​​​​​In the Past Thirty Years, the United States Shifted Its Expenditures From the Manufacturing Industry to the Healthcare Industry.

​​​This is an open letter from Roy J. Meidinger, author of “The Truth About the Healthcare Industry”.

In the past thirty years, the United States shifted its expenditures from the manufacturing industry to the healthcare industry. If you look at the industries that make up our Gross Domestic Product, the percentage changes over these past three decades clearly reflect this shift: the healthcare industry has grown by 11 percent, and the manufacturing industry has shrunk by 11 percent. Also, as healthcare began to annually increase its expenditures in the 1980’s, the United States trade deficit rapidly expanded, rising from zero dollars to the present high of eight hundred billion dollars. The cause and effect directly related to how much the U.S. pays for healthcare and the methodology of how the U.S. pays for its national healthcare expenditures.

Our Nation has lost its competitive edge in manufacturing goods because our production costs are much higher than in other industrial countries. A basic concept in business is in order to compete with the selling price of similar goods, the manufacturer’s price must be lower than our competitors, which can only be done through lower manufacturing costs. In varying degrees, all other international competitors have the same production cost factors, but the U.S. has one additional production cost, health care expenditures. The U.S. manufacturers include in their production costs our national health care expenditures while the international competitors do not have any health care production costs.

The United States has the highest health care expenditures of all industrial countries, for every dollar, other nations pay the U.S. pays three dollars and these countries pay for their healthcare in a different manner. All other industrial countries have gone to a single-payer health care system, with the government picking up the tab. This is the reason why their national health care expenditures are so low. The U.S., on the other hand, has relied on a free market system that has broken down and morphed into an oligopoly, which has eliminated competition, created high costs and provided a low quality of service, the World Health Organization places the U.S. at thirty-ninth in quality of service. 

Our manufacturers have three health care production costs, first, the direct costs they pay for employee health coverage, second, the Federal Insurance Contributions Act (FICA), which is a U.S. law that creates a payroll tax requiring a deduction from the paychecks of employees as well as a contribution from employers to fund the Social Security and Medicare programs. and third, the indirect health care costs. All these costs are marked up in order to set a price to make a profit and pay income taxes. The indirect costs, the largest of all, they come from the fact every business in the U.S. is marking up its health care costs and including them in the prices of their goods or services, thereby passing them on to our manufacturers. The reason other international competitors have no production health care costs is that their health care systems are paid by corporate income taxes on profits, as well as personal income taxes.

In order to eliminate high production health care costs, we must move to a single-payer health care system, pay for it out of corporate profits and personal income taxes, and pay FICA benefits out of general tax fund revenues, not from a non-discretionary tax fund. When this happens, all businesses will eliminate healthcare expenditure and pay the money allocated to every employee as a raise, which should be about $11,000. All manufacturers should see a production cost reduction of 25 percent to 50 percent.

If there were a king, he could easily change our healthcare and tax systems, by issuing a royal decree. The U.S.A. is a republic, governed by our elective officials, who have the responsibility for looking out for the financial well-being of our nation. The only determining factor for voting for a candidate in the 2018 election should be implementing a single-payer health care system and revising our tax system. To ensure passage is brought about, both the Senate and House of Representatives must have a 2/3 majority of representatives, whether they are a Democrat, Republican or Independent, therefore vote for individuals who support a single-payer system and a tax reform and then choose the individual who represents your point of view.

Roy J. Meidinger, working with several Economists and Certified Public Accountants analyzed the healthcare industry. They concentrated the decisions made within the industry, on the flow of revenues, and the impact the industry has had on our economy and society. Their combined work can be found in the book “The Truth About The Healthcare Industry”, available on Amazon Kindle.

Source: Roy J. Meidinger, author of "The Truth About The Healthcare Industry"


Categories: Healthcare

Tags: benefits, FICA, healthcare, payroll tax, personal income taxes, tax breaks, taxes


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