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Americans spend more on less health care

Health Care 2005

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#21 Spectacles

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Posted 18 July 2005 - 02:33 PM

Thanks for the clarification, Tech. :)

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TechHarper: When I say "checks and balances inherent in its government" I mean that a socialized healthcare system will have to contend with the natural redundancies resultant from the checks and balances and will likely be more expensive. This kind of thing happens all the time in the government (redundant paperwork, jobs, products, expenses, etcetera) and I fear what this would mean for the already expensive cost of healthcare. I suppose another possibility is that the healthcare will be less expensive but the service will be unresponsive. *shrug*

Just to clarify a little more, are you talking about bureaucracy? I agree that it's a problem with government, but it's also a problem in some industries. Insurance, for instance, is largely a confusing bunch of bureaucracies that hospitals and doctor's offices have to hire people to wade through, adding to the cost of providing healthcare.

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An additional question I have (not specifically aimed at Spectacles, but anyone who wants to answer it) is how much will we pay the nurses and doctors under a theoretical socialized healthcare program in the United States? There's already a shortage of both and cutting pay to cut costs would most definitely NOT be an option.

I'm not keen on cutting pay of doctors and especially not of nurses. But I'm also not sure I'm comfortable working under the assumption that we either continue to soldier on under our present system or make the leap into "socialized medicine."

If government imposes any regulations on insurers and healthcare providers, any at all, is that socialized medicine? I ask because (1) I don't know and (2) I think the term itself is so scary to most Americans that it effectively shuts down any thinking outside the current box.

I suspect that, as Cardie says, what has been campaigned against as "socialized medicine" in the past is about to be repackaged and embraced by business because companies are finding it increasingly difficult to provide insurance for their workers.

Ireland, for instance, is now booming. It's home to many multinationals because it combines a very low corporate tax rate with national health benefits, relieving corporations of that cost. The combination is irresistable to businesses--and I don't blame them.
"Facts are stupid things." -Ronald Reagan at the 1988 Republican National Convention, attempting to quote John Adams, who said, "Facts are stubborn things"

"Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing." -- Paul Krugman

#22 Rhiannonjk

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Posted 18 July 2005 - 04:11 PM

Themis, on Jul 18 2005, 12:31 PM, said:

One big factor is the cost of drugs.  I don't know what advertising contributes to the cost, but I don't understand drug companies advertising on tv and in in print when the medications they advertise are only available by prescription.  Advertise in medical journals, maybe, but general consumer media?  I suppose the idea is that you'll go ask your doctor for that medication, but I certainly wouldn't want my doctor prescribing something just because I asked for it...
Themis

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I promise you, in the cost of drugs, advertisement is not where it breaks down.  

We are particular people.  We want our government to take care of us.  We want to know that the drugs we take are safe, completely totally safe.  If they aren't safe, we shall sue the butt off the drug makers.  therefore our government regulates the drug companies, and the medical profession.  

Drug manufacturers put out *so* much money in creating new treatments and getting them approved.  I'm not saying that I think the approval process is too strict, I'm just explaining the cost.  While it might only cost a buck to physically create the pill, they need to charge $30 (and those are random numbers, I have no idea what the actual ratio is) to pay for all the research that led to that pill eventually getting on the shelves, and the hundreds of other ideas that *didn't* make it to the shelves.  

the same is true of medical practices.  We want to be safe, so we want our doctors to be regulated, so we are paying for all of the research to make sure that what they are doing is safe.  I'm not saying that our safety measures are any stricter than the countries with less healthcare costs per person, but I would be interested in knowing those numbers.  

But, from working with Horses, I know that there are revolutionary practices out there that would be great for humans, that aren't even being pursued for human use because, as it was told to me, the process is just too difficult for certain types of things (the specific example that I'm thinking of is arthritis injections, which are incredibly common in horses, but I was told weren't being pursued in America because such an invasive procedure wasn't worthwhile pursuing.  At the time I was told that it *was* being pursued in Europe.  Meanwhile, I have heard of people getting cortizone injections in their knee, so this may have changed)  

Anyways, those are just some thoughts.  research and development take a lot of resources.  But those resources keep us safe.

