Human life is a precious thing. It’s also fickle and temperamental. Just when you think you have a handle on it, something new gets thrown your way. A man might smoke everyday of his adult life and never suffer the consequences and a man who never touched a cigarette may get lung cancer. One day we all get sick, and when we do we rely on a well tested system. Unfortunately, the system has failed us time and time again. American healthcare has gone septic, it lost sight of its’ goals and so have we. It’s the difference between living and surviving. We should not only be concerned about the quality of our lives, but the value placed on them. Can someone decide you’re too expensive to save? To be clear, this is a side effect of the system as a whole, not the individuals comprising it. Doctors, nurses, paramedics, and hundreds of other professionals have the singular goal of making you better. It’s hard work and they do their jobs to the best of their ability. However, when all is said and done, their ability to act is limited. This is the beginning of a conversation that’s long overdue. To start we need to understand our system. No more jargon, no more empty sales pitches or campaign promises, and no more oversaturated terms and conditions. We need plain facts and a simple way to interpret them.
The United States spends more money on healthcare than any other country. America spends twice as much as most well developed nations. In 2017 approximately $3.5 trillion dollars were spent on healthcare. Of that, $1.5 trillion can be attributed to the US government. In 2018 the US population sits at around 325 million people. Unfortunately, exact data for 2018 isn’t available, but data used from 2016 has been modeled by the CDC to provide approximations for what our current statistics look like. Over 10% of the population is uninsured, 70% of the population has private insurance, and approximately 20% of the population has public insurance. The question begging to be asked is how our government spends more money but provides a lesser quality of care for its’ people than similar nations? The obvious answer has led to ongoing debates, taxes. Many Western European countries provide government healthcare while spending half as much as the US. So are we to believe half of the money for healthcare comes from taxpayers?
Not exactly. The problem isn’t with our taxes it’s with how much money pumps through the system. In the US doctors make nearly twice as much as their counterparts in Western Europe. The United States also has a larger administrative network. American doctors deal with differing insurance companies, each with a unique range of policies regarding how to handle and process claims. We spend the most on healthcare, but we also spend the most on the bureaucracy that comes with it. The so called “administrative burden” is equivalent to 8% of our countries GDP. In comparison most countries spend between 1% and 3%. Our medications also cost more. The US spends $1,500 dollars on pharmaceuticals per person. Western Europe averaged $750 per person.
While there may be a logical explanation for the differences in administrative burden and salary, the cost of pharmaceuticals is still unexplained. For the most part the pills dispensed in the US have the same makeup as pills in the EU and are manufactured the same way. So why is there such a large gap in price? The answer is in how the marketplace is regulated. In most countries comparable to the US the government has some influence over the cost of prescription drugs. In the US it’s nearly the opposite. The Pharmaceutical Research and Manufacturers of America otherwise known as PhRMA is a lobbyist organization. In 2017 they were the third biggest spender clocking in at $25.4 million. This is a $5 million increase from spending in 2016. Rather than control how much companies can charge for their drugs, it seems the US government is being influenced by PhRMA’s wallets. While the average profit of drug making companies in the EU is 7%, the average profit for American drug companies is 18%.
So far this article has contained a lot of numbers and facts, but what do they actually mean for you? If you’re an average American you have private insurance and pay around $600 per month on health insurance, the price for the lowest coverage package. As stated earlier, at some point everyone gets sick and when you go to the doctor you will be overcharged. Why? Insurance companies are greedy. They’re getting money from both ends. You pay them for health insurance, but your doctor also pays them in “administrative burden” which has the causal relationship of making your medical bills higher so your doctor can pay them and get paid as well. If god forbid you need actual medicine, you can expect to be overcharged at any pharmacy as well. There are a handful of pharmaceutical conglomerates in the US which allows them to hike prices whenever they wish. These companies aren’t profiting off their drugs and research, they’re profiting off of you. In the end, it’s clear to see why the US spends the most on healthcare, what remains unclear is why we have to.
As I said in the opening of the article this is going to be a long process. This is only the first entry of a three part series. The purpose of this article was solely to cut through the web of jargon and political posturing to see what’s being done to protect our interests. Unfortunately, it seems like the answer is nothing. The sad fact of the matter is we don’t have the money to compete with organizations like PhRMA. When politicians who are as polar opposites as Trump and Obama both made campaign promises to help get the system back on track, it seems like we would have solved this long ago. However, while our current president has talked about it, his tax policies have benefitted large pharmaceutical companies. Obama tried to improve our situation with the Affordable Care Act, but the scope of the bill was limited by insurance and pharmaceutical lobbyists. By the time the ACA could actually be passed it was a shadow of what it had originally been. However, if nothing else it showed us the right way to move forward. The ACA was responsible for bringing down the number uninsured Americans.
In the end there doesn’t seem to be a whole lot of hope moving forward. It seems like a David versus Goliath and his five wealthy brothers situation. The next step and the next article in this series will focus solely on health insurance and pharmaceutical companies.
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