Archive for the ‘Healthcare’ category

Which Consumer’s Interest In Mind?

February 14, 2020

If one can read and ask relatively simple questions, one can realize that not only is American healthcare expensive, it is so by a factor of 2, the most expensive healthcare in the world.  About 15% of this healthcare expense falls on drug expenditures.  Hmmm. 

When Obamacare was being debated, pharmaceutical companies lobbied long and hard that (1) their proportion of healthcare costs was small, (2) their profits were necessary to maintain the army of researchers working to find new cures, and (3) pharmaceutical companies would do all that was possible to keep drug prices as low as possible… so don’t attack drug prices in Obamacare.

Twelve years later the evidence points to drug prices as the most egregious part of the unseemly high overall healthcare cost.  Maybe a case can be made for sky high prices for newly developed wonder drugs, but drug companies have engaged in all sorts of schemes aimed at raising drug prices and extending the time these drugs were under patent protection.  So much for Mr Nice Guy.

How much is too much profit?  In a free and open society that is a question beyond definition.  Capitalism demands any company to price their products for maximum profit (units sold x profit per unit).  So what can a free economy do to reign in this predatory behavior?

Here are three ideas.

  • Patent Protection.  This is the shot across the bow to get the industry’s attention. Patents are granted by governments, giving monopoly status to the drug company for some period of time.  Shortening the monopoly period will bring on competition and competition normally lowers prices.

 

  • Offering/withholding government money.  This is the carrot and stick approach to gaining more favorable industry behavior.  The US government could offer universities and drug companies grants to underwrite drug research.  For example, in addition to making funding available or not, government could make the grants contingent upon drug selling prices no higher than “X” in return for government financing.

 

  • Worldclass pricing.  This is the hammer where Government enters the pricing decision.  Government funded healthcare plans should expect the lowest price available “in the world” for a specific drug.  Drug companies would have the choice (1) raise the prices of their drugs sold overseas or (2) lower the prices charged in the US.  Most Americans do not realize the US companies sell the same drug overseas (Canada included) for less than the charge US citizens. 

Any plan to reduce the overall US healthcare cost must proceed deliberately but cautiously too.  HOverall healthcare represents over 1/3rd of the US economy and unforeseen consequences could materialize if draconian measures are used as solutions to the overall healthcare cost dilemma.  Further, healthcare availability varies across the US and “one size, fits all” solutions could adversely impact many Americans. 

On the other hand, drug prices can more easily be done in a “one off” manner.

Pharmaceutical companies have been very righteous in their advertising.  Their advertising strategies reflect the industry as dedicated life savers  The opioids tragedy showed the underbelly of the industry where greed and profits ruled. 

It is time for no more Mr Nice Guy. 

Next Stop Iowa

January 8, 2020

Today, Elizabeth Warren scored a lot of minutes on MSNBC.  Warren was gratuitously tossed some softball questions which allowed the Senator to share her ideas on major campaign issues.  She did well, IMO, and provided believable scenarios, but missed the point with healthcare.

Healthcare should be a slam dunk for Warren or any Democrat.  Today American healthcare is the most expensive in the world and still does not cover all Americans.  US healthcare cost twice as much (per capita) as two dozen other industrial countries and delivers mediocre results when compared to these countries.  Most galling is that medications produced by US companies are available in other countries at lower prices than in the US.  Hmmm.

Warren, however, emphasized how she would provide universal coverage (Medicare For All) with out raising taxes on the middle class.  Taxing wealth Americans and Corporations was her prescription.  In otters words, Warren offered the same high priced healthcare with no new taxes.  Hmmm.  IMO, Warren is missing the point on healthcare.

All Americans find the cost of healthcare too expensive.  Many Americans find they can not afford prescription drugs.  And too many Americans find healthcare is not available due to pre-existing conditions.  Focusing on solving those defects will garner votes.  How to pay for it is a detail.

Elizabeth’s Pickel

October 18, 2019

Senator Elizabeth Warren has drawn some criticism for her performance at this week’s Democrat Debate.  The criticism centers on Warren dodging the answer to the question “will taxes increase for middle class families if Medicare For All is adopted.  There are many answers Warren could have given but none that fit the frame work of a televised debate with 11 other hopefuls.  Here’s Warren’s problem.

The most fundamental question should be “is healthcare a right” or “is healthcare a privilege”?

If healthcare is a privilege, then the path forward leads to “the best healthcare money can buy”.  If someone has the money, they can have access to the best healthcare available in the US.  If someone does not have the money, then the healthcare available is to be found in whatever safety net programs Employers and Congress enact or at the Emergency Room.

If on the other hand one believes healthcare is a right, then the question arises what is the best method to deliver healthcare.  And here begins the pickle.  Healthcare is not free and must be paid for.  And, healthcare will cost middle class Americans more next year regardless of whether there is a “Medicare For All” option or not.  

So how should Warren have answered the question?

