The health care system in the United States is broken. Most who receive care in hospitals cannot pay. Those who can, suffer outrageously inflated bills. Increasingly unprofitable hospitals and doctors' offices have been closing. Even the prestigious field of medicine is drawing fewer and fewer candidates to our nation's universities. How can the wealthiest country the world has ever known have gotten to such a distressing state?

Hospitals in California routinely mark up their services by 500-1,000%. The reason for this outrageous markup is simple: 80% of those being treated at those hospitals can't pay for the services provided. Still, the hospital needs to be able to cover its costs, and in most cases earn a profit. The obvious question therefore, is where does the money come from?

In almost all cases the answer is ultimately the same: "We, the American workers, and taxpayers." How that money gets from us to that hospital, however, is at the heart of the health care problem in the United States. Most health care bills are paid from three sources: 1.) Health Insurance (either paid for by employers, or increasingly privately purchased) 2.) Federal and State governments (predominantly through Medicare, Medicaid and reimbursements for some non-paying patients). 3.) The patients directly. No matter how you look at it, that means we're paying, either through 1.) Less pay 2.) Taxes 3.) Our wallets.

According to the Dept. of Health and Human Services, about $1.7 trillion was spent in the US on health care in 2003, accounting for about 15.3% of GDP. This cost was born almost equally between the private sector (insurance and individuals) and the public sector (both state and federal). Our entire Federal budget in 2003 was approximately $2.2 trillion. This means that, very roughly, we are spending about a third of our budget on health care, ostensibly only for the elderly and the poor. This provides an important safety net for approximately 24% of the population. (39 million people from Medicare and 32 million from Medicaid). An additional 41.2 million people (13.8%) are estimated to be uninsured in the US, leaving about 186 million (~ 62%) insured privately. Put differently, the average American accounts for approximately $5,700 per capita in health spending!

Health insurance is perhaps the most basic of benefits that most American employees expect when accepting a job. The government agrees, providing tax breaks to corporations for offering insurance. Increasingly, however, corporations are hiring workers without this basic benefit. The reason is that health insurance is increasingly becoming a serious distortion to the economies of US companies.

Take General Motors, as a particularly famous example. The company has been losing billions of dollars and recently announced that they will be cutting 30,000 jobs. According to A.T. Kearney, last year General Motors spent $1,500 per vehicle on health care. Toyota, in contrast, spent just $201 per vehicle in North America and $97 in Japan. In short, benefit obligations (which also include high pensions) have made it impossible for GM to compete in the global car market.

On the other side of the corporate spectrum is a company that has been able to compete remarkably well: Wal-Mart. How much does Wal-Mart pay per employee on healthcare? For the vast majority of its workers: $0. Wal-Mart is one of the pioneers of the practice of hiring "Part-Time" work, so that they will not need to pay benefits to their employees. In essence, transferring the burden of benefits back to the government, making it possible to offer its goods cheaper and its profits higher.

In an increasingly globalized economy, the lessons from these two examples are obvious: The traditional American system of employer financed healthcare leaves those companies that generously take care of their workers at a severe disadvantage vis-a-vis International competitors, who have the equivalent benefit costs financed by national health care systems. Companies like Wal-Mart are actually at a significant advantage as they are burdened even less than their competition as they pay very few benefits themselves and bear little responsibility for healthcare through taxation. Their workers often fall either into the social safety net of Medicaid or are forced to purchase insurance individually.

Canada spends approximately 22% of its budget on universal health care or about 10% of GDP. The UK spends approximately 8% of GDP on its universal health care system. In fact most European countries spend between 7-12% of GDP on their health care systems. Most Americans regard Europe's "welfare states" as extravagant. In terms of health care, however, Europe pays far less than the 15% of GDP spent in the US where nearly 14% of the population is not insured at all. This is not to say that the American system is inferior. Quite the opposite: Medical technology and access to expensive state-of-the-art tests are better in the US than anywhere in the world. Ask a Canadian who has waited 2 years in line for surgery which system he prefers and he's likely to cry. Americans pay more for a superior level of service, the problem is that the way we pay is increasingly disjointed.

