Well, we all just passed through that little bump we call tax time, and as we breathe a sigh of relief it is interesting to look at a little thing called “Tax Freedom Day”. Tax freedom day estimates the day each calendar year that the taxpayers are finished paying for their government and can start earning for themselves. It is a simple measure, based on total income tax, total earnings, and a 365-day year. This year tax freedom day fell on the 13th of April. The Tax Foundation explains this this way
(1) the recession has reduced tax collections even faster than it has reduced income, and
(2) the stimulus package includes large temporary tax cuts for 2009 and 2010. Nevertheless, Americans will pay more in taxes than they will spend on food, clothing and housing combined.
[emphasis added, editorial: boy, is temporary an overstatement or what?]
Look at the graph below (from The Tax Foundation (est. 1937) and study it well.
The Tax Foundation
Note that during the 1992-2000 Clinton years (yellow) taxes went up and the adjusted date went down, indicating we were making progress on one front while losing ground on another in what is always a highly correlated pair of measures. During the war years (2000-2008) the economy and spending showed some instability as the beginning of the current troubles was evident.
The most shocking is the red, where we see tax freedom day dropping to a low unvisited since 1967, but the adjusted tax freedom day shoots nearly off the charts. Anyone want to project this forward 10 years and see when the true tax freedom day will arrive when we have added $10T in debt? I don’t think any politicians want us to think that far ahead. Lucky for us, 12 year olds (who will get to lead the way in paying this off) don’t get to vote either. Talk about your “taxation without representation!“.
After this discussion, I would like to share some insights I picked up from a couple of recent seminars I attended at the Mayo Clinic (where I work). We saw two speakers who presented on the looming Medicare crisis, and who had some very interesting comments. The discussion will focus on how to handle a $36T implied debt. We’ll talk about the two terms you cannot use in politics, but since we are not running for office, we can use them, they are: cost-benefit analysis and rationing.
So if taxes made you sick, wait till you see the health care system up close and personal.
The fine print:
What: Politics and a Pint
Where: The Contented Cow, Northfield
When: 19 April 2009, 6-7:30PM
References:
Part I: The Tax Foundation.
Part II: Healthcare at risk
It is evident that particularly for the rich, dying is an un-American activity! This accounts in part for Americans’ spending twice as much per capita on health care as the British do. The British reluctantly accept two facts of life. First, they are all suffering from a terminal, sexually transmitted disease called life. Second, with death inevitable and resources finite, health care rationing is inevitable. Rationing involves depriving patients of care from which they could benefit and which they wish to consume. The British are much more vigorous than Americans are in “drawing the line,” as Henry Aaron, William Schwartz, and Melissa Cox show in Can We Say No? But even with Americans’ higher levels of health spending, rationing in the United States is also inevitable.
Jennifer Stanton, London School of Hygiene and Tropical Medicine, Keppel Street, London WC1E 7HT, UK
Available online 10 August 1999.
Abstract: How important is research in shaping policy when a new life-saving medical technology becomes available, but happens to be very expensive? Taking the case of kidney dialysis, this paper argues that the emerging discipline of health economics had little influence relative to national differences in health service organization and cultures of expectation of provision. Paradoxically, the most effective covert rationing was achieved under the British NHS which ostensibly provides free care for all, while the uncentralised market system in the US gave way, on this issue, to almost universal state-subsidised provision. Under the British system, the most cost-effective options for renal care tended to flourish, but some patients were turned away. Physicians have been held responsible for complying with covert rationing: this paper suggests that early gearing towards socially-useful survival filtered back to selection at primary level, possibly continuing long after specialists wished to expand. Public outcry, though muted, reached parliament and caused minor shifts in policy; the main aim of the voluntary pressure campaign, to release more organs for transplant through ‘opt-out’, remained unrealised in the UK. Yet dialysis was targetted [sic] for expansion in the 1980s just at the point when health economists were presenting evidence for its low cost-effectiveness compared with other expensive interventions. According to the main strand of argument in this paper, comparisons with other countries and between regions were most influential in breaking the hold of covert rationing: policy making by embarrassment. However, in the 1990s, there are both theoretical discussions of explicit rationing, and open intiatives afoot to target dialysis for rationing.
Author Keywords: Rationing; Kidney dialysis; Health economics; QALYs; Expensive technologies; NHS; UK
Article Outline
• Introduction
• Contrast between early dialysis provision in the USA and Britain
• Selection of patients for dialysis in Britain, 1960s and 1970s
• ‘Simple’ economic research and a shift in policy?
• Kidneys in parliament, 1976–1984
• Was Britain killing kidney patients: the medical press, 1981–1984
• 1984–1990: target-setting, contracting-out, and QALYs
• Discussion
New Zealand’s health reforms were introduced in 1993 and changed the framework for health service delivery; this framework clearly contemplates rationing. We describe the development of guidelines for entry into end stage renal failure programmes in the northern region of New Zealand,1 how they were used in the clinical decision making process, and how they influenced public opinion. In particular, we describe two cases which put the decision to ration renal dialysis under the public spotlight.
