, , ,

America’s Healthcare: Paying more – getting less

Healthcare in america


“… what we see is created by what we don’t see”  (The Book of Hebrews – Message Translation)

FOUNDING FATHERS’ PERSPECTIVE

“You may promise yourself everything – but [without] health, … there is no happiness. An attention to health then should take place of every other object.”  (Thomas Jefferson)

FACTS

◊ The US spends 50-100% MORE per person on healthcare than 12 other high-income countries, but has a lower life expectancy than all of them. The US spends much less than these same countries on social services, which can prevent the need for excessive medical care.
The Commonwealth Fund, 10/8/15. “US healthcare from a global perspective” 


◊ US health statistics, overall, are worse than most developed countries because the health outcomes for Blacks and Latinos are 30-40% lower than for Whites which is largely due to economics: an inability to pay for health insurance and/or lack of access to better, quicker treatment.
Forbes, 3/5/15. Peral, Robert M.D. “Why healthcare is difference if you’re Black, Latino, or poor” 


◊ 86% of the $3 trillion spent annually on healthcare in the US is for chronic diseases. Over 70% of these chronic diseases are preventable. With lifestyle changes, the US would save $1.8 trillion per year, which is $700 billion more than the money spent annually by the federal government on all discretionary spending.
Center for Disease Control and Prevention, 2/23/16. “Chronic disease prevention and health promotion”
CMS.gov, 2014. “National Health Expenditure Data fact sheet”
National Priorities Project, “Federal spending – Where does the money go?”


Americans go to the doctor half as much as people in other developed countries, but pay twice as much for medication and up to 5 times more for medical procedures.
The Commonwealth Fund, 10/8/15. “US spends more on healthcare than high-income nations, but has lower life expectancy, and worse health” 


◊ Six reasons why the US spends 50-100% more than other nations on healthcare:

Administrative Costs –  Administrative costs account for 1/4 of the cost of our healthcare system. Using multiple insurers rather than a single-pay system requires more staffing costs.

  • Drug Costs – The US pays much more for its drugs, because unlike other countries, the Congress-passed Medicare Part D does not allow the government to negotiate prices with drug companies. Changing this law would save about $11 billion per year.
  • Defensive Medicine – Due to a fear of lawsuits, US doctors require excessive amounts of tests before prescribing treatment. Changing this practice would save about $650 billion per year.
  • Expensive Mix of Treatments – US doctors use a more expensive mix of treatments on their patients, and treat patients with far more specialists than other countries.
  • Wages – The over-utilized specialists demand reimbursement at a much higher rate than general physicians.
  • Branding – Brand name providers and insurers charge amounts that greatly exceed reasonable costs, and customers who have been convinced of brand superiority demand them.  

Investopedia, 8/6/15. Epstein, Lita “6 Reasons healthcare is so expensive in the US” 


◊ The 2010 passage of the Affordable Care Act (ACA), commonly known as “Obamacare,” has resulted in approximately 20 million more Americans having health insurance including 50% more Blacks and Whites, and 25% more Latinos.

The number of Americans without health insurance has dropped from 18% to about 9% since the passage of the ACA.

HHS.gov, 3/3/16. “20 million people have gained health insurance coverage because of the Affordable Care Act , new estimates show”
CNN Money, 4/13/15.  Isidore, Chris, “Nearly 90% of Americans have health coverage” 


◊ Pros and Cons of the Affordable Care Act include the following.

PROS

  • More Americans have healthcare insurance.
  • It’s more affordable for some individuals.
  • Pre-existing conditions cannot be denied coverage.
  • No time limits on care.
  • More preventive screenings are covered.
  • Prescription drugs costs continue to decrease.

CONS

  • People who had health care insurance have seen large premium increases.
  • The government forces individuals to have health insurance, and fines them if they don’t.  
  • Businesses with more than 50 employees are required to provide health insurance to their full-time workers. As a result many employees’ hours were decreased and therefore don’t qualify for company insurance.
  • Taxes have increased to pay for the ACA. Higher wage earners are subsidizing health insurance for the poor.

Health-line, 6/15/15. Roland, James. “The Pros and Cons of Obamacare” 

SUMMARY

America’s overall health would improve, and healthcare costs could be reduced by about 60% with lifestyle changes that would eliminate most chronic disease.  Another 20% of healthcare costs could be reduced by limiting malpractice litigation, simplifying healthcare program administration, and allowing government negotiation for drug pricing.

POSSIBLE SOLUTIONS

  • Eliminate the “Medicare Part D” provision; government negotiation of drug pricing would result in lower drug costs.
  • Eliminate the need for excessive, costly screening by putting limits on malpractice litigation.
  • Simplify healthcare administrative requirements, reducing the excessive costs
  • Create a national government campaign that would share the facts regarding cost and prevention of chronic disease, and emphasize lifestyle changes through schools and communities.   

Brief #20A – December 5, 2016

print