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Howard Speaks Howard Farran, DDS MBA, MAGD

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What Would You Pay for the Little Blue Pill?

Howard Farran, DDS
MBA, MAGD
Publisher,
Dentaltown Magazine
 Famed American economist Milton Freidman was once asked how much would "too much" be for a country to spend on health care, seeing as Americans spend more on health care per person than any other country.

Friedman explained how Mayo Clinic founders Charles and William Mayo had noticed that most people spend 50 percent of their entire lifetime medical expenditures in the last two weeks of their lives. Friedman indicated that there would always be a market for those who valued the highest quality of medicine available.

Let's say you are going to die tonight, but you're given a choice. You can either end it all and die tonight or you can buy a little blue pill from Merck or Pfizer and die exactly one year from tonight. How much would you pay for that pill? How much is one more year worth to you? Wouldn't you sell your boat, camper, cabin or even your car and your house? I would spend everything I had for that extra time! So, what is wrong for spending a huge amount of money to have a very healthy body?

Friedman had some very profound insights on this subject. First he asked, "Why is health care, the largest industry in the United States, treated so differently than other businesses?" If Intel, Microsoft, Cisco and Dell drive up their sales and their stock goes up, everyone applauds. When health care expands, our government complains. Don't you find it amazing that 50 percent of the budget of every state is devoted to education, and you never hear a single complaint when it comes to increasing that budget, but when there's talk about devoting money to health care, all we hear are grumbles
Health Care Spending
United States $5,711
Luxembourg $4,611
Switzerland $3,847
Norway $3,769
Iceland $3,159
France $3,048
Belgium $3,044
Canada $2,998
Germany $2,983
Austria $2,958
Netherlands $2,909
Australia $2,886
Sweden $2,745
Denmark $2,743
Ireland $2,455
United Kingdom $2,317
Italy $2,314
Japan $2,249
Finland $2,104

Significant Points from the Bureau of Labor Statistics
• As the largest industry in the United States in 2006, health care provided 14 million jobs – 13.6 million jobs for wage and salary workers and about 438,000 jobs for the self-employed.

• Seven of the 20 fastest growing occupations are health-care related.

• Health care will generate three million new wage and salary jobs between 2006 and 2016 – more than any other industry.

• Most workers have jobs that require less than four years of college education, but health diagnosing and treating practitioners are among the most educated workers.

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Howard Farran, DDS, MBA, MAGD, is an international speaker who has written dozens of published articles. To schedule Howard to speak to your next national, state or local dental meeting, email colleen@farranmedia.com.

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and groans about how it needs to be reined in? Do the 14 million Americans who work in the health-care industry complain about their jobs? Would all health-care workers love to lose their jobs? Do patients want low-cost but low-quality care?

This is only a question because other people pay for your health care – i.e. government and employers. Other people, government and employers do not care about you or your health, they just want to pay as little as possible. If you treated health care the same way you cared for your house and your car, you would want the best health care available, especially with a serious disease.

Basically the problem is very simple. There are four ways in which you can spend money:
  1. You can spend your own money on yourself. When you do that, then you really keep a good eye on what you're doing. When you spend your own money on yourself, you typically try to get the best bang for your buck. This is why health care should shift to bigger deductibles and patient portions so that everyone will be more efficient with their dollars.

  2. You can spend your own money on somebody else. For example, I buy a birthday present for someone. In this case, I'm not so careful about the content of the present, but I'm very careful about the cost.

  3. You can spend somebody else's money on yourself. If this is the case, chances are you're going to eat a steak the size of a toilet seat for lunch! This is the case with employers paying for your health care. Employers would rather by the low-cost HMO or PPO and are not interested in buying premium services. Americans need to understand this fully and you should be explaining this to your patients.

  4. You can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it is, and I'm not concerned about what I get. That's how government works. The government doesn't care about the quality of health care for Medicare and Medicaid; it simply cares how much it costs. This reminds me of many presidents, like Barack Obama, who cater to the public school unions, who oppose school vouchers and yet send their own children to private school. Don't you just love hypocrites?
If Americans don't take responsibility for paying a bigger part of their health care and if they do not demand more involvement in their rights, then they deserve exactly what Barack and Hillary are going to deliver – Socialized Medicine.

About 580,000 establishments make up the current health-care industry; they vary greatly in terms of size, staffing patterns and organizational structures. Nearly 77 percent of health-care establishments are offices of physicians, dentists or other health-care practitioners. Although hospitals constitute only one percent of all health-care establishments, they employ 35 percent of all health-care workers
(visit: www.bls.gov/oco/cg/cgs035.htm#table2).

According to the U.S. Department of Labor's Bureau of Labor Statistics, the health-care industry includes establishments ranging from small-town private practices of physicians, who employ only one medical assistant, to busy inner-city hospitals that provide thousands of diverse jobs. In 2006, almost half of non-hospital health-care establishments employed fewer than five workers. By contrast, seven out of 10 hospital employees were in establishments with more than 1,000 workers.

What does this mean? Health care today is primarily delivered by small businesses like dental offices that employ about five people per business. This is a very healthy and growing segment of our economy! We should be applauding their efforts for making America not only more prosperous, but more healthy. These small business have also convinced consumers to spend their money in health care instead of big screen TVs and trips to Disneyland, which is not an easy task.

Another point to remember is that most of the big gains in curing disease have come from the pharmaceutical industry – not surgery. The more money that you take out of health care the more money you take out of big pharma. Cures for major diseases – especially cancer – are going to come from big pharma. These companies need to be awash in cash so that they can afford to hire more scientists to do more research and development.

So, to conclude: Don't listen to the government naysayers who try to make you feel bad and guilty for having a thriving business that contributes to the employment of nearly 14 million people. Don't listen to or vote for people who say health care costs need to be cut. Feel proud to be a health-care provider! Health care is the fastest growing segment of our economy. And keep in mind, when Hillary and Barack need a bypass or chemo some day they'll never have to go to a Medicare or Medicaid provider. They're already taken care of. They'll never have a personal investment in American health care. So why let them decide what's best for you?
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