***Is easily distracted***


#23 Spectacles

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Posted 18 July 2005 - 05:26 PM

Unfortunately, drug companies have been putting very little into research and development of new drugs. Many of the new products are heavily advertised copycats, like the lipitor-like drugs, the varieties of erectile dysfunction drugs, and assorted arthritis drugs. All are like brands of cigarettes. Each company makes and markets its own brand of the same kind of drug.

They spend lots more on advertising than they do on R & D.



http://www.kaisernet....cfm?DR_ID=5732

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Prescription Drugs | Drug Company Spending on Advertising Double That for Research and Development, Families USA Study Says
[Jul 11, 2001]

      The nation's leading drug companies last year spent nearly twice as much on advertising alone than on research and development, and nearly three times more on advertising, administration and executive compensation, according to a study released yesterday by Families USA. The AP/Arizona Republic reports that the consumer group said the study's findings disputed the industry's "contentions" that the high cost of research and development has led to the recent rise in prescription drug costs (AP/Arizona Republic, 7/11). The group analyzed annual reports for fiscal year 2000 submitted by nine drug makers to the Securities and Exchange Commission. The companies -- Merck, Pfizer, Bristol-Myers Squibb, Pharmacia, Abbott Laboratories, American Home Products, Eli Lilly, Schering-Plough, and Allergan -- were selected because they produced the 50 most frequently prescribed drugs for seniors. A Families USA report last month concluded that the prices for these medications rose at twice the rate of inflation last year.

'Sugar Coating'
The new study found that each of the nine companies except Eli Lilly spent more than double the amount on marketing, administration and advertising compared to research and development (Lilly spent 1.5 times the amount). Six of the nine "made more money in net profits than they spent on research and development last year." Merck, for example, produced $40.4 billion in revenue last year -- net profits represented 17% of this figure; marketing, advertising and administration, 15%; and research and development, 6%, with the latter percentage the lowest among the nine companies. In percentage terms, Lilly spent the most of any company on research and development (19%), while also seeing the largest net profits at 28%. The report also found "profligate spending on compensation packages" for pharmaceutical executives. For instance, excluding "unexercised stock options," Pfizer Chair William Steere received a compensation package of $40.2 million last year. "Pharmaceutical companies charging skyrocketing drug prices like to sugar coat the pain by saying those prices are needed for research and development," Ron Pollack, Families USA's executive director, said, adding, "The truth is high prices are much more associated with record-breaking profits and enormous compensation for top drug company executives (Families USA release, 7/10).

Profits for People
The Pharmaceutical Research and Manufacturers of America criticized the study, saying its "condemn[ation]" of drug makers was "unfair," the AP/Republic reports. PhRMA spokesperson Jackie Cottrell said, "When the pharmaceutical industry does well, patients do even better."


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Rhiannonjk: Meanwhile, I have heard of people getting cortizone injections in their knee, so this may have changed

Ouch. I've had cortisone injections in my shoulder. The doctor wanted to do my hip, too, but I decided I'd rather limp.  :blush:   Really, I think cortisone injections in joints have been around for years. I know my father used to have them many years ago....
"Facts are stupid things." -Ronald Reagan at the 1988 Republican National Convention, attempting to quote John Adams, who said, "Facts are stubborn things"

"Although health care enrollment is actually going pretty well at this point, thousands and maybe millions of Americans have failed to sign up for coverage because they believe the false horror stories they keep hearing." -- Paul Krugman

#24 Lin731

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Posted 18 July 2005 - 05:34 PM

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I promise you, in the cost of drugs, advertisement is not where it breaks down.

http://www.elitestv....473f58c2fe.html
Drug Companies spent 4 billion dollars on advertising in 2004, that's not chump change. They've also spent 800 million on lobbying in the past 7 years.

