Monday, May 1, 2017

"The health care industry is bound to collapse soon, experts say"

Via Instapundit: The US health care sector may be incubating the next big Lehman-style disaster that could tip the economy into a full-blown recession, according to industry analysts.

Forget about the subprime mortgage collapse. The health care sector is nursing its own toxic mess, with soaring debt, the analysts say. “As a nation, we have to step up our game and get on top of it; this is a huge issue,” said Chris Oretis, a former Washington lobbyist who now works as executive vice president in the life insurance secondary markets at GWG Holdings.

As industry spending and debt servicing rage out of control, health care is ranked as the No. 1 US “systemic recession risk” in a new report. The sums at stake are staggering: Spending in the sector accounted for $3.3 trillion in 2015, and is 18 percent of the US economy today. The industry generates 16 percent of private sector jobs nationwide, up from 10 percent in 1990.

US health care spending is forecast to grow by an average 5.6 percent annually in the coming decade, according to a report by the Center for Medicare and Medicaid Services (CMS), a projection based on no changes out of Washington and in the Affordable Care Care through 2025. Meanwhile, national spending on health care is forecast to outpace US gross domestic product growth by 1.2 percent. CMS has estimated that spending will comprise 19.9 percent of GDP by 2025, up from 17.8 percent in 2015.

“There’s no question that rising health care costs are hurting our overall economy,” said New York-based financial adviser Michael Mondiello. “With consumer spending accounting for some 70 percent of economic activity, the more we spend on health care, the less we have to purchase other things like a vacation or to save for retirement.”

(Link to more)

7 comments:

Evi L. Bloggerlady said...

How exactly does healthcare collapse? Insurers and hospitals going broke? People not affording it?

If you are sick, and you have money, you will pay whatever you have to get well. The problem we have with health care is rather than market driven, with catastrophic plans just in case. We have prepaid health plans that are not only expensive but inefficient as hell.

And we have individuals who can't afford medical care and how do we address that situation (or not).

edutcher said...

Time to light a fire under Ryan.

Better yet, get rid of him.

AllenS said...

Nonsense.

Methadras said...

Evi, there has to be a recognition that healthcare is a requirement for the individual to provide for themselves. Government cannot be the sole provider, even with insurance partners, of healthcare and wellness in this country. However, there are models that are working successfully with doctor/patient partnerships that don't include insurance or government. Imagine them basically like being memberships to a gym, but rather they are with a medical group. You pay a monthly membership fee and the basics are covered for nearly free, with elevated services costing marginally more based on the need. There is a free market solution and I think this group has found it. Government just needs to get the fuck out of the way. It's called Direct Primary Care and it's working and growing.

http://www.dpcfrontier.com/defined

http://www.dpcfrontier.com/mapper/

https://www.youtube.com/watch?v=zDfjDzFr4h4

This last video pretty much nails it all together. This is how it should be done and the beauty of it is, is that it's scalable.

https://www.youtube.com/watch?v=9Y25Sh_BG_M

Evi L. Bloggerlady said...

The underlying story is FAKE NEWS. That was my point. They make it like the markets are melting down like 2008 or 1987, as if that could be possible with healthcare. It is media crap. There is no looming collapse of the health care system.

BTW: Apparently Ryan and the boys must think they have the votes, because the GOP revised plan is being voted on tomorrow.

Evi L. Bloggerlady said...

Meth, I love free market solutions. Frankly I wish we could by catastrophic plans and just pay as we go (with pretax cash) for everyday services.

Leland said...

I believe in single payer, as I'm the single person responsible for paying. My work sponsored healthcare plan covers a free physical each year. I purchased one once, because I didn't want to wait the 12 months to get a new one. After convincing the office workers that their doctor would be happy to receive money out of my pocket; they figured out the cost to be $80. My monthly premium is much higher than that amount.

As for the media story; it would be awesome if people could understand the difference between insurance and bedside healthcare. They are not even close to the same thing. I agree with Evi; if you are sick, you'll pay someone to be by your side to heal you. That industry will only collapse if people decide the pay isn't worth the time to heal. In that case, supply will drop immediately, and they'll start getting paid by someone a lot more. Right now, we have an artificial system in place, and like all artificial markets; prices are inflated. I can see that artificial system collapsing like a socialist government in Latin America.