So why is healthcare so expensive in the United States compared with other countries? Our healthcare system is a profit-driven industry, which encourages unnecessary testing and procedures. If administrative waste and middlemen profits were reduced along with drug pricing, there would be enough resources to cover all uninsured Americans and include dental and long-term care. Often pharmaceutical interventions are promoted through commercial advertisement versus less expensive alternatives, resulting in a healthcare system focused on payment for services versus prevention and wellness.2
It is true the United States leads in cutting-edge research and medical breakthroughs, and the pharmaceutical companies cite this as justification for the high costs. In reality, the amount of research dollars expended is far less than what is expended by the pharmaceutical industry on marketing efforts and payment of bonuses and profit. When reviewing the price paid for pharmaceuticals in other countries, it’s hard to understand the restrictions placed on Medicare by Congress to negotiate prices for controlling drug costs. The marketing expenditures of the top 10 pharmaceutical companies account for 50% of their total budgets,3 whereas dollars spent on research are about 17%.3 On average, the United States is paying 42% more in pharmaceutical costs than the rest of the developed nations.3 One can only assume that Congress is unduly influenced by the pharmaceutical lobby, because it has the power to prevent the wasteful spending currently occurring on pharmaceutical expenditures.
Utilization of services in the United States is similar to that of other countries, but it pays a much higher price in administrative costs than other industrialized nations. The United States spends 17.8% of its gross domestic product on healthcare, whereas other top 10 Western nations spend between 9.6% and 12.4%. Insurance coverage for the American population was 90% versus close to 100% in the other top 10 nations. It is estimated that 11.4 million uninsured people with diabetes and coronary artery disease go untreated in the United States, which results in higher cost and incidence of complications.4 In a nutshell, Americans pay more for healthcare, pharmaceuticals, devices, and administrative costs without getting the benefits of improved outcomes and full coverage for the population.
Widely available evidence-based medicine should be utilized to establish more effective quality standards to reduce unnecessary testing, lab, radiology, and other procedures. Medicare already drives treatment standards and availability, but congressional lawmakers have in effect prevented Medicare from free-market pricing, protecting the pharmaceutical companies’ grip on price protections and growing price increases.
Veterans Affairs has been bidding on pharmaceuticals, durables, and devices for years, realizing a 40% savings. With the cost savings from wasteful practice, we could include long-term care, dental coverage, and additional preventive services with emphasis on community and home support for mentally disabled and aging populations. Other advantages to our economy would be creating a robust job market for healthcare employment, reducing the number of sick days, improving worker productivity, and reducing premature deaths.5 Quality measures can drive down costs while elevating healthcare access and promoting prevention.
The intent of the Affordable Care Act (ACA) was to provide the availability of low-cost insurance to uninsured, poor, low- and middle-income Americans; protections for Americans with preexisting conditions; continued protections for young adults aged 18 to 26 years; and for people who may find themselves unemployed or sick. The Marketplace insurance provision was designed for lower- to middle-class earners who could purchase insurance, with additional subsidies in place for qualifying individuals.6
An additional provision to the ACA was the Medicaid expansion that could be adopted by states to help insure people who could not afford or did not qualify for the Marketplace insurance. Individuals qualifying for Medicaid expansion are mostly the unemployed, temporarily disabled, and low-wage earners who find themselves without insurance and do not earn enough to qualify for Marketplace insurance. Currently, 14 states do not participate in Medicaid expansion, denying coverage for the most vulnerable and leaving many people uninsured.6
In addition, Marketplace websites and promotional programs in nonexpansion states have varied from state to state. There are wide variations in education to the public, direction to providers, program enhancements, and enforcement of insurance regulation as well as poor website design and shortened availability for enrollment, all while creating confusion among patients and providers. Since the passage of the ACA, there has been congressional bipartisan refusal to make changes or fixes to problems that were unforeseen in the early implementation of the ACA. Opponents to the ACA have filed lawsuits and challenges resulting in Medicaid and Marketplace uncertainty for patients, insurers, providers, and hospital systems. The consequences of these barriers to Marketplace enrollments and lack of Medicaid coverage through the expansion program are rising insurance costs, coverage gaps, hospital closures, and declining services, particularly in rural America.
In states without Medicaid expansion, the poor, mentally ill, and low- to middle-income families continue to go to hospital emergency departments for care, driving up hospital costs and often closures. Hospital closures are at an all-time high and are 3 times more likely to occur in rural areas in states that did not implement Medicaid expansion. With little or no availability of nearby healthcare services, rural communities are unattractive to young families and retirees, resulting in economic and population declines. Because of the hospital closures, rural communities are facing the emergence of healthcare deserts. Many Americans, when faced with a medical emergency, may have to drive more than 100 miles to seek care, often with deleterious outcomes.
