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Essay4COMM9-FINAL.docx
Rising Health Care Costs in the US
INTRODUCTION
A quick Google image search for “US medical bill” will show pictures of grotesque amounts of money being charged for any and all medical services in the US. These pictures are representative of the wasteful and excessive costs of for-profit healthcare in the US. Unfortunately, the US spends the most out of any of the 36 countries of Organization for Economic Co-Operation and Development (OECD) on healthcare at $3.65 trillion dollars in 2018 (Center for Medicare & Medicaid Services, 2018). If the US spends so much on healthcare, one would assume the US should have better outcomes. However it’s the exact opposite; the US has more than double the preventable mortality than the best performing nation, Switzerland (Schneider, 2021; Yu, 2016). Other metrics of healthcare quality, such as infant mortality, treatable mortality, and life expectancy is the lowest of all OECD nations. (Schneider, 2021). This difference highlights the inefficiency and excessive costs of the current healthcare system in the US. In an attempt to address this issue, the Affordable Care Act (ACA) was signed into law in 2010, to make healthcare more affordable by overhauling the medical insurance market; however, it was ultimately ineffective in addressing the core issue of rising healthcare costs. While an admirable effort, the ACA was not sufficient to address the excessive healthcare costs of the US population; the US should move to a Single Payer Healthcare system by expanding the coverage of the current Medicare system to reduce the financial burden of healthcare costs for the population and improve outcomes.
PROBLEM DESCRIPTION
The ACA remains woefully inadequate both in its coverage and impact, and the minimal gains from ACA is not enough to justify maintaining the status quo. The Affordable Care Act was signed into law in 2010, with its major provisions coming into force in 2014 - which includes prohibiting insurers from denying coverage to any individual based on pre-existing medical conditions/gender and expanding medicaid eligibility (Binckes, 2010). While the number of uninsured Americans have fallen with the introduction of ACA from over 45 million to 30 million, 30 million Americans still remain without any form of health insurance - and millions more are considered “underinsured”, meaning their coverage is insufficient to cover major health events. (Crowley, 2020). Likewise, prior to ACA, 9% of healthcare insurance did not cover any prescription medicine, and the insured had to pay the full cost out-of-pocket (Binkes, 2010). After the ACA mandated essential prescription drug coverage, the unfortunate side effect was skyrocketing drug prices; for example, the price of insulin had more than tripled since the introduction of ACA (Cohen, 2021; Conti, 2020). While the ACA mandates the drugs be available, it does not cap the price at which the drugs are offered (Conti, 2020). That is why the US remains the highest in pharmaceutical spending as of 2020 compared to other OECD nations even after implementation of ACA (Crowley, 2020). To summarize, ACA expanded coverage but the coverage was inadequate both in quantity and quality; ACA made more prescriptions available but the prices became unaffordable. With continually rising prescription prices, it is not justifiable to maintain the status quo - soon, coverage itself can become meaningless because the average American will be unable to afford anything beyond the coverage. And if one was not covered? That’s the basis of this essay, as described in the next paragraph.
PERSONAL IMPACT
The lack of affordable health care coverage is important to me because I was very close to being stuck in debt due to my own procedure due to a lack of coverage. An everyday check-up turned into a cardiac procedural nightmare, for I was thrown into a world of specialist visits, multiple echocardiogram procedures, cardiac MRIs, and topped off with a full on cardiac cath to close my atrial ventricular septal defect. When the final bill came in, I was in for a surprise: the total bill of the procedure and one-night overnight stay came out to $275,000. It’s fine, I thought, because I have insurance through my work. My max out-of-pocket should have been $1,200. However, when I called to inquire about my bill, the billing specialist notified me that I was considered uninsured, and that she could put me on a payment plan of $1,000/month for the next 22 years. I was floored - how could that be? I was living just above paycheck-to-paycheck, managing to save a couple hundred each month. $1,000/month would wipe that out completely, and I would have to work overtime simply to make the ends meet. In the long run, it would have been cheaper to fly first class to Switzerland ($32,000 for a round trip at the time of writing), stay at a five-star hotel ($800/night for 3 nights), and pay cash for my procedure ($6,700 in Switzerland) than to have the exact same procedure done here in the US. Ultimately, I was able to figure out why I was considered uninsured, correct the bureaucratic error, and simply pay the $1,200. But this event gave me a glimpse of the extreme financial hardship an individual would have faced without any coverage. At the end of the day, I was fortunate enough to be spared from financial ruin. But that does not mean that other people will be as lucky.
