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OpEdNews Op Eds    H2'ed 11/14/18

America's Healthcare Crisis Is about to Get Even Crazier

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If you paid attention to the issues people were concerned about during the 2018 midterms -- and not just the popular media's assertion that it was a referendum on Trump -- you know healthcare was one of the biggest issues, and for good reason.

Undoubtedly, you know that America's healthcare costs are the highest in the world . With the amount of money we spend -- $2.8 trillion annually, which is 17.7 percent of the economy and nearly twice as much as other wealthy countries -- you'd expect a good return on investment. You'd expect healthcare outcomes to be the best in the world. Not so: life expectancy in the US is lower than the 10 other wealthiest countries in the world, and infant mortality rates are the highest.

With healthcare prices being as high as they are, it's no wonder medical tourism is becoming more popular: in one case, a man flew to Belgium for a hip replacement and paid $13,660 instead of $100,000. Not only is it cheaper, but you can also get healthcare faster in other countries.

"Most other countries have some central body that negotiates prices with hospitals and drug manufacturers," says Vox's Sarah Kliff and Soo Oh. "The United States doesn't have that type of agency. Every insurance plan negotiates individually with hospitals, doctors, and pharmaceutical company to set prices."

"You could say that American health care providers and pharmaceuticals are essentially taking advantage of the American public because they have such a fragmented system," says Tom Sackville, chief executive of the International Federation of Health Plans. "The system is so divided, it's easy to conquer."

In the midst of these sobering, and quite frankly, infuriating facts, we have a system called the Affordable Care Act (ACA) and a divided Congress that will not repeal it. No one can call it Obamacare anymore -- Obama isn't in office and the ACA lives on. Stunning how Republicans had a majority in the Senate and the House as well as a far-right Republican in the White House for two years but failed get rid of it.

Although some of us thought the ACA was a step in the right direction, there's a glaring problem it failed to address: the existence of these parasites called insurance companies. And now, the situation is going to spiral out of control completely. Here's why:

  1. By 2029, 20 percent of Americans will be 65 or older, 25 percent of baby boomers will have diabetes, over 33 percent will be obese, and nearly 50 percent will be arthritic. This aging population will place greater and greater demand on healthcare providers.
  2. Hospitals waste $11 billion annually, which is reflected by how much they charge you for care -- a single day in the hospital already costs an average of $5,220. At the same time, we're heading towards a shortage of nurses and physicians. Hospitals will need to charge even more exorbitant fees to cope with demand and come up with innovations for treating patients when they're short-staffed.
  3. In 2019, the ACA's Individual Mandate will go away thanks to the Trump's tax reform. The government will no longer reimburse insurance companies for discounts the ACA requires them to provide to poor people, and Trump's administration has created new rules that incentivize people to adopt short-term plans (non-Marketplace plans) that don't cover people with pre-existing conditions.

Let's take these 3 facts to their logical conclusion. As the population continues to age, more people will need health insurance, hospital visits, and pharmaceuticals. Yet, when it comes to health insurance, fewer healthy people will be paying into the pool, meaning insurance companies will have to raise premiums because they'll be insuring people who have high demand for healthcare services and drugs.

It's just simple math: fewer healthy people will help foot the bill for unhealthy people who need to buy insurance on the ACA Marketplace. In turn, Marketplace insurers will have to charge more for premiums because they'll be paying out more for cost-sharing and post-deductible medical costs.

The cost of hospital visits will also rise as demand increases but the supply of staff shrinks. The same goes for pharmaceuticals. The greater the demand from an aging population, the higher the cost for drugs, because pharma companies can game the fragmented insurance system even more than they already are.

This is just simple supply-and-demand economics. Moving towards 2030, the more people need healthcare, the more providers, pharma, and insurance companies will be able to charge. Government subsidies can help foot the rising bills to impoverished individuals and retirees, but who's paying for those subsidies? People below retirement age, many of whom are poor due to stagnating wages.

To end this mess, at minimum we need to look to the example of countries like Switzerland and implement a government agency to negotiate fair healthcare prices on behalf of the American people. Right now, our biotechnology and pharmaceutical companies are making massive strides and American citizens are paying for it while other companies get to take advantage of the same products at a lower cost.

If our government cares at all for the American people, it will see the situation for what it is -- a scam -- and put an end to it.

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