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Mending our health system

Dale Satre, Up in the air

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Americans boast about our country’s number one achievements, but when it comes to healthcare, we shirk in shame. The Organization for Cooperation and Economic Development (OCED) showed Americans paid $10,209 per citizen for healthcare last year through taxes and out of pocket expenses. In 2016, our federal and state governments alone spent 8.5 percent of gross domestic product on healthcare, which is consistent with other developed nations. However, the real blow came with private spending on healthcare, which was 8.8 percent of GDP. The average for other developed nations was only 2.7 percent.

 

What we get in return is a Shakespearean tragedy. Americans lost 15,267,720 lifetime years in 2016 to premature deaths, according to the OCED. We have lower life expectancies than citizens of developed countries while having higher rates of infant mortality, heart disease, diabetes, and respiratory illness. As populations age and we are burdened with costs for drugs ($1,174 per citizen on average), emergency room visits ($1,917), and medical debt ($9,255), conversation over healthcare reform is rabid.

 

Washington’s metric for the Affordable Care Act’s — commonly known as Obamacare — success has been the increasing number of Americans with health insurance, but the laws of economics are winning against the laws of Congress. Counting on healthy people to cover costs of the chronically sick doesn’t work because healthy people don’t buy the insurance necessary to support the business model. Many private insurers that originally pushed for Obamacare simply can’t break even.

 

The Wall Street Journal recently examined one case in a La Crosse, Wis. hospital. As a physician-led nonprofit, the hospital raised knee surgery prices by three percent annually on autopilot until the price was over $50,000. The hospital tallied labor, facilities, and equipment expenses: the price was brought down to $8,700. At Vox Media, citizens submitted bills such as $25,000 for an MRI scan, $629 for a band-aid, and even a $39.95 fee for mothers to hold their babies after birth. Private insurance companies often only cover a low fraction of these costs.

 

The consolidation of providers to a fewer number of entrenched health management organizations (HMOs) and insurers, fueled by taxpayer subsidies, is an American nightmare. Patients rarely know the true prices until they get the bill, and their choices as consumers are limited by their insurance network. By processing regular checkups and primary care purposes through a bureaucracy meant to protect against high cost rare events, the system wildly overcharges for services that other countries’ socialized programs provide much more efficiently.

 

Whether America decides to keep private health insurers or ultimately go to socialized medicine, we must address an industry that is politically and economically well-endowed. The biggest return on investment would be reforming how the government regulates insurers and HMOs. Currently the government funds any procedure that hospitals deem “reasonable and necessary.” There aren’t even federal guidelines to classify identical procedures across different hospitals. The other facet of reform is transparency in out-of-pocket costs. Hospitals must be contractually obliged to disclose full costs upfront, like any other product, letting patients evaluate choices for themselves. What Obamacare’s marketplace tried to do for insurance should be done for hospitals.

Restructuring how the government disburses healthcare funds and patients’ right to choice will spur political angst on both sides as we debate how much the taxpayer should spend for different cases of operations. It’ll even come around to the question, how do we assess the value of a patient’s life? Any healthcare system must answer these questions if it is to survive economically. Just throwing money at the problem isn’t going to fix it. Having taxpayers subsidize any industry without a spending limit is insane: Americans cannot have the cake and eat it too. Reforming healthcare is an uncomfortable but necessary conversation for all citizens — our lives depend on it.

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Mending our health system