How Americans Drive Up Their Own Health Insurance Costs

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I grew up in an advertising era touting “rugged individualism.” The icons of that era included John Wayne, the TV character Palladin, and the advertising “Marlboro Man,” all part of a mythology that people could cut their own path regardless of others.

Unfortunately, that’s not how life works. If your reading this, someone else probably had provided the electricity for  you. If you also write, the court system protects your intellectual property. If you have a retirment account, you depend on financial regulators to protect your assets. If you eat (and you’d better be doing that), there’s the farmers and fishermen who provide what you consume. We are a connected network of people, whether on the grid or not. Whether you like it or not.

That’s blatantly the case in health insurance. There was a time when health insurance didn’t exist and didn’t matter. There were relatively few doctors in the 1850s, medical knowledge was relatively crude, and life expectancy was short.

  • In the Americans, life expectancy from birth was only 35.1 years in 1850. Life expectancy for slaves was less, with estimates ranging from 22 to 30 years of age.
  • The shortness was due to childhood deaths. If one could make it to age 10, there was a reasonable prospect to live to age 60.

ourworldindata_life-expectancy-cumulative-over-200-years-768x548

Life expectancy has  increased dramatically in the last two years, as you can see from the chart above, from an excellent article by Max Roser. (1)

In most geographies, the major gain in life expectancy came after World War II.

Exponential-PHE-Growth-Irfan

However, the increase in life expectancy comes at a substantial cost. One estimate says that each day of additional life expectancy adds $1.6 billion to medical costs just in the US. (2) However, living longer is just one component of the story of rising health costs.

Behavior matters. Certain things some of us do add substantially to medical costs for each and every one of us. How does that work? It’s in built into the concept of insurance as conceived by Benjamin Franklin.

  • People — healthy and sick — pay into a fund that in turn pays people in their time of need.
  • The required size of the fund is determined by the number of claims and the size of claims. The required size of the fund determines what people who participate have to pay.

That might seem unfair to healthy people, but we have to remember that no one stays healthy forever. Everyone dies. Everyone gets a turn with illness, sometimes more than one turn.

What might be considered unfair is when people do things or allow things to happen that cause illness. For example,

  • The CDC estimates that 36.5 million Americans smoke cigarettes, and 16 million currently have a smoking-related illness. Not everyone who smokes gets sick, but a larger percentage do, and that adds $170 billion to total medical expenses in the US. (3, 4)
    • According to a recent Gallup survey, more than 28% of adults in Ft. Smith, Arkansas, Layfayette, Louisiana, Erie, Pennsylvania and Bristol, Tennessee smoke. The national incidence is 18.2%, down from more than 40% in the 1960s. (9)
  • Obesity is estimated to add $147 billion to national healthcare spending (2008 dollars). (5) That figure may be low due to the large number of undiagnosed diabetics in the US.
  • Alcohol and drug abuse adds another $64 billion to healthcare spending (7)
  • Distracted driving (there are no separate estimates of direct medical costs), but medical bills have been rising even as the severity of injuries has been declining. (6)

The medical expenses that result from these behaviors hit every consumer:

  • Rising healthcare charges (remember the principle of “supply and demand”?)
  • Rising insurance premiums to cover the rising healthcare costs
  • Rising taxes to cover the proportion of expenses the government pays

High spending doesn’t mean better medical results.

With development, health outcomes generally improve, but the U.S. is an anomaly. The U.S. and the U.K. are both high-income, highly developed countries. The U.K. spends less per person ($3,749) on health care than the U.S. ($9,237). Despite its high spending, the U.S. does not have the best health outcomes. [Life expectancy, for example, is 79.1 years in the U.S. and 80.9 years in the U.K. And while the U.S. spends more on health care than any country in the world, it ranks 12th in life expectancy among the 12 wealthiest industrialized countries, according to the Kaiser Family Foundation, a non-profit organization focusing on health issues.] (8)

Europeans and the Chinese government understand the impact of individual behavior on costs. Americans have been more reluctant to understand and accept personal responsibility for how their behavior affects themselves and everyone else. It’s time to grow up and put the myth of rugged individualism away.


