Two days ago a report from Commonwealth Fund came out comparing healthcare in five developed countries: United States, Germany, Britain, Australia and Canada. And the conclusion: “The U.S. health care system ranks last compared with five other nations on measures of quality, access, efficiency, equity, and outcomes.”
It is well-known that we have the most expensive healthcare in the world. And many people are proud of the fact that the U.S. has the most vigilant and productive market for biomedical research and pharmaceutical companies. I even read about envious comments on U.S. healthcare industry from a British economist on The Economist. However, it is undeniable that the paid price might be too high: we have fast growing insurance premiums; about 1/6 of total population is uninsured mostly because of affordability; need to pay the most for prescription drugs compared with everywhere else in the world…
How much more do we pay for health care compared to other countries? “Per-capita health spending in the United States in 2004 was $6,102, twice that of Germany, which spent $3,005. Canada spent $3,165, New Zealand $2,083 and Australia $2,876, while Britain spent $2,546 per person.” $6000 annual expense per-capita is a lot of money. For a family of four, that’s $24,000 per year. Twice that of other rich countries is simply too much, not a good buy!
However, U.S. healthcare providers are usually very proud of themselves for being the best in the world. Medical students have been trained to give patients the best care possible regardless of the cost, and we also know very well that how long (months and years) patients need to wait inline to have a non-emergent medical procedure done in UK and Canada. We actually read some similar stories on HMO or Medicare patients in the U.S.
Now why is U.S. healthcare also inefficient? Let’s take a look at the primary measures: infant mortality and healthy lives at age 60. Given the high prevalence of obesity and diabetes, I can understand why the U.S. did not do well in the later measure. However this is hardly the responsibility of the healthcare system alone, given the powerful commercials from fast food chains targeting our young children. Another convenience measure is also understandably low for the U.S. healthcare system: emergency room waiting time. If you have 1/6 uninsured people who on average need more serious interventions and only get medical care in various emergency departments of hospitals, how fast can you expect patients turned around there?
“The area where the U.S. health care system performs best is preventive care, an area that has been monitored closely for over a decade by managed care plans,” I am rather surprised by this measure. Vaccines in U.S. are usually expensive and not covered by health insurance. In fact, there are many such examples that private insurance companies put their short-term profitability above long-term societal values, which in the end, leads to higher medical cost for everyone.
In the end, I think that we are indeed paying too much for healthcare. Ethically and economically speaking, we should have a national program to cover uninsured 45 million people and free ERs from providing the care though expensive, but usually very late. Educating people to have a healthy life-style is at least as important as medical technology to reverse the increasing prevalence of chronic disease such as obesity, diabetes and heart disease.
two years ago, I thought that people like Mike Milken would be despised everywhere, by Wall Street, by the media, by the general public — He traded on insider information, he accumulated enough market power to inflate the junk bond prices, and many middle class who followed were left with worthless papers; he fostered corporate raids and destroyed many business. How can the public tolerate such a person?
. Obviously, Michael Lewis did not think Milken as a criminal when he wrote “Liar’s Poker”. And in some sense, Michael Lewis thought that Milken spotted a good financial innovation opportunity (junk bond) that Solomon Brothers missed.
. He “is a buy-and-hold kind of guy who predicts that an unprecedented wave of discovery and innovation will fuel economic growth in the U.S. and provide superior returns for investors who are patient.” What is his take on Milken’s junk bonds?
Late Starters' Journey to Financial Freedom 
How much income paid for rent?
May 30, 2007 — latestartersIntrigued by an MSNBC’s article titled Americans becoming increasingly house poor, Golbguru recently write an post inquiring people’s expense on housing. The MSNBC article only revealed that an average homeowner spends nearly 21% of their household income on housing, up from under 19% in 1999. Percentage-wise, Californian spend the most, 25.4% in 2005. The data includes many homeowners who bought their houses before the boom, thus, the 2 to 3% increase does not seem very dramatic. For more recent buyers, I do not know any friends who spend less than 25% (one couple bought earlier with 200K annual income) of their income on housing, most between 30 to 40%!
However, I did not find any percentage for renters. My further research found that the ratio really depends on the locality. In Golbguru’s case, he was able to pay only 11% of his gross household income (mainly two graduate students’ stipends) on rent, likely around $500 in a University subsidized apartment. Yes, an excellent job of Golbguru!
New York City is likely the other extreme, high rent and low vacancy. People not only need to get in line to rent an apartment, but also need to hire a professional broker for apartment hunt. According to New York City’s Economic Snapshot July 2006, the average monthly contractor and increased by 25% after adjusting for inflation, from $767 in 1991 to $956 in 2005. From the following picture, we can see average rent as % of average renter’s household income has also swelled from 34.4% in 1991 to 36.7% in 2005. It seems that not only the housing price soared, the rent was raised significantly too! I hope no one pay so much to stay in NYC. Of course, if you’re earning more than average renter’s household income and live under your means, you can beat those ratios.
I attended graduate school on the west coast, where rents are high. University housings are both cheaper and more convenient compared to local rental market. I was earning 23K annual stipend, but paid about 28% of my gross income for one room in a 2-bedroom university dorm. Despite the small annual raise of 1-3% of my stipends, when I finally graduated, I was paying 39% of my gross for the same room. A very good strategy to move out PhD students faster!
Right now, with 2 full-time job income, Jacqui and I are paying about 7% gross including cell phones and utilities, not much better than Golbguru, but way better than people in NYC and myself before. However, we’re looking for a reasonable upgrade in the next few months to have more space.