10 more things I learned from "Deaths of Despair and the Future of Capitalism" by Anne Case and Angus Deaton
They write from the perspective of the US. I heard someone on a YouTube video reference this book heavily without crediting the authors, which I thought was unfair.
1. The authors stated that the government is basically in partnership with the healthcare system
This is certainly sickening, but I think they are correct. They detail how government policies allow the healthcare industry to sweep money out of people's pockets through tax base support like Medicare and Medicaid and require employees and employers to purchase healthcare insurance. There are certainly a lot of expensive hospitals being built in my area.
2. The rising cost of health care is like a death spiral for the working poor
When an employer has to pay the same amount of healthcare for somebody making $40,000 a year as somebody making $400,000 a year, the healthcare is a much larger percentage. This puts direct downward pressure on take-home wages. For example, if the employer could afford $50,000 a year but has to pay $10,000 of your health insurance, that salary would be $40,000. The other way that this is a negative effect is that low-salaried employees are very expensive due to the hidden costs of healthcare. Eliminating these jobs can save a company a lot of money.
3. Another way high health care costs cause jobs to be eliminated is outsourcing to contractors
A lower wage earner, for example, like a custodial staff, will be laid off, and a contractor will fill this role. I have seen this in companies that I have worked for. The contractor may or may not have the same obligations to their workers. For example, if you run a company with a certain employee threshold, you need to provide healthcare. However, if you have fewer employees, I don't know exactly what it is but say less than ten employees, you don't need to provide healthcare. So jobs get outsourced to companies that are small enough so they don't have to pay for healthcare.
This is a lose-lose for people in that position. They lose access to the job where the healthcare is subsidized by the company. And then they get hired at the same wage with no health care from a contractor. The healthcare costs put down with pressure on wages, this is because now the contracting companies are competing with each other without the burden of having to provide healthcare to their employees.
4. The gap between the list price of the hospital service and what they will accept from Medicare or insurance is staggering.
I had surgery bills that showed that the charge was almost $200,000 for a procedure and four days in the hospital. They accepted closer to $20,000 from my insurance company, and I had no out-of-pocket. A $200,000 bill would have been devastating.
5. Billing is a huge portion of costs
I had a different situation where I was getting physical therapy on my hand (pinky finger). I was told it would be a co-pay and $50 per visit. I went about 15 times, and then they told me that the insurance was not paying because of the way that it was being billed and the charge was going to be $1000 per visit: after I had already been! I would never have paid $1000 for a hand massage. My insurance company would have paid for this procedure if they billed using a different code but neither side would budge. After many phone calls, they agreed to accept the $50 per visit from me with nothing from the insurance company: a 95% discount! This was fine with me, but what would have happened if I did not have insurance? Who ends up paying $1000 a visit?
6. Unnecessary tests drive up costs
We watched the hospital staff give an EKG to a 97-year-old deceased family member that had been in the hospital for weeks "just to be sure."
7. Rising health care costs reduce the purchasing power of everyone: and it disproportionately affects lower income people
If healthcare for a family of 4 costs $12,500 per year (this is low, I was paying over $20k just for insurance) that is 25% of a household's income making $50k or less. Since the cost is per person a household making $250k would pay the same amount, which becomes 5%. If healthcare costs double it puts family A into poverty but family B can still manage easily.
8. The presentation that I referenced included Dave Ramsey and Mike Rowe (Dirty Jobs) as panelists
Mike Rowe has tirelessly supported working people and his foundation gives out scholarships to learn welding and other trades. While he is a genuine, all-around great guy and a super hard worker (https://mikerowe.com/about-mike/bio/) he is an author and actor, not a welder or machinist. Dave Ramsey is a "money expert."
The panel featured three wealthy (at least two are very wealthy), college-educated, soft-skill guys talking about the benefits of manual labor, trade education, and not going into debt for college. While this is important and true they did not seem to notice the irony. This is a difficult problem to solve.
9. Reaching people in this class that is suffering from Deaths of Dispair will be increasingly important because it will be growing
In the US, we need a shift in focus of the education system. It is extremely focused on the college-bound path. This is becoming less and less important and practical.
10. With AI and robotics, entire sectors of the economy that were considered "good jobs" 15 years ago will be gutted and replaced. This will happen more suddenly than the loss of manufacturing jobs and millions will be displaced.
I know many people at my workplace and elsewhere who have a BA or MBA degree but don't seem to do much or have many definable skills. Jobs like "market researcher," "business analyst," and "product manager" will disappear or be consolidated and teams will be replaced with one person and automation. Transportation will be highly automated in my lifetime and probably within the next five years. Thousands or millions of college graduates are under-employed already and the trend will only increase.
Individuals facing significant college debt and lacking job opportunities are under considerable stress. At the same time, they're drawn to distractions like immersive virtual realities, the internet, new-age legal and illegal drugs (all of the marijuana-based and vape products that did not exist 30 years ago), and casual dating apps. However, these short-term escapes don't provide the satisfaction and fulfillment of genuine achievements, leading to unhappiness.