The American Healthcare System is a disaster financially
The United States spent $3.5 trillion ($10,739 per person) in 2017 on healthcare expenditures. This accounts for healthcare spending of 17.9% of the GDP. The average expense for OECD countries (countries similar to the US) was 8.8% in 2017. We are double the average cost.
Not only are we paying double in terms of GDP, we are also paying the most per capita (per person). Which accounts to double the average rate. Just look at the comparison rates:
- 1. United States — $10,209
- 2. Switzerland — $8,009
- 3. Luxembourg — $6,475
- 4. Norway — $6,351
- 5. Germany — $5,728
- 6. Sweden — $5,511
- 7. Ireland — $5,449
- 8. Austria — $5,440
- 9. Netherlands — $5,386
- 10. Denmark — $5,183
- 11. France — $4,902
- 12. Canada — $4,826
- 13. Belgium — $4,774
- 14. Japan — $4,717
- 15. Iceland — $4,581
- 16. Australia — $4,543
- 17. United Kingdom — $4,246
- 18. Finland — $4,173
- 19. New Zealand — $3,683
- 20. Italy — $3,542
- 21. Spain — $3,371
Not only this, but our rates have been skyrocketing:
Most of the federal money comes from state medicare/medicaid programs. These programs provide quasi-universal coverage to certain at-risk groups in the US such as elderly, low-income, children, and disabled. Additionally, feds spend a decent amount of change on exchange subsidies for Obamacare and their tax preferences:
The rest of the money then comes from states and local governments, who contribute an obscene amount on top of the federal amounts.
If we break up the healthcare spending by major source of funds, we see that Medicare/Medicaid are the major expenses:
- Medicare/Medicaid: 37% of total funds
- Private health insurance: 34% of total funds
- Out of pocket: 10% of total funds
- Other or combination: 19% of total funds
Look at the out-of-pocket expense. Think about all the other things they could have spent that money on. The contribution we lost to other beneficial sectors of our economy. The money they could have saved or spent further on consumption. 10% is insane.
Not to forget that 66.5 percent of all bankruptcies were tied to medical issues. That accounts to 530,000 families filing bankruptcy each year because of medical bills. That is absolutely asinine.
Medicare and medicaid are universal in the sense that they cover the health insurance costs for specific populations, but they aren’t really “single-payer”. Usually, the federal and state government have to pay part so it’s single-payer only in the sense that the government is paying. But more than one government level is paying for it. Regardless, it’s still “universal” in the implied sense of the term.
The American Healthcare System is a disaster culturally
So while we’ve discussed how financially the system is a disaster, it’s also a disaster in practice.
Our wait times to see doctors are not much better. We have no idea what it will cost prior to payment. Insurances make it nearly impossible to know what doctor to go too.
Add on the obvious fact that I have to pay thousands in taxes to fund medicare/medicaid recipients.
This tax money doesn’t help me at all. I still have to pay for my own health insurance and I lose out on money from the payroll tax that my employer has to pay to offer me health insurance.
Couple on the fact that I’m healthy so I’m subsidizing those on the insurance plan that aren’t healthy.
Then, I still have to pay a copay every time I go to a health care provider and I have a deductible that is thousands of dollars (nearly $6000, to be exact).
I went to the doctor and dentist once each last year for a routine checkup. Those two health care visits probably cost me about $6000 total in insurance premiums, lost payroll opportunity cost, employer expense, and tax subsidies to medicare/medicaid. Once everything is calculated in, that’s a $3000 trip to the dentist, lol.
Now I understand I’m paying for “catastrophic” insurance that I hold in case anything happens. Nothing happened, so it didn’t cost me anything. But it’s still absolutely insane. Culturally, this doesn’t make sense. Financially, it doesn’t add up.
The American Healthcare System is a disaster ethically
Our system is broken. Either we should have universal for everyone (not just medicare recipients) or we should have a strict pay-your-own-way system.
I should not be paying my own health insurance and then also paying for universal healthcare for 30% of the population that gets it for free.
The reason why healthcare costs so much in the US is because the government does not have leverage over the prices as in universal or single-payer systems. Since they only have medicaid/medicare leverage, it blows up the prices for everyone else.
