Class Warfare Blog

February 11, 2014

What You Mean “We” White Man?

(If you get the reference in the title, you are older than you look. It is the punch line from a joke from the 60’s. Think Tonto and the Lone Ranger.)

Republicans have insisted since the beginning of the health care debate that “We have the finest health care system in the world.” Others clarified that as “We have the finest health care money can buy.” Here is a slide from a course Economist Paul Krugman is giving that clarifies this:

Health Care Costs per Segment

It is a little hard to read but the vertical axis is “Percent of Total Expenditures on Health Care” and the horizontal axis is “Percent of U.S. Population by Income (Various)”. All you need do is look at the column on the far right: it says that the bottom 50% of Americans account for 3% of the health care expenditures of the country. Therefore the top 50% pay for 97% of the healthcare. Since Republicans insist that “you get what you pay for” (and only what you pay for) this means that the bottom 50% of Americans (160,000,000 or so) get 3% of all of the health care given. In other words:

top 50% ALL
bottom 50% NONE

And according to Republican officials, who do not know anybody in the bottom 50%, this is fine and dandy.

It is not fine and dandy, it is a disgrace!

Carried to the extreme we would only extend aid to soldiers on the battlefield if they were card carry members of the top 50% of Americans by income. Hey, if it’s good enough for the folks back home, it’s good enough for our troops! Think about it. We should leave no battlefield wound untended, nor should we leave any citizen without basic health care at any time. Why? Because we can and it is the right thing to do: for the troops and our citizens.

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4 Comments »

  1. Steve, I’m not sure you are interpreting the graph correctly.

    A large portion of bottom 50% are either retirees with Medicare or poor enough to be covered by Medicaid. Medicare pays out $9000 on average or so per beneficiary on average, and at least 10% of the bottom 50% are seniors (meaning 5% of all). Medicare pays out on average $3000-$4000 and covers around 60 million, nearly all of whom would be in bottom 50% – so about 36% of them (18% of all). So assuming Medicare pays about the same average $9000 for 10% seniors in bottom half and Medicare pays out $3500 on average for 36% of bottom half, it comes out to at over $2000 average expenditure per everyone in bottom half. This is already much higher than $664/per person in the last column – and that’s even without counting any out-of-pocket, or even accounting for remaining 54% in the bottom half.

    I think these are the breakdowns between 1% with highest health expenditures / 10% / 20 %, etc., regardless of the income level. There might be some discrepancy between top 1% by income and bottom 50%, but it shouldn’t be nearly as drastic as 367 to 1 ratio.

    Comment by List of X — February 12, 2014 @ 12:26 am | Reply

    • I think you are right, that I oversimplified. Government pays about 25-28% of all health care expenditures, so possibly a fraction of what the more affluent spend could be shifted toward the less affluent. But estimating how much would be very difficult. For one, the affluent do use health services at a much higher level than the non-affluent. Also, when I say “Government” pays, where does that money come from? I am on SS and Medicare for example, and I am not in the bottom 50% (plus because I have a public pension, my SS is cut to a small fraction of the normal benefit–basically it covers my charge for Medicare). Much of what I receive from SS is paid for from receipts I deposited over the years, so like an investment, I am paying for those things partially and others (through redistribution) partially. (I know my payroll taxes were spent on other people back then and not put into an account to accrue interest, etc. and that the money I am receiving is coming from others, but the principle is the same.)

      I haven’t seen the statistics regarding people who get no healthcare at all, meaning they spend 0$ and receive zero service. Like those at the top, they would distort the averages, but with a lower bound effect it less than those at the top who have no upper bound.

      The 367:1 ratio seems high but look at the small numbers under the columns representing the annual (in 2002) expenditures by those folks. The top 1% are spending over $35K per year? Amazing. Also, Medicare and SS deductions from those folks are capped, so they aren’t being sucked dry.

      Maybe I am interpreting the data incorrectly (it is from “Research in Action, #19”) as there was no explanation of what the numbers represented other than the chart’s axis labels.

      On Wed, Feb 12, 2014 at 12:26 AM, Class Warfare Blog wrote:

      >

      Comment by stephenpruis — February 12, 2014 @ 8:56 am | Reply

      • I think this link (http://meps.ahrq.gov/mepsweb/data_files/publications/st421/stat421.shtml) supports my theory that it’s not the breakdown by income, but by costliest health expenditures. According to the 2010 data in the link, 1% of people with the highest healthcare expenses consumed 21.4% of all health spending and cheapest 50% just 2.8%, which are almost exactly the numbers in the graph. Top 5% uses 49.9%, top 10%: 65.6% which also correspond to the graph. The report uses mean amounts versus the cut-off amounts, but I’m confident it’s the same breakdown, if maybe from a different year.
        It is very possible that top 1% by income consumes more (for example, I doubt that poorest 50% do much plastic surgery, for example). However, the same link also has Income section, according to which costliest 5% of the poor actually cost more than costliest 5% of the high income subgroup. I don’t know whether poor and rich were groups of the same size (e.g., bottom 20% and top 20%), but it should give the indication that health expenditures on poor and rich should at least be in the same ballpark.

        Comment by List of X — February 12, 2014 @ 10:45 pm | Reply

        • Thanks for the follow-up, it appears that I am still somewhat of an athlete: I can still jump to a conclusion.

          On Wed, Feb 12, 2014 at 10:45 PM, Class Warfare Blog wrote:

          >

          Comment by stephenpruis — February 13, 2014 @ 9:05 am | Reply


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