Sources:

  1. Max Roser, “Life Expectancy,” Our World in Data, undated. https://ourworldindata.org/life-expectancy/
  2. Sean Davis, “8 Charts that Explain the Explosive Growth of U. S. Health Care Costs,” Media Trackers, 1 October 2013. http://mediatrackers.org/national/2013/10/01/8-charts-explain-explosive-growth-u-s-health-care-costs
  3. US Centers for Disease Control and Prevention, “Economic Trends in Tobacco,” last updated 17 June 2017. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm
  4. US Centers for Disease Control and Prevention, “Current Cigarette Smoking Among Adults in the United States,” last updated 1 December 2016. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm
  5. US Centers for Disease Control and Prevention, “Adult Obesity Causes and Consequences,” last updated 15 August 2016. https://www.cdc.gov/obesity/adult/causes.html
  6. Rocky Mountain Insurance Information Association, “Cost of Auto Crashes and Statistics,” undated. http://www.rmiia.org/auto/traffic_safety/Cost_of_crashes.asp
  7. National Institute of Drug Abuse, “Trends and Statistics,” last updated April 2017. https://www.drugabuse.gov/related-topics/trends-statistics
  8. NPR, “What Country Spends The Most (And Least) On Health Care Per Person?” 20 April 2017. http://www.npr.org/sections/goatsandsoda/2017/04/20/524774195/what-country-spends-the-most-and-least-on-health-care-per-person
  9. Samuel Stebbins, “Cities with the Most Smokers,” 24/7 Wall Street, 22 JUne 2017. http://247wallst.com/special-report/2017/06/22/cities-with-the-highest-smoking-rates/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUN232017A&utm_campaign=DailyNewsletter

Emergency Pain Management

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A newly reported study from Australia finds that

  1. Acupuncture is a viable alternative to drugs such as opioids for pain management for patients coming into ERs in severe pain. The researchers believe that ER personnel should be trained in acupuncture and have this available as a resource.
  2. However, the authors report that neither drugs nor acupuncture provide immediate, adequate pain relief. They urge the need for research into development of tools for immediate pain management.

In a previous post, I talked about tai chi as a recommended treatment for depression for individuals resistant to Western psychotherapy. Now we have a recommendation for incorporating  acupuncture with Western medicine. Taking the best elements from different traditions seems to make sense.


Marc M Cohen, De Villiers Smit, Nick Andrianopoulos, Michael Ben-Meir, David McD Taylor, Shefton J Parker, Chalie C Xue, Peter A Cameron. Acupuncture for analgesia in the emergency department: a multicentre, randomised, equivalence and non-inferiority trial. The Medical Journal of Australia, 2017; 206 (11): 494 DOI: 10.5694/mja16.00771

Immigration and the New American Reality

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“I don’t want my child to grow up in the US.”

That’s a simple and direct statement from a financial professional who moved to Europe earlier this year. Her child will grow up learning between four and six languages and without the attitude/belligerence she sees in US schools. Plus college and healthcare are free.

Europeans pay high taxes. However, because so many expenses are included in those taxes, they have more money available to spend than most Americans do. That’s driving a faster economic recover in Europe than the US is seeing.

That prompted me to look at the data on migration. What are the trends? You might be surprised.

  1. Both legal and illegal immigration peaked prior to the recession in late 2008. The trends since are downward. The declines started during the Obama administration.
    • The illegal immigrant population peaked at 12.2 million in 2007.(2)
  2. Most illegal immigrants living in the US have been in the US for more than ten years. They are homeowners and taxpayers.
  3. Mexico no longer accounts for a majority of illegal immigrants. The majority now from from a combination of Central America and Asia.
  4. Mexico provides the largest number of LEGAL immigrants to the US. (1) Most Hispanic residents in the US are legal residents. (3)
  5. Recent immigrants from Mexico tend to work in the US for a few years and then return to Mexico. Pew reported in 2012 that net immigration from Mexico was zero, with the number of people leaving the US matching the number entering.
    • This “breakeven” has little to do with US immigration enforcement. People are leaving for a lower cost of living and better social services.

FT_17.04.17_unauthorized_update_2015-1The State Department estimates that 9 million US (non-military) citizens are now residents of other countries. That’s up from 4 million in 1999. However, the government has no formal mechanism for tracking citizens who move overseas. The actual number could be lower or much higher.

