President Obama

On August 14th, 2009, the President continued his nationalized health care tour in Belgrade, MT. During the question and answer session of his town hall event, Randy Rathie from Montana (a proud NRA member), asked the President a question regarding his plan to pay for his health care agenda. The President responded by saying:

I can’t cover another 46 million people for free…we will have to get the money from somewhere…overall this bill will cost, let’s say it will cost $800 billion to $900 billion, that’s a lot of money…that’s over 10 years though, alright? So that’s about $90 billion, $80 billion to $90 billion a year.

The Department of Veterans Affairs (DVA) is the government’s second largest government agency, second only to the Department of Defense. The Veterans Health Administration (VHA), a government controlled single-payer system, which the President is a proponent of, has a 2009 annual budget of $44.5 billion, while providing healthcare to 7.84 million patients. As large as it is, it pales in comparison to the population of the United States, which last estimates reported to be over 308 million. Do the math. $44.5 billion divided by 7.85 billion patients equates to $5,676 per patient, per year. Can the private sector compete with those numbers?

A larger problem arises based on President Obama’s statement today. The president claims that he can cover an additional 46 million people on a budget of $80 to $90 billion dollars a year (which we do not have). Do the math. That equates to $1,739 to $1,956 per person. These are real numbers, they do not lie.  This does not take into account the millions of people that will be thrust into the system for a variety of reasons, and the cost to insure them..

To put this into perspective, the VA spends half that amount ($44.5 billion) to cover only 7.84 million people, yet the President is raising the VA’s budget in 2010 to $52.5 billion, a 10% increase. By comparison, his claims do not make sense. A long standing government controlled health care system operates on a budget that equates to $5,676per person, yet they need a raise to increase the quality of care, while the president claims he can operate the same type of government controlled health care system, operating on a budget that equates to $1,739 to $1,956 per person, per year.

Health care economics ensures that the more people you have in a system, the lower the cost per person. That is understandable. But thinking the cost would be reduced by 64% (the difference between the VHA cost per person, and Obama’s health care plan cost per person) defies economic logic, it just doesn’t work.

But let’s say, for arguments sake, that the president is right and that his plan will only cost up to $1,956 per person. If this is true, then:

1. Why can’t the government run the VHA on a budget that operates at a cost per person of $1,956 instead of a cost per person of $5,676that the VHA operates on today?
2. What kind of care would we get with a cost per person of $1,956, while the VHA has a record of less than adequate quality of care with a cost of $5,676 per person? (click here for the HIV and Hepatitis exposure investgation). Who would be succeptible to coverage denial and rationing to keep the cost so low?
3. How would the private sector be able to compete against a cost per person of $1,956?

If the President is right, then he has a lot of explaining to do. If the President is wrong, he has a lot of explaining to do.

Care to explain Mr. President?