Walter Williams On Health Care Costs

The invaluable Walter Williams has a few facts about our health care here in the United States that you may not be aware of….

“The recently published “Miracle Cure,” by Sally Pipes, president of the San Francisco-based Pacific Research Institute, exposes health-care myths while explaining why the sometimes-touted Canadian style health care isn’t the answer. Myth: Uninsured individuals have no access to medical care. Fact: It turns out that in 2004 uninsured Americans received $125 billion of health care, of which $41 billion was provided totally free of charge.

Myth: Skyrocketing prescription drugs are driving health-care spending up. Fact: According to the Bureau of Labor Statistics, as a whole, Americans spend about 1 percent of their income on drugs. Seniors spend about 3 percent on drugs, less than the amount they spend on entertainment. Spending on drugs, as a percent of total health-care spending, was 10 percent in 1960. It’s roughly the same today.

The fact of business is, pharmaceutical spending actually lowers total health-care spending. It often replaces expensive and invasive surgical procedures and the time spent in the hospital. For example, in a yearlong disease-management program, Humana Hospitals studied 1,100 congestive heart failure patients. While pharmaceutical costs increased by 60 percent, the medications reduced hospital costs by 78 percent — a net savings of $9 million.

Among other myths exposed in “Miracle Cure” is the myth that our health-care problems derive from the fact that we have a free-market health-care system. Little can be further from the truth. The government has been the largest participant in our health-care system since the 1960s. Today, the government directly pays for 45 percent of health-care spending. Government intervenes in the form of tax subsidies and costly regulations on private insurers. Regulations imposed on medical practitioners are oppressive. According to a study by PricewaterhouseCoopers, for every four hours that a physician devotes to caring for a Medicare patient, hospital administrators spend 30 minutes on Medicare paperwork. For emergency room care, it’s one hour spent on paperwork per one hour spent caring for a patient.”

Williams concludes by saying,

“Americans shouldn’t (be) looking to Canada’s socialized medicine as a solution to our health-care problems and lose what we have. A much smarter move is to repeal previous government-created “solutions” that have marched us nearer to socialism in the provision of medical services. In a word or two, get government out of our hospitals and doctor’s offices.”


We need to cut the red tape by easing the enormously burdensome rules and regulations we have for bringing drugs to market here in the US and get more free market forces involved in health care by promoting savings accounts. Then if we slash legal costs and instead of moving towards socialized medicine, fight price controls on American drugs in other countries, we can make a big difference in health care costs.

The costs and difficulties involved in our health care system can best be fixed not by socializing it, but by lessening government imposed rules, regulations, and burdens on the system.

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