Health care competiton won’t work
Some Republicans are pushing a healthcare bill Sen. Paul Ryan called a “monumental improvement” over the ACA, and repeat their hypothesis that free market completion will spur healthcare cost reductions. Common sense says this cannot be true, partly because of issues not dealt with in our country.
Do we believe health care is a right or a privilege (for those who can pay)? We are the only wealthy country that has not determined our collective answer. Many citizens have insurance through employers — originally provided as a cheaper option than raises. But the costly explosion in medical technology has left many employers stuck between covering employees and maintaining profitability, and some people staying in jobs for insurance.
Do we believe healthcare is a commodity to be bought or sold like bread or gasoline, or should it be treated like public safety and education? The big six health insurers are traded in the stock market and investors get their cut before spending for subscriber care. In 2015, CEOs of these companies were compensated $155 million (double that for other execs). FYI, for-profit providers base payment formulas on Medicare (no profit) rates.
How can this induce competition?
New medicines come out at a phenomenal pace, but are we approaching the point where we can’t afford progress? Some big pharma companies are socially responsible, but others have profit margins as high as 40 percent — rivaling big banks. Is competition working when a pill for leukemia was expensive at $11,000 per year when introduced in 2001 now averages $86,800? And similar drugs are exorbitantly priced. Only the U.S. (and New Zealand) permit direct-to-consumer prescription drug advertising, and every $1 of advertising brings in $4 of profit. President Trump talks about negotiating drug prices, but in 2003 pharma lobbyists pushed Congress to pass the law that forbids Medicare from doing so — it can’t be rescinded by EO.
Mr. Trump says people can go to the emergency room, but this is illness care — often at a point when disease is advanced and poorly treatable. Will we ever place greater emphasis on helping people be as healthy as possible, which is more costly with aging, rather than episodic illness care bandaids? Federal law requires hospitals to provide a specified amount of charity and they cannot turn away someone who cannot pay, but has a life-threatening problem. Who do you suppose pays for such care? If you ran a hospital, nursing, or other service, you couldn’t stay in business if you didn’t meet payroll and cover expenses. So how can competition possibly work here?
Medicaid programs have benefited states who opted into ACA expansion; Michigan is near the top with 18.9 million participants in 2015, which may increase by almost 0.5 million by 2020.
If the Republican bill passes, states will get block grants that will not cover costs and lead to denials of care. Not to worry: just follow Rep. Jason Chaffetz’s admonition, “Americans will have to choose between a new iPhone or better insurance.”