The reform of the medical system has always been a hot topic in the United States. Problems such as difficult medical care and high expenditure have plagued ordinary Americans for a long time. Increasingly high medical insurance costs have caused many low- and middle-income groups to give up medical treatment and resign themselves to fate.
Therefore, the previous presidential elections will have fierce quarrels on the medical system, and this election is no exception. Trump and Biden have launched an endless war of words around the repeal and reform of the “Obama Healthcare Act.” However, the U.S. medical system has too many shortcomings and involves too many interest groups, and neither party can come up with an effective reform plan.
High medical costs did not increase the life expectancy of the people
The per capita medical expenditure in the United States ranks first in the world. According to data from the OECD in 2019, the per capita medical expenditure (purchasing power parity) of the U.S. is 11072 U.S. dollars, far exceeding second-place Switzerland (7732 U.S. dollars). Germany (6646 U.S. dollars), Britain (4653 U.S. dollars), Japan (4823 U.S. dollars) The dollar) is far behind.
Not only that, the total annual medical expenditure in the United States accounts for about 8% of GDP, which is higher than Europe and Japan, and twice the military expenditure. What is not commensurate with the huge medical investment in the United States is that the life expectancy of the United States (78.9 years, the United Nations Development Program’s 2019 data) is lower than that of Western European countries, Japan, and South Korea, and is the bottom of the developed countries.
Why does the US medical system present problems of high investment and low effectiveness? The fundamental reason is that there are many participants in the system, complicated relationships, and lack of effective government regulation.
Beneficiaries and victims of the current U.S. medical system
The United States pursues a free market economy, and the government’s role in industrial management and supervision is very limited. As for the medical industry, the government is seriously incapable of regulation.
Regardless of patients, there are roughly four types of participants in this field: doctors, insurance companies, pharmaceutical companies, and medical insurance management institutions.
These four types of players compete fiercely with each other, and the entire medical system presents a serious market failure problem. The US federal government and local governments have fatal management flaws when dealing with every type of player.
The first is the direct providers of medical services, hospitals and doctors. Doctors in the United States are a self-contained and independent kingdom, and the government cannot intervene in all aspects of medical school admissions, obtaining licenses, hospital system construction, and doctors’ salaries.
The medical school admission examination MCAT is organized by private medical examination institutions. The doctor’s license examination is also undertaken by private “non-profit” organizations. Not to mention that most individual clinics and hospitals are private for-profit organizations, and the government cannot interfere with internal affairs.
As a rigid demand for medical services, individual patients have no bargaining power in front of hospitals and clinics. As a result of lack of government supervision and no service pricing standards, the phenomenon of arbitrary charges by hospitals is very common. For example, if you go to a private clinic instead of a free health testing center designated by the government for the new coronavirus testing service, the testing fee will vary between US$241 and US$4510.
The average price of CT is US$97 in Canada, US$500 in Australia, and US$896 in the United States. MRI examination is 450 US dollars in the UK, while the US is 1420 US dollars. To make matters worse, American hospitals tend to over-examine patients in order to avoid getting into legal proceedings. If patients without medical insurance are admitted to the hospital for a sudden illness, most of the bills they get after discharge are sky-high.
The money earned from patients has been transformed into income for doctors and even nurses.
The average annual salary of family doctors in the United States is US$218,000, and that of specialist doctors is US$316,000, which is much higher than the average standard of all other developed countries. The same is true for nurses. The average annual income of ordinary nurses is US$74,000, while Switzerland, where medical expenses are relatively high, is only US$58,000.
If the government manages hospitals and doctors extensively, causing serious indiscriminate charges, pharmaceutical factories are at the other extreme. The government’s strict control of drugs has also led to abnormally high drug prices.
The Food and Drug Administration (FDA) has a rigorous new drug approval process, which involves a lengthy clinical testing process.
It is difficult for small companies without sufficient funds and contacts to obtain approval for new drugs. Several giant pharmaceutical companies control the entire drug market. On the other hand, the US government has granted very generous patent treatment to new drugs, and even requires other countries to recognize the patents of these drugs through WTO channels.
These measures have resulted in no free competition in the entire US drug market, drug prices remain high, and consumers have become the target of consumption in monopoly industries.
As individual consumers, patients are unable to negotiate prices with medical institutions and pharmaceutical companies in this disabling environment of the doctor-patient market. So buying medical insurance has become the only effective way to reduce medical costs.
As long as the number of people insured is large enough, the insurance company has certain bargaining power, and when dealing with the hospital, it does not have to be at a disadvantage like the patient.
Even in many cases, insurance companies still play an important role in determining hospital fees and doctors’ income.
How does the US medical insurance industry make big money?
In the past 20 years, the annual increase in the premiums of commercial medical insurance in the United States has far exceeded the increase in personal income and inflation, causing a huge economic burden on individuals and businesses.
