Pretty much everyone agrees … health care in the US IS UNAFFORDABLE.
Between premiums and out-of-pocket costs, health care costs most Americans thousands of dollars each year.
That’s the easy part – knowing what is unaffordable.
But what is AFFORDABLE? Does anyone know or want to define affordable?
Is it a percentage of income, a dollar amount or should it all be FREE and by that I mean the cost hidden in taxes in some way.
Would Americans be willing to see the Medicare payroll tax increase from the current 1.45% to say 12% to fund M4A? Employers offering health benefits pay on average about 8% of payroll and that’s for plans with high cost sharing.
Would Americans prefer to pay for health care at the point of service or through taxes? The obvious or the hidden? There really are no other choices.
If we adopted M4A in anything close to the progressive version, taxes must go way up. What would that mean for those of us already on Medicare?
Do you believe paying for M4A would be less expensive for you than what you now pay in premiums and OOP spending – year after year?
Waste of time. A majority of Americans want the best health care coverage YOUR money will buy. We ration care based on ability to pay. Other countries explicitly ration care itself.
A 2020 study estimated that the median cost to bring a new drug to market was $985MM with an average of $1.3B. The federal government just decided to limit coverage for a costly new medication for Alzheimer’s disease, restricting it to Medicare patients enrolled in clinical trials. The decision means Aduhelm will remain unavailable for now to some of the nation’s 6.2 million people with Alzheimer’s who had hoped to try it for mild cognitive impairment or dementia that results from the disease. The population with milder Alzheimer’s disease, the target group for the drug, is estimated at 1 million to 2 million people.
So, NICE anyone? The brits use a government function called NICE, that makes explicit judgements on what treatment is permitted – using something called quality-adjusted life years (QALY). The difference between being alive and dead is, on this measure, easy to express: Death represents the end of QALYs, a zero. So, the brits value one QALY at between 20,000 and 30,000 pounds, roughly $26,000 to $40,000. If a treatment will give someone another year of life with good health and if it costs less than 20,000 pounds, it clears NICE’s bar. If not, …
When an American needs something, who is going to stand in the hospital doorway and tell them no?
Importantly, remember that 65+% of medical spending is incurred by less than 10% of the American population; 80+% of spend by less than 20% of the population. https://www.hccinstitute.org/concentration-of-healthcare-expenditures-in-the-u-s-2019/#:~:text=In%202019%2C%20the%20top%201,of%20%24129%2C911%20(Figure%202).
People 55 and over accounted for 56% of total health spending in 2019, despite making up only 30% of the population. In contrast, people under age 35 made up 45% of the population but were responsible for only 21% of spending. For those age 65+, spend is 5X that of a child – with, obviously, very few QALY’s comparatively.
Let’s see who volunteers – surely won’t be Bernie Sanders, Liz Warren, Nancy Pelosi, Brandon, Chuckie Schumer – even though each has sufficient funds to pay for most anything that NICE would decline.
To figure out what is affordable, I tried Googling what healthcare costs per person that included premiums and or taxes (direct or general fund) that applies to healthcare around the world. I found studies as a percentage of GDP, per capita, and for “comparable countries”. The United States appears to spend twice as much as other “comparable countries”. But there are countries that only spend as little as 4% of their GDP. Access to healthcare and percentage of the population is not really factor into most of the charts. A poor country that spends only 4% of their GDP probably doesn’t have the best healthcare system or access. The countries of the European Union spend about half of what the United States spends but we know that the US subsidizes their R&D and that they limit access to care and limit the brands of drugs.
The United States does spend too much money on healthcare but how much? Until you figure that out, how can you figure out what is affordable? How little can we spend and still have the healthcare system that we have, which by most standards is one of the best? Do we get rid of the helicopters, paramedics, and the non-emergency transport ambulances? Do you start making patients what weeks more appointments more so than we do now? Do we want ICU beds or band aids? Band aids are affordable for most people.
I still say the first step is to determine what US healthcare actually costs. Everybody seems to be charged a different rate for the same services. The poorer you are, the higher the bill.