AUDIENCE IMPACT
Everyone will get sick or hurt at some point in their lives, and that’s why the reader should care about this topic: in the US, getting sick or hurt is simply too costly, and the reader’s loved ones (or readers themselves) could be thrown into an inescapable medical debt after just a single procedure. One of the most common procedures done on the aging population is a cardiac bypass surgery (Jaul et al 2017). According to International Health Care prices comparison, as recently as 2017, a cardiac bypass surgery will cost an average Brit $24,440, while the American will pay over triple that amount at $78,100 (Hargraves et al 2017). It’s important to keep in mind that this is with insurance, the most common one being a high-deductible plan whose premiums are $21,662/year for a family of four after a $5,217 deductible (Hargraves et al 2017). However, the biggest bulk of medical spending would be via prescription medication. Take diabetes, for example - it is common in America, with over 35 million Americans having either type 1 or type 2 diabetes (Cohen, 2021). Diabetics are now being prescribed newer, more effective (yet costlier!) insulin at $250-$300 a vial and the average diabetic goes through 2-3 bottles per month (Cohen, 2021). That is a crippling cost, considering that insulin costs less than $4 per vial to produce (Gotham, 2018). If the reader knows someone with a chronic disease, or someone close to them who is getting older, it is likely they will face some sort of medical problem at one point in their lives. It is evident that with the current prices for medical care as well as prescription medication, the current system is overly costly with or without insurance. We need to fight for a solution, and a proven solution that is successful in other countries is single payer healthcare.
SOLUTION DESCRIPTION
The solution to the unsustainable rise in healthcare costs if the expansion of Medicare into Medicare for All, proposed by Senator Bernie Sanders. Medicare is a government national health insurance in the United States which currently covers Americans aged 65 years or older, and is funded by payroll taxes, premiums paid by Medicare enrollees and the general U.S. treasury (Cotton et. al, 2016). The solution is twofold: first, switch Medicare as the sole, nationwide insurance provider for all essential and preventative healthcare, and second, phase out all private insurance - the government will be responsible for paying private providers a pre-arranged rate for their services. This is in line with what Senator Bernie Sanders is proposing, as his Medicare for All campaign (BBC News, 2020). Medicare originally began under the Social Security Administration, but is now being administered by the Center for Medicare and Medicaid Services (CMS)(Cotton et. al, 2016). It is reasonable to expect that with the expansion of Medicare, the CMS will continue to be the party that carries out the solution. Medicare for All (MFA) is expected to cost $17.5 trillion dollars over the next decade, which is a hefty price tag considering the current US government spending is projected at $52 trillion dollars - an additional 33% increase over the current budget (BBC News, 2020). However, this $17.5 trillion dollars will be levied from various sources and not simply limited to solely on employee’s income tax (BBC News, 2020). Instead, the costs are covered through employer’s income tax, eliminating health tax expenditures, capital gains tax, corporation tax, and raising top marginal tax (BBC News, 2020). MFA will be overseen by the federal, not state governments. As a federal law, it does not give the states a choice in whether or not to enforce the bill. Ultimately the bill itself is a thorough way to address the core issue of rising health care costs, and not simply put a band-aid on the issue. At the same time, it is important to analyze and understand the finer details of the solution in terms of its feasibility and both positive and negative qualities.
SOLUTION ANALYSIS
MFA at this point unfortunately appears to be a lofty solution with great costs and even greater positive impacts - while the advantages of MFA is able to justify the costs, it does not appear likely to pass through Congress easily. Initial data from Americans appear to have a glimmer of feasibility: according to a Harvard-Politico poll, 68% of Americans support a National Health Plan, but this level of support is not currently reflected with congress - only 39% of Republicans and 54% of Democrats polled support MFA (Diamond, 2019; Zurcher, 2019). Realistically however, it would be reasonable to expect that the bill would have a tough time garnering Congress’ support. The limitation would lie in modification of the bill. In order to sway more Republicans and moderate Democrats, some compromises may need to be made - however, this then could result in ACA version 2, where too many concessions ultimately cripple the overall purpose of the bill, limiting its effectiveness. Left uncompromised, the bill has three distinct advantages: First, while the ACA helped cover more Americans (albeit arguably insufficiently) with health insurance, the MFA would cover every single American, and cover them well - there won’t be anyone that will slip through the cracks. Second advantage is that the healthcare costs are projected to reach $42.9 trillion dollars if the status quo is to be maintained; this is a distinct advantage in that MFA is projected to “only” spend $17.5 trillion dollars instead (Stankiewicz, 2021). Lastly, MFA would end medical debt and medical bankruptcies as it is designed to not have any deductibles, premiums or co-payments for care, keeping Americans healthy and productive unburdened by costs. Unfortunately, a distinct disadvantage is that at the same time, to achieve true universal coverage, coverage must be compulsory (Crowley, 2020). If coverage is compulsory, everyone must pay additional taxes to pay for it - an additional 6.2% tax, in fact (BBC News, 2020). However, while one would pay additional taxes, it is important to remember they no longer would have to pay any premiums or deductibles with MFA, which would more justify the increased taxes - for a taxpayer’s overall net income, implementation of MFA would mean a net gain overall for both the government as well as the individual American (BBC News, 2020).