You can’t have a dual system like the one we have. It has to be either all in or all out. While I would love an all out approach by the government, I don’t see it as a realistic approach. It’s great in theory but not in practice.
Capitalistic healthcare will always become socialized over time
The healthcare system is a prime component of the anacyclosis effect. Capitalism will eventually turn to socialism. You can’t have a system where the most at-risk can’t afford health insurance. Eventually, people will vote to change that. What kind of ethical country would allow it? Private companies and non-profits cannot make up the cost differential to cover them all.
When they vote to change it, what do you get? Well, you get the dual system where we cover some groups universally. They then force the rest to pay for themselves and the universally-covered groups. This causes prices to skyrocket and you create a system where you pay the most while receiving the average.
A capitalistic system for healthcare is just not sustainable. Eventually, it would fall to the dual system because of this anacyclosis cycle. The dual system is arguably the worst out of the three options (full capitalism, dual system, universal). If the full capitalism system is not sustainable, the only option left is universal.
It doesn’t mean that the government needs to control everything. You can avoid nationalization of the industry by only having the government offer an insurance program. This is how many universal systems operate. This way, doctors and healthcare providers stay private. No one gets nationalized. Additionally, you can then have private companies offer insurance on top of the basic insurance. This allows for an individual to choose their own desired level of insurance.
You keep the freedom of choice but remove the clusterf**k we have now.
In practice, a universal insurance system like the one in Italy would save the US tremendous amounts of money.
The major profiteers of the dual system are healthcare insurance companies and big pharma. Both industries that would make America better off by being completely annihilated.
Who profits under a universal government-offered insurance system? The consumers. Healthcare staff are paid reasonably. There are no insurance or corrupt big pharma companies. The government doesn’t profit, it pays. Instead of the average US citizen owing ~$10k, maybe we could drop that figure significantly. Thus, we profit. The people.
the conservative opposition
There is a common conservative trend with healthcare where conservatives believe that we are “free” in our pursuit of healthcare under the current system:
“I don’t want the government in charge of my healthcare”
So you prefer an un-elected, un-accountable, un-caring, and profit-driven insurance company instead?
Don’t act like you get a choice. In nearly all cases, your employer dictates who the insurance options come from. You get a few options of different colors made from the same material. It’s not like we have a free market system where you can go pick from 50 different very independent insurance agencies in an open market. They pick for you.
Also, you pay for the universal receivers, anyway. Every American reading this that pays taxes already pays for single payer healthcare. It just doesn’t cover you. You’re paying for it already and getting no benefit. Why not continue to pay for it… but get a benefit and reduce the costs?
This current system limits our freedoms more than a universal system.
It limits our freedom of practitioner choice. We can only go to “in-network” practices. Under a single-payer, everything is in-network.
We also don’t have the freedom of information. We don’t know the costs when we get a procedure done. Under a single-payer system, the government determines the cost long before you even have a procedure. This is how the government maintains costs.
It also limits our freedom of movement. We can’t just up and switch jobs or try a risky new entrepreneurial idea. Why? Because if we leave our current job we don’t have healthcare. And lord knows we can’t afford it without an employer sponsor. This limits our ability for the best and brightest to continue to push the entrepreneurial edge.
Finally, I also see a limitation in our “freedom to trust”. Who in the US trusts dentists? I know I don’t. They have an intrinsic profit motive to screw with my teeth even when there isn’t a problem. If you leave citizens unprotected against the cost of medicine, and then organize the delivery of medicine services around maximum profit, you’re creating a very messed up cycle that will not end well. We leave the citizens vulnerable and not trusting of doctors’ motives.
Single payer also gives much better incentives. Under our system, doctors have a drive to keep you coming back for chronic illnesses. Big pharma wants you to keep needing more and more drugs. This is how they make money. Under a single-payer system, the government, as a primary insurer, has a massive incentive to focus on preventive care to keep costs down. The government is big pharma and wants you to be healthy instead of use their expensive drugs.
the partisan divide
Healthcare should not be a partisan issue.
I’m decently far on the political right but not with the health of my American brothers and sisters.
We have seen how this dual system has and is continuing to fail. This is not sustainable, nor is it working. If the free market variant always leads to this, the best option is clear. We need a universal system. Let’s build a government that removes all welfare but provides healthcare.
If conservatives keep fighting against this, we will only lose more people to the left.