Warren Buffet: Health Care Bill Needs Redo Focused On Costs

http://www.npr.org/blogs/thetwo-way/2010/03/warren_buffet_health_care_bill.html

"Warren Buffet, the oracle of Omaha, suggested President Barack Obama and his fellow Democrats go back to the drawing board on health-care overhaul legislation and work with Republicans to come up with new legislation that deals with the "cost, cost, cost," that he calls a "tapeworm eating at American competitiveness."

In comments made during a lengthy CNBC appearance Monday where he talked about the economy and financial markets, he criticized the Democratic legislation as not doing enough to slow the cost increases that are making health care an ever larger share of the U.S. economy and making American companies less competitive globally.

While he didn't say the Democrats should "scrap" the bill in response to a question to that effect from interviewer Becky Quick, he clearly suggested as much.

Buffet's comments are likely to draw wide notice since Obama was fond of dropping the mega-billionaire's name as one of his informal advisers earlier in his presidency. Buffet's position certainly doesn't help the president as he tries to push his plan through Congress in coming weeks....

Here's the transcript:

WARREN BUFFETT: We have a health system that, in terms of cost, is really out of control, and if you take this line and you project what has been happening into the future, we will get less and less competitive. So, we need something else. Unfortunately, we came up with a bill that really doesn't attack the cost situation that much and we have to have a fundamental change. We have to have something that will end the constant increase in medical cost as a percentage of GDP..."

In no way would he agree with Obama on the health care issue.

middle man.

:shrug:

http://www.cnbc.com/id/35643967/

"BUFFETT: Well, the health--the health situation, what we have now is untenable over time. I mean, it--call what we're doing now plan A, and plan A has taken us from 5 percent of GDP to 17 or close to 17 percent of GDP. And that kind of a cost compared to the rest of the world is really a--it's like a tapeworm eating, you know, at our economic body. Every--everything we produce for export, everything we compete with that comes imported in this country, everything is bearing that cost, and it's a cost that the rest of the world isn't bearing. And the--tops around the world, you find 10 percent of GDP. We have fewer doctors than many--we have two and a half--a little over two and a half doctors per thousand, much of the world has well over three doctors. We have 11 nurses per thousand, much of the world has far more nurses per thousand. We have three beds per thousand, hospital beds per thousand, much of the world has six or seven beds per thousand. We have higher infant mortality than most places, or many places. We have higher--we have shorter overall mortality. So we have a health system that, in terms of costs, is really out of control. And if you take this line and you project what has been happening into the future, we will get less and less competitive. So we need something else. Unfortunately, we came up with a bill that really doesn't attack the cost situation that much. And we have to have a fundamental change. We have to have something that will end the constant increase in medical costs as a percentage of GDP..."

invested in to "make his money"?

He owned GEICO and SAFECO. Auto and home insurance. Pretty darn cheap insurance policies.

Buffett "made his money" by investing in or owning newspapers, soft drink companies, broadcasters, car insurers for government employees, furniture retailers, jeweler's, vacuum cleaner makers, and shoe makers.

Buffett is 100% correct when he says that we MUST focus on COSTS if we want to truly reform health care. Rising HEALTH CARE COSTS are the problem; rising insurance premiums are a symptom of that problem.

Edit: Yes, he recently added WellPoint (in 2007), but it's a small part of the Berkshire portfolio, and I daresay Warren had already "made his money" by then.

but I couldn't help but wonder if that was what he was suggesting.

If we spend 2.5 trillion, and we enact single payer and it is an amazing success, it might save $400 billion a year. That drops it down to 2.1 trillion, and hopefully single payer, when done with some kind of efficiency panels, will slow medical inflation.

But 2.1 trillion still means we are spending 14-15% of GDP on health care. Nations like Canada & Germany are spending 11%, and places like Japan, Taiwan and the UK spend 8%.

So even with single payer, we still have the most expensive system on earth by far.

Assuming 14.4 T is the current U.S. GDP, that means about 8.3% of GDP would be spent under Conyer's Single Payer proposal.

http://www.concop.org/universal/HR_676_Financing.pdf

I think maybe you're getting the 400B a bit confused.

HR676 keeps 1.3 trillion in funding for medicaid, medicare, VA, SCHIP, etc but it replaces the 1.5 trillion in private spending with 1.2 trillion in public revenue.

That 1.2 trillion you are referencing is new taxes for health care on top of the 1.3 trillion we already spend on medicare, medicaid, VA, SCHIP and other programs. So about 2.4-2.5 trillion total.

And it would save $387 billion, but again that leaves a health care system that is 2.4 trillion instead of 2.776 like Conyers predicted for 2010.

Even with single payer we still have a bloated, inefficient, overpriced system that'll eat up 14-16% of GDP. Its an improvement, but its not the only thing we need.

That report says total spending will remain the same.

Thanks.

Because of bulk purchases and lower overhead. But evenso, we will still have a bloated system that is inefficient as hell and can't compete with nations that spend 8-11% of GDP on health care.

if we do not bring costs under control. I wondered the same as well, but would not want to be too hopeful.

:)

The reason is we are something of a plutocracy (a government of and for the interests of the wealthy). And anything that would cut the influence, profits or market share of the wealthy will not stand.

That is why we don't have a public option, drug reimportation or medicare negotiations. These interventions would've saved hundreds of billions over a decade in direct cost, and probably trillions in indirect costs (by slowing medical inflation). But that money has to come from somewhere. It comes from lower salaries for doctors, lower revenues for pharma companies, lower revenues for hospitals.

If we spent 11% of GDP on health instead of 17%, we'd spend 1.5 trillion on health care instead of 2.5 trillion. However how many private individuals & industries are going to give up 1 trillion a year in revenue? Those people (hospital agencies, insurance agencies, pharma, medical suppliers) are organized.

Point being, there isn't and will not be any top down method of cost control.

There are grassroots methods of reducing costs. Going overseas for elective surgery, reimporting drugs, websites like pharmacychecker to get the best deal on drugs, etc.

But any effort at cost reduction will have to be bottom up. The interests that stand to lose from meaningful reform won't let any reform that lowers their revenue or influence pass.

Our system is wasteful and inefficient. But very powerful people stand to benefit from all that waste and inefficiency.

The best thing to do is emigrate if you can. The US is going down the tubes. In between our unsustainable health system, unsustainable energy policy and unsustainable financial system (all of which are hard to reform because we are a plutocracy) we are putting ourselves at huge risk down the road.

:shrug:

when you click on the thread.

:shrug:

There are many problems with the health care system in our country and just the most obviously noticeable is all of the people not having insurance.

When you actually break it down and look at WHY they dont' have insurance, it comes back to costs, malpractice, hospitals giving free care, etc.

It's true that we need to fix all of those issues but we ALSO need to do as the President suggests and get an immediate coverage plan for everyone in the mean time. Fixing all that stuff will take years/decades so, although that is a viable solution, it isn't timely enough to solve all of the problem.

we do not have the extra money to wait years/decades. The President is not planning on giving insurance to everyone, millions will be left behind, we hardly ever hear the word universal anymore.