Healthcare Is On Life Support

The American healthcare prognosis is critical. Nearly fifty million people are uninsured, and millions more lack the level of care they need. Collectively, we spend over $2.2 trillion dollars each year dealing with our healthcare maladies. That’s a staggering $600 per person per month. That’s right … $2,400 for a family of four… every single month. Yes, that’s right, $30,000 per year!

Statistics in this article represent the 2007 calendar year. Sources: CIA World Factbook; The Congressional Budget Office; The Heritage Foundation; National Center for Health Statistics; PBS.org; Physicians for a National Health Program; U.S. Census Bureau; Dept. of Health & Human Services.

Don’t believe it? Neither did we. So, let’s add it up. First, let’s double check the math. $600 x 300,000,000 people = $180 billion per month. Multiply by 12 to arrive at $2.16 trillion dollars! Here in the U.S. we spend over 16% of our GDP on healthcare. That’s more than any other country in the world. Germany ranks #2 at 11%. How can we afford this? It’s simple. We can’t.

In 2008, health insurance costs increased by 5% – twice the rate of inflation. Annual premiums for an employer plan covering a family of four averaged $12,700. Annual premiums for single coverage averaged $4,700!

Now let’s break it down.
Where does the money actually come from?

• Private Health Insurance: 36%
• Federal Government (taxes) 35%
• Private Citizens/Out of Pocket 15%
• State & Local Government (taxes) 12%
• Private Charitable Funds 4%

And where does it actually go?

Medicare $440 billion

The only larger categories of federal spending are Social Security and defense. By the way, Medicare is much closer to insolvency than Social Security.

Medicaid $332 billion

Medicaid payments assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. Contrary to what you might think, healthcare provided to illegal aliens is less than 1/10th of 1% of the total annual $2.2 trillion budget.  

Prescription Drugs $300 billion

For the first time ever, in 2006, global spending on prescription drugs topped $643 billion, even as growth slowed somewhat in Europe and North America. The United States accounts for almost half of the global pharmaceutical market, with $289 billion in annual sales followed by the EU and Japan. Emerging markets such as China, Russia, South Korea and Mexico outpaced that market, growing a huge 81%. U.S. drug company profits were maintained even while other top industries saw slowed or no growth.

Despite this, the pharmaceutical industry is - and has been for years - the most profitable of all industries in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, "with a net return of 17% on revenue." Pfizer’s cholesterol pill Lipitor® remains the best-selling drug in the world for the fifth year in a row. Its annual sales average about $13 billion, more than twice as much as its closest competitors: Plavix, the blood thinner from BristoMyers Squibb and Sanofi-Aventis; Nexium, the heartburn pill from AstraZeneca, and Advair, the asthma inhaler from GlaxoSmithKline are also huge sellers.

The pharmaceutical industry spent $855 million on lobbying activities from 1998-2006, more than any other industry, according to the Center for Public Integrity.  

Private Health Insurance Statistics…

177,367,000 people (59.3%) were enrolled in employer based health plans in 2007. Employers, on average, cover about 60% of the cost. 83,151,000 people (27.8%) were covered by some form of government insurance. 26,620,000 people (8.9%) purchased health insurance directly.

In 2008, health insurance costs increased by 5% – twice the rate of inflation. Annual premiums for an employer plan covering a family of four averaged $12,700. Annual premiums for single coverage averaged $4,700!