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In addition, of the 1,274 people registered to lobby in Washington, D.C. in 2004 on behalf of the pharmaceutical industry, according to the non-partisan Center for Public Integrity, 476 are former federal officials who worked for regulatory agencies as well as in Congress. They include over 15 former members of the U.S. Senate and over 60 members of the U.S. House of Representatives. The most powerful pharmaceutical industry lobbying group in Washington is the pharmaceutical trade group Pharmaceutical Research Manufacturers of America (PhRMA). It is now headed by former Rep. Billy Tauzin (R-LA) and was central to getting the 2003 Medicare Modernization Act passed while Tauzin was Chairman of the House Energy & Commerce Committee

Drug manufacturers successfully joined with the Bush administration in preventing cost restrictions on drugs with the passage of the new Medicare law which features prescription benefits, shortly going into effect in 2006. In addition, drug companies are awarded with corporate tax breaks by the federal government.

Senator Bill Frist, a heart surgeon prior to serving in the Senate and now Senate majority leader, has just recently called upon the Government Accountability Office (GAO), a non-partisan investigative branch of the Congress, to examine drug advertising practices. He said, “This advertising can lead to inappropriate prescribing and fuel prescription drug spending.” On the other hand Sen. Frist has personally enjoyed favors from pharmaceutical giant, Schering-Plough, supplying him with a private Gulfstream corporate jet several times at the cost of a first-class commercial fare. Pharmaceuticals regularly supply members of Congress access to private jets at a minimal cost, which often includes a lobbyist along for the ride to capture a lawmaker’s ear on key legislation they either want passed or want to prevent.

Along with the lobbying efforts of pharmaceutical companies themselves are non-profit organizations which directly profit from a money stream from the drug makers. To wit, during the Senate hearings in March 2005 on the FDA’s drug approval process in light of the belated discoveries of the health risks from taking Vioxx, witness Nancy Davenport-Ennis testified on behalf of the National Patient Advocate Foundation which receives funding from pharmaceutical firms, Pfizer, Merck - manufacturer of Vioxx-, and Glaxo-SmithKline. She admitted that “I don’t think there is a patient advocacy group in America that does not receive some level of funding from a pharmaceutical company.” This includes the AARP, instrumental in passage of Medicare’s new prescription drug plan, which remains flawed and confusing to date, even to the Social Security Administration, as they scramble to outline its rules and benefits for 2006.

Physicians have long been concerned about the direct-to-consumer advertising and want the discretion to prescribe medication put back into the examining room. At a recent American Medical Association meeting several resolutions were proposed to restrict such advertising. Interestingly Washington lobbyists on behalf of several pharmaceuticals attended the meeting in an effort to block such reforms and such issues were then tabled by the AMA for another year.

Senator Herb Kohl (D-WI), ranking member of the Senate Special Committee on Aging, recently said, “Spending for prescription drugs is one of the fastest growing components of national health care spending in the U.S., increasing fourfold between 1990 and 2002. At the same time, pharmaceutical manufacturers are spending billions of dollars to advertise prescription drugs directly to consumers.” Kohl has joined Sen. Frist in requesting the GAO research on the impact of direct-to-consumer advertising to consumers and how much television and print ads have led to escalation of drug costs.

And more importantly, the less costly prescriptions are dispensed, the less the costs will continue to rise. Yet the retail costs of medications which many elderly and disabled must pay for out-of-pocket due to no prescription coverage, can easily add up to thousands of dollars each year, and they usually do not have the luxury of doing without their medications. Until medications are affordable for all, especially for those most in need of them, it will be up to the federal government to take on the pharmaceutical industry in containing costs. Sadly, at this juncture it does not appear that will happen anytime soon.





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We are particular people. We want our government to take care of us. We want to know that the drugs we take are safe, completely totally safe. If they aren't safe, we shall sue the butt off the drug makers. therefore our government regulates the drug companies, and the medical profession.

