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Comment by petercooper | Hacker News Reader

The trials and tribulations of the poor and rich ends of the spectrum don't tend to surprise me, but the wildly varying ways the middle class perceives their incomes always does.

It surprised me that a family bringing in $900 a week ($47k per year) doesn't feel comfortable in Des Moines (statistically it's above local median). But then they note every 2 weeks they pay $375 for health insurance.. 20.8% of their pre-tax income! Yet their "state and federal" taxes are only about 10%?

For all the bleating about paying "less tax" than other countries, it's ironic that an ostensibly "free market" healthcare system is less efficient, more cartel-like and wildly more expensive for its users than, say, the "socialist" one in the UK where you could live well on the same money and still be paying your fair share without getting any handouts.

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If the american healthcare system is "free market," then I need to retake macro economics. It's such a regulated mess, I don't even know where to begin to point out the flaws in that statement. But, just as an example, I called to get standard billing rates for a specialist a few years ago and they said that patients weren't allowed to receive that information. Free market my arse.

Your sentence is strangely ironic... You want a completely free market without regulations and yet you are complaining that a company doesn't give out standard billing rates.

The idea of the non-regulated free market is that you'd choose with your wallet by going for another health care provider that tells you the billing rates.

If you want to force companies to reveal standard rates you are adding regulation. So is regulation needed or not?

Not even Adam Smith argued for a free market without regulation... He himself even identified several pain points and warned against "laissez-faire" economy.

In India's free market healthcare system, I had no difficulty finding out billing rates. The common stuff (e.g., cost of a hospital room or a blood test) was posted on the wall, and the doctors gave me details on more specific stuff.

That's at least one data point suggesting that in a free market, prices will become transparent.

Japan does that, too. They have a big book doctors follow for every procedure. Their system is regulated, price-fixed, and universal.

Pretty much true of dental, optical, and veterinary care in the USA, too (which are often paid directly out of pocket; dental and vision insurance is just a taxable vs. untaxable thing, but doesn't really spread risk like insurance).

Rather than focusing on the "meaningful use" EHR stuff, I wish the government would demand machine-readable and easily accessed pricing (list, prevailing, medicare, and all negotiated insurance, as well as actual collection rates) for services, at least from any doctor who accepts medicare or medicaid. Publish this, let people build awesome tools.

I take it you're not an american? Almost all health providers will not give out their rates, it's extremely hard to get prices on prescriptions, and you're rarely billed in full up front. It's damn near impossible to do anything remotely resembling a free market based approach to healthcare. There's this relationship between insurance providers and the health industry today that's impenetrable. It's very hard to explain, because nothing in the world exists like it. It's a horrible mess.

P.S. I never shared my opinion on the matter, but since you brought it up, I'm actually on the fence about the matter. I'm not a fan of the health care bill, but more because it seems to me like it's going to make things even more complicated than before. Also, I'm not a fan of the precedent the supreme court's ruling has set essentially weakening the states' powers. But, that's all fairly irrelevant to the discussion at hand.

But are you asserting that this is somehow the result of regulation? Because I have trouble understanding that.

I asserted nothing of the sort. Regulation is just a part of it. Again, I could go on for days. It's the result of both employer subsidized health insurance and bad regulation. I'm not against regulation. I'm just against stupid regulation and there's a ton of stupid regulation in the health industry today. Prime example: not being able to purchase health insurance out of state, which forces insurance corporations to setup shell companies in every state complicating the claims process and creating a ton of bureaucratic waste. On the employer provided bit, by having the employer negotiate the terms of the coverage, it removes the insured from the process. I, as an individual, have nearly no choice in the matter. I either go with the employer provided plan or I go with an ubsubsidized plan where there's nearly no competition in the marketplace, among other things (so rates are ridiculous).

You did not address the question.

Are you excluding the "free" healthcare in the UK from your definition of "handout"?

What "fair share" of taxation would they be paying in the UK?

(For simplicity, let's assume a household with a single earner of $47k / £30k.)

Sort of, but not exactly. I was implying that a household with that income would be making close to a median contribution to the tax base so, purely in my own opinion, would be paying a "fair share" in absolute terms. That is, they should not be either highly subsidized or a major contributor. But.. let's run the numbers to see if my hunch is wrong! :-)

Said household would have a gross income of £30000, pay £4505 in income taxes, pay £2732 in "national insurance" (ostensibly to fund social security, sick pay, and various benefits), and be left with £22,762, or 75.9% of pre-tax income.

(A "hidden" part to this is that (most) employers also make employer "national insurance" contributions, in this case of £3164 so it could be argued this is a hidden salary cost for employees.)

The total NHS budget in 2008/2009 was £94bn and there are around 25 million households in the UK. This gives an expense of £3760 per household or 36% of the total earned in direct taxation on our imagined household. This is double the percentage of the national budget dedicated to health, so my initial assumption may have been wrong.

However, with indirect taxation, especially VAT at 20% and high fuel duties, and subtracting the contribution of things like corporation taxes to the tax base, the total tax paid vs the absolute "fair share" is likely to come pretty close for this family.

Sorry if this is boring but I was intrigued and thought I'd look into it! :-)

FYI, speaking as an employer, Employer's NI doesn't feel hidden at all! It is basically part of the cost of employing someone. It may be hidden from the employee, but that's just a sleight of hand...

