Monday, October 23, 2006

Out of Touch?

Our recent Good News post generated a lot of comments and dissenting views. So I decided to go back to the well once more and pull up another chart to review. This one has to do with rising health care COSTS. (Click image to enlarge).

The top reason listed by those surveyed? Drug company profits. Other causes and the percentage of respondents listing the cause follow.

50% say drug companies are making too much money

37% say med mal suits are the primary issue

Another 37% list fraud & waste in the health care system

36% say doctors & hospitals make too much money

Here is an interesting observation. Only 2 categories of contributing factors shoulder the blame on consumers.

29% say consumers are getting treatment they don't really need


28% say people need more care due to unhealthy lifestyle

Do drug companies make too much profit? Recent numbers indicate the profit margin for many companies is around 16 - 18%. Certainly this is much higher than grocery stores with an average 3 - 4% profits, but how much does it really affect health care costs?

On average, meds make up around 16% of total medical claims. If drug company profits were reduced to grocery store levels, how much would the cost of meds decline? Around 12%. How much of an impact on overall health care costs would such a move have? About 2%.

Back to the survey.

Of the 10 categories listed as affecting health care costs, 5 are clearly foisted on "the system" bascially following a theme of someone in the delivery system making too much money or needlessly overcharging. Only 1 category clearly states that consumers are at least partially responsible due to lifestyle while another hints that those receiving unnecessary treatment may be at least partially to blame.

And perhaps most surprising of all, only one category showed a positive response (rather than shifting blame) by stating people are getting better care.

Of course we now know this is really illusory since consumers are not really intelligent enough to distinguish between good and bad care . . .
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