New Bill to Lessen the Pain of the Dysfunctional U.S. Healthcare System is a Reminder of Its Critical Flaws

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.

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Latest Data Confirm the Increased Frequency of Extreme Weather Events Over the Past 3 Decades

A direct consequence of climate change.

New data show that extreme weather events have become more frequent over the past 36 years, with a significant uptick in floods and other hydrological events compared even with five years ago, according to a new publication, “Extreme weather events in Europe: Preparing for climate change adaptation: an update on EASAC’s 2013 study” by the European Academies’ Science Advisory Council (EASAC), a body made up of 27 national science academies in the European Union, Norway, and Switzerland.

[…]

Globally, according to the new data, the number of floods and other hydrological events have quadrupled since 1980 and have doubled since 2004, highlighting the urgency of adaptation to climate change. Climatological events, such as extreme temperatures, droughts, and forest fires, have more than doubled since 1980. Meteorological events, such as storms, have doubled since 1980.

These extreme weather events carry substantial economic costs. In the updated data, thunderstorm losses in North America have doubled — from under US$10 billion in 1980 to almost $20 billion in 2015.

[…]

The update also reviews evidence on key drivers of extreme events. A major point of debate remains whether the Gulf Stream, or Atlantic Meridional Overturning Circulation (AMOC), will just decline or could ‘switch off’ entirely with substantial implications for Northwest Europe’s climate. Recent monitoring does suggest a significant weakening but debate continues over whether the gulf stream may “switch off” as a result of the increased flows of fresh water from northern latitude rainfall and melting of the Greenland icecap. EASAC notes the importance of continuing to use emerging oceanographic monitoring data to provide a more reliable forecast of impacts of global warming on the AMOC. The update also notes the recent evidence which suggests an association between the rapid rate of Arctic warming and extreme cold events further south (including in Europe and the Eastern USA) due to a weakened and meandering jet stream.

New Potential Asthma Treatment Through New Understanding of Airway Closure

Asthma is a consequence of rising air pollution, and new approaches to the problem like this can help those who suffer from it. It’s a disease estimated to cost the U.S. economy about $80 billion a year, which is an amount equal to about $635 per U.S. family.

Houston Methodist researchers have a new explanation for what causes the lungs’ airways to close during asthma attacks that could change the lives of the 300 million people worldwide who suffer from asthma. The discovery holds promise for developing a new class of drugs that is radically different from the steroids currently used to treat it.

Led by Xian C. Li, M.D., Ph.D., and his colleagues in the Immunobiology and Transplant Science Center at the Houston Methodist Research Institute, the study is in the Feb. 5 issue of the Journal of Experimental Medicine, one of the oldest journals in medicine.

One of the key features of asthma is an overproduction of a highly sticky protein secreted by the mucous membranes of airways in the lungs, called mucin, which leads to plugging up the small airways and stopping air from traveling in and out of them. This leaves patients out of breath and, oftentimes, causes them to gasp for air.

Li and his team discovered an interaction between two molecules that can be manipulated to solve this problem. “If we can do this and develop better and more specific drugs to selectively stop super-enhancers, asthmatic patients may never have to struggle for air again,” he said.

[…]

“Finding new approaches to target and block super-enhancers may provide a new means of treatment for asthma patients that is likely to be more efficacious than the standard of care, which is now steroids,” Li said.

The Misconduct of the “World’s Most Admired Companies”

In terms of misconduct, usually what is found among the biggest multinational corporations is exploitation and benefits from immense public subsidy without providing adequate returns to the public. There are numerous examples showing that to be true, but they often manifest as the use of super-exploited workers and the highly profitable use of technology that was originally developed through public investment.

For example, Walmart long hasn’t paid workers living wages, resulting in those workers (among other things) having to use publicly-funded programs such as SNAP. Then there’s computers, which were developed in large part through taxpayer-funded research at the Department of Defense in the latter half of the 20th century. And speaking of the military, Lockheed Martin’s weapons manufacturing has been complicit in U.S. war crimes that violate international law for decades, and Lockheed likely wouldn’t even exist today if it hadn’t been bailed out by the public under the Nixon administration in 1971.

Literally trillions of dollars worth of taxpayer research and subsidies over the past several decades has been fundamental to the advancement of industries such as the aerospace industry, the computer industry, the pharmaceutical industry, the biotechnology industry, and the telecommunications industry. Much of this taxpayer funding into developments that otherwise probably wouldn’t exist today has often translated into the phenomenon known as public costs and private profits, which is hardly a fair return on investment.