Whether we like it or not, we must compete globally. In order to ensure that our corporations, and with them our economy, will continue to be competitive in the 21st century, we must level the playing field by removing the disadvantages of our outdated health care system. Our companies will have a serious burden (partially) lifted from them, and an increasingly anxious American workforce will be able to worry a little bit less about where to go when they get sick. This does not mean that the US need enact a massive new Federal health care bureaucracy, or adopt Universal coverage systems like those in Europe. It means that we need to fundamentally reform our system so that it is no longer a patchwork of different payers, leaving so many of us without any coverage at all. After all, we're already paying about a third of our taxes into the healthcare system in the US anyway!

Some suggestions on how to tackle solutions to this immense problem in a future column.

S. Tookie's "Trapped on Death Row"

Sung (poorly) to the the tune of R. Kelly's
"Trapped in the Closet."
Original Lyrics available here.

Four o'clock in the morning
And the smoke from my 'shrooms takes me
I'm stretchin' and yawnin' 'cause I'm about to go on a murder spree.
And a voice yells, "Take everything you want," from the parking out back
Then that SOB disses me
And I shot two rounds into his back.

Now I've got this dumb look on my face
Like, what have I done?
How could I be so stupid to have been here til the morning sun?
Must of lost the track of time
Oh, what was that on my mind?
From the 7-Eleven, went back to my home
Laughed with my friends about it on the telephone

Here I am, quickly tryin' to eat my hamburger
Searching for my french fries
Tryin' to get on up out the door
Then I thought about it some more
Said, "Now what do I do, pray tell?"
Called up my Crips on the phone
Said, "How about the Brookhaven Motel?"
Said, "I think maybe we'll get stoned"
Can you bring your weapons please?
Damn, I've got to get stoned
Hey isn't that the place with all those Taiwanese?

Bang, Bang, shells rang
First I aimed and shot at Yen-I-Yang
Then I turned and smashed the door
Homies aks me what that for?
I said, "What you care about those Buddhaheads?"
Another crack and Yang's wife and kid fell dead.
That's when I laughed as I heard their dying hollers
And now I'm in this dark ass motel, tryin' to figure out
Just how to spend the hundred dollars?

Suddenly I wake up in jail.
It's been twenty-five years of hell
Six years I spent in solitary
I Came out and had an epiphany
Now I wanna work for peace
So I began writing books for children
I'm tellin' them how not to join gangs, please.

Oh hey but wait,
I still say I'm innocent
Dozens of courts have unfairly decided my fate
What have those eye witnesses
got to do with anything, it's blacks they hate
I wrote "Tookie speaks out" to atone for my sins
Which is for founding the crips, not bein' willin'
to use that shotgun. I didn't do no killin'
These judges never cease to make me more irate
I'm gonna walk I figure
Call the Governor, too bad it's up to Schwarzenegger

I'm trapped here on Death Row
No place that I can go
San Quentin is no place for me
They want to quell my speech
I have reformed a bit, I think
If they put me to death
Who will those kids look to for help
It almost is too late for me
Where is that clemency?
I feel really bad about
Those crimes I did not commit
I hear footsteps coming down the hall
I've run out of ways to stall
I think I'm gonna be sick
I've used up my last trick
Ouch, watch out that needle sticks.

Joseph Lieberman, Democratic Senator from Connecticut wrote an Op-Ed for the Wall Street Journal this week (Tue. 11/29/05) entitled "America can't abandon 27 million Iraqis to 10,000 terrorists." Senator Lieberman should be commended for taking a courageous stance that differs from many in his party. Of particular interest, however, is not that a veteran US Senator writes in support of American efforts in Iraq, rather that he is seemingly in the minority for doing so.

