Care for a Poor Bill of Health?

We’ve already seen how zombieism overtook the education industry. Now let’s look at another one — health.

The health care industry is demonstrably unproductive. We know that because we can compare the spending with the results. For our purposes we will measure ‘health’ by life expectancy. They are not exactly the same thing; but close enough.

The relationship between spending money and living long is weak, if there is any at all. Singapore spends about $1,000 per person on health care. Its people live longer than those in the US, which spends about $5,000. In fact, the US stands out in health care…as it does in education and defense. It spends more and gets less. Money is invested badly, with either no return…or a negative return. The people of the US are not very different culturally, racially and economically from the people of the United Kingdom. Yet the British live longer while spending less than half as much on health care.

Most of the health improvements in a society can be achieved by simple procedures at modest cost. This is another thing we can thank the communists for. They demonstrated that “barefoot doctors” in China, or poorly supplied, underpaid doctors in Cuba do about as well as the expensive professionals that fill South Florida. Cuba spends barely $100 per capita for health care; in terms of life expectancy, it gets the same results that Florida gets, 90 miles away. In Florida, however, people spend 45 times more on health care.

But isn’t the US a free economy? Why would people spend so much and get so little for it. Why don’t competitors step up to the plate and offer a better product? Why doesn’t someone start a “Pretty Good Health Care 4 Less” franchise? You have a problem? We can imagine how it might work. You walk in. You don’t see a doctor. You see someone with a computer who has been trained for 6 months on how to use it. He listens. He gives you an exam. He asks questions. He reviews your symptoms. He feeds the data into a computer. The computer is programmed to draw upon the entire world’s medical experience and give you an answer. Or…to pass…and tell you to go see a real doctor.

Most people do not have strange ailments. They have the problems that most people have. Those are the ailments that a person with modest training could recognize and treat with simple procedures and cheap generic drugs. Aided by electronic tools…and perhaps a few good doctors in India, connected by Skype…you could probably get as good advice as you could get anywhere. Maybe better.

You would pay about as much as you would pay to have your muffler changed. You would agree not to sue anyone. In and out. No muss. No fuss. Nothing fancy about it. And if you had a brain tumor you should probably go elsewhere. But if you want cheap medical care…it would be the place to go.

Soon, there would be competing nationwide chains…giving customers a choice…and a range of prices that would accommodate each income bracket. Employers would pay a modest fee to enroll their employees. If the employee wanted to spend more, he could enroll in a more traditional program.

Why won’t that work? Really, dear reader, sometimes you surprise us. Were you born yesterday? It’s against the law! The feds reward their protected industries with almost boundless wealth. And they punish interlopers. You can’t practice medicine without a license. And you wouldn’t be re-imbursed by insurance programs…and certainly not covered by Medicare or Medicaid. And even though your clients had specifically agreed not to sue, you’d be pursued by every shyster lawyer in the country.

Health care is a protected industry. It’s a zombie industry, which cushions life for the people who profit from it. And based on the numbers…it squanders at least $2,500 per person per year. That’s the equivalent of the entire Pentagon budget…or nearly half the entire 2011 deficit. It’s spent on unnecessary and ineffective tests and treatments — not to mention a mountain of patent medicines. And these costs do not include all the indirect costs of lawyers and court time, caused by the medical malpractice industry.

Why can’t a patient agree not to sue in return for lower medical costs? Where have you been, dear reader? Tort lawyers, those who bring these sorts of cases…and who advertise on billboards in poor neighborhoods…are among the biggest campaign contributors to the political system. They, along with doctors, pharmaceutical companies, hospitals, insurance companies — all support lobbyists. All have an interest in keeping the industry alive — as it is. None wants to see an upstart competitor bringing destruction to his zombie life. None wants to give up his edge…his subsidy…or his privileges. None wants capitalism in the health industry.

More to come…

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail Markets and Money.
Bill Bonner

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Doctor person

The main reason that Americans spend more on healthcare with no significant improvement in life expectancy is lawyers. Doctors are scared to miss a diagnosis. An American medical colleague put it this way – you keep investigating a patient’s complaint until you either get a diagnosis or the patient dies. Half the tests I order are done to cover my arse, not because I think it’s likely the patient has that condition.

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