The internal contradictions of ObamaCare

October 26, 2009

At the heart of the economic case for U.S. healthcare reform is a simple comparison: Whereas America spends 16 percent of GDP on healthcare, the average across OECD countries was 8.9 percent, as of 2007.

So what do these frugal healthcare systems look like from the ground? T.R. Reid tries to find out in his book “The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care.”

In this health-policy travelogue, Reid visits a number of nations and interacts with their healthcare systems as he seeks help for a bum shoulder.

The main commonality is far from revelatory: lots more government. In one country, government determines the prices for medical treatment, in another it’s running the hospitals and employing the doctors.

So, too, would various Democratic plans for U.S. healthcare reform increase government intervention. Greater subsidies for the purchase of private insurance, new regulations on insurance companies, and, most likely, some sort of new government-run health plan.

But when one imagines what a post-reform American healthcare system might look like, there are two notable aspects in which it would still differ greatly from other OECD nations.

First, American doctors may pay as much as a hundred times more for malpractice insurance than their foreign counterparts, and will likely be sued several times during a career. Democratic healthcare reform would mostly leave this system in place.

But there is reason to believe that medical-liability reform could produce big cost savings. The Congressional Budget Office pegs the savings in overall healthcare spending at $110 billion over 10 years.

Some private estimates are far higher. A new study by the healthcare analytics unit of Thomson Reuters ( ) finds that defensive medicine — such as overuse of antibiotics and lab tests — by malpractice-jittery doctors costs the United States as much as $300 billion a year.

Another important difference is in what healthcare providers are paid. Reid’s book is full of examples of spartan medical facilities and doctors compensated more like high-end New York Times reporters than low-end Manhattan hedge fund managers.

Yet seeking to appease the doctors lobby, Democrats recently tried and failed to shield physicians from $250 billion in Medicare reimbursement cuts over the next decade. Expect them to try again.

Can ObamaCare “bend the curve” of rising healthcare costs? Not if it attempts to pay for reform more through higher taxes than by cutting compensation for doctors and trial attorneys.


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Another major difference is that medical school is free in places like France. Here, doctors go to work with truly crushing med school debt that take years to pay down. Its hardly fair that they invested hundreds of thousands of dollars in their education and could now be told they can’t expect the ‘doctor’ type compensation we’re used to seeing.

Posted by Mark Buehner | Report as abusive

[…] But when one imagines what a post-reform American healthcare system might look like, there are two notable aspects in which it would still differ greatly from other OECD nations. […]

Posted by The internal contradictions of ObamaCare — James Pethokoukis | The Kansas Progress | Report as abusive

Yea – We want it all, as is our norm – Best in everything, while pretending that best does not come with its own cost/requirements – Others take what they get/are given & accept it as best they can have – Not sure how you bend the curve without breaking the mindset – Demand for healthcare will always exceed the supply, b/c the best healthcare (Impossible to define, other than providing everything that people can expect/want) is what we all want/expect – So, the cost will continue to go up – Best generally = More

In short, not sure there really in an answer in our mindset – Which really is not all bad – B/c best healthcare does drive a lot in our economy – Good jobs, medical innovation & the like – Without that 16-20% GDP what really would we have to offer to each other? Cars & other mfg gone – Energy no longer on the cheap – Technology good, but an adder on

So, we’ll continue to have the best healthcare (That is, more) & we’ll figure out what we can afford politically, on the fly, as we always have done

That is our norm, until something/someone (The Chinese, the value of the dollar, whatever) tells us otherwise & we have to deal with these costs (Medicare, Medicaid, best healthcare with or without public option)

Current, public debate really is not seen as a mindset/deal breaker – Just looks like more of same to me

Posted by David Weidner | Report as abusive

The Democrats’ “reform” bills do not address tort reform. Why not?

The Democrats’ “reform” bills do not address buying health insurance across state lines. Why not?

The “reform” bills being pushed in the current “cram and jam” are disgustingly disingenuous.

Write about that, why don’t you?

Posted by Jack Davis | Report as abusive

Left totally out of this discussion are nurses.

Hospitals are not about Physicians–they are about RNs. Who do you think provides all that round-the-clock hands on care. Nurses salaries are the single largest cost item in ANY hospital’s budget. When mention is made of how much less health-care costs in other countries they should check out nurses salaries. In Germany–thought of as a co-equal to the US in industrial sophistication, etc.,–nurses salaries are 1/5th of that in the US. If we are to significantly reduce costs we would have to ask nurses to work at peons wages. Fat chance nurses–who have bills to pay and children to put thru college–are going to stand for “bending the cost curve” on their backs. And trust me sports fans, nurses salaries are the FIRST place both govt and the hospital industry are going to look to hold down costs. Should that happen we will see some titanic strikes in the years ahead. Why do you think nurses come from the world over to the US to nurse? The wages. We are already heading for a dramatic nursing shortage as it is due to the coming retirement of the baby-boom cohort at the very same time we need even more as the population ages. And reducing nurses salaries is going to alleviate that exactly how? And what will nursing shortages do to quality of care? To even ask the question is to answer it.

