United States hold a dubious distinction of establishing the most unfair healthcare system among the nations of the developed world. Unfair as in marked by injustice, partiality, or deception. And unfair as in not equitable in business dealings.
It has been hard not to think about the healthcare lately. It was a hot topic in the most recent election despite its overhaul enacted just this year by Democrats. Republicans’ promise to ‘defund’ the bill may have been one of the factors that brought them the House majority.
But what made me think about it is a personal experience that, with minor variations, is relived sooner or later by almost everybody. You try to renew a prescription. A pharmacy website informs you that you no longer have a necessary benefit. Your insurer confirms that it has not been renewed by your provider, which in my case is a company that manages COBRA benefits. Which in turn wasn’t notified by a former employer that you are still entitled to that particular benefit. After several phone calls they all assure me it will be restored within 3 days. No biggie if you have no life threatening disease. In case you lost count that’s 4 companies and an army of clerks between you paying your money and a pharmacy that receives it. Nobody cares to notify you about changes, and that’s because you don’t really matter in this whole process. Apart from shelling out the money.
A typical argument trotted out against the American healthcare financing model centers around the number of uninsured (50 million people, 16% of the population) and a practice of denying coverage to people who need it most. The recent bill presumably solved those problems, so let’s talk about the kind of coverage American population has.
Actually, let’s dispel some misconceptions first. The so called health insurance is an insurance only in a very vague sense of providing protection against something terrifying and unexpected. Differently than having one’s house burned down, practically nobody goes through life without requiring medical attention at some point. In fact, it is advisable to get regular checkups as preventive measure. There is an entire category of medical procedures: yearly flu shots, children vaccinations, routine tests that can be called anything but unexpected. It’s like insuring against oil change for one’s car. Or insuring against grocery shopping. Nobody offers that because there is little market for a service that will take your money and then pay it to a service station or a supermarket.
So, in its current form, health insurance - and that goes for all the developed world, not just US - is no insurance at all. It’s a tax to provide universal medical coverage. Universal as in for all. And universal as in any medical procedure one may ever need.
It’s a tax. And in US it is a flat tax, i.e. the exact amount may depend on the negotiating power of your employer but it is not related to your salary. The janitors in your company, if they happen to have access to an insurance plan, pay as much as you do and as much as your CEO does. And don’t get the illusion that it is the company that pays - it’s you, merely not in a direct way.
I know that some consider the flat tax to be the fairest of all: people are created equal, right? That said I don’t consider myself equal to most people. I am smarter, healthier, better educated. All that not due to hard work but because of a random chance of a genetic makeup and a birthplace. In short, I’m luckier. And while luck is a hard thing to measure, income is a reasonable proxy. So, to me, the flat tax is anything but fair.
But the flat premium aspect of the insurance tax in US is not what makes it so spectacularly unjust. American healthcare may have consumed as much as 17.3% of the GDP in 2009 compared to 12% in Switzerland and 8% in Japan. Both have higher life expectancy and lower infant mortality rate then US. Even Poland that spends only 6.2% of the GDP on healthcare has lower infant mortality rate and life expectancy not that far off (75 to US 77). And to discount the argument of immigrants skewing the data: Canada spends only 10% of the GDP on healthcare while boasting longer life expectancy and lower infant mortality rate. Canada has the highest immigration rate in the world.
The spending on healthcare in US was 9.1% of the GDP in 1980 - it doubled in the last 30 years. Perhaps it’s the technology to blame. Differently than in any other area of human enterprise, technology in medicine increases the cost. Medical equipment price doesn’t follow the same rule as computers and digital readers, which are getting cheaper by the day. The reason for that is quite simple: patient’s interest is not what powers the medical industry. If we required everyone to reserve a fixed part of their income to purchase computers or software through the obligatory digital insurance program, I guarantee that their prices would go up.
So the healthcare system in US is the most expensive and it doesn’t provide as good results as cheaper alternatives. Its cost has been significantly outpacing inflation. This is great for doctors, hospitals, equipment manufacturers, insurers, everybody but its nominal beneficiaries: patients who have to fork over more and more money. Not that they realize that since they are not the customers. The patients are not the ones purchasing the so called insurance, their employers are. Neither are the patients settling bills, it’s their so called insurers who do that.
The unfairness of such system is visible in a disconnect between spiraling costs and patient’s benefits. Other countries accomplished at least some form of cost control. But nowhere the patients are the party to price negotiation. The recent reforms affectionally called Obamacare just took this ineffective system and made it more prevalent. America has now officially the worst of two worlds: the byzantine structure of a national program married to the unfairness and high cost of a private enterprise unbridled by competition.
Insurers are spending inordinate amounts of money on advertisement promising easy access and effective healthcare, hospitals are putting up billboards inhabited by smiling, vaguely multiracial faces creating an illusion that there is a free market and competition in the process. But you have no meaningful choice of what insurance or what hospital you use. Nor do you know how much your healthcare costs. And that’s the issue here: the most unfair aspect of the healthcare system is the fact that its intended beneficiaries are captured in the position of helpless children - completely deprived of any control.
No control means no responsibility. As long as American patients allow themselves to be held in this position they will expect unlimited care for everyone and everything. And the costs will climb uncontrollably. The only good news is that there is a natural barrier to cost increases: 100% of the GDP. Any bets on how quickly we get there?