingdom... it's just hard to explain what is going on here, unless you live in the world of soundbites and political extremes.

Remember, we wrote last year as the recession hits Americans are cutting back on "Extras"... you know, like healthcare [Sep 24, 2008: As Economy Gets Tough, Americans Begin to Cut out "Extras" - Like Healthcare]

22% of 686 consumers said that economy-related woes were causing them to go to the doctor less often. About 11% said they've scaled back on prescription drugs to save money.

Health-care companies say the current economic slump's impact on demand for medical services has been surprisingly swift.

Speaking at an investor conference this month, Walgreen Co. Chief Executive Jeffrey Rein said the U.S. is experiencing the "tightest prescription market" in his 27-year career, as more cash-strapped patients skip their pills or take half doses.

"It's hard to get people to follow up when they're having to decide between the gas bill, the electric bill or deciding to come in and see the doctor," Dr. King says.


Ironically even with 4/10ths of Americans without insurance, the system will still eventually bankrupt the country. Cleary a very healthy system. Anyhow back to green shoots.

This is where I say 'richest country on Earth'*
*excluding debts

Via Reuters
  • Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported Thursday in a report they said demonstrates that healthcare reform is on the wrong track.
  • More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.
  • "Using a conservative definition, 62.1 percent of all bankruptcies in 2007 were medical; 92 percent of these medical debtors had medical debts over $5,000, or 10 percent of pretax family income," the researchers wrote.
  • "Most medical debtors were well-educated, owned homes and had middle-class occupations."
  • "Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," Harvard's Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said in a statement. "For middle-class Americans, health insurance offers little protection," he added.
We don't need no stinkin' middle class... the have and have not system we are moving to is working like a charm. Reverse Robin Hood.
  • The researchers, funded by the Robert Wood Johnson Foundation, said the share of bankruptcies that could be blamed on medical problems rose by 50 percent from 2001 to 2007. (while I'm not advocate of bankruptcy, please keep in mind the lobbyists for the financial firms made filing bankruptcy much more expensive and difficult mid decade. When oligarchs say jump, our feckless... err, fearless leaders jump)
  • Patients with multiple sclerosis paid a mean of $34,167 out of pocket in 2007, diabetics paid $26,971, and those with injuries paid $25,096, the researchers found.
Solution?
  • The researchers and some consumer advocates said the study showed the proposals under the most serious consideration are unlikely to help many Americans. They are pressing for a so-called single payer plan, in which one agency, usually the government, coordinates health coverage. (that would make us European.. or worse.... Canadian) Neither Congress nor Obama are considering the kind of single-payer plan advocated by Public Citizen, Himmelstein and his colleague Dr. Steffie Woolhandler. (no one wants to be called European - it's a dirty word in America)
  • "Expanding private insurance and calling it health reform will fail to prevent financial catastrophe for hundreds of thousands of Americans every year," Dr. Sidney Wolfe of the Health Research Group at Public Citizen said in a statement.
  • "Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year," the report reads. (which last I checked, pretty much removes the whole point of healthcare insurance)
If anyone is from Australia and happens to catch this, please feel free to drop me a line on how your healthcare works. It's a Western style country and since Americans hate to be branded European (code word for socialistic) maybe we can adopt whatever Australia is doing. Australia does not have the same bad associations. Unless of course you have a single payer system... and then we will not want to be branded Australian either.

EDIT 1:45 PM - since not everyone reads comments on the blog, I will copy and paste these comments from Alex (from Australia) My comment back was nothing was 'free' so how is this paid for... but I like the general idea.


Hey Mark,

Alex, from Australia here...

Basically, our system works like this:

We have what we call Medicare, (NOT like your medicare from what I can gather) which is available to everyone. It is a basic level of health insurance if you like, where you pay for the service at a doctors, and are reimbursed a percentage of that by going into a medicare office and claiming it, depending on what the service is the percentage changes I think.

Some doctors offer what we call bulk billing, where they will take care of getting the money off medicare, and you just go in and sign a thing saying you were there. Not sure if they are all like this, but the bulk billing doctor near me will bulk bill up to $75AUD I think.

The service we get for free is quite good, it encourages people to go and get things checked out, why not when it's free anyway right? We also get paid sick leave here, so that probably helps too. :) What a bunch of commies we are...

Ok, that's the basics...

HOWEVER, a lot of middle class and above also have private health insurance. This allows you to go to a private hospital, and choose your own doctor. http://www.iselect.com.au/ will give you an idea of the different types and costs of insurance available. Where this comes in handy is with things like sports injuries etc, where may want a doctor who is the best in say knee surgery for instance if you have torn a ligament there or something. Heart patients and that sort of thing might want to choose a certain specialist too.

Also the lower income earners can get what's called a healthcare card, where among other benefits they get more back from medicare (I think, I'm not 100% on this, as I've never been in that situation personally.)

My personal experience is that the healthcare here is pretty good. This said, I've never really needed anything serious done. Probably the most serious thing I've ever had here in Australia is a couple moles removed, which was free and done at a bulk billing doctors. I'm pretty happy with the job done. The doctor was competent and friendly.

Anything else just ask. :)

Oh yeah, I should add, that if we earn over a certain threshold, and don't have private health cover, then we pay what is called a medicare levy. Which is $500AUD for those earning over $50kAUD a year and are single, and goes up again after $100kAUD or something like that.


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