How about, “I don’t know but I am sure asking if taxes are going up is the wrong question.  Income taxes could increase but middle class Americans’ healthcare costs might go down”.  “Here’s why.  Medicare For All is an aspirational proposal whose goal is to provide healthcare to all American residents at existing quality levels or better and at steadily reducing costs.  Under Medicare for All, there should be no exclusions for pre-existing conditions or life time monetary limits on benefits.” 

And why not, all other modern industrialized countries provide their residents basic healthcare with health outcomes equal to or better than the US, and experience a national expenditure that is one half what we spend in the US, so why can’t the US do the same?”

Warren could have said, “And even if there are reasons we can’t achieve a 50% reduction (and still provide equal or better care), there is a lot of room to cover the costs of the 20% of Americans under or uninsured.”

These “best in class” healthcare delivery systems which cost about one half what the US pays have (1) a far greater emphasis on preventive health care, (2) negotiate healthcare providers costs nationally, and (3) offset much of the actual healthcare costs with a consumption based tax (VAT) which involves all of its residents in sharing the healthcare cost burden.   

Finally, Senator Warren might have said, “healthcare costs are bankrupting America.  Over two dozen other countries have found ways to deliver equal or better healthcare outcomes at one half the total amount the US spends.  Why can’t we do the same.  If you do not think healthcare should be a right (which of course must be paid for), I can only say I sincerely disagree with your view.  If you hold this view and are relaxed because you receive your healthcare insurance from your employer, I have bad news for you.  Global competitive market pressures are slowly making your employer uncompetitive and over the coming years more and more companies will be ending healthcare coverage.

So the wiser goal is not just insuring all Americans, but rather insuring all Americans at a cost approaching one half of what we are paying today insuring 80% of Americans.

Shh, Who’s In My Pocket

September 30, 2019

Amid all the ruckus this week over the Trump extortion-like telephone call with the Ukrainian President, there was a Kaiser Healthcare news release picked up by most newspapers including the Wall Street Journal which quickly became “below the fold” news.  The article revealed the continuing rise in employer provided healthcare insurance cost, this time topping the $20,000 a year cost tag.  Hmmm.

The article went on to point out that on average the insured paid about 1/3rd of this cost through deductibles and co-pays.  That means that on average, Americans who obtained their insurance through work were paying about $6000 per year.  Hmmm.

As is always helpful in these matters, US minimum wage is $7.25 per hour or $15,080 per year.  So if one is employed at minimum wage, healthcare cost would amount to 40% of your “before tax” annual salary.  The average annual income is $59,039, so healthcare cost for those earners is about 10% of “before tax” income.  Hmmm.

These are just interesting statistics unless you believe healthcare is a right.  I mean a right like access to water, clean air, and safe streets.  Healthcare is not free just like water, air, and safety.  Everyone must pay in some way.  But it should be clear that with healthcare everyone cannot afford to pay the same amount.

Some politicians would suggest the problem lies with “high cost” insurance and Americans ought to be able to buy stripped down policies.  Really!!! How does buying less healthcare with second class healthcare insurance make everyone equal?

If one has “employer provided” health insurance, the new $20,000 threshold represents another hand in ones pocket.  The employer isn’t paying for the employees health insurance, the employee is.  The employee’s wages are artificially lower by the amount the employer pays not just the amount co-pays and deductibles represent.  And why is that important?

Healthcare spending in the US is twice as much as two dozens other modern industrial countries and the healthcare outcomes are no better.  With people thinking that healthcare is free (since healthcare insurance comes with their job), who cares.

Basic healthcare has become a right for most people’s expectation.  What’s needed is for Americans to realize that not all Americans are covered, the quality of healthcare service varies widely across the US, and the price Americans are paying for healthcare is increasing each year at a pace far greater than the rate of inflation.

It is time to realize, “who’s in my pocket”?

Healthcare’s Inconvenient Truth

August 20, 2019

Democrats have been trying to make “healthcare” the 2020 Presidential election campaign theme.  “Medicare for All” and “Public Option” have been packaged as the banner the party should hoist against President Trump.  But for many, these words evoke fears of what they might be giving up if the Government is asked to provide healthcare for all residents.

To be sure there is no guarantee that an expanded “Medicare” healthcare system would provide trouble free healthcare for all.  Maybe the question should be “would Medicare for All be worse than the patchwork of private insurers currently providing healthcare”?  And, if America is such an exceptional country as so many conservative proclaim, why would it be that 20 or so other countries including Germany, France, the UK, Canada, and Japan provide excellent healthcare for all the residents at half the cost per person than the US?

In a recent Kaiser Family Foundation report, the average cost of healthcare coverage for a family of four was $22,900 per year.  Think about that.  The minimum wage of $7.50 yields and annual income before taxes of $15,600, and the proposed $15 per hour yields $31,200 (after paying healthcare insurance cost, where’s food and lodging costs?).

The Kaiser Family Foundation report also said the $22,900 cost had increased 56% from 2008! Do you know anyone who pay has increased 56% in 10 years?

There are clearly three issues with US healthcare,

  • what’s covered (like pre-existing conditions), 
  • who’s covered (universal coverage or only if one can afford insurance), and
  • cost (can someone afford the premiums, co-pays, and deductibles).  