An increasingly unpopular President George W. Bush has not done a great job explaining the American war effort at home. His popularity rating is a pitiful 41%, causing Democrats to go on the attack, and Republicans to distance themselves from him in the run-up to the 2006 congressional elections. More and more people on both sides are starting to question the war in Iraq and increasingly loud voices like that of Democratic representative John Murtha are calling for the return of US troops. Unfortunately, domestic politics may yet lose a war that we may just be winning.

The Economist's leader this week (Why America Must Stay) begins "Wars waged abroad are often lost at home; and that may be starting to happen with Iraq." As in Vietnam, the theory goes, a lack of popular support for a foreign war may cause a premature disengagement from the theater and bring about a collapse of the goals of the endeavor. A telling aspect of Democracy is that armed conflict is generally unpopular; therefore wars fought by Democracies tend to be shorter than those waged by despotic regimes. The danger, however, of premature war weariness is that otherwise laudable goals can collapse in a chorus of popular discontent. The war in Iraq is more than a laudable goal, it has the potential to transform the entire Middle East, indeed the entire Muslim world in ways that can make all of us safer.

Politicians pandering to a skittish populace in an election year can, perhaps, be forgiven for missing key turning points in history, as their eye is firmly focused on the goal of winning elections. An informed electorate, however, cannot afford to lose sight of the big ideas that affect the world they live in for reasons of political disaffection or personal ambivalence. Many Americans believe that President Bush disingenuously initiated the conflict in Iraq under false pretenses of "Weapons of Mass Destruction," or links to the attacks of Sept. 11, 2001. We must not forget, however, that the argument about whether America should leave Iraq is not the same as the argument about whether it should have gone there in the first place.

Whether or not we got into Iraq for the right reasons, we are there now and the job we are doing is one we cannot afford to fail. If we leave the Iraqis to the viciousness of the insurgency, we risk losing the very fledgling democracy that is the first of its kind in the Arab world. Worse, such a retreat would be viewed by the militant Islamists who are fighting us as a victory. When Israel withdrew from Southern Lebanon in 2000 (see previous column, Immoral Equivalence), the terrorists used the occasion to drive home their point that terror and barbarism, if applied with enough cruelty, wanton destruction, and above all regularity, could be remarkably effective at achieving their overall goal. Zarqawi and Al-Qaeda would certainly use any withdrawal from Iraq as a rallying cry for the victory of their cause and technique.

Did we learn nothing from the lessons of Sept. 11th? Fundamentalist Islamic terrorists do not attack the U.S. because of any specific American foreign policy or involvement with any particular regime. They attack us because our pluralistic, tolerant, and liberally Western way of life are a threat to the very world they believe in. Globalization increasingly shows the very people they subjugate (women, minorities, other religions) that there are alternatives to repressive orthodoxy and if enough people take notice, their way of life is doomed. This is precisely why Iraq is so important, America can show the Arab and Muslim world that the lies they've been fed all these years by their own autocrats and theocrats were only self-serving ways to extend their own corrupt regimes. The much fabled "Arab street" can (and just might) rise up against their perfidious leaders and usurp power for their own. Perhaps the same war-weariness that characterizes Western Democracies can yet prevent the ceaseless violence that currently defines so much of the Middle East?

There is already significant "macro" progress in this volatile region of the world. Lebanon has shrugged off its Syrian oppressors and is showing some signs that perhaps it may soon do the same from the Hizbollah terrorists in the South of the country. Libya has abandoned its quest for nuclear armament and began to comply with UN resolutions. Iraq and the Palestinian territories have held some of the first (if still somewhat flawed) elections in the Arab world. Egypt is showing some signs of allowing the very beginnings of political dissent. Even Saudi Arabia is beginning to allow some local political control rather than the strict monarchic, autocratic hold its regime has kept since the country was established. American power and principles in the region are being noticed!

Iraq is currently a rare opportunity for positive transformation in the Middle East whose success teeters on a rather precarious edge. As Joe Lieberman reminded us this week: "What a colossal mistake it would be for America's bipartisan political leadership to choose this moment in history to lose its will and, in the famous phrase, to seize defeat from the jaws of the coming victory."