Healthcare: Powerful and Practical Solutions
We are the only democracy in the world that does not have a universal healthcare system. We have the highest per capita cost of healthcare in the world and the worst outcomes. Our average life expectancy is declining when compared with other democracies as our costs continue to rise. Center for Medicare and Medicaid Services has projected that if we do nothing to reduce the cost of healthcare, it will continue to rise at the rate of 5.5% per year so that by 2027 the cost of healthcare will grow from $3.4 trillion per year to $6 trillion per year.
Health care was the number one issue in the last election and judging from the recent debates it will be central to 2020. There are three essential major issues that the next President and Congress will need to address to make our healthcare system meet the needs of our nation:
1. Provide Universal Healthcare
2. Reduce Healthcare’s per capita cost
3. ReduceHealthcare’s bureaucracy
Several of the Democratic candidates for president have announced their plans to remedy all or part of our national health care issue. Senator Sanders Medicare-For-All plan and Former Congressman John Delaney’s Bettercare plan are among the more discussed healthcare plans; they each went into detail Tuesday night. Delaney’s plan is very similar to Medicare-for-All for people under the age of 65. He would provide more choice by allowing people to opt out of the national healthcare plan. People who opt out would receive a credit to help to offset the cost of private insurance. But both of these democratic candidates’ plans would increase the national expenditure for health care when the goal should be to reduce our per capita costs.
Most of the plans seek to reduce the cost of pharmaceuticals in the United States. This is a very important and politically popular goal. Voters can certainly relate to the high cost of drugs in our country; the high costs affect everyone. Our leaders should work to lower these costs; however, it should be well understood that although the cost of drugs has grown faster than any other health care cost segment, they represent only about 10% of the healthcare costs in our economy. Hospital costs are the largest segment of healthcare costs and these plans do not address these cost factors. Much more needs to be done to lower the per capita cost of healthcare than to just tackle the high cost of drugs.
Another extremely important issue is that none of these plans engages doctors in developing a workable solution to address our country’s major health care. Physician direct compensation is approximately 10% of healthcare costs and they specify 80-90% of healthcare expenditures. We need to let doctors be doctors and they need to be apart of the effort to develop a cost effective, quality-focused, universal healthcare system. In 2017 The Association of American Medical Colleges released their report that projected the future shortage of physicians in the United States will be between 61,000 and 94,000 by 2025. Adding people to Medicare or Medicaid during this period without involving physicians in the plans to move our country to universal healthcarewill inevitably increase the projected shortage, as experienced physicians will leave the system or retire.
The Congressional Budget Office report of May 2019 entitled, Key Design Components and Considerations for Establishing a Single-Payer Health Care System points out that Medicare covers 87% of provider costs and Medicaid covers 78% of these costs. Private insurance on average pays as much as 89% more than Medicare. Most of the plans proposed by the Democratic Candidates want to expand the access to Medicare and reduce the role of private insurance in healthcare. This goal will have a negative impact on physicians and hospitals. Without reimbursement adjustment, and reductions in billing bureaucracy more physicians will retire and more hospitals will close as more people get coverage through the plans that these candidates propose.
The Medicare-for-All and Bettercare plans appear to be modeled more on the British and Canadian systems. There are other national system plans that deserve consideration as we plan a universal healthcare system that would work in the United States. For many years, the largest source of health insurance in the United States has been through employer-based plans. The oldest successful universal healthcare system in the world is the German system which has been in existence since 1883 and is provided primarily through employment. Employer’s collect the premiums and employees can select from 100 nonprofit providers for their coverage. 10% of the German market is also provided by private insurance. German citizens have choice in their healthcare, something that Americans want.
The best path to universal healthcare in the United States is to model the German plan while adapting it to our current system. Our book, Healing American Healthcare outlines a plan that would accomplish the goals of universal healthcare, lowering per capita cost, and reducing bureaucracy without requiring any new taxes.At the same time, it would also eliminate the taxes that are a part of Obamacare. Our plan would reduce the societal cost of healthcare by $1 trillion per year and improve the quality of care. As Healthcare take a central role in the election, it is critical that we find a solution that provides the best healthcare for the most people, at the lowest cost.