Health-care “reform” advocates are living in a dream world totally divorced from economic reality. Political reality? THATS what Congress is focused upon, but that’s hardly objective reality–a reality Congress and the American public will have to take into account like it or not–sooner or later–and I’m bettin’ on sooner. Wait until they ask nurses to take a 25% pay cut, THEN you’ll see *reality.*

Posted by virgil xenophon | Report as abusive

good short article

Posted by AKS | Report as abusive

We should be able to learn from other systems and they can learn from us as well. While Democrats–openly or not–push for a fully government run plan, Canada and the UK, where such plans are in place, suffer from conditions we would not tolerate and now publicly complain about. In Canada, meanwhile, it has taken its highest court to allow private medical practices following a lawsuit that found government was not delivering the care it had promised–and private care is now growing expotentially.

In France, where many European and international studies suggest the best care in the world is available, the system has struggled with deficits since 1988 and each year must find new sources of revenue as the percentage of GDP absorbed by health care begins to approach our costs. As noted in a previous post, education for doctors is picked up by the state–but those costs are not included in the overall price of health care in France, where a public/private system is in place.

What seems to be forgotten or ignored by liberals is that our current government system–Medicare–is itself on life support and just a few years away from insolvency. Rather than politicians trying to restructure our entire system, you would think this well accepted fact might give them pause and make them concentrate first on ensuring that Medicare can remain viable for some extended period of time before embarking on a quest to add millions more to a system on the brink of economic collapse.

Posted by Peter | Report as abusive

Another major difference is the fact of European Union and comparable prosperity across it. Health care is government run all across it and there is not much economic incentive to migrate because of it. Not so here in the US of A. Mexico is already pouring its poorest onto our shores without universal health care. Imagine the horde arriving when they can get free medical as a matter of course?
Europe is also accustomed to tax rates from 60 to 70% in much of the EU. Health care is part of the reason. Will Americans put up with that?

Posted by richardb | Report as abusive

Why exactly should government dictate doctor’s salaries? Does government dictate journalists salaries? Lawyers? Actors? Mechanics?

As long as people are shielded from the true cost of care, they will demand more.

Posted by Dan | Report as abusive

We still don’t get it; we still think we can have everything for everybody and somehow…some way…we won’t REALLY have to pay for it personally. Europe has universal coverage and protection against catastrophic costs (for an expensive illness). But it comes at a price, and that’s MUCH higher taxes and VERY aggressive rationing. Given our track record on big govt entitlement programs I have NO confidence our pols will be able to hold the line and contain costs. I predict Obamacare will be a backbreaking black hole that will make Medicare look like swiss watch efficiency.

Posted by JohnR | Report as abusive

According to the article the “ObamaCare” plan will save us $110 Billion dollars over the next 10 years? Let me get this straight, we are about to overhaul our entire Healthcare system at a cost of $1.4 Trillion dollars just to save $110 Billion? Does that sound like a bargain? If so, I have a ten year old Saturn that I’d love to sell to you at the bargain price of $100,000.

Posted by Ed Larson | Report as abusive

Funny that someone said in other countries medical school was “free”. It is not “free”. If doctors do not pay for medical school, it is paid for through taxation. There is no “free” healthcare, no “free” education, etc. Those “freebies” are paid for by your fellow citizens. There is no free lunch that isn’t paid for by someone else.

Posted by Steve | Report as abusive

Actually the “saving” are obtained through the usual congressional budget trickery. Over the 1st 10 years there full effect of increased taxes and reduced spending on medicare for the entire 10 years. The spending however over those same first 10 years only occurs the last 6 years. So it is easy to generate a “savings” when you tax for 10 years but only spend for 6. What happens over 10 years of full taxes and full spending……a HUGE budget deficit that’s what! But lucky for Obama he will no longer be president when the deficits hit so why does he care. That is our kids problem to deal with.

Posted by Steve | Report as abusive

Watching the smarmy and scuzzy Reid announce today , with a lecture to Pub voters to send more ‘moderate progressive’ Pubs to Congress, the public option. He then convoluted the issue with opt outs, co=ops, competitive choices supposedly. What he meant was, do it now, and years from now, we will have federal control. Then too, the Dems apparently do not care whether Americans by an 85% score approve of their health insurance coverage. They do not care that nearly 56% of Americans oppose the federal control public option. They want to have more dependent voters, some now 13 million at the most and of course, they will try to include illegals too. And this is type of Care that Dems want to force on Americans with the resulting ruination of free enterprise???