Until the cost is addressed, what’s covered and who’s covered will drive up uninsured Emergency Room usage (which ironically drives up the overall healthcare costs further).

In a few words, healthcare is about providing healthcare services at world class cost, qualify, and availability.  That should be a banner all Democrats could run under.

Speaking About Life

May 12, 2019

On Friday, another pro-life protest broke out in Philadelphia.  The site was the center city “Planned Parenthood” office and as has happened so often in the past, pro-life demonstrators were “praying” and then “calling out” (respectfully they say) to strangers who appeared about to enter the Planned Parenthood office.  A Philadelphia State Senator happened to be present and went into a tirade against a pro-life mother and daughter telling them this was none of their business.  Bad form to be sure and not very smart since his tirade got onto social media and you guessed it, more pro and against people arrived.

Seizing the opportunity the Catholic Archbishop (Chaput), called out for protecting the unborn.  I wonder whether the Bishop was aware of the irony of his words.  The Bishop is someone who has stonewalled the investigations into priest child abuse and yet he feels compelled to speak out on women’s rights.  Hmmm.

There is no question in my mind that many pro-life advocates genuinely feel that abortion is wrong.  To this group the fetus is life and is destine to live in suburbia, go to great schools, and when an adult, saves the world.  Unfortunately, life is not that way.  Planned Parenthood deals mostly with middle class to the very poor Americans who lack the means and knowledge to prevent unwanted pregnancies, or sadly learn that the fetus is defective or likely to be a risk to the mother herself.

The Catholic Church speaks of love yet until very recently shunned LGBTQ community members and still speaks of them in “defective” terms.  Wouldn’t it be far more loving for the Church to welcome pregnant women and if the pregnancy is unwanted, to provide options including moral and accepting ways to end the pregnancy?

There should be no concern that “well to do” women will need the service of Planned Parenthood.  Abortions for the well off are safe and widely available if you have the money.  It seems life of the unborn is only a problem for the poor.  

Healthcare All Over Again?

March 29, 2019

Like a flash brush fire, the subject of US healthcare has blazed anew.  Dumbing the complex healthcare situation down, the President and loyal Republicans are chanting for the ACA’s elimination and good things will follow.  The President has promised the best healthcare ever, one with “pre-existing” coverage and no individual mandate.  Of course the President wants first the ACA repealed, or ruled un-Constitutional in the courts, and then… “trust me”… the GOP will introduce a beautiful new healthcare bill.  Hmmm.

The silver lining of this “bad dream again” issue is that there are compelling reasons to reopen the healthcare “can of worms” again.  The ACA represented an honorable, ethical, and moral effort to improve upon what existed in 2008 and provide access to basic healthcare for all Americans.  Republicans tell us that ACA is not so. 

The inconvenient truth about US healthcare (the current ACA or the version before ACA) is that

  • healthcare spending per capita is twice that of other developed countries,
  • does not still cover everyone (estimated 20 million more however), and
  • mediocre healthcare outcomes compared to many other countries.  (Healthcare available through institutions such as the Mayo Clinic, Johns Hopkins, Cleveland Clinic and most major University teaching hospitals are as good as there are in the world but those located in the suburbs, depressed inner city areas, and the rural areas across the country are not delivering on the highest standards. And, not to be overlooked, US healthcare is not affordable or not available to too many Americans.)

Affordability, and availability rise above the partisan solutions such as “Medicare For All”, “the replace of Repeal and Replace”, and “keep government out on my healthcare”.  There is no known credible reasons to justify current US healthcare cost and outcomes. 

  • Drug prices are non-negotiable for Medicare.  How is that possible? 
  • A growing number of Americans are learning that they can buy prescription drugs in Mexico or Canada the exact same medications they currently purchase in the US for substantially less.  Why would the Government not demand the best global price? 
  • Republicans have embraced private sector solutions built around private healthcare insurance. Let the insurance companies police costs, the GOP says.
  • Insurance is based upon pooling risks. .  So how can the GOP fight to eliminate the individual mandate? Without the individual mandate the insurance revenue pool will shrink.  In addition, individuals without insurance will go to Emergency Rooms where they will, by law receive treatment.   In essence, no individual mandate means a free pass for those who do not wish to buy insurance, cost everyone more, and makes everyone else a sucker.  How does this make sense? 
  • Estimates put US healthcare spending at 18% of the approximate US $20 trillion GDP (almost $4 trillion).  If the actual spending was on a parr with 20 other major world countries, there could  be $1-2 trillion savings each year extra for investment in infrastructure or paying off the national debt.  What are Republicans thinking?

President Trump and Republicans are disingenuous about healthcare reform.  Democrat candidates who are singularly focused on insuring everyone and overlooking the inexplicable cost differences with other modern countries are destined to make the GDP cost even larger.  The US deficit can not be reduced or brought under control without first dealing with healthcare costs.  Even more dangerous, in the world of income inequality, unless basic healthcare is made affordable for all, there is destine to be social upheaval.