Make Me Richer

As I stared at the Social Progress Index mentioned in a recent blog, my eyes fixed on the placement of the United States as 70th on the quality of list of the world’s countries. Compare that to the fact that we far and away have the most expensive average medical care costs on earth and, among developed nations – even with the Affordable Care Act – have the most with people without healthcare coverage. So we have subpar healthcare at unsustainable rates.

We made sure pharmaceutical companies could continue charge American more for prescription drugs than residents of most western nations by making sure that Americans cannot legally buy the same products off-shore. Our legislation insures that people opting to buy Obamacare policies have to access the private carriers with no cheaper governmental alternatives, again, insuring that the private insurance sector has very limited government competition (Medicare and Medicaid exceptions noted).

Although we are seeing increasing new medical patents from overseas researchers, the U.S. continues to create new medical solutions that remain at the cutting edge of biotechnology. There is a lot of motivation to invent and create, because the payoff can be staggering. The system that protects profits most certainly makes the incentives rich, but do the payoffs really need to be that rich, and how much better off would we be with greater government grant contributions to such research?

New tech costs a lot, and typically Americans will pay more for the greatest and the latest than will most of their international counterparts, sometime even multiples of the international rates. And there are limits to what private insurance covers on average, so individuals have to pick up a large chunk of the tab. Certain diseases are so widespread that they constitute a particularly significant part of our overall healthcare costs. And with so many Americans suffering from Type 1 or Type 2 diabetes, costs in this section are particularly impactful.

Why? “Companies that produce the treatments say the higher costs reflect medical advances and the need to recoup money spent on research. But David Kliff, a financial analyst who is editor of Diabetic Investor, an independent newsletter on the industry, points out: ‘Diabetes is not just a disease state; it’s a huge business, too.’

“Those companies spend millions of dollars recruiting patients at health fairs, through physicians’ offices and with aggressive advertising — often urging them to get devices and treatments that are not necessary, doctors say. ‘They may be better in some abstract sense, but the clinical relevance is minor,’ said Dr. Joel Zonszein, director of the Clinical Diabetes Center at Montefiore Medical Center… ‘People don’t need a meter that talks to them,’ he added. ‘There’s an incredible waste of money.’

“Even patients with insurance often feel squeezed by large out-of-pocket costs, and many describe holding old pumps together with duct tape, rationing their test strips and skimping on insulin. Dr. Jeoffry B. Gordon, a family practitioner in San Diego, said he had patients with failing kidneys and others who had ended up in emergency rooms because they could not afford their maintenance care.

 “‘From a guy on the front lines, the improvements have been miraculous,’ he said. ‘But the acquisition cost is very high, and the pricing dictates what treatment you get.’… Complication rates from diabetes in the United States are generally higher than in other developed countries. That is true even though the United States spends more per patient and per capita treating diabetes than elsewhere, said Ping Zhang, an economist at the Centers for Disease Control and Prevention.” April 5th, New York Times.

Looking at one fully-insured woman, opting for the latest in insulin pumps, the Times described the staggering annual cost of $26,470 with a co-pay of $4,224. Type 1 diabetics cannot survive without insulin shots, so they have to guarantee supplies, albeit not necessarily through these highly-accurate pump systems. But for those with more esoteric ailments, that carry massive specialize treatments costing multiple of this insulin pump, there is no choice but to have virtually all those costs picked up by the system… somewhere… or simply write them off and let them suffer and die.

As pressures from the conservative right are requiring those participating in “entitlements” to pay increasing shares of their medical costs, someday seniors could be facing collective insolvency if such policies are implemented. “Representative Paul Ryan’s budget plan has been praised as a serious approach to the budget that provides a ‘path to prosperity.’ But analysis by the Center for Economic and Policy Research (CEPR) finds that the Medicare portion of the Wisconsin Republican’s plan merely shifts costs to retirees, eventually making healthcare unaffordable for most. If Ryan’s plan is adopted, by 2030 nearly 50 percent of retirees age 65 on Medicare would be paying half of their retirement income to pay for medical care, the CEPR estimates [based on numbers generated by the Congressional Budget Office].” Boilermakers.org.

The differential of 40-60% of higher costs for per capita healthcare in the United States over the comparable costs in other “expensive” Western nations has to be unacceptable. If healthcare costs rise faster than the cost-of-living – a clear and uninterrupted pattern for a very long time – we are going to see serious decreases in available discretionary income that drives the rest of our economy… until there isn’t even discretionary income left to cut. Nothing that has been proposed by anyone has seriously challenged this sacrifice of availability of quality healthcare when compared to the rather powerful support for keeping our healthcare companies seriously profitable. But if the rest of the developed world has figured it out, why can’t we? Is the healthcare lobby impenetrable?

I’m Peter Dekom, and as the debate over Obamacare rages, it seems that the underlying cost escalation issues have been relegated to second place.