We Can’t Make Healthcare Great Again Unless We Consider This Hidden Cost
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By Seth J. Frantzman December 6, 2016
The new Republican administration is expected to tackle health care as one of its main domestic priorities after the new year. “The President-elect’s made it very clear. He wants the Congress when they convene in early January to take up the task of repealing and replacing ObamaCare first,” Vice-president elect Mike Pence told FoxNews on November 30.
The Affordable Care Act was signed into law in 2010. In 2014 when people began enrolling, more than 7.3 million signed up. Overall, the Act has helped reduce the number of uninsured Americans from 48 million in 2010 to 27 million in 2016. However, many of those who obtained insurance are still looking at double-digit percentage increases in their monthly premiums for 2017.
Health care is still unaffordable. David Barnes, the policy director of a millennial advocacy non-profit organization, noted that although his friends looked forward to enrolling, “the average monthly premium is a substantial $304 – a costly expense that a millennial struggling to find work…can hardly afford.” One of my cousins recently enrolled in a similar plan in found it even more expensive. Whether through ObamaCare or not, Americans cannot afford increasing premiums.
Debates about health care always focus on the insurance aspect of it: more health-savings accounts, high risk pools, shared responsibility payments, more subsidies for enrollees (57% of enrollees receive them today). However, the most important focus should be on costs at the hospital. Shifting premiums from one place to another doesn’t reduce the central problem in U.S. health care — why does it cost so much?
I saw this first-hand when my grandfather passed away. The bills we received from the hospital went to Medicare, but we could still see the exorbitant costs charged for procedures and drugs. It’s easy not to ask “why” when those costs are passed on to the government and not shouldered by the individual.
According to OECD figures from 2012, the US spends twice as much on health care overall than the average. Compares to peers such as Australia or Canada, the US cost for procedures such as a Caesarean section is $,7000 compared to $4,000 in Germany or $4,800 in Canada. In 2012, an MRI in the U.S. cost on average $1,080 and $280 in France. Prescription drugs cost more, and spending on medicine in the US has increased from $195 billion to $374 billion between 2002 and 2014 according to the Institute for Health Informatics. A lot of this is due to the fact that all these costs can be passed on to insurers or the government. Aspirin, for instance, costs around $0.32 but at a hospital can cost $18.
In the debate on healthcare in the U.S. this issue is never front and center. Earnings increase a few percent a year, but health care premiums increased between 6 and 15% a year from 1993 to today. We are just passing the cost onto insurers, and increasingly onto the government, but that cost comes back to us either in taxes or in premiums.
So why won’t anyone look at the elephant in the room and go after the initial costs incurred by visits to hospitals or those charged for prescription drugs? It doesn’t “fix” health care to repeal parts of Obamacare or de-fund parts of it. Hospitals and prescription drug manufacturers are happy to keep the spotlight off their costs, because congressional hearings on why Aspirin costs 56 times more in a hospital would be a scandal. Films such as the 2014 Cake with Jennifer Aniston showed the main character crossing to Mexico to buy cheaper painkillers and Dallas Buyers Club hinted at the same. We know that drugs are cheaper everywhere in the world, yet we won’t ask Congress why, and Congress won’t confront the stranglehold on the consumer imposed by hospitals and companies? Only a national reform targeting costs will save American health care.
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