"America's healthcare system is neither healthy, caring, nor a system."
Walter Cronkite
The United States spends $3 trillion dollars annually on healthcare - that’s nearly 20% of our GDP, or more than double what other countries spend! And what do we get from this? Cheated and scammed. We’re ranked near the bottom of developed countries on nearly every measure of quality of care, and the new GOP health care bill will only make matters worse. 23 million Americans will lose health coverage over the next ten years, and over $800 billion will be cut from Medicaid, which covers 69 million of our most vulnerable Americans. Why? In order to fund a tax cut for the wealthiest 1%. So as I said: cheated and scammed.
So you may ask: what went wrong? Why did this happen?
While there are many inefficiencies in our system, the fundamental flaw is this: our health care is administered by private, for-profit, and near-monopolistic insurance companies. This is what fuels rising costs, causes life-saving medicine to be 2-10 times more expensive, and precludes universal coverage.
In 1970’s and 1980’s, insurance companies began reorganizing as for-profit entities. Politicians believed that such for-profit privatization would lower costs by increasing efficiency. Needless to say, they were wrong. For example, prior to becoming a for-profit corporation, Texas Blue Cross spent 95 cents of every dollar on patient care. However, to increase profits, the insurance companies began spending more on marketing, administration, executive salaries, and paying out dividends (profits). Prior to the enactment of the Affordable Care Act (ACA, also known as “Obamacare”) in 2010, private insurance companies were spending only 60 cents per dollar on actual health care. This means that 40% of all money spent by these insurance companies was not for patient care.
To understand the mindset of these for-profit insurance companies, it’s important to note that they use the term “Medical Loss Ratio” to describe the percentage of money that’s spent on health care. This means that the insurance companies view every dollar spent on patients as a “loss,” and their goal is to minimize this “loss” in order to maximize profits, as opposed to ensuring the delivery of the highest level of care to patients. In other words, they put profits before people.
The ACA attempted to fix this situation by limiting the “Medical Loss Ratio” to 80%, meaning that health insurance companies had to spend at least 80% of all money on patient care. Not ideal, but a step in the right direction. However, the for-profit corporations figured out that if they stopped controlling costs, the overall price of health care would rise, increasing their profits back to pre-ACA levels. In other words, if your profits are limited to 20% of a pie, you can make more money by increasing the size of that pie (i.e. the cost of health care).
Health care expert Dr. Elisabeth Rosenthal describes this phenomenon as: “Prices will rise to whatever the market will bear.” The result is that the cost of health care has drastically risen, and this cost is passed off to you in the form of higher premiums, while health insurance companies’ CEO’s are laughing all the way to the bank with salaries of over $10 million. Again: profits before people.
So what do we do? How do we fix this?
First and foremost, it is time to follow in the (relative) footsteps of Theodore Roosevelt by using antitrust laws against all monopolistic pharmaceutical and insurance corporations. In doing so, not only would we lower the cost of drugs and other procedures, but we would also break these corporations’ chokehold on corrupted politicians. This, in turn, creates a path for step two: we legislate laws requiring all insurance companies to become non-profits. This step would naturally push prices down by removing the for-profit waste from our health insurance system. Once these two moves are accomplished, we go for the checkmate: create a public option for all Americans.
The fact of the matter is we already have two semi-public systems in place: Medicare and the VA. By expanding VA coverage to cover the dependents of all veterans (since family members serve alongside our brave soldiers) and offering Medicare as a public option for everyone else, we can bring universal, affordable coverage to everyone while forcing prices down.
As for the other now non-profit insurance companies, they can continue to act as supplemental insurers through Medicare Part C (also known as “Medicare Advantage”), or they can cover anything beyond essential health benefits. Think of the difference between Medicare and supplemental insurers as the difference between upgrading from a basic seat to first class. At the end of the day, you still get to where you need to be, though the amount of paid luxury may differ. And when it comes to health care, we all deserve to get to a healthy destination.
So perhaps the biggest question of all: how do we pay for it?
Most importantly, universal coverage will significantly reduce costs by bringing healthy people into the risk pool, lowering the overall cost of health care. Under universal coverage, everyone has access to diagnostic and preventative services so that patients are treated before they require costly life-saving operations. Just as it’s much cheaper to change your oil every 5,000 miles rather than rebuild a burnt out engine, it’s far less expensive to prevent an illness than to undergo a costly, life-saving operation. Thus, the overall cost of healthcare in the U.S. would decline by making full coverage available to all Americans.
Moreover, one of the primary reasons for risings costs in our current system is that physicians have an incentive to order unnecessary procedures because they are paid under a “fee for service” basis. We must recalibrate these incentives so that doctors are paid for performance, meaning that compensation depends on the relative health of their group of patients. This system incentivizes preventative care and reduces the practice of ordering unnecessary, costly medical services.
There are also cost-saving advantages to having the federal government oversee a “unified” health system, as opposed to one where each state sets its own rules. This system can enforce quality measures, such as compatible electronic medical records that reduce medical errors and costly duplication of tests and services, as well as measure outcomes and mandate processes that are evidence-based and not anecdotal. These cost-saving measures cannot be put into effect unless there is first universal coverage.
In order to make coverage affordable, we must also address the problem of prescription costs, which are currently out of control because the law prohibits Medicare from negotiating directly with pharmaceutical companies. Since only smaller, private insurance companies are permitted to negotiate, each has less leverage than Medicare would have if it was allowed to directly negotiate down the prices. When elected to Congress, I will introduce a bill authorizing Medicare to negotiate directly with pharmaceutical companies to reduce drug prices, saving an estimated $14 billion annually. The VA already has shown that this is an effective way to control quality and reduce costs.
Let me be clear: Health is freedom. I believe in a society where my fellow Americans don’t suffer or die needlessly because they can’t get timely access to health care or face financial ruin just to receive basic care. As Dr. Martin Luther King Jr. said, “Of all the forms of inequality, injustice in health is the most shocking and inhuman." Every other developed country in the world has faced this question and answered it in one way: universal coverage via a non-profit mechanism. And yet, the Greatest Country of All has failed to answer the call. There can be no compromises when our freedom--our lives--are at stake.
I am Chris Perri; I am a progressive of the people, by the people, and for the people; and I stand for guaranteeing all Americans the health they deserve.
Help me stand for universal and affordable healthcare. For the price of a cup of coffee, we can bring about better, more affordable, and more inclusive healthcare in our nation. We must stand together or fall alone. Your contribution will be an investment into a better future.
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https://www.chrisperrifortexas.com/