At the time, the U.S. was investing about 17% of the Gross Domestic Product in healthcare. The devils in the details surrounding that are many, and he mentioned several: What about the billions of dollars in over-the-counter medications and supplements included in that number? How to separate from the number what is making people healthier and improving quality of life from what is sustaining life? How to explain the U.S. position in infant mortality (quite high, relatively) and longevity (quite low, among industrialized nations)? In short, how to analyze the bang for our very big buck?
He mentioned that, at that time, Japan was spending about 23% of their GDP on healthcare, but that much of it was going for diagnostic technology, much of that at the consumer level. For instance, they had an attachment on the commode that could check for colon cancer on a regular basis, thus increasing the likelihood of early diagnosis and successful treatment. Similarly, saliva samples could provide early detection of many diseases at an affordable, self-provided level. He suggested that the American public would be tolerant of a similar investment with similar expectations.
That must have been ten years ago, and I am struck by the fact that none of that seems to have been considered in the Affordable Care Act. More important, little regard seems to have been given to consumers supporting the ACA for services they might actually find of greater value than the traditional services delivered by and paid to a health community held to little accountability for Outcomes.
President Obama is currently stressing how great the ACA has been in providing care for uninsured children under the age of 26, and for preventing denial of care for prior conditions. Even before my retirement from WellPoint, both of these situations were embraced by the industry, and, partially in response to regulatory action, were being addressed at no additional premium cost, and there has been little effect on premium since the law required these changes, at least as a consequence of those two factors.
What has me terribly concerned are the planned conditions of future funding for providing care to many millions (300,000 estimated in Riverside, California) of new additions to the insurance roles.
For example, to support the program, there will be a new 3.8% tax on Capital gains. Last year my Capital gains (a significant portion of my planned retirement) were more than $10,000, new tax $380. Capital gains on property sales would also be similarly affected, in a depressed market. Medical appliances, including anything from artificial hips, dental implants, and heart valves, to contact lenses, would be subject to a similar tax on SALES. A friend in the health appliance industry says that the margin of profit is probably close to that number for established companies, and would exceed start-up costs so much as to guarantee no new entries in the field. Those who might try would likely find themselves bankrupt and still owing taxes.
This post is too time-limited to discuss the true cost problem in healthcare, but in shorthand, it is caused by a payment system based on number of services provided instead of value of those services. There is also a component that the U.S. has failed to make patients responsible for their own treatment, failed to prevent recidivisms (backsliding into unhealthy behavior), and failed to develop an efficient system for healthcare delivery. If only trained Internists or family Practitioners can be trusted to diagnose disease and refer to trained specialists, we will never be able to provide necessary care, no matter how we decide to finance it.
Please feel free to comment if I hit a nerve regarding how you feel about the cost of healthcare. I read and respond to every one.
My next post will be a little lighter. I discovered a new word: murmurations and I think you will find facts surrounding it to be interesting.