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Studies by Census Bureau, New England Journal of Medicine, University of Michigan and Notre Dame show that poor people are more likely to be sick. Because these people are poor, they often don't have access to health insurance and are more likely to be forced to pay for medical care out-of-pocket. There are two things poor people can do at this point. One: get needed medical care and suffer huge financial losses thus being driven further into poverty. Two: they opt to forego treatment because the costs are prohibitive. The health of those who forego treatment deteriorates, they become less productive, missing days of work, losing human capital, and becoming even poorer. Sometimes the people who choose to forego care reach a critical point where they must get medical help. The cost of this treatment impoverishes them even more.
The following example illustrates this viscious cycle of impoverishment. Although government data on this subject is poor, a review of the last 300 bankruptcy cases in Arkansas showed a medical bill in half of them. According to the New York Times, bankruptcy lawyer Danielle Walker estimates that 40% of her clients have medical problems that caused them to file. This is direct evidence of high health care costs forcing people into poverty.
A nationalized health insurance program would solve this problem by providing health care for everyone regardless of their ability to pay.
We want to stress that nationalized health insurance is NOT socialized medicine, but socialized insurance. There are other essential services that the US has socialized such as: retirement income support or Social Security, police protection, fire departments, and the military. The point is to provide services to all. Everybody has an equal right to them. The fire department doesn't refuse to put out a poor man's flaming home. Similarly, poor people should not be refused health care simply because they are poor. In the rest of our argument, we will use the Canadian health system as our model
In the Canadian system, every citizen receives health insurance regardless of income. This is not the case in America as we all know. According to the Census Bureau, in 1995, 15.4% of the total US population was w/o insurance for the entire year.
Those people who are uninsured are largely poor. In order to pay for needed health care, these people will be driven into poverty. But simply because you are insured doesn't mean you can afford health care. According to the American Journal of Public Health, cost is the major barrier to receiving care for the insured and uninsured alike. A Harvard study says that in reality 31% of the U.S. population was either w/o insurance or could not pay for care in 1995.
A large percentage of the US population goes without insurance because of the need for profits. US Census Bureau statistics show that 24.3% of people with incomes less than $25,000 went without insurance during some portion of 1996. 15.4% of the total US population went without insurance for all of 1995. Millions of people are unable to get medical care unless they pay out-of-pocket, again leading to poverty.
The money that these poor folks spend on health care could be used for other purposes. Especially purposes which would increase their human capital and potentially raise them out of poverty. Such things as job training, captial investment, housing, or education.
According to a 1996 study from the Journal of the National Medical Association, there are 16.1 hospital beds per 1000 population in Canada compared to 4.4 per 1000 in the U.S. Canadians get more doctor visits, more hospital stays, more procedures and better health care in general than Americans, regardless of income. In Canada, even the poor have accesss to health care, with no out-of-pocket costs. Because the Canadian system is financed through a progressive tax, poor people in Canada can get treatment without being driven into poverty to do so.
In the Canadian system, since all patients are covered by government insurance, their is no incentive to undertreat poor people. In America, however, poor people are often given inadequate treatment or no treatment at all because treating the poor is not profitable. The Canadian health system treats for health, not for profit.
The U.S health care system is a profiteering enterprise concerned with making money and not with treating patients. Corporations are making medical decisions behind closed doors, as well as decisions on physicians' fees and working conditions with only one thing in mind: increase profits. The HMO system of health care which is the American example of "competition" and "freedom of choice" therefore only restricts quality and access to health care.
According to the Wall Street Journal, having multiple hospitals at one location actually drives up costs. Competition in health care does not follow an idealistic economic model, it forms a "health care arms race" making health care even less accessible.
The bureaucratic administrative waste and greed for profits drive up the costs of health care in the US. Costs designated as "overhead" go only to pay for administration and other non-patient directed fees, including corporate profits. 13% of private insurance premiums are used to pay overhead costs in the U.S. , according to the Journal of the National Medical Association. This number goes up to 30% for large carriers such as U.S. Healthcare and Blue Cross of Massachusetts. These costs are paid by the insured. Large overheads often prevent low income families from being able to pay for insurance or even just the increasingly large co-payments for treatment. This means people who need treatment will be driven into poverty to get it. Compared to the exorbitant 13% overhead in the US, less than 1% of premiums in the Canadian health care system went to overhead costs.
A major argument against a nationalized health care system is that it will be ineffecient. This is false. The so-called "efficient" system of competition in the US is actually just the opposite. Costs are increasing, administrative waste is on the rise, physicians and patients are subject to corporate control, and the poor simply do not get the treatment they deserve.
A Canadian health care system would eliminate much the bureaucratic waste that plagues the American system. According to the General Accounting Office of the US congress, the savings from consolidating the bureaucracy of the U.S. health care system into one such as the Canadian system would be upwards of $100 billion annually. Without increasing the total amount of money spent in the US on health care, this money could be redirected to pay for the costs of including everyone, rich or poor, in a nationalized insurance program that could even cover co-payments and deductables. The Canadian system simply offers more for your money: more and better care than US HMOs, at a lower cost.
By 1990, the average US hospital was spending 25% of its revenues on billing and administration, compared to 10% in Canadian hospitals, according to the New England Journal of Medicine. The enitre national health care system of Canada, which covers 26 million people, has fewer administrative employees than Blue Cross of Massachusetts, which only serves 2.7 million subscribers. Again, the Canadian system proves to be less wasteful by avoiding a top-heavy bureaucracy and giving all Canadians- even the poorest- the health care they need.
The US healthcare system only perpetuates this problem. According to major business journals, the costs for HMOs are predicted to rise because of low profitablilty. These rising costs would be directly translated into increased premiums and co-payments, again marginalizing the poor. As costs continue to rise, the impoverished will be driven further into poverty. It is nearly self-evident that a nationalized health insurance program would reduce poverty in the United States.
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