These blog posts started months ago, with me questioning why exactly Universal Health Care was innately bad on Facebook and proceeding with me reading various analyses and articles on the issue. So the following blog posts are a summarization of my understanding of the issues at stake and an overview of the solutions that have made the most sense to me in my readings. I’m writing this for my benefit as well as anyone who would like a bigger picture view of the system and it’s flaws. I am organizing the posts so that I explore all the flaws first, and then some potential solutions that make sense to me, and I am trying to keep the posts to bite-sized chunks. I am of course, always open to discussion.
Regarding the Uninsured
Democrats say 30 million. Republicans say more like 6 million. No matter which figure you believe, that’s a lot of people in America who are legitimately uninsured. Even more worrisome is that every year the majority of personal bankruptcies are declared because of medical bills that are too expensive to be paid. Insurance providers have no incentive to compete on the individual market because they make the majority of their money from businesses who provide employer-based insurance as a benefit. Healthcare providers do not compete on an open market and thus set the prices of services based on their own estimates, then negotiate with insurance providers for the price that those insurers will pay. But uninsured individual consumers have to pay full price, meaning that most medical services are overpriced and the uninsured avoid medical services unless they are absolutely necessary.
This means that an individual or family who does not have access to employer-provided healthcare insurance is stuck between a rock and a hard place. Their first option is to pay full price on insurance premiums out of pocket or face the other option – avoid healthcare until they are faced with an emergency, and then face medical bills that are debilitatingly expensive. This is a real problem in America – the human side of the healthcare debate. That is why it has seen the most amount of attention in the debates.
But it’s not just the uninsured who have these problems – even people with insurance are often faced with incredibly high medical bills because they reached the limit of their coverage or their insurance was revoked due to whatever medical problem they have. It is a documented issue that many people nationwide face what is called rescission – the revocation of their policy when a major medical issue arises. Insurance companies have been known to pore through medical histories to find problems which they can claim were preexisting issues, or even to find typos on the original forms which they claim as a lie and therefore reason enough to revoke the policy. These are the extreme cases, but they are documented and the insurance company CEO’s are on record in front of congress saying these practices will continue because they are currently legal.
A sidenote about Drug Companies
All of this information regarding our Healthcare system boils it down to two major players; Insurance Providers and Healthcare Providers. But there is a third party that does a great deal to increase confusion and costs in the medical system. The drug companies, or “Big Pharma” as they are often called, have a really large hand in the pot stirring things around, attempting to profit off our misfortunes as a society. That would seem a dramatic statement, but the Government and journalists have documented the nefarious activities that drug companies practice to increase their market share and profits.
Big Pharma is profitable. The number three most profitable industry in the US in fact, with 20% profits last year alone, which translates into billions and billions of dollars. But Big Pharma has a lot on the line as well – each year they spend billions on research and development of new drugs, and often times drugs can get well into testing (after billions have been invested) before failing out of clinical trials. So Pharmaceutical companies have a lot of risk, and work hard to offset that for their investors by increasing their profits yearly. The problem is, normal ailments just aren’t that profitable.
The laws right now are very strict on how a new drug can come to market – it must be proven through clinical trials and multiple studies against placebos. Once a drug is approved by the FDA for sale, it can only be marketed by its manufacturer for the specific purpose the drug was approved for. This is usually a very specific ailment or problem. However there are no laws restricting doctors on their prescriptions – so drug companies have discovered that an easy way to increase the profitability of a drug is to recommend to doctors that it be prescribed for “off-label” uses. This is a common practice now – and there is very little science that goes into these prescriptions. Drug companies merely tout (to doctors) the great uses of their drug for a certain use, and doctors proceed to prescribe it for that use – whether or not there are any studies to back what is being touted.
Insurance companies meanwhile are constantly fighting drug companies to keep down costs. A generic version of a popular drug might have the same efficacy and side effect risks, but can cost hundreds of dollars less each month. It is thus very desirable to insurance companies to promote generic drugs to their consumers. Drug companies don’t like this because they need the revenue from their drugs to keep making new ones, so each time the insurance company attempts to encourage generic usage by putting up obstacles to getting brand-name drugs (such as more costly co-pays for the brand name drugs), the drug companies fight back (by offering coupons that remove the copay for the consumer). The consumer loves this, but the insurance company is left paying hundreds more for the drug.
This issue of drugs and their prices might not be so powerful were it not for the philosophical problems in our healthcare system today, which is the topic of tomorrows post.