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Where does America get it's money? Watch

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    (Original post by Made in the USA)
    I have had similar experiences with chiropractors. They will just insist on you coming over and over again so they can make their money, even long after your back has been cured of pain.

    My family on the other side of the pond often have the opposite problem: not being able to get the tests they need because it's deemed too expensive unless they are practically dying.

    I agree that the ripping off of insurance company shenanigans has to stop, but how could it be stopped? The only way is for insurance companies to draw the line in the sand and not green light certain tests unless it can be proven that it's absolutely necessary. If they reigned in the doctors, we would see premiums fall, but they don't have any incentives to bring down premiums because the companies don't really compete with one another and their customer base is more or less a captive audience.
    How about taking private insurers (at least partially) out of the loop? What about a nationalized health service for emergencies, and run-of-the-milll family medicine (albeit each State could have it's own approach to fulfilling a Federal requirement) and have private insurance to deal with the "nasties" - heart bypasses, cancer treatments and such like?

    Also, how about paying doctors and other medical professionals on a "per patient" basis rather than a "per treatment" basis? Take dentistry for example. An hour sitting in the chair is an hour sitting in the chair as far as I am concerned. The price should be the same for whether the dentist is replacing a couple of old fillings or doing a root canal. Why should an hour's worth of filling work cost perhaps $250 but a root canal that also takes an hour cost $900? Payment by treatment encourages uneccessary and expensive procedures.
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    (Original post by davidmarsh01)
    I was in holiday in Boston Massachusetts and the tour guide at the state house said that Sales Tax (VAT) was going to be raised to 6.25%. Ours is going up to 20% and when we told her this she was truly shocked :eek:

    I think that in general, there is lower taxes compared to here, is this correct? If so, how does America make it's money? It has a huge armed forces and was in Vietnam, the Gulf War, Iraq and Afghanistan (the ones which spring to mind) which must have cos billions and billions of dollars. In Britain, our armed forces isn't so nearly as big, and I've heard that American troops are generally higher paid than their British counterparts. So the question is, where does America get it's money?
    Premise is mistaken: the armed forces are not a significant expense in either country. In Britain it's about 2% of GDP. In America it's about 4%. So their tax would only have to be 2% higher to fund the difference - hardly noticeable on its own - while they have less state spending in other areas.

    I suppose not having an NHS will help a lot, but I was thinking that that wouldn't be enough. I don't know if this makes much sense, but where does America make it's money to me a massive global player with such low taxes?
    Ironically not necessarily. The US state spends about as much per capita (slightly more, but not significantly) as the British state on healthcare. Of course it is about 25% less as a proportion of GDP, but only because America is about 1/3 richer than Britain per capita.


    (Original post by Howard)
    Also, how about paying doctors and other medical professionals on a "per patient" basis rather than a "per treatment" basis? Take dentistry for example. An hour sitting in the chair is an hour sitting in the chair as far as I am concerned. The price should be the same for whether the dentist is replacing a couple of old fillings or doing a root canal. Why should an hour's worth of filling work cost perhaps $250 but a root canal that also takes an hour cost $900? Payment by treatment encourages uneccessary and expensive procedures.
    Seriously? Do you think that an hour spent mining gold should pay the same as an hour spent mining dirt? This will just mean dentists turn down root canal patients and try to do as many fillings as possible, resulting in under and oversupply of services respectively.
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    (Original post by Hilux)
    Seriously? Do you think that an hour spent mining gold should pay the same as an hour spent mining dirt? This will just mean dentists turn down root canal patients and try to do as many fillings as possible, resulting in under and oversupply of services respectively.
    No. They'd be paid for an hours work. There'd be no financial incentive to do fillings or root canals. This would mean that the patient would get what he actually needs rather than what the dentist could charge most for.
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    (Original post by Howard)
    No. They'd be paid for an hours work. There'd be no financial incentive to do fillings or root canals. This would mean that the patient would get what he actually needs rather than what the dentist could charge most for.
    One requires far far more intense skill.

