All water is recycled. The drip from my nose was, at one point, the drip from someone else's nose and so on. And the same goes for money. There is a limited amount of money, as it represents resources, but it doesn't just go away when we spend it. So, with health care dollars, the problem with the 2.3 trillion dollars going to pay for health care isn't exactly that 2.3 trillion dollars, it is where it comes from and where it goes.
An example in point: A friend of mine was just diagnosed with a particularly nasty form of brain cancer, glioblastoma multiforme. It is the most common malignant brain tumor, and it just killed Ted Kennedy. I don't have any idea how it chooses its victims, but it seems clear they have no fault in the process. He has already had 2 MRI scans, brain surgery and 5 days of hospitalization around the brain surgery. He also had an ambulance ride and several doctors' visits. He hasn't got the bill yet, but my guess is that he has just racked up close to $100,000 in medical costs. Everything, so far, has been necessary. But the costs of everything are significantly higher than they would need to be if procedure prices were as low as a competitive market could make them.
So the money comes from my friend, a teacher making maybe $45,000 a year, and his insurance company and it goes to a neurosurgeon, emergency room doctor, 2 hospitals, and indirectly to the makers of various medical equipment and supplies. It also goes to the many administrators who push pens regarding insurance payments. If he is responsible for 10% of the costs, he's already looking at 10K out of pocket.
As he enters the next phase in his treatment, he will spend tens of thousands of dollars over the next 6 weeks getting radiation therapy and then chemotherapy, at an expected cost of $5000 a month, for which he will foot some percentage of the bill. The money will come from him, his insurance company, and go to an oncologist, a radiation oncologist, a hospital that does the radiation, and a drug company that produced and markets his chemotherapy agent. And a bunch of administrators pushing pens in a system more complex than anyone could shake a stick at.
His situation illustrates a problem that will not be solved by doctors getting together and streamlining and making more effective the care they deliver. The care that he is going to need over the however long he has to live is just way too expensive, and his portion of the cost is way too high.
If he happened to roll the jackpot and live a long time, he will exceed his insurance's lifetime max of 2 million dollars in less than 10 years.
It is clear to me that there needs to be significant pressure to bring down the costs of big ticket items, procedures and certain medications, and that the system of insurance coverage needs powerful tweaking, either by regulation, replacement, or effective competition, in order to protect people from financial ruin. Just having a public option won't achieve this, but a public option, with standardization of coverage, and regulation of private insurance companies, could do this.