Apparently they're not doing a good job given all the recent problems we've seen with numerous drugs. Who generates the data used to decide if a drug will recieve approval? The drug companies do.

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Drug manufacturers put out *so* much money in creating new treatments and getting them approved. I'm not saying that I think the approval process is too strict, I'm just explaining the cost. While it might only cost a buck to physically create the pill, they need to charge $30 (and those are random numbers, I have no idea what the actual ratio is) to pay for all the research that led to that pill eventually getting on the shelves, and the hundreds of other ideas that *didn't* make it to the shelves.

As I understand it the American taxpayer is pretty much footing the R&D bills for new drugs (given the price controls everyone BUT America has on how much drug companies can charge.

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US residents pay more as taxpayers and consumers for pharmaceutical R&D than do persons in other OECD countries.

The most important US contributions to global R&D are from the public sector. The $28+ billion per year the US government spends on the National Institutes of Health and the significant amounts spent on health care R&D in other federal agencies (CDC, DOE, DOD, NSF, FDA, etc) are highly valued resources for the entire global scientific community. These public sector expenditures on R&D are more than 25 basis points of US GDP. No other country comes close.

Based upon data from the US IRS regarding the federal R&D Tax Credit and other sources, CPTech estimates that 13 percent of US pharmaceutical sales are reinvested in R&D. Given current outlays on medicines, this is more than 25 billion dollars in private sector R&D that is financed from purchases of drugs by US residents -- or about 25 basis points of GDP from consumers.

Taken together, US residents, taxpayers and consumers pay for R&D in amounts greater than 50 basis points of GDP. We estimate that other OECD countries pay considerably less, probably in the range of 5 to 20 basis points of GDP.

Private Sector R&D is Not Very Productive or Innovative
CPTech estimates that the patent system increased the cost of pharmaceutical products by $400 billion globally in 2003. This higher cost is justified on the grounds that it finances R&D.

Despite staggering increases in consumer outlays for new medicines, the rate of innovation in new drugs is modest. Over the past eleven years, about 70 percent of New Chemical Entities (NCEs) registered with the US FDA were judged not significantly better than existing treatments. Clinical trials for the “me too” products were almost twice as large as the trials on the innovative products, suggesting an even greater bias in investment toward “me too” drugs.




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the same is true of medical practices. We want to be safe, so we want our doctors to be regulated, so we are paying for all of the research to make sure that what they are doing is safe. I'm not saying that our safety measures are any stricter than the countries with less healthcare costs per person, but I would be interested in knowing those numbers.

Last in my personal laundry list of problems with the system is too much overhead and pencil pushers to pay for. Why? Because we have 1,000s of providers with 1,000s of different forms, coverages, exclusions, exemptions etc...THAT IMO is the real source of tons of waste.
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#25 eloisel

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Posted 18 July 2005 - 08:26 PM

All I know is the last time I was in the hospital a person wheeled a contraption into the room every few hours and stuck a thing on my finger for a few minutes, then looked at the machine, took the thing off my finger and left the room.  The hospital charged $45 for each time they did that.  I also know I wasn't allowed to eat or drink anything for 3 days but I was charged for 3 days worth of a dietician and food.  I was also charged for a number of xrays I did not receive.  And, I had a wheez in my lungs after surgery so they had me on breathing treatments for a couple of days.

I have insurance which I pay $70 a month for through my employer so it only cost me $100 for the emergency room visit and a little over $1500 for my 20% co-pay of the remainder of the bill.

That is still better than my dental plan.  I had a tooth absess and had to have a root canal done and a cap put on.  $550 my share after co-pay.  One tooth!

My eyeglasses cost me $340 after co-pay.

I need dental work and new glasses now but I can't afford the co-pays.

The only thing good about my plan are prescriptions.  Used to be a $10 co-pay.  Now we're on a 10% 3-tier program.  Meds that cost me $10 last year now cost me 99 cents.  Of course, I haven't had to get anything super expensive yet.  Knock on wood.

