How the U.S. Government Can Increase Health Without Spending More Than a Cent
a.k.a. Mike Moffatt's one cent health care plan - a continuation of an earlier post - The Health Risks of Obesity.
A RAND study suggests that obesity causes an increase in chronic medical conditions of 67 percent. Similarly living in poverty increases the rate of chronic medical conditions of 58 percent. These naturally lead to an increase in costs to health care:
Obese individuals spend more on both services and medication than daily smokers and heavy drinkers. For example, obese individuals spend approximately 36 percent more than the general baseline population on health services, compared with a 21 percent increase for daily smokers and a 14 percent increase for heavy drinkers. Obese individuals spend 77 percent more on medications. Only aging has a greater effect -- and only on expenditures for medications.
Want to improve the health of the U.S. population? You can do so in three steps:
- Remove highly distortionary farm policies, which largely subsidize the production of 'junk food'.
- Place a tax on junk food - such as the proposed cola tax:
"In what is certain to become a world-wide debate on the use of economic sanctions to tackle obesity, a group led by academics from Yale and Harvard universities proposed a "cola war", with a 1 cent tax per fluid ounce on sweetened beverages, raising the price of the average can of cola by 15 to 20 per cent.
They say this would cut calorie consumption from drinks by a minimum of 10 per cent (enough to prompt weight loss) and contribute almost $15bn towards the health costs of obesity."
- Transfer the tax revenue collected to low-income households, or implement some kind of negative income tax, in order to help raise families out of poverty.
These three steps would greatly improve health outcomes in the United States and not cost the U.S. government a thing. Lives would improve as chronic disease would be reduced - the benefits go beyond financial costs. Furthermore, health care resources would be freed up to be used elsewhere.
This is a far, far more sensible plan than increasing government spending and only treating people after they get sick.
Comments
Mike
I have enjoyed your recent articles about health care in the USA. They sound fine to me.
I hate goods and services taxes but I know that they can work, as your article suggests.
In Australia our governments have decided that they want Australians to smoke less, and invest in superannuation more. So now we have horrendous taxes on tobacco products, plus other disincentives, e.g. lower life insurance premiums for non smokers, and great tax relief for investing in superannuation.
The results are, amongst other things, massive investment in superannuation, and a decline in smokers as a percentage of the population. That was what the governments wanted.
However super money is the most mismanaged money in the country, and a black market has developed in tobacco products. That was not what the governments wanted.
We are in the midst of a taxation revue, so within a year or so we may do things differently.
What has happened here demonstates the truism that there are costs and benefits of all decisions. That is something you understand well, but not all policy makers do.
I see you have put more common sense on this site than I thought you could.
The best way for the cost of health to go down, is
GET GOVERNMENT OUT OF OUR LIVES
Once upon a time we weere able to go to a real doctor and get treated for whta really ails us, but government got involved in dictating rules an regulations for the Medicare and Medicaid and the medical profession had to cover their losses!
Did you know that the real payments of Medicare bills is 7%?!!
Also, are you aware at how badly us veterans are treated in the VA system? Have you seen a lot of older people now walking around with strollers and walkers, barely able to do that? We can thank the bad medical government system for that and the drugging of America.
Try to stick to economics please; the Federal Reserve is destroying our economy and we need real economics people to see through the smoke screens and warn the American people of the possible greater depression coming because of the high employment rate (no jobs, they were sent overseas).
I see you have put more common sense on this site than I thought you could.