I've always thought that the most damning part of the UK-US comparison is this:

The United States government spends substantially more per capita on healthcare than the UK (a number which, to be clear, excludes people's private spending and if anything understates things because it doesn't include the cost of tax breaks for employer plans), but fails to guarantee healthcare to everyone and has developed an underclass of people who have substantially worse healthcare than many second world countries.

The UK system is, in many ways, unique, in that it's severely underfunded but gets outstanding bang for buck. I wouldn't recommend it here, because I'd be pretty skeptical we could transplant the necessary consensus political support and willingness to say no to stupid treatments.

Here's my take on the UK health care system - these are just anecdotes, but they are illuminating in their own way.

I broke my collarbone (clavicle, whatever) snowboarding - I go to see an orthopedic surgeon, or rather I go to the local hospital's orthopedic department and see somebody who I assume is a surgeon (he was in fact an MRCS) who tells me, "Collarbones heal on their own just fine in about 95% of cases" - my response - "According to this very out of focus x-ray I was given in France, my collarbone is in a gazillion pieces - maybe I'm in the 5%" - to which he replies - "Collarbones heal on their own just fine in about 95% of cases, I can write you a sick note".

My nephew, my brother's child, was born with what at the time was assumed to be a hole in the heart but which later turned out to be a particularly obnoxious genetic disorder (CHARGE), my brother and his partner lived in a central London hospital for six months while their son lived on life support and underwent open heart surgery. He will need a fairly high level of medical support his entire life, the cost to his parents $0 - in the US this could bankrupt an extended family.

Lines up well with my impressions of the system.

Perhaps my point about not doing stupid treatments was badly phrased, though: your collarbone example is one such treatment, and stupid isn't exactly the right word. Humans seem to have this inborn tendency to always overestimate the effects of medical care. The USA healthcare system thrives on that impulse: if there's any procedure at all that could conceivably do something and you can afford health insurance, you get it, from a full array of pointless tests to highly invasive surgery.

In the UK, the system seems to work on the opposite assumption: because every cent spent on healthcare is a cent that the government doesn't have access to, it vigorously refuses treatments if at all possible. Hence, your collarbone example: most collarbones (apparently) heal easily enough on their own, so it's cheaper to assume it will and treat it later than it is to treat all of them to the maximum extent possible. "Death panel" is fairly histrionic, but it does have some validity to it. The issue is that if we want to get the American system's spiraling costs out of control, we need to recognize it doesn't have enough death panels (i.e. a willingness to say, no, it's better to give half-assed or no treatment here and perhaps sacrifice some level of well-being in order to save a couple bucks).

I personally believe that people place way too much faith in the ability of medical science to perfect outcomes, and that much of what we do amounts to modern voodoo. So I tend toward thinking that doing the minimum treatment that can be justified is the better way to go.

Nonsense, the cost wasn't $0, the price was. Doctor's don't work for free and that money came from somewhere, in that case taxpaying citizens of the UK, of which I assume your brother was one of. It cost him, he just got the bill from the gov't instead of the hospital.

I know it may sound pedantic to argue over little words like that, but I think people's lack of understanding around basic economics contributes to the problems we have. Promoting the notion that healthcare can somehow be "free" does little to fix the problems we see in our current system here in the US.

I don't know how the UK system is funded, but the Danish system is funded with a flat 8% income tax (the sundhedsbidrag) applied to all income, with no deductions or exclusions. Pretty good deal overall imo, especially considering that it's not dependent on age or preexisting conditions.

The UK funds the health care system with what is know as National Insurance contributions that comes out of your pay packet; which also covers a basic state pension. Companies will also pay what are known as on costs to top up the NI contributions. I think together they work out at around 12% of your own salary and the company pays ~12% on top.

I get the distinct impression that taxes in the UK are just thrown into one big pot anyway so NI contributions are just another general tax.

The UK funds the health care system with what is know as National Insurance contributions that comes out of your pay packet

Technically NICs are for the social security system generally, including most major benefits, state pension, unemployment, and sick pay. On their own they couldn't be able to fund all of this plus the health service (I don't have the numbers but I'd be surprised if they could even fund just the health service).

I get the distinct impression that taxes in the UK are just thrown into one big pot anyway so NI contributions are just another general tax.

Essentially, yes. The government has been considering merging the two into a new, higher income tax in recent years.

> ostensibly "free market" healthcare system

Some guy said of sick care in America: The American health care system is socialism without a central plan, and capitalism without markets or prices.

You really have to pick one or the other of socialism or the free market. Our current system is the worst of both worlds.

You really have to pick one or the other of socialism or the free market. Our current system is the worst of both worlds.

That is the essence of contemporary corporatism. It has nothing to do with capitalism or socialism, because it's neither system. The problem is one of social topology, from which money disparities follow, but it's otherwise not really about money per se. Modern corporatism works like this: a well-connected, parasitic elite (~0.5%) gets the best of both systems: the chance of personal enrichment and the freedom of capitalism, and the safety net (up to outright governmental favoritism, as seen in corporate welfare) and low minimal expectations of socialism. The other 99.5% get the worst of both systems.

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