Monthly Archive for November, 2010

Do you notice anything in common in these two graphs?

In both, one country towers over the others.  Since these numbers represent costs, that is not a particularly good thing.

“But one is health care costs and the other is pension costs”, you say.

“And it is not even the same country”, you add, perhaps noticing that in the second graph, the United States is the low cost country.

The first graph displays information that has become a staple of discourse in the health care debate.  The United States has the most expensive health care in the world.  President Obama said it. Max Baucus said it.  Even Republicans concede the point, albeit with their own spin.

This particular version was based on a report to Congress by the Congressional Research Service.

The second graph came from a data presented by Jan P. Hartford, Director, CEM Benchmarking Inc. (CEM), a Canadian firm that offers administrative benchmarking to pension funds around the world.  The presentation was delivered at the 56^th Annual Employee Benefits Conference of the International Foundation of Employee Benefit Plans.

I offer these two graphs and suggest one common feature of both tall towers, the United States in health care and Australia in pension administration.  They both take a free market approach to their plans in contrast to the rest of their peers who take a single payer approach.

Yes, here in the United States we rarely have the choice of more than one pension plan.  Employers don’t do that, and employees cannot put their pension contributions anywhere else.  But according to Ms Hartford, in Australia employees have a choice of plans and that means that plans must add marketing costs over and above those typical in other countries.

So what is the common theme in these two awkward towers?  Marketing and “competition”.  What is the common theme among their lower priced peers?  Single payer.

As a commercial for a large local church puts it:  not a sermon, just a thought.