Part 29: Escalating Healthcare Costs are Mostly Due to Prioritization of Hospital-Based Medical Model

The current U.S. fee-for-service insurance healthcare model is outmoded and continues to fail. It is important us to remember that the fundamental premise that healthcare is an essential service and a Right.  Consequently, authorities have the fiduciary, ethical and moral responsibility to make sure that the healthcare system is accessible, affordable, fair and meaningful for the population.  

Provision of healthcare in a country is one of the most expensive venture. In most countries there is a mixed model of provision of healthcare by the government and the private sector. Except for the rising costs and variability of the quality of services provided, this system works reasonably well for the needs of the population.

In contrast, the healthcare in socialist countries is mostly provided by the government, but the access and the delivery of care is much restricted and waiting lists are painfully long. In recent years in America, some politicians propagating the concept of “free healthcare for all;” giving freebies to consumers as an attempt to attract votes. They proposed to use a Medicaid or Medicare model (perhaps a mixer of these two). Opponents of this, interpret this as, “healthcare for none.” 

The Medicaid/Medicare for all is sustainable?

However, consumers get nothing for free. The proposed ‘free’ healthcare for all (including those who entered the country illegally) in fact, more than ~$3.0 trillion a year, in addition to the current cost. This amounts to more than the current U.S. annual budget. Already country has acquired a budget-deficit in excess of $22 trillion; thus, there is no sensible, legal or ethical way to pay for the extra 3.0 trillion needed annually for this proposed free healthcare program.  

Most politicians who are proposing free healthcare for all would not talk about how to pay for this enormous, recurring cost. Other have proposed a tax increase of more than 70% for the people in the top tax bracket to pay for this. However, despite such it is grossly insufficient to generate additional tax revenue needed to cover the excess (extra funds) of more than $3.0 trillion a year. 

Considering the above, implementation of Medicaid or Medicare model for all is a recipe for economic and political disaster and will ruin the U.S. economy. Medicaid/Medicare for all will adds overall, more than $35 trillion for the budget deficit, over the next ten-years. This requires not only increasing the tax brackets to between 50 and 80% for all, and monitorization (i.e., quantitative easing), which would markedly increase the risk of hyper-inflation. Thus, it is an irresponsible and ill-thought proposal that would harm the country; thus, should be a non-starter. 

Like many politicians around the world, people who coming up with such disastrous ideas to capture votes to get elected, put their political interest first and the country last. Another hyperbolic example is the ‘Green New Deal’ from socialists, estimated to cost over $90 trillion dollars over a ten-year period.  Technically, this requires raising the income taxes over 90% of all tax payers plus quantitative easing.

Yet, because of the current divisive and polarized political atmosphere, and the way these proposals are marketed by politicians and propagated by the mainstream media, many constituents begin to believe such fairy tales. Considering the current political climate, one can only hope that a well-considered, long-term, sustainable, bipartisan, new healthcare law that contains no loopholes will be enacted soon.

Affordability and access to healthcare:

As a result of increasing premiums, decreasing benefits (in fact, the coverage provided by some insurance companies are worthless), and removal of Obamacare mandate (i.e., elimination of tax/penalty for not having medical insurance), many in the middle and low-income groups are dropping out of the healthcare insurance market. 

Since they may have to depend on care provided at indigent health clinics and/or accident and emergency departments (the latter is the most expensive way to take care of people), eventual cost to the government will be higher. However, because millions of people are added to the health system each year, these discrepancies are not obvious when one examines the overall statistics, but trends are observable and they are of real concern.

Insurance companies vs. maintaining good health:

It is impossible to maintain a healthy nation when insurance companies control referrals and restrict services to patients, mandate valueless and time-consuming pre-approval process, and refusal to authorize the needed medications and procedures are designed to discourage patients seeking care. For example, forcing their customers to pay out of pocket payments of 50% (or even more in some insurance plans) of the bill for each service received from a physician or from a healthcare entity (i.e., these are intended to discourage treatment; thus, people are getting sicker) and by controlling how physicians practice medicine, make things worse. 

It is unconscionable that successive U.S. legislature and the administrations tolerate this situation, compromising the health and well-being of the nation. However, considering the billions of dollars that insurance companies and healthcare entities spend annually for political lobbying, the negative results and poor outcomes for healthcare plan-participants are not surprising.  Despite these, the government refuses to implement measures and audits to check clinical outcomes from the (unethical)decisions made by insurance companies, or at the minimum, enact fiduciary oversight legislation to prevent such.

Lobbying and policies:

When the cost of hospital-based healthcare is increasing whilst the total healthcare budget is stagnant, it is no-brainer that lesser funding will be available for disease prevention. Because of conflicts of interest and extensive lobbying of members of the Congress (inclusive the successive legislative branches and the administrations), it is not surprising that, while dramatizing healthcare as an important issue, have taken little or no action to fix inherent issues/loopholes in the system. 

Moreover, lack of capability of individuals, inability to comprehend the harm following the lack of action and lassitude, lawmakers have shown no interest in disease prevention or overcoming the deficits of the Affordable Care Act (ACA; Obamacare). 

Importance of disease prevention:

Based on the current knowledge, approximately 75% of the common, prevailing human diseases are preventable. However, prevention of a disease is not glamorous for politicians and does not provide photo or television opportunities for presidents (minsters/secretaries) or the legislators. In addition, paying attention and funding disease prevention per se does not provide a platform for victory speeches or opportunities for opening new (many times, unnecessary and expensive) hospitals or enhancing the propaganda (PR) machinery of politicians.

However, there are few exceptions, such as the work of the (Jimmy)Carter Center on Guinea worm disease, with a reduction from more than 3 million cases to fewer than 30 in a little more than three decades. Except for the lack of enthusiasm, this highly cost-effective prioritization and funding of disease prevention model can be applied to many other diseases, thereby, helping millions of people, worldwide. Meanwhile, there is no tangible way to significantly reduce health insurance premiums and improve the access and delivery of care at the same time, while prioritizing and funding the current (failed), profit-driven, expensive, acute healthcare model.  

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Professor Sunil J. Wimalawansa, MD, PhD, MBA, DSc, is a physician-scientist, educator, social entrepreneur, and process consultant. He is a philanthropist with experience in long-term strategic planning, cost-effective investment and interventions globally for preventing non-communicable diseases [recent charitable work]. The author has no conflicts of interest and received no funding for this work.