Health Care and Income - Comparative Analysis

Reading the BBC News article “Healthcare around the World” made me curious about the possible shared cost profiles relative to the United States for the listed countries’ versions of Universal Healthcare. I made some simple assumptions based upon the noted per capita expenditures for each of the four countries to split costs between the Private Sector (non-government Employers providing coverage) and individual employees. In the event that the individual does not have employer provided coverage, the cost of care would be subsidized.

Analysis based upon these assumptions reveal that individuals around the world still bear the larger burden of cost at rates relatively close to U.S. employees (exception: Singapore). And, the Private Sector (non-government Business / Employers) stands to benefit about $3,000 per employee from reductions in healthcare costs in alignment with the compared nations.

Healthcare and 2008 Per Capita Income (Slides)

Further analysis using the calculated cost sharing and applied against per capita mean income provides some insight into the struggles of most American families. Some general points to keep in mind while reviewing the comparison include:

• Mean Income represents Gross Income before taxes;

• The basis of earnings analysis is MEAN INCOME, no adjustments for geographical locations or earnings distribution [Median income less than average];

• No adjustment for population concentrations in higher cost of living locations [Asian, Pacific Islanders on West Coast];
• BBC News reported per capita healthcare expenditure was used with Private Sector covering 52.8% and individuals responsible for the remainder at 47.2%;
• Healthcare adjusted income comparison reflects a male and female household within a given ethnicity;
• Analysis population = People 15 years old and over beginning with March 1980;
• Majority of Hispanics and Blacks in the analysis are High School Graduates or in High School (education opportunity):

The Gender, Per Capita Mean Income graphic analysis was created to reflect the limits of the Segmented Assimilation argument which maintains the distribution status quo. Make of it what you will! But, it should be viewed in context with my previous posts: Judgments, Gatekeepers, Self-Identity Recognition, and Integrative Social and Economic Systems.

Healthcare Around the World

BBC News August 19, 2009 article on Healthcare comparisons of expenditure.

Could Pensions follow Healthcare?

While reading the lead story in the April 2009 edition of CFO Magazine regarding the evolution of 401k plans in America, I began to wonder about the occurrences behind the shift away from pensions and if their dismal performance could eventually require a government takeover similar to plans for universal healthcare.

Initially, the 401(k) plan was a benefit to the corporations because it allowed for the general shift in financial recognition from the income statement to the balance sheet. The move allowed companies to give employees stock as a benefit where the employees would share in the gains (and losses) of the company stock performance. The pension plans required the company to make-up investment short-comings with cash contributions to ensure the benefit obligations.

With the current state of the economy and corporate equity valuations as measured by stock indices, the gains in stock performance supporting the middle class wealth have disappeared due to the financial crisis. Employees with plans to retire within the next five years will have to reevaluate those plans even if they had managed to alter their portfolio mix prior to the decline. They still took a hit. Those workers in bankrupt companies still covered by defined pensions have some protections provided by the Pension Benefit Guaranty Corporation (PBGC).

This current economic state of the financial crisis is what brought on the pondering. However, I do not think that pension/401(k) retirement plans will go the way of healthcare for a couple of fundamental reasons. The first reason is that there is no current political pressure highlighting the system disparities because all employees are theoretically in the same system. Although contributions vary at different employment levels within any organization, all are subject to the market fluctuations in stock values.

The second reason, and probably the biggest, is that the system is not a structural competitive burden to US corporations such as healthcare. The largest commercial competitors in the US market hail from the EU, Japan, and China which all have some version of Universal Healthcare. This means the burden of managing rising healthcare cost rests with the government and not the corporations. Insurance companies, hospitals, and pharmaceutical companies are not transferring inefficiencies and protecting their own profitability at the expense of manufacturers or other companies competing internationally.