My daughter went through JPS, a county health service, when she became too old for me to carry on my health insurance, and was charged for medical services on a sliding scale.  They pulled her wisdom teeth - for free.  She has hemacromotosis and has had to have hospital treatment for that a few times - each time for free.  She also has bipolar issues and has received treatment and medications for that - for free.    

From my point of view, in the U.S., health care is for the poor or the rich and those of everywhere in the middle get stuck in a can get it if we can pay for it situation.

#26 Themis

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Posted 18 July 2005 - 10:08 PM

eloisel, on Jul 19 2005, 01:26 AM, said:

From my point of view, in the U.S., health care is for the poor or the rich and those of everywhere in the middle get stuck in a can get it if we can pay for it situation.

<{POST_SNAPBACK}>


That's it in a nutshell, and the middle, because of it, is sliding it ever closer to the poor end.

Dental insurance??  What's that?! (LOL)  I've had to spend $1,600 out of my own pocket on two crowns recently.  Thank the gods for good credit.

This country desperately needs some kind of basic-care national health insurance.  In the long run it'll be less expensive than every state trying to manage their own plan.  Tennessee is in crisis now over its TennCare program.  Yep, of course we're supporting some people who darned well could be working and paying their own way.  But people who really need the program, through no fault of their own except for getting sick, are being kicked off.  Apparently children are staying on, at least, but a lot of seniors are getting the proverbial shaft.  Our receptionist cannot afford to put her child on our company insurance (not surprising given her salary), but between she and her husband (who has no insurance through his job), they make too much for their infant son to go on TennCare.  

I'd say it's the most important issue the country faces.

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#27 eloisel

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Posted 18 July 2005 - 10:41 PM

I know what you mean.  I know a lady who works part time as a cook at a local diner.  She makes too much to qualify for the county funded health care but she has no insurance and can't afford it on her part time earnings.  She works part time because she is not well but not quite old enough to retire and qualify for medicaid and social security.  It is one of those can't win situations.  It is like it is better to be really, really poor because then one can qualify for all kinds of programs - housing assistance, free dental and health care, food stamps.  Otherwise, one needs to have lots of disposable income.

#28 Rhiannonjk

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Posted 19 July 2005 - 07:29 AM

Ok, I stand highly corrected on the advertising thing.  I still find it really hard to believe, but whatever.

***Is easily distracted***


#29 Anakam

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Posted 19 July 2005 - 08:22 AM

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Lin731:
Last in my personal laundry list of problems with the system is too much overhead and pencil pushers to pay for. Why? Because we have 1,000s of providers with 1,000s of different forms, coverages, exclusions, exemptions etc...THAT IMO is the real source of tons of waste.

My favorite example of this in my state is that on our current plan, we now have to (and have for a few years) needed to get a referral from our primary care physician if we need to see a specialist if we want it covered by our insurance.  I feel as though I'm somehow suddenly not smart enough to find a specialist and know when I need one; I realize it may have been to stop frivolous visits, but I really have to wonder if it pays off.

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Themis:
That's it in a nutshell, and the middle, because of it, is sliding it ever closer to the poor end.

Yes, yes we are.  :suspect:

The *only* reason I cannot count myself in the 'sliding' category right now, along with my parents, is that by some miracle, my dad's insurance, via the college, is fairly reasonable for our usual costs.  However, that may change, as the state is attempting to put the insurance of all school employees under the state, controlled by a six-member board.  I don't have the full details on it but I do know that many, many teachers appreciate the insurance they've been able to negiotiate and would like to keep what they got.

eloisel, I think that eyeglasses have got to be one of the most expensive things, and I cannot understand why, unless they're trifocals; I could understand the lenses being steep if they're still ground by hand, but frames are, well, frames.  If I didn't like the place we've been getting my glasses from so much, I'd be rather annoyed by it.
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#30 eloisel

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Posted 19 July 2005 - 06:49 PM

Yep - the glasses are trifocals and no lines.  Plus one eye has suffered some vision loss from an injury.  Honestly, I can see.  I just can't make out the letters on the street signs or the menu boards at the fast food restaurants.  

