Summary
We have the world's most expensive healthcare system costing $2.4 trillion per Year 4.3 times more than we spend on national defense, 20% of GDP. It is also one of the world's worst systems ranked 37th by the World Health Organization. Costs are escalating at 7%, at least twice the rate of inflation. Our Healthcare System is the most inefficient and wasteful among leading industrial countries. Other countries with some regulation, provide Universal Healthcare for about half of the cost of our system, which does not. We can support economic recovery through healthcare reform. About 46% of the US population is receiving government provided healthcare at a cost of $1 trillion. This includes politicians, prisoners, armed forces, federal and state employees and Medicaide and Medicare recipients. There is little central purchasing power leverage and billions of our tax dollars are being wasted along with billions of dollars of philanthropic, employer, employee and individuals monies.
Analysis
I have been a senior International Benefit and Healthcare consultant for over 25 years. I have lived in Europe, Africa and Australia as well as the US where I am a citizen. I have been writing papers and working for Healthcare reform in the US for 19 years. I have seen the reality of other healthcare systems in the world and I have seen the way they have been distorted by the vested interest groups in the US.
The "for profit" US Healthcare System has a huge surplus of resources the cost of which is shifted to those that can pay to meet financial targets and profit. Other countries focus on a much more productive integrated delivery system with centers of excellence creating much higher productivity. We often hear of waiting times in the UK and Canada for non essential services. No one points out however, that this is the result of highly utilized resources and a much more productive and cost effective healthcare system that produces better outcomes than the US.
We have finally reached the point of desperation where I believe the will to change will overcome the influence of the vested interest groups. There is a great opportunity to relieve the huge financial burden on employers and give the people of the US the healthcare system that they deserve. Studies by McKinsey, Dartmouth researchers and Business Groups on health have identified cost saving opportunities in the existing system of 30%+. The problem is that there is no incentive for the providers to accept them and little data for the consumer on their benefits. This is because healthcare is not a supply and demand model. the provider controls the demand.
We are not qualified to know what healthcare services and procedures we need and we are not informed enough to make an intelligent purchasing decision. There are a few exceptions to this for treatments where people make the the decision to buy, such as Lasik eye surgery and cosmetic surgery. A truly competitive market exists in these areas and as a result costs are more contained. You are however, in no position to make purchasing decisions as you lay on the operating table.
As a result we are 5% of the world's population consuming 48% of the drugs in the world by value. Pharmaceutical companies around the world make the majority of their profit in the US. This is because their profits are regulated to some extent in their home countries. This means that we are indirectly financing other companies universal healthcare systems.
There is no doubt that some degree of regulation will come however if it is just led by politicians it is not going to deliver what the people of this country want and need, a cost effective universal healthcare system. We already have attempts to establish universal healthcare for certain groups in terms of Medicare and Medicaid. We have however not had success in controlling the cost of these programs. We have tried fixing prices but what happens is that physicians and hospitals then refuse to participate, because it is not as profitable as treating other patients. We must have some regulation around this area as every other major industrial country has. As an illustration Humana Standard plan, one of the major providers of Medicare Part D plans has hiked its premiums 329.3% since 2006.
We have to relieve employers of the main role, of hundreds of billions of dollars, in healthcare provision. they are also facing a $108 billion pension funding cost in 2009. We need a vision of where healthcare needs to be over the next few years and a transition plan to get it there. We can still preserve a "for profit" system but it must be combined with a "US style" regulated universal healthcare environment.
