KEEN: The DNPP* shows you where the health money went

KEEN: The DNPP* shows you where the health money went

Postby Oscar » Tue Dec 04, 2012 8:33 am

The DNPP* Shows you where the health money went

by John Keen November 30, 2012

It is January. Dark and cold. An alarm rings in a large split level bungalow on an acreage outside the city. Nurse Jane switches on the light, swings her feet out of bed and stands up iu the bedroom of the house she and her husband, Stationary Engineer James, have built. They didn't literally build it, they supplied the mortgage money. Part of her salary pays part of the payments.

And because her salary is paying half, she was partly responsible for people being hired to mine copper and iron ore, other people turning the ores into copper pipe, copper wire, and reinforcing rod. Other people cut timber and milled it. Others haul sand, gravel and cement. You can see where we are going. A large portion of what everyone earns becomes part of some one elses income. And from those incomes, taxes are paid.

And that happens even when we are not building a house. As Jane stood up, she had flipped on the light. And the light came on. That meant the power bill had been paid. And Sask Power employees had been paid and had paid some taxes. She showered and dressed. Went downstairs to the kitchen and opened the fridge. She took out the milk, reached into the cupboard for the puffed wheat, and the farm community celebrated. And had some income, and so the wheel turns. As Red Green says - "We are all in this together."

Speaking of together, Jane had been alone so far this morning. Jim was working the midnight shift at the Potash mine and would not be home before she left for the hospital. She could hear her mother moving about. Her mother had come to live with them when Jane's father had died suddenly, three years earlier. James and Jane had remodelled the house to provide a bed sitting room and bath. The arrangement provided accommodation for Mom and the kind of daycare that shift workers find hard to find. Life can be good when you have two good, steady incomes, everybody benefited.

As we had said, it was cold and dark. Nurse Jane looked out the window. It had snowed, but the plow had been past. That meant the school bus could deliver the girls to the school, where their teachers would be waiting. Snow plow operators, school bus drivers, teachers, janitors and principals, all paid by people like Jane and Jim from their property taxes and all the other sources of revenue from people like them that make community life possible in a harsh climate.

Jane went out to her car - built in Oshawa, where the auto workers paid taxes, transported by drivers who paid taxes, serviced and sold by people
who paid taxes, and insured by the Provincial gov't. Of all those taxes, teeny tiny dribbles, found their way into Jane's paycheck, then out and through the whole economy, and then back home again in another of her pay checks.

Jane started off to work. At the edge of the city, she pulled into the Co-op. The kid filled the tank and she gave back a little more of her pay to the governments (from whence it had come) in gas taxes The kid that pumped the gas pays a little income tax, a little CPP and a tiny bit of EI. Jane went on to the hospital, arrived there a little early, pulled into her parking place, reached into the glovebox, pulled out her smokes and paid a little more tax.

Don't get me wrong. I am not complaining. Taxes are not bad and neither is government. A famous quotation from Oliver Wendell Holmes, "Taxes are the price we pay to live in a civilized society". And I really like Government. I like good Government better.

But all this talk points out a major failing in our communications. Of the two hundred billion spent on health care, how much generates other income?

How much of the taxes paid for health care provides other work? What is the final net cost of health care? What is it worth to society to be able to repair workers and restore them to productivity? And what is it worth to enable the elderly, injured or sick to die with some dignity?

I have an econometric study done in the USA, Medicare For All (Single-Payer)
[ ... uboard.php?
az=view_all&address=389x4828848 ] examining this question. Ironically, it was done using our (Canadian) payment model and shows Medicare, using the single-payer model, to be quite affordable. It is inexcusable that our society continues to lament the unaffordability of health care when a small dose of decency in our research would reverse that finding. Yes, there will be a cost for care. But it will be a fraction of what is claimed.

The American study goes to such detail as showing the return to our province of the fishing licence fee from Nurse Jane, and her auto licence and driver's licence. I, myself, do not have the expertise to do such a study (or the facilities) but even rudimentary knowledge can poke large holes in many of the statements being made that exaggerate the cost of our health services A statement made in Alberta a few years ago that said "Health care has gone from less than 30% of our budget to over 50% of program spending" shows a contempt for the public. People in the public service know program spending and budget spending are different, and that the statement was deceptive. Saskatchewan was guilty of similar behavior in including Gov't auto insurance medical spending as gov't spending when, in reality, it was paid by the public through premiums. Such knowing deceit has no place in public affairs.

Let's try a little amateur economics. For years, starting in the 1930's, it was taught that, as money entered the spending stream, it moved back and forth, creating jobs and returning taxes, to be spent and respent. But around 1960, a meanness began. A movement, known as the Chicago School of Economics, began to grow in importance in the USA and to spread beyond its borders. Its purpose, as stated by its proponents, was "to shrink goverment to the point it could be drowned in a bathtub". By minimizing what is known as "The Multiplier", the meaner side of society attempts to persuade people it is unaffordable to be nice.

Let's try a little more amateur economics. We are told that health spending is about $200 billion a year. About $6,000 for each of us. I have seen numbers ranging from 54 cents on the dollar returning to all levels of government, up to 95 cents on the dollar returning. While that seems high, some studies on social spending maintain that a positive return can be posssible. I do not have the ability to cut through all the back and forth and arrive at a definite number.

But let's take an average of the two examples:
54 + .95 = 1.49 divide by 2 = .75. So we will say - over time 75 cents of
each dollar spent on health will return to Government (all Levels).

And again, good old amateur economics. (Amateurs should be good. Look at the mess the pros have got us into.) So $200 Bn spent, $60 Bn spent by the public on optical, dental, medications, etc. and $140 Bn spent by
government, all $200 Bn enter the spending stream to be spent and respent and taxed and retaxed. At a possible return of 200 billion times 75 cents on each and every dollar - - - $150 BILLION DOLLARS.

It does seem health care is affordable. Especially for governments.

John Keen
Riceton, SK
306 738 2005

*The Damn Near Perfect Party
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