The fatal flaw affecting health care in America has always been cost.
Americans spend about twice as much as citizens of other developed countries for health care and don’t gain nearly enough for the expense.
The Affordable Care Act, Obamacare, never did enough to control costs so it was bound to fail. And attempts to reform Obamacare will fail, too, if costs aren’t addressed.
The group that has done well with Obamacare include people who are heavily subsidized, many through Medicaid expansion, said Robert Laszewski, a health industry analyst.
“But the middle class is just getting clobbered,” Laszewski said on CNBC, “both because they face huge deductibles and huge premiums.”
Laszewski calls Obamacare “Zombiecare” because it’s the walking dead.
In Iowa, for instance, Politico’s story was headlined “How Iowa became an Obamacare horror story”
Individual health insurers have left the state after big losses, so the market is in chaos. Just one insurer is left and that company plans to raise premiums by more than 50 percent.
Arizona, North Carolina and Tennessee are in similarly bad shape. Nearly half the counties in America have just a single insurer in the Obamacare exchanges.
The best example of the cost impact comes with prescription drug prices.
Medicare is seeking comments on ways to help decrease the costs of drugs, reported Kaiser Health News.
Fees and discounts often are negotiated on drug prices that consumers never see.
The Food and Drug Administration is speeding up approvals of some generic drugs.
Like so much in the health care industry, this is not a free market with unfettered competition and transparency. Consumers often are faced with bewildering rules and hurdles.
And the claim that pharmaceutical companies need higher prices to fund research doesn’t always wash.
A hearing by the U.S. Senate, Education, Labor and Pensions Committee revealed hedge fund companies buying rights to a drug and then raising prices as much as 5,000 percent.
Some drugs are actually cheaper when bought out of pocket than through insurance plans.
Some drugs in the U.S. cost 50 percent more than the same drugs in Canada. All of that difference can’t be going to research.
Medicare is prohibited from negotiating prices with drug makers.
One federal bill, called the CREATES Act, is designed to lower the cost of prescription drugs by increasing competition and making it easier for generics and biosimilars to reach the market.
One solution: transparency
How much are drug companies spending on research and how much on marketing?
One move the Trump administration can make is to allow more waivers for states that fit their cultures.
After all, Florida is much different than Alaska.
There are good examples of efficiencies in some states.
One move is called “reference pricing.”
This is designed to eliminate high prices of common medical procedures.
In California, prices for knee and hip replacements varied from $15,000 to $100,000 with no difference in quality.
So the state’s public employee retirement system set $30,000 as the top price it would pay at quality hospitals and patients would have to cover the rest. Guess what? Referrals to lower-priced hospitals increased by 20 percent.
For the uninsured, direct primary care is a good option. It involves a monthly charge for basic office care. About 3 percent of family physicians offer it.
Of course, that still leaves patients with costs of hospital and catastrophic care. For physicians it means less paperwork and more time for patients.
Insurance really is pretty simple. It’s based on the idea that for a small premium a person is protected against a rare disastrous event.
In health insurance, if you insure enough healthy people you can keep premiums lower for everyone.
If only sick people are in a plan, though, people can’t afford the premiums.
That’s the danger of eliminating the individual mandate in the Affordable Care Act.
Americans don’t like to be forced to do anything, and in this age of smart phones, we are enabled to make rapid decisions about nearly everything.
But a group of health care companies has written a letter to leaders in Congress warning about the impacts of eliminating the individual mandate.
“Repealing the individual mandate without a workable alternative (to) reduce enrollment, further destabilizing an already fragile individual and small group health insurance market on which more than 10 million Americans rely,” the companies wrote.
Among the companies are the Blue Cross Blue Shield Association, the American Medical Association and the American Hospital Association.
One way to deal with the sick people is to set up high risk insurance pools, but still they will have to be subsidized.
More smart ideas were offered by Robert Pozen, a lecturer at MIT, in a piece for The Wall Street Journal:
▪ Broaden the use of health savings accounts along with more ability to buy catastrophic insurance.
▪ Create a federal reinsurance fund to help finance care for costly patients. Five million Americans aren’t eligible for Medicare but have three or more chronic conditions. They need rigorous primary care.
A proposal from Jacksonville physician and consultant Carolyn McClanahan deserves support. She would use current Medicaid funding to open up federal health care centers to everyone.