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Wednesday, February 18, 2009

A Solution to Health Care.

Let’s say roughly half of the people registered to vote in 2004 (71mm people) think that medical coverage is a right that should be provided by the government. I think this problem can be solved simply by having these people donate to pay for it themselves.

Let’s see how this works- shall we. If each of these people gave $1 a month, that would be $852mm a year. It would take $156 per month from each of these people to raise the $133billion needed to insure the uninsured. In the US there is a median house hold income of $50,233 (2007 figures). Now, assume that each household has 2 people- making it a payment of $312/month/household. If this was taken pre-tax- that would leave hat household with $3,874 gross per month, or 92.5% of their current income.

This is, of course, an overestimation in the percentage of income taken, given that double income households actually make a higher median household income.

Now, if it was pre-taxed (or if the contribution was tax deductible) the household who contributes making the median annual income would pay $6,171 annually in taxes (with no other deductions). Before this contribution they would be paying $6,732. That change actually makes the cost of their annual contribution at $3,183 annually to provide insurance for the uninsured.

This is, of course, average. But, I am assuming that many of those who propose such government services also support progressive tax systems, than a sliding scale can be accommodated. 7.5% of your current income is all it could take to privately accomplish what the government cannot. (Also, please keep in mind that government traditionally does not get the same value per dollar as nonprofit organizations.)

This would raise enough money annually to relieve the cost of medical school for 953,000 doctors. This figure could also employ 532,000 doctors making an average of $250,000 a year.

Salary is 40.5% of hospital costs (http://www.solucient.com/articles/07_MTM_Solucient.pdf ). Let’s use Philadelphia’s Presbyterian Medical Center’s number of employees of 1350 for an example. (http://westphillydata.library.upenn.edu/west%20philly%20data%20top%2020%20businesss%20by%20employees.htm ) Now, if EVERY employee was a doctor making an average salary used above, the annual hospital costs of labor would be $337,500,000. Using this as 40.5% of hospital costs, the total annual cost of that hospital would be $833,333,333.33. When we divide that number into the whole, this money could annually fund 160 hospitals. That’s one hospital in each of the top 160 cities listed here http://en.wikipedia.org/wiki/List_of_United_States_cities_by_population#Incorporated_places_over_100.2C000_population .

Of course, not every employee is a doctor, so this number could radically go up. Also, not every hospital would have this many employees. Now, the cost of managing such a large organization of hospitals would be large, which is why a nonprofit insurance agency with certain requirements for approval would be better.

Am I wrong here? Do my numbers not add up? If this is the case, why don’t the 50% of Americans who want such a system simply make it happen? Remember, these are annual costs, so this would be an ongoing figure. Perhaps there would be another level that would also cover all people contributing.

I guess my question is, why force the other half to foot the bill if they don’t want to when they can easily get it done if they quit complaining about it and just did it on their own. I think if they don’t do it, then it makes their motives suspect. Perhaps they don’t want this health care. Perhaps they really want to force other people to pay. I don’t know.

Please let me know if I’m wrong.