High premiums are also the main reason why 25 million Americans lack medical insurance. However, due to the lack of government supervision, the specific reasons for the increase in premiums lack transparency. Medical insurance itself is a high-risk, low-margin industry, which requires government supervision and guidance.
Generally speaking, the people who need medical insurance the most are often those who need medical care the most. What insurance companies expect is that policyholders will pay more premiums and get less sick, so as to ensure their income and profits.
In order to increase profits, insurance companies substantially increase the premiums of high-risk groups, or increase the out-of-pocket amount of policyholders. The Obama Medical Insurance Act that year required that insurance companies not refuse people with existing physical conditions (such as heart disease, cancer and other common diseases) to join medical insurance, so the medical insurance company used this as an excuse to adjust everyone’s premiums upwards .
In addition, a tax law passed by the U.S. Congress in 1954 stipulates that the collective medical insurance expenditures purchased by companies for employees are not included in the taxation scope.
This has also caused many companies to purchase extremely generous medical insurance plans for their executives. In fact, the original intention of the 1954 tax law was to reduce the burden of the heavy taxation policy during World War II. I did not want to make this tax exemption policy a tool for some corporate executives to legally avoid tax because of the high medical expenses in the United States, and raise the overall premiums of the market. Level.
△Health insurance bill for flu shots in the United States
The growth of the medical insurance industry and the lack of government supervision have spawned many new profit industries, which further increased overall medical expenditures.
The most typical example is the so-called Pharmacy benefit management (PBM), which is an industry unique to the United States. In order to facilitate management, the medical insurance company outsources the right to negotiate with the pharmaceutical company and the management of drugs to a third-party PBM to handle the services involved in which drugs can be reimbursed, the drug treatment process, the market price of reimbursed drugs, and drug insurance claims.
PBM You can even veto the prescription prescribed by the doctor. There are also many channels for PBM to make money. They charge a service fee from the medical insurance company, get a rebate from the pharmaceutical factory, and can also sell drugs at a price higher than the agreed drug price to make a price difference. These profit channels are completely invisible to the government. The shadow of regulation.
This opacity has spawned a profiteering industry. In 2017, the U.S.’s largest PBM Express Scripts revenue exceeded 100 billion U.S. dollars, while Pfizer, the world’s largest pharmaceutical company, had only 52 billion U.S. dollars in revenue that year. Among the top 25 American companies by revenue ranked by Fortune magazine, 6 are PBMs. It can be seen that the patients at the bottom of the food chain are all paying for PBM.
Not only that, because PBM is an industry that makes money lying down, the quality of its internal staff is uneven, and because of PBM management problems, patients cannot get medicines in time, which seriously reduces the overall quality of American medical care.
It can be said that the federal and local governments are to blame for the chronic illnesses of the American medical system and the unbearable financial burden of ordinary patients.
The Affordable Care Act (Affordable Care Act, also known as the Obama Care Act), which was promulgated during the Obama era, has the greatest reform, but it has also brought a lot of controversy.
In this presidential election, the candidates of the two parties engaged in extremely fierce debates around the repeal of the Obamacare Act.
The sorrow of the marketization of the American medical system
In the current economic downturn in the United States, people are very sensitive to changes in tax rates.
After Trump was sworn in on January 20, 2017, he immediately signed an executive order, requiring various channels to prevent the continued implementation of the Obamacare case. In the same year, the Republican-controlled Congress amended the tax law to reduce the amount of fines in the mandatory enrollment clause for individuals to zero.
The insurance company once again increased the premium significantly. In addition, Trump has used many knives against the “Obama Healthcare Act” during his tenure, such as setting restrictions on Medicaid applicants.
As the Vice President of the Obama era, Biden regarded the “Obama Healthcare Act” as one of his political achievements, so he chose to maintain the status quo and make some minor adjustments irrelevant to the overall situation.
At present, most American politicians, whether Republicans or Democrats, are unwilling to make major reforms of the medical system, although the government can effectively reduce various expenditures after it has the right to bargain for medical services and drugs.
Unfortunately, as a last resort in the United States, companies do not allow the government to intervene, even if it will cause bad social negative effects.
Although the United States leads the world in medical technology, the newly developed treatments and drugs are not for the poor.
For example, after President Trump was infected with the new crown virus, he received a new antibody cocktail therapy, which burned at least 100,000 US dollars in three days, and ordinary people simply cannot afford such high medical expenses.
According to the analysis of the Kessel Family Foundation (KFF), a non-profit organization of public health in the United States, even with medical insurance, people infected with the new crown virus without complications need to pay an average of about US$9,800 for treatment.
If there are complications, the cost will exceed $20,000. This high-priced medical system, coupled with the government’s forward and backward thinking, has caused Americans to have a lower life expectancy than all other developed countries. This is the sadness of the United States.