CONCLUSION
It is clear that the maintenance of the status quo with the weak ACA would not only lead to greater costs, it would lead to greater deaths and greater pain (both medically and financially) for the average American. The solution would be to push for national health insurance, and fortunately there is no need to reinvent the wheel; the pre-existing system of Medicare could be expanded to include not only those 65 years or older, but everyone else as well. The focus on the $17.5 trillion price tag must be put into perspective, as the maintenance of the status quo is far costlier. As we get older, our health continues to deteriorate, and it is becoming more and more likely that we will get sick. The application of MFA will guarantee our health now and for the future, and despite its lofty goals, it is imperative to fight for an uncompromised version of MFA lest we fall for a second neutered bill like the ACA.
CITATIONS
Binckes, J., & Wong, N. (2011, May 25). Health reform bill summary: The top 18 immediate effects. HuffPost. Retrieved June 15, 2022, from https://www.huffpost.com/entry/health-reform-bill-summary_n_508315#s75147
Center for Medicare and Medicaid Services. (2018, December 15). NHE fact sheet. Center for Medicare and Medicaid Services. Retrieved June 15, 2022, from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet
Cohen, J. (2021, January 5). Insulin's out-of-pocket cost burden to diabetic patients continues to rise despite reduced net costs to pbms. Forbes. Retrieved June 15, 2022, from https://www.forbes.com/sites/joshuacohen/2021/01/05/insulins-out-of-pocket-cost-burden-to-diabetic-patients-continues-to-rise-despite-reduced-net-costs-to-pbms/?sh=1240ed9840b2
Conti, R. (2020, February 27). What's next for ACA's prescription drug market. QuestromSchool of Business Prescription Drugs and The Affordable Care Act 10 Years Later Comments. Retrieved June 15, 2022, from https://www.bu.edu/questrom/2020/02/27/the-acas-effect-on-the-prescription-drug-market-and-what-might-come-next/
Cotton, P., Newhouse, J. P., Volpp, K. G., Fendrick, A. M., Oesterle, S. L., Oungpasuk, P., Aggarwal, R., Wilensky, G., & Sebelius, K. (2016, November). Medicare Advantage: Issues, insights, and implications for the future. Population health management. Retrieved June 15, 2022, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5107672/
Crowley, R., Daniel, H., Cooney, T. G., & Engel, L. S. (2020). Envisioning a better U.S. Health Care System for all: Coverage and cost of care. Annals of Internal Medicine, 172(2_Supplement). https://doi.org/10.7326/m19-2415
Hargraves, J., & Bloschichak, A. (2019, December 17). International comparisons of health care prices from the 2017 iFHP survey. Retrieved June 15, 2022, from https://healthcostinstitute.org/hcci-research/international-comparisons-of-health-care-prices-2017-ifhp-survey .
Gotham, D., Barber, M. J., & Hill, A. (2018, September 1). Production costs and potential prices for biosimilars of human insulin and insulin analogues. BMJ Global Health. Retrieved June 15, 2022, from https://gh.bmj.com/content/3/5/e000850
Jaul, E., & Barron, J. (2017). Age-related diseases and clinical and public health implications for the 85 years old and over population. Frontiers in Public Health, 5. https://doi.org/10.3389/fpubh.2017.00335
Schneider, E et al., Mirror, Mirror 2021 — Reflecting Poorly: Health Care in the U.S. Compared to Other High-Income Countries (Commonwealth Fund, Aug. 2021). https://doi.org/10.26099/01dv-h208
Yu, J. (2016). Avoidable mortality and healthcare expenditure in OECD countries: DEA and SFA methods to Health Expenditure Efficiency. Journal of Advances in Social Science and Humanities, 2(5). https://doi.org/10.15520/jassh20561
Note: I apologize for not having enough time to cite the rest of my sources, which are here but not listed in APA format
Costs and justification of MFA
https://www.bbc.com/news/516 HYPERLINK "https://www.bbc.com/news/51662741"62741
68% of Americans support a national health plan (Diamond, 2019)
Will Medicare Succeed? (Zurcher 2019)
https://www.bbc.com/news/world-us-canada-47821997
How much would Medicare cost? (BBC News 2020)
https://www.bbc.com/news/51662741
(Mike Stankiewicz, 2021)