Posted by Glenn Koons | Report as abusive

One of the big differences are therapies that prolong life but not always add to the quality of life. An example, the US reimburses for long term dialysis treatments and therapies for people with renal disease (via Medicare). I bet most Americans aren’t aware that among dialysis patients there are significant numbers of illicit drug users. Dialysis is a big business in the US – most treatments are delivered by a handful of companies.

Don’t look for any restrictions in dialysis services under health reform.

Posted by s. valenti | Report as abusive

This is why Obama wants bipartisanship.

This is why he wants the Republicans to help, even when the Democrats already have a supermajority.

Because Obama knows this reform is a turkey. And now he is chained to it. And eventually the turkey is going to start giving off the stench of failure.

So he needs to somehow shift the blame….before the American people find out.

Posted by JohnisGood | Report as abusive

Obama started this debate by setting 3 goals: more access for poor people, reducing the long-term growth rate of costs, and making insurance more affordable.

It is beginning to look like he will accomplish the first goal, making medicine more accessible. But he is doing nothing to reduce costs, and the regulations being proposed will make health insurance even more expensive.

If the Democrats persist and pass this abomination, they may just lose control of the House of Representatives next year.

Then Nancy Pelosi will lose her staff, her private plane, and get the tiny office under the stairs.

That’s a change I could believe in.

Posted by Ernie Banks | Report as abusive

Bring down the compensation of medical professionals and the hospital costs which are outrageous. I was billed 13,000 for the slipshod mistreatment in a hospital emergency room which occupied 2.5 hours of my and a scant few med techs. Where was the value I am forced to associate with my time and paycheck? I am still in poor physical 6 months later with undiagnosed broken bones and God only knows what else. Because I refused to allow the hospital to run my bill even higher with irrelevant tests, I was compelled to leave the hospital being dragged by my elderly parents to the parking lot. A wheelchair was asked for but my parents were ignored. If my parents had fallen and gotten hurt, the hospital would have my name on the marquis today. That’s how angry I am at this whole keep the wealthy wealthy system in this declining nation.

Posted by Not Unemployed anymore | Report as abusive

What Obama needs to do is change and apply his quote below to what the Chase Bank is doing to millions of its customers who were lured to a small % credit card by AARP only to have Chase now say they are changing the % rate plus it will no longer be a fixed rate card….

“These are the very taxpayers who stood by America’s banks in a crisis — and now it’s time for our banks to stand by credit-worthy US CITIZENS, and make the loans they need to open their doors, grow their operations, and create new jobs,” he said.

Posted by kolla | Report as abusive


The $530 billion in Medicare savings up to this point have always been a bit of a mistery in Obamacare but no more. Senator Reid in a bid to increase savings reported by the Congressional Budget Office proposes to cut dramatically reeinbursements under the Medicare Advantage Plans which will force many companies out of that portion of their business and cause rates to skyrocket for those remaining. This includes all Kaiser’s Medicare plans, AARP’s Senior Advantage, CalPERS Bluue Shield Medicare Advantage plan among others. Call Senator Reid’s Office today and voice your opposition. The balance of the savings will have to come from undefined rationing.

Other Reid changes which will increase costs include further expansion of Medicaid coverage with it associatred cost shifting and taxes of durable medical equipment which gets passes on to the insurance buyer.

Speakup now because the promise that you can keep the insurance you have if you like it is evaporating right their before our eyes.

A Hospital Director from California

Posted by Kurt Hahn | Report as abusive

If Congress really want to help cut healthcare costs, they would allow interstate competition, and enact tort reform. There is no country in the world where doctors have to pay 1/4 million a year for insurance, and where the losing plaintiff doesn’t have to pay. That would slow the frivolous suits. Are there so many ambulance chasers out there that they control Congress? It looks like it.

Posted by joan | Report as abusive

No matter how you slice an dice it Obamacare is a horror, as seen in this video:
‘3-D Halloween Obamacare Horror Show’ fo

How can anyone trust Obamacare designed by Obama who spends a million bucks to hire attorneys to hide his original vaulted long form birth certificate? Everyone is asking why he hides the bc: ETHEBIRTHERS4-0

Posted by njre | Report as abusive

“…medical-liability reform could produce big cost savings. The Congressional Budget Office pegs the savings in overall healthcare spending at $110 billion over 10 years.”

Why not count it for 100 years and say that it saves over a TRILLION dollars, huh?

The $11 billion/year savings is not even 1/2% of our total health care spending of over $2400 billion every year.

Moreover, researchers like Atul Gawande have shown that even in case of states where there has been medical malpractice insurance reform, the total healthcare costs have NOT come down.

Posted by Whirlaway | Report as abusive

well OBAMACARE past…
WONDER when they are going to go after the nurses salaries
to see so many strikes, wonder how soon the other
contry nurses will come in and take the jobs for
min wage…
come to the U>S>A and get citizen ship
just have to be a nurse and work for peon wages…

Does anyone know the second country that pays the most
for nurses besides U.S.A.

Posted by usakindatheart | Report as abusive