Monday, June 29, 2009

Matt Miller on Heathcare

Matt Miller on healthcare, from The Commonwealth (June 2009, p. 16):

General Motors famously spends more on health care than it does on steel. And Starbucks spends more on health care than it does on coffee. [Nice margins on coffee, eh?] Workers are left in a situation where, because of the nature of employment and benefits being tied [together], we've got 50 million uninsured and maybe 30 million additional folks [underinsured] in tremendous anxiety. It doesn't work anymore.

According to the same speech, in 1960, healthcare cost 5% of GDP. Now it costs 20%. Did we get completely out of shape in just 49 years? If so, the short time frame indicates no permanent difference, meaning we may be able to change our habits and return to a healthier society. I suspect, however, that the real problem is the way healthcare companies, including hospitals, get paid by insurance companies.

When I was in college, I remember going into the ER for some stomach and head pain--I had slept for about 21 hours in a row and was feeling terrible and nauseous. I'd never slept that long before, and I was afraid something had happened (and no, I did not drink the night before--I have never really liked alcohol because I like sweet drinks, and I hadn't discovered Drambuie yet). An ER doctor checked me out for five minutes and saw nothing wrong. Since I was already there, I asked him to check out a small growth on my calf. The doctor looked at it for five seconds and declared there was nothing serious.

As a student, I was still covered under my dad's health insurance policy, but it refused to pay the bill--the insurance company said my nausea and weariness were not true emergencies, and therefore I should not have gone to the ER. The insurance company said I should have waited until Monday to see my regular doctor, but I didn't have a regular doctor in my college town--I was a freshman, and I rarely went to a primary care physician anyway.

I got the bill from the hospital and was able to see the full charges. In addition to the normal ER fee (which is normally quite high), the doctor had charged me around 200 dollars for the five seconds it took him to check my leg. That's right--the doctor had classified my simple question as a completely new healthcare issue. Even lawyers have to account for their time, so they can't charge outrageous amounts for five seconds of work. I don't want doctors to account for every six minutes of their time, but the current system is too easily manipulated. When I received that separate charge for around 200 dollars--a princely sum for a college student back in the mid-90's--I knew there was something morbidly wrong with the American healthcare system.

There is a happy ending, if my memory serves me correctly. My mom called my dad's insurance company day after day, and I believe it finally paid the bill. I wonder what people do if they don't have a determined person who can call and argue a bill over and over. As a full-time college student, there was no way I could have paid that bill. And what's the point of having health insurance if you can't go to the doctor when you're feeling absolutely horrible and terrified about about a brand-new, sudden problem?

In any case, if you believe healthcare companies won't be forced to change their inefficient ways under an Obama administration, you may want to consider Vanguard Health Care Fund ((VGHCX) and the Vanguard Healthcare ETF (VHT).

Disclosure: as of June 29, 2009, I have no positions in any funds mentioned above.

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