FacebookTwitterGoogle+RedditEmail

The Real Problem With US Health Care

A recent report by McKinsey and Company was seized upon by opponents of health care reform to create a new myth: that President Obama’s health insurance reform (the 2010 Patient Protection and Affordable Care Act — PPACA) will cause huge numbers of employers to drop health insurance coverage that they currently provide for employees.

The McKinsey study was soon shown to be worthless, and McKinsey itself acknowledged that it “was not intended as predictive economic analysis.” But the myth seems to not be completely dead yet. For a more reasonable estimate of the impact of the health insurance reform, we can look to the non-partisan Congressional Budget Office. They estimated that the number of people (including family members) covered by employment-based insurance would be about 1.8 percent fewer in 2019, as a result of the PPACA legislation. Of course, this is more than counter-balanced by the fact that the percentage of the (non-elderly) population with insurance would increase from 82 to 92 percent ? the main purpose of the reform.

Right-wingers, insurance companies, and other opponents of health care reform in the United States are always looking for ways to blame the government for the failures of our health care system. But the simple truth is that they have it backwards: our problems with health care are firmly rooted in the private sector. That is why the average high-income country ? where government is vastly more involved in health care ? spends half as much per person on health care as we do, and has better health outcomes.

That is why even Medicare ? which has to pay for health care services and drugs at costs inflated by our dysfunctional private health care sector ? has still proven to be much more efficient than private insurance. As Nobel Laureate economist Paul Krugman recently pointed out, from 1969 -2009, Medicare spending per person rose 400 percent, adjusted for inflation; private insurance premiums, also adjusted for inflation, rose 700 percent.

The most effective way to insure everyone and make our health care system affordable would have been to expand Medicare to everyone, while beginning the process of reducing costs through negotiation with, and restructuring incentives for, the private sector. The private insurance companies use up hundreds of billions annually on administrative costs, marketing, and other waste ? which is what you would expect from companies who maximize profit by insuring the healthy and trying to avoid paying for the sick.

We also spend nearly $300 billion on pharmaceuticals each year, most of which is waste due to the patent monopolies of pharmaceutical companies. We could eliminate most of this waste through further public financing of pharmaceutical research, with new drugs sold as low-cost generics. Vermont Senator Bernie Sanders has introduced legislation in the Senate to realize these savings.

A distant second best reform, as compared with Medicare for all, would have been to include in Obama’s health care reform a public option for employers and individuals to buy into. This would at least have provided some competition from a more efficient public sector to help control costs. But unfortunately, the insurance and pharmaceutical companies’ lobbies proved to have a more powerful influence on our government than the voice of the people. This is another sad result of our dysfunctional health care system: The winners ? waste for us is income for them ? have a veto over health care reform.

It remains to be seen whether the PPACA will be a step toward more comprehensive, effective reform that gives us Medicare for all. In the meantime, the right will try to blame the government and the legislation itself for rising health care costs and other failures of our health care system. But in fact these result from the legislation not having gone far enough to rein in the private sector.

Mark Weisbrot is an economist and co-director of the Center for Economic and Policy Research. He is co-author, with Dean Baker, of Social Security: the Phony Crisis.

This column was originally published by the Sacramento Bee.

 

More articles by:

Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of  Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015).

June 25, 2018
Ludwig Watzal
The Death of Felicia Langer
Weekend Edition
June 22, 2018
Friday - Sunday
Karl Grossman
Star Wars Redux: Trump’s Space Force
Andrew Levine
Strange Bedfellows
Jeffrey St. Clair
Intolerable Opinions in an Intolerant Time
Paul Street
None of Us are Free, One of Us is Chained
Edward Curtin
Slow Suicide and the Abandonment of the World
Celina Stien-della Croce
The ‘Soft Coup’ and the Attack on the Brazilian People 
James Bovard
Pro-War Media Deserve Slamming, Not Sainthood
Louisa Willcox
My Friend Margot Kidder: Sharing a Love of Dogs, the Wild, and Speaking Truth to Power
David Rosen
Trump’s War on Sex
Mir Alikhan
Trump, North Korea, and the Death of IR Theory
Christopher Jones
Neoliberalism, Pipelines, and Canadian Political Economy
Barbara Nimri Aziz
Why is Tariq Ramadan Imprisoned?
Robert Fantina
MAGA, Trump Style
Linn Washington Jr.
Justice System Abuses Mothers with No Apologies
Martha Rosenberg
Questions About a Popular Antibiotic Class
Ida Audeh
A Watershed Moment in Palestinian History: Interview with Jamal Juma’
Edward Hunt
The Afghan War is Killing More People Than Ever
Geoff Dutton
Electrocuting Oral Tradition
Don Fitz
When Cuban Polyclinics Were Born
Ramzy Baroud
End the Wars to Halt the Refugee Crisis
Ralph Nader
The Unsurpassed Power trip by an Insuperable Control Freak
Lara Merling
The Pain of Puerto Ricans is a Profit Source for Creditors
James Jordan
Struggle and Defiance at Colombia’s Feast of Pestilence
Tamara Pearson
Indifference to a Hellish World
Kathy Kelly
Hungering for Nuclear Disarmament
Jessicah Pierre
Celebrating the End of Slavery, With One Big Asterisk
Rohullah Naderi
The Ever-Shrinking Space for Hazara Ethnic Group
Binoy Kampmark
Leaving the UN Human Rights Council
Nomi Prins 
How Trump’s Trade Wars Could Lead to a Great Depression
Robert Fisk
Can Former Lebanese MP Mustafa Alloush Turn Even the Coldest of Middle Eastern Sceptics into an Optimist?
Franklin Lamb
Could “Tough Love” Salvage Lebanon?
George Ochenski
Why Wild Horse Island is Still Wild
Ann Garrison
Nikki Haley: Damn the UNHRC and the Rest of You Too
Jonah Raskin
What’s Hippie Food? A Culinary Quest for the Real Deal
Raouf Halaby
Give It Up, Ya Mahmoud
Brian Wakamo
We Subsidize the Wrong Kind of Agriculture
Patrick Higgins
Children in Cages Create Glimmers of the Moral Reserve
Patrick Bobilin
What Does Optimism Look Like Now?
Don Qaswa
A Reduction of Economic Warfare and Bombing Might Help 
Robin Carver
Why We Still Need Pride Parades
Jill Richardson
Immigrant Kids are Suffering From Trauma That Will Last for Years
Thomas Mountain
USA’s “Soft” Coup in Ethiopia?
Jim Hightower
Big Oil’s Man in Foreign Policy
Louis Proyect
Civilization and Its Absence
FacebookTwitterGoogle+RedditEmail