Fortune magazine recently released its 2018 list of the World’s Most Admired Companies. From a pool of roughly 1,500 candidates, Fortune picked the 50 “best-regarded companies in 52 industries.” Apple topped the list for the eleventh year straight. General Electric plummeted in the last year from number 7 to number 30. Lockheed Martin and Adidas both cracked the top 50 for the first time.

Of course, Fortune’s ranking is somewhat skewed and self-serving. It is based on a survey of corporate executives and financial analysts. “Admiration” is measured according to criteria that emphasize companies’ financial shape over their track record of integrity and business ethics.

So, we took it upon ourselves to document the dark side of the world’s 50 most admired companies. Ten of the companies are in our Federal Contractor Misconduct Database (FCMD), which includes civil, criminal, and administrative misconduct instances dating back to 1995 for 220 of the federal government’s largest contractors. All but 3 of the top 50 are in Good Jobs First’s Violation Tracker corporate misconduct database, which includes enforcement data from the federal regulatory agencies and the Justice Department dating back to 2000 for over 2,800 companies. Both databases show that most of the companies have multiple instances of misconduct for which they paid millions of dollars in fines, penalties, judgments, and settlements.

Unfinished Coverage of the Obesity Epidemic

The statistics on the epidemic of too many people being obese and overweight are disturbing. There are reports finding that — within a decade — the number of people who will be overweight or obese will be about a third of Earth’s total human population. That makes it a significant issue of public health costs, but it’s unsurprising that the corporate mass media hasn’t given this (or a number of other problems) much coverage. The latest idiocy appearing out of today’s Oval Office is too often granted precedence instead.

As is the case frequently enough, the United States provides an extreme example of this world trend of rising obesity rates. A recent study by the Centers for Disease Control and Prevention found that the American obesity epidemic is at a record high, with almost 40 percent of adults being considered obese. Over two thirds of Americans were also found to be overweight or obese, and of those, about a fifth of American adolescents fit in the obese range.

The costs associated with the American obesity problem have been estimated at $190 billion annually, or an amount that’s about 1 percent of GDP and nearly twice the annual budget of the Department of Education. This amount may of course rise even higher if obesity rates continue expanding.

While the costs are difficult to quantify, as it’s difficult to truly attach monetary costs to the overall well-being of livelihoods, there’s ample evidence to conclude that a lot of people being too overweight is a serious problem. It’s therefore time to more actively discuss solutions.

For starters, all products containing sugar could be required to have a daily recommended limit of 50 grams of sugar labeled on the package. That’s about the amount of sugar the World Health Organization recommends people limit themselves to daily. The sugar industry has of course tried to prevent these sorts of labels, as they represent a threat to their profits — even as the lack of them continues to take its toll on public health.

Beyond sugar being “empty calories,” there is bitter proof that an excess consumption of sugar has inherently negative effects. An overabundance of sugar consumption accelerates the decay of teeth, often causes undesirable weight gain, raises risks for a lot of diseases, and presents problems from potential cognitive damage to a higher chance of developing various consequential health conditions. A study recently released even discovered a correlation between sugar intake and worsened outcomes from cancer. The study’s lead researcher said that “Our research reveals how the hyperactive sugar consumption of cancerous cells leads to a vicious cycle of continued stimulation of cancer development and growth.”

The important point about sugar being raised, it’s also worth noting that the direct cause of weight gain is typically the continual intake of more calories than is burned off. A pound of fat is about 3500 calories, so the excess consumption of those is obviously contributing to more pounds. What a lot of people do not realize though is that a pound of muscle burns a higher amount of calories than a pound of fat does, even at rest. Aerobic exercise (such as running) is regularly seen as a way of losing weight, but anaerobic exercise (such as doing pushups) is primarily what will create the muscles that could prevent a lot of weight gain to begin with.

Saving $1.5 Trillion Annually on Healthcare

Bringing the per capita costs of U.S. healthcare in line with other wealthy countries would save over a trillion dollars a year.

Austin Frakt and Aaron Carroll had an interesting Upshot piece in the NYT on why the U.S. spends twice as much per person as other wealthy countries for its health care. The piece cites research pointing out that people in the United States do not use more health care services than people in other countries. The reason that we pay more for health care is that actors in the industry, such as doctors, drug companies, insurers, and medical equipment manufacturers, get more money than their counterparts elsewhere.

The piece concludes by noting a couple of mechanisms for containing costs, but then argues:

“If attempted nationally, or even in a state, either of these would be met with resistance from all those who directly benefit from high prices, including physicians, hospitals, pharmaceutical companies — and pretty much every other provider of health care in the United States.

“Higher prices aren’t all bad for consumers. They probably lead to some increased innovation, which confers benefits to patients globally. Though it’s reasonable to push back on high health care prices, there may be a limit to how far we should.”

