Our Health “Care” System is Unsustainable

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Over the next several weeks I’ll be covering various key focused topics that we believe, when linked together, are contributing to the current predicament of increasing wealth disparities, poverty, and economic, financial and political dysfunction in the U.S.  My first topic here is our hopelessly broken healthcare system.

The dysfunction of our current healthcare system has many layers to it, first and foremost being that as a country we spend far more than any other country in the world and get worse results.  Spot the obvious outlier in the charts. According to Health System Tracker, as of 2017, the U.S. spent nearly double per capita ($10,224) of the average of the 12 closest comparable countries.  And, again, we get worse results for those outlays.

As a direct comparison, the U.S. currently costs more than four times as much as Canada’s single-payer system, according to a new study revealed at Naked Capitalism. Here’s a key excerpt from the blog post:

The average American pays a whopping $2,497 per year in administrative costs — which fund insurer overhead and salaries of administrative workers as well as executive pay packages and growing profits — compared to $551 per person per year in Canada, according to a study published in the Annals of Internal Medicine last month. The study estimated that cutting administrative costs to Canadian levels could save more than $600 billion per year.

Many of us have seen the stats, but let’s look at this one, according to the study:

The average American spent $933 in hospital administration costs, compared to $196 in Canada, according to the research. Americans paid an average of $844 on insurance companies’ overhead, compared to $146 in Canada. Americans spent an average of $465 for physicians’ insurance-related costs, compared to $87 in Canada.

Also this:

“Americans spend twice as much per person as Canadians on health care. But instead of buying better care, that extra spending buys us sky-high profits and useless paperwork,” said Dr. David Himmelstein, the study’s lead author and a distinguished professor at Hunter College. “Before their single-payer reform, Canadians died younger than Americans, and their infant mortality rate was higher than ours. Now Canadians live three years longer and their infant mortality rate is 22% lower than ours. Under Medicare for All, Americans could cut out the red tape and afford a Rolls Royce version of Canada’s system.”

The study also revealed that simply adding a public option (currently favored by many of the Democratic presidential candidates in the primary) would not help lower costs as effectively as Medicare For All, and would actually make things worse because it leaves the current broken privately run system in place.

Another recent study released by Newsweek also revealed that Medicare For All would ultimately save $450 billion annually and prevent up to 68,000 deaths.

Here’s a key excerpt:

“Our study is actually conservative because it doesn’t factor in the lives saved among underinsured Americans—which includes anyone who nominally has insurance but has postponed or foregone care because they couldn’t afford the copays and deductibles,” Alison Galvani, an author of the study and researcher at the Center for Infectious Disease Modeling and Analysis at the Yale School of Public Health, told Newsweek.

So how are people “affording” access to healthcare under the current system?  Well, as it turns out, according to NORC at the University of Chicago, 50 million people (or one in five Americans) have reported donating to a crowdfunding campaign to help someone raise money for a medical bill or treatment of some sort. Let that sink in for a moment. Americans (many of them undoubtedly “covered” by some form of health insurance) are having to grovel for donations in order to afford medical treatments.

Here’s a key excerpt from the article:

Although more people gained insurance coverage with the Affordable Care Act, crowdfunding for health care expenses is becoming more common because Americans still cannot afford their out-of-pocket costs—deductibles, copays, or coinsurance—their coverage notwithstanding. Medical bills remain the number one reason Americans file for personal bankruptcy, according to a 2019 City University of New York-Harvard study. When asked who is responsible for paying for care for those who cannot afford it, a majority of Americans (60 percent) believe the government should as opposed to health care providers, charities, and family and friends.

We can debate the many reasons for how and why we got here, but what cannot be debated is that the current system is hopelessly broken and needs to be fixed. Another mostly unspoken, yet critical item in all of this, is the significant lost $$$ continually spent on a dysfunctional healthcare system by people that could be used in more productive ways in our economy.  Meaning, our current system is also highly economically inefficient. That should resonate with more people. The time to fix it is NOW.

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Jeff Mann and Nick Hanauer

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