Massachusetts Senator Elizabeth Warren has introduced a bill that attempts to “curb pain” emanating from the corrupted for-profit healthcare system of the United States. Among other things, the bill’s provisions would implement helpful but admittedly inadequate measures, such as making it illegal for insurance companies to revoke a patient’s plan during their course of treatment. There could of course be many reminders about the more critical flaws of U.S. healthcare made in relation to this.
For one, the U.S. spends about twice as much on healthcare compared to other wealthy countries such as Canada, Britain, and Germany. If that spending — which is annually $3.4 trillion ( about 18 percent of annual U.S. GDP) — was reduced by around half, it would be an enormous savings that (all else unchanged) would actually have the U.S. running substantial budget surpluses.
That isn’t to say that budget surpluses are necessarily good (budget deficits can be helpful and natural), but it’s to point out that subtracting the almost $700 billion ($5550 per U.S. household) in budget deficit totals that the U.S. ran in fiscal year 2017 from a $1.7 trillion in healthcare savings would still be about a trillion dollars of budget surplus. It’s strange how rarely this simple point enters the mainstream press, what with the irrational and even harmful attention corporate media such as the Washington Post has given to budget deficits. More importantly though, it’s over a trillion dollars that could be spent productively elsewhere in the economy instead of harmfully allowing health insurance corporations receive it.
Interestingly enough, Berkshire Hathaway, Amazon, and JP Morgan Chase announced plans earlier this year to jointly form a healthcare company for their employees that’s “intended to be free from profit-making incentives.” This is another revealing insight into why a for-profit healthcare system is too flawed to function well — building a healthcare system around corporate profits simply raises the costs too much. The executives at those three corporations aren’t the only parts of the business community to understand this as they seek to reduce their own expenses.
Businessman Warren Buffett has even admitted that single-payer is “probably the best” healthcare system for the U.S. He has made a comparison between U.S. healthcare in 1960 and in 2017 — in 1960, U.S. healthcare spending was only five percent of annual GDP, and almost 60 years later there’s been almost a four fold GDP-based increase in healthcare spending. This reveals again that the amount of resources being devoted to the overall mediocre U.S. healthcare system is excessive.
The for-profit element of the system has other consequences outside of direct economic costs though. One of them is unnecessarily lost lives, with strong evidence finding that over 20,000 people die a year in the U.S. due to being unable to afford health insurance. It is simply a major moral disgrace that world history’s wealthiest country suffers from such a problem.
Also disgraceful is the staggering number of medical bankruptcies per year in the United States. The amount of those per year has been estimated at hundreds of thousands in the U.S. alone (far more than other wealthy countries) and medical bills have been a leading cause of Americans filing for bankruptcy for years. All other OECD countries besides Mexico have universal healthcare and have a much more efficient healthcare system to prevent many of those problems to begin with.
For a practical example, Medicare (a predominantly single-payer healthcare service run by the government) has administrative overhead costs of about 1 to 2 percent, which is usefully contrasted to the 12 to 20 percent overhead costs typically run by the for-profit health insurance industry. This is because inefficiently having thousands of different healthcare payer plans necessitates higher bureaucratic costs with too much paperwork.
And another notable part of the high U.S. health costs is due to the ridiculous prices of prescription drugs there. In 2017, the U.S. spent $450 billion (2.4 percent of GDP) on prescription drugs, an amount that could almost certainly be reduced by about $370 billion ($2930 per U.S. household) by having prescription drugs sold without patent monopolies and other unjust protectionist measures. In a time when at least nearly one in five Americans are unable to afford their medications adequately, this proposal for savings should be considered much more.
It should also be noted what happens an extreme amount of undeserved resources are diverted to harmful corporations such as the pharmaceutical ones. Pharmaceutical companies — such as Purdue Pharma — have used their excess profits to manufacture an opioid crisis (to seek even more profits) through flooding economically downtrodden communities with highly addictive opioids. This has resulted in opioids becoming the leading cause of death for Americans under 50, and it’s also largely been what’s resulted in a decline in the average U.S. life expectancy rate, a phenomenon that’s probably otherwise unheard of in other wealthy nations in the 21st century.
In all, the U.S. healthcare system suffers from significant problems that will require more than tweaking around the edges to solve. Its system requires a major alteration, and the sooner that happens, the less health-based suffering among its people there can be.