It’s striking to see economists reluctant to use mechanisms that would bring payments in the health care in line with payments in the rest of the world because they “would be met with resistance from all those who directly benefit from high prices.”

Efforts to reduce trade barriers that had the effect of destroying jobs and cutting pay for autoworkers, textile workers, and other manufacturing workers were also met with resistance. Economists not only supported these efforts, they treated them as an almost holy cause. They insisted on “free trade,” as the ultimate good.

For some reason, Frakt and Carroll believe that comparable efforts (we can also use trade in the health care sector to reduce costs) to reduce excess payments in the health care sector are a bad idea because the people who would see their pay and income reduced will be unhappy. In this context, it is probably worth mentioning that there is hugely more money at stake in bringing our health care costs in line with the rest of the world than with reducing trade barriers with items like steel and cars. The latter can save us at most a few tens of billions a year. If we paid the same amount per person for health care as people in Canada or Germany, the savings would be more than $1.5 trillion annually, more than $4,000 per person per year.

Financing Prescription Drugs Using a Different System Without Harmful Drug Patent Monopolies

A new study finds that scientific breakthroughs are significantly as a result of collaboration. It used the development of five anti-cancer drugs to show how important researchers sharing information was, and it also strengthened the notion that beneficial scientific research tends to advance fastest when the results are fully open to view.

The study is evidence against the pharmaceutical research financing failure that is drug patent monopolies. Pharmaceutical corporations have an incentive to share as little of their research as possible to be granted their drug patent monopolies, as doing otherwise would risk threats to their profit margins through not receiving the patent. If the research findings are kept hidden from the public in this type of example, there is also a waste of resources to develop another similarly effective drug. This is notably seen with the Hepatitis C drug Sovaldi, which costs $84,000 for a 12 week course of treatment because the Gilead Sciences corporation has a patent monopoly on the drug. This is usefully contrasted with a high quality generic of Sovaldi selling for only $200 for the same three month course of treatment in India.

The U.S. government has the power to arrest people who sell Sovaldi in competition with Gilead Sciences, so the Abbvie corporation developed its own Hepatitis C cure drug known as Mavyret. Sovaldi was already an effective drug at curing Hepatitis C though, so the researchers that developed Mavyret could have been focused on other important research. This is, of course, a phenomenon that is continuously repeated with other drugs, and it prompts the logical conclusion of using a different system to finance pharmaceutical research.

A more ideal system would be to make drug patent monopolies illegal and have the U.S. government directly finance pharmaceutical research. The U.S. public already funds the National Institutes of Health with $30 billion annually, and even the pharmaceutical industry admits that is money well spent. PhRMA, the industry trade group, puts the amount that the pharmaceutical corporations spend on yearly research and development at only a somewhat higher total of $70 billion. This is in light of an important study revealing that pharmaceutical corporations spend more on stock buybacks that benefit the wealthy than they do on research and development. That is in light of the U.S. set to spend $450 billion (2.4 percent of GDP) on prescription drugs in 2017, an amount that would be $370 billion — half of the latest U.S. military budget approval — less if the patents and related unjust protections were removed from the pharmaceutical industry.

These large expenditures are especially significant considering that it’s been estimated that the U.S. will spend an even higher $610 billion a year on prescription drugs by 2021. With the current pharmaceutical system, that will mean that the U.S. could be spending about $120 billion on prescription drugs in 2021 instead of $610 billion.

The $370 billion possible to save currently though could be used in a variety of more productive ways than granting it to the pharmaceutical industry under the current financing system. For one example, the budget of the NIH could easily be boosted by a factor of five, making it $150 billion a year. What money remains is possible to spend on productive investment programs, such as an infrastructure project for clean and renewable energy. The U.S. economy is not doing that well for most of its people, but a significant improvement to that should be well-known — government investment to stimulate more demand.

The research done by the NIH could of course remain fully open for pharmaceutical companies and other organizations to use to develop drugs. Developed drugs could then be sold inexpensively without patent monopolies and the other unjust protections, which is how it should be done considering that prescription drugs are usually cheap to produce after their research process is completed. The firms developing valuable drugs should be rewarded for their innovative efforts, and they could be through the combination of governmental contracting, a publicly-funded prize system, and the demand of markets. That would almost certainly be a more beneficial system for the public interest than the current drug patent monopoly scandal, which is inefficient at advancing vital research and leaves many millions struggling to afford unnecessarily costly prescription drugs.

Thugnificently

In his own (admittedly questionable) way, Thugnificent wasn’t a sucker for the pharmaceutical industry’s tricks. You shouldn’t be a sucker for their tricks either. [Image is from S3E12 of The Boondocks.]