I move my head all the time so the no lines make me dizzy, I'm too vain to wear glasses with lines, and I will not put anything in my eye.   However, I do enjoy putting them on occasionally and discovering all over again that there are individual leaves on trees and blades of grass in the lawn.

The frame broke - while it was in the case - and I need to get them fixed.

#31 gadfly

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Posted 19 July 2005 - 10:37 PM

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I also don't understand how clinics and other providers can post signs saying "no insurance? We can discount." Why don't they charge everybody less and maybe insurance wouldn't cost so much????

Because practioners will charge a higher fee knowing that the insurance company will pay less so they(the practioners) agree to write off the balance the insurance company won't pay.  If a patient doesn't have insurance the clinic simply bills them what they'd probably get from the insurance company anyway.  Practioners actually make contracts with payors for their fees.

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The time we'll get healthcare reform will be the time when it's such a burden on every other business except the insurance companies that they lobby Congress to clamp down on price-gouging.

That time is nearing soon I fear.  Many companies are cutting down drastically on healthcare benefits because the cost is rising so fast.  I work for a healthcare revenue cycle management company now and this is a big issue for us as a company and as employees.  There is talk of a healthcare plan that I'd never heard of before but which says that doctors and other providers are paid based on quality so that the more successful their procedures the more money they can collect for their services.  The idea is that this would provide a cosumer driven market and would eventually help cut back on price gouging.  One of my fears is that you'd pretty much have to be wealthy to afford high quality healthcare.  The plan would also have members put aside their own money, as in a 401K, for healthcare so, if you didn't use the money for healthcare, you'd have it to spend for other things once you left that company.

#32 Spectacles

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Posted 20 July 2005 - 05:56 AM

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Rhiannonjk: Ok, I stand highly corrected on the advertising thing. I still find it really hard to believe, but whatever.

I'm with you, Rhiannon. I thought it was amazing, too. But those figures have been documented over and over again. The pharmaceutical companies spend more on advertising (and CEO compensation packages) than they do on research and development. And on top of that, research and development is partially subsidized by the government. So we're hit twice: as consumers we pay higher prices for the pleasure of seeing those ads for Lipitor, Plavix, Viagra, and as taxpayers we partly subsidize the development of new drugs. Add to that a bunch of congressmen who are in the pocket of Big Pharma and protect them with legislation, and we're looking at quite a racket here.
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#33 Themis

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Posted 20 July 2005 - 02:59 PM

While we're considering health care, let's include dental care or lack thereof.  Story in today's paper about faith-based dental vans in Appalachia (about the only thing I like about organized religions is when they're behind stuff like this)  More than 32% of Tennessee residents surveyed last year had lost six or more teeth because of decay or gum disease..that number was 38.1% in Kentucky and 42.9% in West Virginia, which holds the distinction of the most toothless state in the nation...adults...postpone dental visits until pain leaves them no other choice...cavaties have given way to full-school tooth decay, and the option usually chosen is having the offending teeth pulled...many of the uninsured people...either can't afford or are unwilling to pay for procedures such as root canals that could save teeth...For people over age 21 who receive Medicaid assistance, the government pays only for extractions.  Root canals and bridges aren't covered.  (Roger Alford, Associated Press)

I've only had one job that offered dental insurance...

America, land of the toothless, except in Hollywood where all the starlets get their teeth capped and bonded....

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#34 Cardie

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Posted 20 July 2005 - 06:52 PM

I have dental insurance, but it only pays about a third of what my dentist charges for a crown.  But when my mom needed a crown for one of her back teeth when she was in her late seventies, she had it pulled, not because she couldn't avoid the care but because she didn't think, with her breathing problems, that she could stand having the work done.  Some people choose extraction for that reason, although certainly delayed dental care gets the teeth to where they need crowns in the first place.

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