    And the basic price would have to be driven up.
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    (Original post by Howard)
    No. They'd be paid for an hours work. There'd be no financial incentive to do fillings or root canals. This would mean that the patient would get what he actually needs rather than what the dentist could charge most for.
    An hour's work doing one thing isn't worth the same as an hour's work doing something else. Root canals are only more expensive if they're more difficult to perform, or need different and more expensive tools. So if there is no financial incentive either way dentists will try to fill up their books with as many fillings and as few root canals as possible, or even consider root canals to be not worth their time at all and take the time off instead. This results in waiting lists and rationing, even when people would be willing to pay the premium, as already exists in the NHS dental system.
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    I'm not well informed on the topic at all, so please correct me if I'm wrong, but I think some of their money comes from other countries being in debt to them, and the interest they have to pay America for their loans..
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    (Original post by Hilux)
    Premise is mistaken: the armed forces are not a significant expense in either country. In Britain it's about 2% of GDP. In America it's about 4%. So their tax would only have to be 2% higher to fund the difference - hardly noticeable on its own - while they have less state spending in other areas.
    I don't think that's right.

    The US has a GDP of $14trillion. The UK has a GDP of $2trillion.
    4.8% (current % of GDP spent on US military) of $14trillion is $672billion
    2% of $2 trillion is $40billionSo
    So the US is spending $632billion (almost 17 times) more.

    In 2005 U.S. taxes at all levels of government claimed nearly 27 percent of GDP. So, if you take 27% of $14 trillion you get $3.8trillion (tax take) So, each tax % point raises $140billion ($3.8trillion/27)
    So, $632/$140 = 4.51% higher. Not 2% higher.
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    (Original post by Howard)
    I don't think that's right.

    The US has a GDP of $14trillion. The UK has a GDP of $2trillion.
    4.8% (current % of GDP spent on US military) of $14trillion is $672billion
    2% of $2 trillion is $40billion
    So the US is spending almost 17 times more.
    2% (ppt, really), not 2x. The vast majority of the US's nominally higher spending is due to its 5x larger population combined with a 33% higher GDPPC.

    You may be right that it's 4.8% rather than 4% (figures from different sources seem to disagree with one another), but that doesn't change the underlying fact that +2/3ppt tax is not that large in comparison to the overall taxation (about 40% in Britain).
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    (Original post by Hilux)
    An hour's work doing one thing isn't worth the same as an hour's work doing something else. Root canals are only more expensive if they're more difficult to perform, or need different and more expensive tools. So if there is no financial incentive either way dentists will try to fill up their books with as many fillings and as few root canals as possible, or even consider root canals to be not worth their time at all and take the time off instead. This results in waiting lists and rationing, even when people would be willing to pay the premium, as already exists in the NHS dental system.
    I don't really follow this at all. Why would the dentist take time off and not get paid at all? He's being paid by the hour. It's the same pay whatever he does.
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    (Original post by Hilux)
    2% (ppt, really), not 2x. The vast majority of the US's nominally higher spending is due to its 5x larger population combined with a 33% higher GDPPC.

    You may be right that it's 4.8% rather than 4% (figures from different sources seem to disagree with one another), but that doesn't change the underlying fact that +2/3ppt tax is not that large in comparison to the overall taxation (about 40% in Britain).
    Take another look. I added on a bit. I had a brain fart and forgot where I was going when I wrote that......it happens.......it's my age.......alzeimers.....
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    (Original post by Howard)
    I don't really follow this at all. Why would the dentist take time off and not get paid at all? He's being paid by the hour. It's the same pay whatever he does.
    The Howard Party imposes a price cap on root canal charging at £300. A root canal costs £301 to produce. No one would ever do a root canal: you might as well throw pound coins down the drain, it would be quicker and easier.

    The Howard Party imposes a price cap on root canal charging at £300. A root canal costs £295 to produce. The dentist may think this is worthwhile if he's starving, but most dentists would rather have an hour of extra holiday than work for minimum wage.

    But whatever the differential, he's still better off doing as many of the cheaper and easier operations as possible, meaning perversely that people with more serious dental problems will be least able to receive treatment.
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    (Original post by Howard)
    Take another look. I added on a bit. I had a brain fart and forgot where I was going when I wrote that......it happens.......it's my age.......alzeimers.....
    I don't quite follow the methodology - if the military costs 4.8% of GDP, that is 4.8-2=2.8ppt more than if it were 2% of GDP. The only way you can have arrived at anything different is if you took numbers from different years, different sources, or in different FY inflation-adjusted dollars.

    But even granting the 4.51% (which is definitely wrong - it would cost about that to take UK defence spending from zero to the US level), it still is small in comparison to UK's 40% of GDP tax take.
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    (Original post by Hilux)
    The Howard Party imposes a price cap on root canal charging at £300. A root canal costs £301 to produce. No one would ever do a root canal: you might as well throw pound coins down the drain, it would be quicker and easier.

