How Healthcare has Devastated the Working Class & Caused Some to Lose Hope

Healthcare is killing the American Dream. How did this happen?

Sometimes people comment that my framing of what healthcare is over the top when I write articles in Forbes with headlines like "The U.S. Has Gone To War For Much Less Than What Healthcare Is Doing To America." Or, when my TED talk is entitled "Healthcare Stole the American Dream - Here’s How We Take it Back.". However, I'll challenge those people to read on and tell me how healthcare is not stealing the American Dream.

Take 90 seconds and listen to a brief segment of a show on NPR about bringing back manufacturing to America. This CEO shares how it's extremely difficult to bring back jobs when healthcare is 30-50% of someone's entire compensation package. Note how the NPR interviewer skips right past the most pivotal statement of the entire show as it didn't fit the narrative of the show. This echoes nearly the exact dynamic after the Michigan primary highlighted below where the NPR interviewer blew past the Dartmouth economist's key point (healthcare, not trade, was the real story of the Michigan primary) -- but it was a point that didn't fit their planned narrative. By no means has NPR been unique. Media has missed, arguably, the biggest root cause of populism that spans the political spectrum -- the wildly underperforming and wasteful healthcare system.

After you listen to a CEO explaining their situation, it becomes easier to see the backdrop of this recent USA Today story on the human impact of an Indiana manufacturing plant getting shut down and moved to Mexico.

Clearly, there is a big gap in the hourly scale between a plant in Mexico and America. Doing what smart employers are doing and saving as much as 55% on health benefits with superior benefits only is part of the picture. However, when you consider the cost of building a new plant, risk of tariffs, bad PR and the human toll of shutting down a plant, doing healthcare right could tip the scales in favor of keeping a plant open.

The New York Times' David Brooks painted a similarly bleak picture in his recent article entitled This Century Is Broken. Healthcare is an overwhelming factor in making American manufacturing non-competitive. That followed a piece by the Wall Street Journal entitled "Burden of Health-Care Costs Moves to the Middle Class" and included this graphic from the Brookings Institution. This is a key reason behind what another USA Today article reported on -- the low levels of savings that are putting families in extreme financial duress.

Biggest Media Whiff of 2016 Presidential Cycle

A year ago, virtually no one expected Bernie and Trump to win the Michigan primary. In my Forbes piece, I highlighted The Dartmouth College economist, who specializes in trade policy, pointed out that the key issue is actually healthcare as the shift in jobs due to trade has resulted, in aggregate, in more high-paying jobs.

Wages have been flat even though total compensation is up because healthcare costs are taking that wedge, that bite out of people's paycheck. So people don't think they've been getting a pay increase at all.

Despite the economist pointing this out, NPR and other media ignored the fact that data from Rand (linked to in that article), Brookings, Kaiser and others makes clear that 20 years of wage stagnation and decline is healthcare caused.

The collateral damage from overspending in healthcare (PwC estimates that half of what we spend in healthcare adds no value) isn't limited to the private sector. Bill Gates devoted an entire TED talk to how healthcare is the primary driver of what is breaking schools. Among the impacts are cuts in vocational and extracurricular programs or surcharges making them unavailable to lower income families. It's one of the key drivers of why tuition at state schools has spiked and caused millennials to take on unprecedented levels of school debt.

To add insult to injury, the boomers have unwittingly left a gargantuan financial albatross for the only generation bigger than the boomers -- the millennials. In the article below, I take an aspirational view of what millennials can do once they rise to the challenge put before them. However, one can take that data and take a darker view of the future. In that piece, I share the well-sourced data from David Goldhill's book that shows how a typical millennial is on track to spend half to two-thirds of their entire lifetime earnings on healthcare. It's almost unbelievable until you look at how much of that is hidden from view but is clear as day once someone like Goldhill lays it out.

Fortunately, stories of redemption are popping up all over the country showing how the greatest lie in healthcare is that it's impossible to tackle healthcare costs. I've written about how companies in Georgia, Kirkland, Milwaukee, Orlando, Tulsa, Pittsburgh and other locales have wise employers who have found ways to thwart the tricks the industry plays to redistribute profits from companies. This has happened in large and small employers not to mention rural and urban as well as public and private sector. These organizations are also aware of how PPOs no longer deliver the promise they once did as outlined in Have PPO Networks Created a 20-year-long Economic Depression for the Middle Class? In the piece highlighting another Fox commentator, Tucker Carlson, I link to how prices in the growing direct pay portion of healthcare have actually flattened.

We founded the non-profit Health Rosetta Institute on the premise that all the solutions to fix healthcare are out there -- they just haven't been scaled broadly. Some fixes are easier than others. One of the easier ones to fix is the massive criminal fraud going on in healthcare. Thanks to a conversation with ex-HHS Secretary Governor Tommy Thompson, I learned how pervasive fraud is and how straightforward it is to fix.

These and many other straightforward fixes are freely available on the Health Rosetta website and will also be available in my upcoming book entitled "CEO's Guide to Restoring the American Dream How to deliver world class healthcare to your employees at half the cost." [Go to the book page to be notified when it's available.]

Despite the large challenges outlined here, I conveyed my optimism in my TEDx talk embedded below. Not only is it possible to take back the American Dream, many are doing it. As I mentioned in the "we've gone to war for less" piece above, there are times when Americans come together across the political spectrum. I'll leave you with a thought from my TEDx talk and embed the talk below if you want to watch it.

These successes are coming from people across the political spectrum. Progressives are the ones implementing healthcare ideas that people call conservative. Conservatives are implementing ideas that would be called progressive. Each of us has had an awakening that we don’t need a left solution or a right solution. We need an American solution and this good news is spreading like wildfire.

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Dave Chase is the Managing Director of the Quad Aim Fund, Executive Producer of The Big Heist (the first fiercely non-partisan satirical film to address healthcare), co-founder of the Health Rosetta Institute (a LEED-like organization for healthcare) and author of the forthcoming book, “CEO's Guide to Restoring the American Dream - How to deliver world class healthcare to your employees at half the cost.” His recent TED talk was entitled "Healthcare stole the American Dream -- here's how we take it back."

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