The American health care system is plagued by monopolies, oligopolies, corporate waste and profiteering, and rip-offs and fraud. Could the federal government do anything about the problem? Of course. The issue is not identifying the policy solutions, it’s mustering the political will.
Before considering solutions that could save hundreds of billions in health care costs every year — yes, that’s billions with a B — let’s address the industry bogeyman: Will clamping down on industry profiteering lead to rationing? The easy and true answer to that question is: No.
The just slightly more complicated and truer answer is: Ending drug and insurance corporations’ profiteering and price gouging will dramatically reduce rationing. Although industry apologists try to disguise it, rationing is a defining feature of our current, dysfunctional system. One in six Americans report rationing prescriptions because of cost — as do one in four insulin users. A shocking one in three Americans skip needed care — seeing the doctor, having a medical test or treatment, filling a prescription — because of cost.
When we lower price — or, even better, treat health care as a right, available as needed, without regard to ability to pay — we can slash or eliminate rationing.
Here are three examples of corporate profiteering and waste that illustrate the available striking savings.
Surprise Billing: Wall Street firms have figured out a devious way to score big profits: surprise medical billing, the practice of giving out-of-network care to a patient who is unaware or unable to determine whether their medical professional is in their insurance network. This has become commonplace in emergency rooms, for example, where a hospital is in-network but has contracted out emergency room services to a Wall Street company-owned out-of-network provider – who slams you with sky-high bills once you get home.
This unethical practice of surprise billing happens to one in six people every year, and is a key reason more than one in four Americans had a medical bill turned over to a debt collection agency.
The problem can easily be solved by legislation, with insurers required to cover these costs — at a reasonable rate, not the rip-off prices imposed by the Wall Street profiteers.
Drug Company Price Gouging: The United States spends nearly $500 billion a year on prescription drugs. Price for brand-name drugs in the United States are two times what they are in other rich countries. The explanation is very simple: The government confers patents and other exclusivities and monopolies on drug corporations and then, unlike every other rich country, lets drug companies charge whatever they please.
The solution is simple: Require drug companies to set prices reasonably. If they refuse, then authorize generic competitors to enter the market. If we did this just for Medicare Part D, we could save $50 billion a year. If we did it for all prescription drugs, we could easily save $150 billion a year.
Eliminate Insurance Industry-Imposed Waste with Medicare for All: Administrative costs consume an astounding 25 percent of U.S. hospital spending, far above most comparable countries, due largely to the costs of billing. If hospital administrative spending were brought in line with more efficient countries, the U.S. could save more than $150 billion each year on hospital spending alone. Processing bills, coupled with expenses for collection of unpaid bills, accounts for half or more of medical practices’ administrative costs.
Medicare for All would eliminate these and similar extremely expensive bureaucratic nightmares by moving away from per-treatment billing and instead relying on global budgets. Hospitals and other medical providers would receive an overall payment based on the patients they serve and the treatments they provide, and then they could get on with the business of providing care. The arrangement would be no different than the ways police stations or public libraries are funded. The potential available savings are tremendous.
We don’t have to choose between bringing down costs and improving care — that’s because bringing down costs the right way will actually improve care. Providing high-quality care is expensive, no doubt. But the United States spends twice as much on health care per person as other rich countries — not to get better care but to pay for corporate profiteering and massive waste. If we eliminate those rip-offs and needless bureaucracy, we can have more for less.
Robert Weissman is the president of Public Citizen, a nonprofit consumer advocacy organization that champions the public interest in the halls of power. He wrote this for InsideSources.com.