An example is Alabama, a state that has not adopted the Medicaid expansion. “On average, almost 1 of every 10 hospital patients do not have health insurance, resulting in more than $530 million annually in uncompensated care,” said Danne Howard, executive vice president and chief policy officer of Alabama Hospital Association. “Currently, 75% of Alabama’s hospitals are operating in the red, meaning the dollars they receive for caring for patients are not enough to cover the cost of that care. Expanding Medicaid would be a significant investment in the state’s fragile healthcare infrastructure and would help maintain access to care for everyone.”7
Texas has the highest rate of uninsured in the United States, and Texas does not participate in Medicaid expansion. Over 20% of Texans continue to be uninsured. According to the CDC, south Texas has the highest rate of lower limb amputation—50% higher than the national average. Amputations are generally preventable with diabetes education and treatment through a primary care physician. Texas has missed over $66 billion of federal matching aid for Medicaid, and lost revenue for hospitals will be over $34 billion by year 2022.8
For every $1 a state invests in Medicaid expansion, $13.41 in federal funds will flow into the state. Expanding Medicaid will likely also generate state savings and revenues that exceed expansion costs.8
In a recent literature review, the Kaiser Family Foundation found that states that adopted Medicaid expansion realized Medicaid savings that offset expenditures.
There have been other positive economic impacts and cost offsets for states adopting Medicaid expansion; for example6:
- Behavioral health and availability to mental health treatment
- Crime and criminal justice system cost reductions
- Treatment for opioid addiction and other substance abuse
- Reduction in Marketplace insurance premiums
- Reduction of medical debt and bankruptcies due to medical debt
- Adults living with disabilities are more likely to be employed
- Earlier detection of cancers, diabetes, and coronary artery disease
According to the Kaiser Family Foundation, 26% of Americans report that they or a family member had trouble paying for medical bills in 2012, and 58% reported that they delayed or did not seek medical care due to cost.5 The number 1 reason Americans go bankrupt is due to medical bills.5
Medicaid expansion and availability of healthcare coverage for all Americans will provide early interventions for chronic illness, encourage prevention and nutrition, and provide care and dignity for the aged, mentally ill, disabled, children, and the poor.
- Many myths and beliefs exist among Americans regarding providing healthcare for all:
- Long wait times that could delay or disrupt treatment, lowering the quality of healthcare
- Single payer can lead to socialism and more entitlements, and overuse of healthcare resources
- Lack of constitutional provision for healthcare coverage
- Interference in an individual’s self-autonomy, resistance to mandate, personal liberty
But I submit that these are dilemmas not predicated on evidence-based research of the issues.
Americans have to understand that we need to “stay the course” and realize the kind of societal benefits that other industrial nations enjoy. We cannot afford to just look at our own sphere of influence with a purely utilitarian viewpoint. Our society is at the tipping point, and to avoid this issue any longer is certainly going to bankrupt our future as a nation. It is time we connect the dots and realize that when poor and low-income Americans are in poor health, it costs us all and threatens our economic stature and potential.
Don’t we owe it to our community to be an example to our children and the generations to follow?
Rising copays cause treatment delays, and many families decline health insurance and treatment to protect family finances when in reality the cost of treatment for late-stage disease is breaking the bank. Every day I speak with a patient diagnosed with cancer, and at least once a week I encounter a patient without health insurance. Imagine the devastation of the cancer diagnosis, and then the impact of not knowing how and where to get care. Imagine the economic impact for a single mother of 3 with a late-stage cancer diagnosis making $12 an hour. Her insurance covers 60%, but her first chemotherapy will be out of pocket. I ask myself what the impact is on her children and family. Who will take care of these children, all under the age of 10, if she is too ill or succumbs to her disease?
I think we can do better!
- Haley J, Zuckerman S, Karpman M, et al. Adults’ uninsurance rates increased by 2018, especially in states that did not expand Medicaid—leaving gaps in coverage, access, and affordability. HealthAffairs. www.healthaffairs.org/do/10.1377/hblog20180924.928969/full. September 26, 2018.
- Wharton School of the University of Pennsylvania. Knowledge@Wharton. Medical Waste: Why American Health Care Is So Expensive. https://knowledge.wharton.upenn.edu/article/medical-waste-american-health-care-expensive/. Published August 18, 2016. Accessed May 4, 2019.
- Belk D. True Cost of Health-Care. http://truecostofhealthcare.org/wp-content/uploads/2015/11/The-True-Cost-of-Healthcare-2-2.pdf.
- Papanicolas I, Woskie LR, Jha AK. Health care spending in the United States and other high-income countries. JAMA. 2018;319:1024-1039.
- ProCon.org. Right to Health Care. www.procon.org. 2019.
- Antonisee L, Garfield R, Rudowitz R, Artiga S. The Effects of Medicaid Expansion Under the ACA: Updated Findings from a Literature Review. Kaiser Family Foundation. https://www.kff.org/medicaid/issue-brief/the-effects-of-medicaid-expansion-under-the-aca-updated-findings-from-a-literature-review-march-2018/. 2018.
- Japsen B. As Hospitals Close, Medicaid Expansion Rises in Deep South. https://www.forbes.com/sites/brucejapsen/2018/09/30/as-hospitals-close-medicaid-expansion-rises-in-deep-south/#4b5256042e44. 2018.
- Dorn S, McGrath M, Holahan J. What Is the Result of States Not Expanding Medicaid? Washington, DC: Urban Institute; 2014. https://www.urban.org/research/publication/what-result-states-not-expanding-medicaid.