  • Seniors are part of the out-migration. Financial advisors recommend considering moves to places like Costa Rica in order to be able to maintain a reasonable standard of living on Medicare. (5)

The US is changing relative to other countries. There are a growing number of valid reasons for not wanting to live here, and that will have an impact on the economy and employment in the future — probably driving more jobs and business investment offshore. Don’t expect driving people and money out of the US to improve job prospects and the economy here. That’s naive in the extreme.


Sources:

  1. Homeland Security, “Yearbook of Immigration Statistics 2015.” https://www.dhs.gov/immigration-statistics/yearbook/2015/
  2. Jeffrey Passel and D’Vera Cohn, “As Mexican share declined, U.S. unauthorized immigrant population fell in 2015 below recession level,” Pew Research Center, 25 April 2017. http://www.pewresearch.org/fact-tank/2017/04/25/as-mexican-share-declined-u-s-unauthorized-immigrant-population-fell-in-2015-below-recession-level/
  3. Jie Zong and Jeanne Batalova, “Frequently Requested Statistics on Immigrants and Immigration in the United States,” Migration Policy Institute, 8 March 2017. http://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states
  4. US State Department, “CA by the Numbers,” updated June 2016.  https://travel.state.gov/content/dam/travel/CA_By_the_Numbers.pdf
  5. “Retire Overseas . . . and Live Better for Less . . . ” International Living, undated.  https://www.internationalliving-magazine.com/?gclid=COyAv7-tytQCFYWNswodZNkMcw

Autism and Eye Contact

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In theory, autistic individuals shun eye contact with others.

According to a new study, that’s not a voluntary or learned behavior. Eye contact can cause excessive stimulation of a section of the brain, and that in turn can be felt as pain by the individual.

That makes sense. If something causes pain, you usually try to avoid doing it.

Unfortunately, lack of eye contact is also interpreted by some as a sign of dishonesty. With the autistic person, that interpretation simply doesn’t apply.

Bottom line: you have to get to know someone in order to understand what their physical cues mean.


Sources:

  1. Nouchine Hadjikhani, Jakob Åsberg Johnels, Nicole R. Zürcher, Amandine Lassalle, Quentin Guillon, Loyse Hippolyte, Eva Billstedt, Noreen Ward, Eric Lemonnier, Christopher Gillberg. Look me in the eyes: constraining gaze in the eye-region provokes abnormally high subcortical activation in autism. Scientific Reports, 2017; 7 (1) DOI: 10.1038/s41598-017-03378-5

Raising Bizarre to an Art Form

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This surfaced from an independent, nonpartisan news service in NJ this afternoon.

President Trump has picked his son’s wedding planner to run federal housing programs in N.J. and N.Y.

The details are actually worse than this statement indicates.

I’m speechless.


Sources: https://patch.com/new-jersey/hoboken/trump-picks-sons-wedding-planner-run-housing-programs-n-j

The Mechanics of Concussion

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A new study from a research team at Ohio State University provides insight into how concussions work. The research is based on a laboratory experiment with mouse tissue, but the effects are quite similar to what is seen with human patients with neurological disorders.

bign

Source: Washington Univ.

Cells contain axons, which transmit signals (messages) to other parts of the body and brain through the nerve system.

Concussions activate a protein “called TRPV4, which causes a chain reaction that prompts a pause in content exchange along the axon.” (1) When the pause occurs, the axon swells, which is the physical sign of the problem. Similar swelling occurs in patients with Alzheimer’s and Parkinson’s.

This research also indicates that the swelling can be reversed with prompt reduction of stress to the brain. Further, if the protein is suppressed, the swelling does not occur. However, we don’t know exactly what that means for humans, at least not yet.

Knowing how something works is key to developing fixes for problems.


Sources:

  1. Yuanzheng Gu, Peter Jukkola, Qian Wang, Thomas Esparza, Yi Zhao, David Brody, Chen Gu. Polarity of varicosity initiation in central neuron mechanosensation. The Journal of Cell Biology, 2017; jcb.201606065 DOI: 10.1083/jcb.201606065
  2. Picture source: https://faculty.washington.edu/chudler/cells.html