How a Lack of Universal Healthcare Could Bankrupt the System

How a Lack of Universal Healthcare Could Bankrupt the System

All to Preserve Maximum Profits for Insurance Carriers and Pharmas

It’s been an immutable doctrinaire GOP platform from Ronald Reagan to the present: keep the government out of healthcare… perhaps even ending Medicare… and let the marketplace set the costs. But as patents – with 20-year exclusivity even for medical patents – are invented, some creating lifesaving treatments for millions of Americans, despite some minor price restraints implemented by the Biden administration, medical costs are skyrocketing… again. Patents are a statutory monopoly that, unless otherwise regulated by government, are priced by the inventor.

As the only developed nation on Earth without universal healthcare, millions of Americans are still without medical coverage. Even for those with health insurance, the exclusions, deductibles, co-pays and premium costs are leaving many with looming medical bankruptcy or a simple “I can’t afford this and rising food and housing costs too” reality. This is one good explanation why people are thinking about not voting for or voting against Biden as “ineffective”… even if Trump will slash many remaining benefits as best he can. When it comes to consumer issues, if stuff ain’t right, blame the incumbent president, even if he (so far) can’t do anything about it.

We’ve watched private equity (basically investment funds) play havoc with our healthcare system. These funds exist for one purpose only: to be as profitable as the market will allow. They do not serve a charitable or social purpose, and the success of their founders is driven entirely by their return on investment. When PE funds buy into a hospital or medical facility, it is not about making it better, only more profitable. Same is true when PE funds acquire companies with pharmaceutical patents. How do you make profits? Increase revenues (through volume or higher prices) or cut costs (reducing staff, go to bare bones equipment or necessary medicines, etc.).

As PE funds have rolled up (aggregated) hospitals, clinics and medical facilities, typically the acquired facility(ies) reduce the quality of their patient care. In smaller communities, that reality can be devastating… usually such medical facilities are “the only game for miles and miles.” To be able to extract money for investors, the acquired companies are often layered with massive new debt, paid off by effectively having the acquired entity literally pay their own acquisition cost.

Relying on the capital markets to improve and provide healthcare is such a terrible idea that the United States is the only developed country in the world that employs that technique. Without universal healthcare, on average, Americans pay double or triple what citizens of other developed countries pay for healthcare. And woe to those whose life depends on one of those monopoly-protected patented medications. Even the 2010 Affordable Care Act allowed pharmas to set their own prices for such medications. Profits, you’ll pardon the expression, trump life itself.

If you have to drill down on two of the biggest ailments (cost-wise) in our healthcare system, they are the related issues of diabetes (particularly, late-onset or type two) and obesity. These afflictions are particularly epidemic among elder Americans, many covered by Medicare. New medications (injectables like Ozempic) are exploding in popularity, not just because they are effective against type two diabetes, but because they are the most effective weight loss drugs ever. They are hideously expensive, slamming Medicare costs and pressing private insurance rates, or simply finding rich overweight people convincing doctors to write these as weight loss prescriptions… which just may require lifetime usage to maintain the benefits.

And while President Biden may have been successful in dropping the direct cost of insulin via recent legislation, there’s nothing in the current system to moderate costs for these newest medicines, even as excessive weight is also a marker for heart disease, strokes, many forms of cancer and a whole host of other medical nasties. With the current profit-driven priority in healthcare, there is a very big question of how we will pay for such prohibitively expensive treatments, as Karen Kaplan, writing for the June 3rd Los Angeles Times, explains:

“An April 24 letter from Vermont Sen. Bernie Sanders to the CEO of Novo Nordisk began with heartfelt thanks to the Danish drugmaker for inventing Ozempic and Wegovy, two medications poised to improve the health of tens of millions of Americans with obesity and related diseases… But the senator’s grateful tone faded rapidly… ‘As important as these drugs are, they will not do any good for the millions of patients who cannot afford them,’ Sanders wrote. ‘Further, if the prices for these products are not substantially reduced they also have the potential to bankrupt Medicare, Medicaid, and our entire health care system.’

“It’s a sentiment that comes up regularly among people who are huge fans of the medications and their close relatives, Eli Lilly’s Mounjaro and Zepbound. All of them work by masquerading as a natural hormone called GLP-1 and tricking the body into slowing digestion and reducing blood sugar.

“The medications help patients lose double-digit percentages of their body weight and keep it off — an average of 12.4% in the clinical trial for Wegovy, and an average of 18% at the highest dose in the trial for Zepound. It’s rare for insurance companies to cover GLP-1 drugs for weight loss alone, and Medicare is forbidden by law from doing so. But as the pounds fall, so do the risks of serious problems like type 2 diabetes, hypertension, heart attacks and strokes, and the medications can be covered to prevent these conditions.

“‘Obesity is a huge public health crisis, and for so long we had no treatments that really made a difference,’ said Dr. Lauren Eberly, a cardiologist and health services researcher at the University of Pennsylvania. ‘These medicines could change the trajectory of your disease and save your life.’.. That makes these drugs extremely valuable. Unfortunately, they’re also extremely expensive.

“The sticker price for Ozempic, which the Food and Drug Administration approved to treat type 2 diabetes, is more than $12,600 per year. Wegovy, a higher-dose version approved for weight loss in people with obesity and as a way for overweight patients with cardiovascular disease to reduce their risk of heart attack and stroke, retails for nearly $17,600 a year… Mounjaro and Zepbound mimic GLP-1 as well as a related hormone called glucose-dependent insulinotropic peptide, or GIP. Their list prices add up to roughly $13,900 per year for Mounjaro, which is approved as a diabetes treatment, and about $13,800 per year for Zepbound, the weight-loss version.

“Eberly said those prices are simply too high… ‘We as a public health medical community — and the community at large — really need to advocate for increased affordability,’ she said. ‘I think we’re overdue for a real reckoning on this.’… In the United States, the tab for these GLP-1 drugs is exorbitant almost any way you look at it… In 2022, the prescription drug that accounted for the biggest share of Medicare Part D spending was the blood thinner Eliquis. More than 3.5 million beneficiaries used it that year, at a cost of $15.2 billion, the U.S. Department of Health and Human Services says.

“That total was more than double the amount spent on the next-costliest drug, the type 2 diabetes medication Trulicity, according to the Centers for Medicare and Medicaid Services, or CMS… But $15.2 billion is practically a rounding error compared to the $268-billion price tag if Wegovy were to be provided to all 19.7 million Medicare beneficiaries with obesity, researchers estimated in the New England Journal of Medicine.” Simply put, the profit-driven marketplace is a terrible place to attempt to moderate healthcare costs, and the monopoly that patent law gives medicines only makes a terrible problem intolerable. Logic will tell you that universal healthcare is truly the only answer. But the entire GOP opposes that with unparalleled ferocity.

I’m Peter Dekom, and while “yes we can” make the American healthcare system work for most of us, so you have to ask yourself “why we don’t.”