    The Howard Party imposes a price cap on root canal charging at £300. A root canal costs £295 to produce. The dentist may think this is worthwhile if he's starving, but most dentists would rather have an hour of extra holiday than work for minimum wage.

    But whatever the differential, he's still better off doing as many of the cheaper and easier operations as possible, meaning perversely that people with more serious dental problems will be least able to receive treatment.
    I'm not really talking about establishing price caps in this way. I know all about the effects of price setting on supply and demand in the free market. This is completely different.

    In my scenario the dentist would be paid an hourly rate (lets say $100) plus cost recovery on a cost+ basis for materials/tools/etc

    So a one hour root canal might cost $100 + ($50+20%) = $164 whereas a couple of fillings that take an hour to complete might cost $100 + ($30+20%) = $136

    This has got to be preferable to a dentist calling my insurance company and discovering that I have $3000 dental allowance - and with joy in his heart and a spring in his step - looking at a great long list of treatments picking the ones that would allow him to invoice the insurance company the most amount of money in the shortest possible time, regardless of actual need. This is unfortunately how it works in the US right now.
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    The USA has a large services sector. It's economy is more or less similar in structure to the UK's.

    As for its large defence spending, well the USA doesn't have as large a welfare state as we do. Besides, there are a lot more people paying taxes.
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    (Original post by Howard)
    I'm not really talking about establishing price caps in this way. I know all about the effects of price setting on supply and demand in the free market. This is completely different.

    In my scenario the dentist would be paid an hourly rate (lets say $100) plus cost recovery on a cost+ basis for materials/tools/etc

    So a one hour root canal might cost $100 + ($50+20%) = $164 whereas a couple of fillings that take an hour to complete might cost $100 + ($30+20%) = $136

    This has got to be preferable to a dentist calling my insurance company and discovering that I have $3000 dental allowance - and with joy in his heart and a spring in his step - looking at a great long list of treatments picking the ones that would allow him to invoice the insurance company the most amount of money in the shortest possible time, regardless of actual need. This is unfortunately how it works in the US right now.
    To be fair, I don't disagree with you that the US healthcare system is pretty broken and I think you're broadly right that the present insurance system does incentivise spiralling costs in the way you describe.

    But I think the solution you propose would do more harm than good. It's trying to fix a distorted price mechanism by removing the price mechanism entirely and having centrally planned price fixing - it's overwhelmingly likely that this is going to result in the prices being either too high or too low. A fixed hourly rate is an excellent example of something pretty much guaranteed to do this, because an hour doing Operation A isn't worth the same as doing Operation B. In general, they will require different levels of skill, experience, concentration, risk, etc. Not allowing people to price for this will mean they will just refuse treatment in many cases.

    What you really want is a normal market system in healthcare, and I think that means the end of the extensive regulations that promote comprehensive, low deductible insurance. Most things should be paid out of pocket, with only (unlikely) catastrophic injuries covered by insurance bought by individuals from companies competing across state lines rather than through employers.
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    Probably something to do with CSI: Miami.
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    (Original post by Howard)
    How about taking private insurers (at least partially) out of the loop? What about a nationalized health service for emergencies, and run-of-the-milll family medicine (albeit each State could have it's own approach to fulfilling a Federal requirement) and have private insurance to deal with the "nasties" - heart bypasses, cancer treatments and such like?
    I think countries like colombia already have a system like that in place, a government provided one in place for all the basic small stuff, and some kind private insurance in place for the really big stuff. I have heard mixed things about the effectiveness of the system though. I think like every other country they feel that the system needs further tweaking.

    (Original post by Howard)
    Also, how about paying doctors and other medical professionals on a "per patient" basis rather than a "per treatment" basis? Take dentistry for example. An hour sitting in the chair is an hour sitting in the chair as far as I am concerned. The price should be the same for whether the dentist is replacing a couple of old fillings or doing a root canal. Why should an hour's worth of filling work cost perhaps $250 but a root canal that also takes an hour cost $900? Payment by treatment encourages uneccessary and expensive procedures.
    If you have a latina girlfriend, you can have lower costs now. Go to one of these latin american countries and see a dentist. Get anything you want done and pay the guy 50 bucks and leave. The quality of the work is superb and it's easier than dealing with insurance companies. I'm already doing that sort of thing now and it's much less of a headache.
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    (Original post by F i s)
    Probably something to do with CSI: Miami.
    Entertainment is the USA's second largest export. Number one is agricultural goods.

    BTW-Coming from someone who has lived in Miami, please take the show with a grain of salt. It's filmed in California by people who obviously have never been to south florida.
 
 
 
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