American Healthcare Sucks
The United States spends roughly twice as much money per capita on healthcare as any other high-income country. Yet the American Healthcare system is still rating incredibly low in health outcomes compared to those same countries. We here at The Cult Machine asked ourselves “why this is?”
Why is American Healthcare so expensive?
American healthcare insurance simply costs more. That’s the bottom line. This includes the salaries of doctors, pharmaceuticals, hospital equipment and diagnostic tests. On a similar note, the high salaries of doctors could be somewhat related to the high costs of medical schooling as well. After all, an expensive education typically has to come with the promise of a financially fruitful career to remain attractive to students.
American Healthcare Quality is God Awful
The quality of healthcare services in the US fares well when compared to other developed countries. However, because the American healthcare system relies on private health insurance rather than a state-run option, accessibility becomes the main issue. Before the Affordable Care Act, a quarter of Americans had no health insurance. The numbers have improved since, notably amongst young Americans because the ACA allowed them to remain on their parent’s insurance until they turned 26 years old. The best care is afforded to wealthier Americans, who are more regularly insured with more comprehensive plans, have lower disease rates, higher life expectancy, and overall fewer adverse health outcomes.
Americans spend more on Healthcare and less on social programs
America spends the highest share of its GDP on healthcare costs out of all OECD countries, specifically 17.4%. Conversely, the US spends the lowest share of its GDP on social programs compared to the 13 most developed OECD members. These social programs include retirement schemes, housing projects as well as unemployment and disability benefits. This transfers some problems that could be preempted by social problems to hospitals adding to their financial burdens. Secondly, reduced social spending decreases positive outcomes by not having support systems available to sick and recovering citizens upon leaving medical supervision.
Big Pharma playing defense against Universal Healthcare
Some of the biggest obstacles in introducing universal healthcare in the US are the relatively high prices of medication in the US compared to other countries. These come as a result of years of lobbying done by the pharmaceutical industry, often called ‘big pharma’, occurring alongside their continued cooperation with the insurance industry. The US spends by far the most money on brand name medication, especially compared to countries like Japan, Canada or The United Kingdom. More than half of Medicare Part D spending can be attributed to only 79 single-source, brand name medications.
The Trick To American Healthcare: Don’t be poor
The shortcomings of the American healthcare system overview don’t burden all of its citizens equally. It is usually the poorest, most vulnerable communities that are worst affected. Amongst those, women of color suffer the most – having higher infant and maternal mortality rates, as well as being given less care and insufficient pain management.
Another obstacle for poorer Americans who manage to get insurance is deductibles. Out of pocket expenses and deductibles are symptomatic of the US insurance market. American households that make 150% over the poverty line spend about a third of their annual income on healthcare, sending them back under the said line. The Affordable Care Act aimed to increase healthcare coverage but compromised by raising deductibles and premiums, which in return hurt some households more than it helped.
Bills, Bills and more Bills
Medical bills are such a big problem for Americans that medical bankruptcy has been the number one reason people go bankrupt since 2014. Even those who have insurance can fall into medical debt, especially when unexpected medical bills and low coverage plans come into play.
Americans sacrifice a lot to be able to afford medical coverage and care. One in six Americans says they have put off vacations, had to cut household spending, avoided necessary household purchases or depleted their savings to pay medical bills in the last 12 months. Those that do not have the money or cannot go into debt can resort to putting off care, waiting until their conditions get worse or even not taking their medicine as prescribed, all due to the high costs.
Insurance and the dreaded pre-existing condition
In order to get medical insurance, people have to hand in their existing medical records and can sometimes be refused insurance because of preexisting conditions. The consequence of this practice is that disabled and chronically ill people who need a lot of medical care cannot get insured. Out of those who say they cannot afford their prescription medication, 35% have to take 4 or more medications at a time. The Affordable Care Act made it illegal to refuse to insure people with preexisting conditions or to raise their insurance premiums. However, the current Republican administration is working on dismantling the ACA and is pushing for preexisting conditions to be excluded in some states
Solutions that can get the American Healthcare systems head out of its ass
An important concern when introducing universal healthcare coverage is the risk of inflating the prices of medications. The European Union implements a system of price anchoring in insurance negotiations called the External Reference Pricing System. This system stops price inflation by taking international averages for certain drug classes and insisting that all price negotiations be tied to these.
The implementation of a similar system in the US could be the key to the successful introduction of Medicare for All. Research conducted in 2018 analyzed prices of drugs that were sold in 2 or more countries besides the US and found that implementing a price referencing system that uses averages tied to international prices could reduce medication spending by 67%.
Another way to combat the shortcomings of American healthcare is by investing in other social programs like housing and welfare. Namely, according to multiple JAMA studies, American healthcare system problem costs and emergency room visits per homeless individual could be gravely reduced by providing them with housing, case management, and addiction counseling.
Economists agree that when it comes to industries that produce sufficiently large externalities, a government-imposed monopoly can be the most economically effective solution. Healthcare is one of those industries because the positive effects of a healthy population are far-reaching and impossible to measure completely using market mechanisms. Therefore it is in the best economic interest, not just social interest, for the government to provide healthcare to the whole population.