35. Cost Outstrip Benefits of US Medicine
Since Obama came into office in 2008, Medical costs as a percent of our gross domestic product (GDP) have risen sharply to 17.3% of GDP in 2022 or $4.5 trillion with a per person expense, $13,493 (Statista). In 2023 with a 5.5% increase in costs and a GDP of $27.36 trillion, medical costs have increased to $4.84 trillion dollars; an expense of $14,423(per person), rising to 17.7% of GDP. On Nov. 6, 2019, The Center of Budget and Policy(gov.) concluded “the expansion of Medicaid saved at least 19,200 adults age 55-64 from 2014-2017.” US healthcare, while significantly increasing in expense, has suffered declining live expectancy this century, why? Yet despite dramatically increased expenses, longevity and many important medical metrics have declined and been outpaced by our peer group including infant mortality, maternal mortality after childbirth, cesareans and obesity in America according to CDC. Why and what can be done?
In 1980, the mortality age was 73.61 and GDP expenditure on Medical was 8.99%. In 2000 the mortality age was 76.64, a marginal improvement; however, GDP expenditure jumped to 13.3% and in 2022 the mortality age declined to 76.4 and the expenditure on Medical increased to 17.3% [Harvard by TH Chang, School of Public Health using CDC numbers released Dec.’23]. This cost far exceeded the medical costs of 14 wealthy countries (the peer group) whose medical expense averaged 11.15% of GDP and whose longevity averaged 82.2 years. The top four lifespan countries today are Monaco 89.52, Singapore 86.32, Macau 84.98 & Japan 84.83.
“In 2022 prescription drug expense increased 8.4% to $405.9 billion, faster than the 6.8% in 2021.”[National Health Expenditures(NHE) Center for Medicare and Medicaid Serves(CMS).gov. Concluding that “retail price drugs represent less than 10% of total expense and are not the primary driver of the nations high health costs.”[KKF study(Feb.’24)]. Today there is nonpartisan unanimity that Americans are paying too much for medications. In addition, NIH spent $40 billion on medical research and private and charitable entities spend over $200 billion on medical research annually, which is 46% of the global spend. [NIH ‘23]. Underscoring the conundrum of America’s leading in medical research but failures in medical care.
This paper will focus on the unbridled increase of the 90% of healthcare costs (absent drugs) particularly since the Affordable Care Act (Obama Care) and make an effort to suggest methods that costs could be reduced and results improved. Momentarily we will show elevated costs of US medical care since the Affordability Care Act in 2010 and inferior performance when compared to the peer group on service and quality
Eliminating Insurance & Risk from Medical Coverage Pricing
Since Obamacare, the US Government regulates and effectively determines the schedules for both government and private companies. The US Governments (Federal and State) account for 53% of all medical expense. American excess expense is over 6% of GDP higher than the peer group or $1,641,600,000. Despite our huge cost for medical care America lags behind by almost six years in mortality as well as a number of other critical matrix of health. Begging the question why? Overspending $1.6 trillion in ’23, almost what our annual deficit is! Why? How could our longevity be increased and our costs be reduced?
Rather than interpreting the failures of medical plans in California and Massachusetts as the bureaucracy’s ineptitude, a series of Federal Laws were passed ending with Obama Care transitioning the failed medical service systems in two states to the whole nation. Now we are suffering the consequences. The Federal Government beginning with HIPPA and ERISA 1994, through COBRA, Health Care Choice Act 2005, to the Health Insurance Marketplace Modernization and Affordability Act (HIMMAA) Law-S. 1955, in 2006. Up to The Affordable Care Act (Obamacare) in 2010 nationalized our Medical Health System. Naturally Congressional Budget Office (CBO) provided false projected savings to make it appear “affordable”. “CBO estimates that a shift would increase Federal Revenue by $3.3 billion from 2007 by 2016” They also falsely estimated a reduction in Medicaid expense. “CBO estimates that enacting Law-S1955 would reduce direct spending for the Federal Share of Medicaid by $790 million over the 2007-2016 period.” CBO was wrong again, Medicare spending was $330 billion in 2007 and by the end of 2015 it was $556.5 billion [CSM.GOV. Dec.6, 2017]. Notice that when these programs pass, they have the word affordable in their name. Refer to The Economics of Medicine and Our Future Welfare p.7. for more detail.
When the US is compared with the peer group on life expectancy from 1980 to 2022, we are clearly falling behind in a number of important medical matrix while our medical costs per person have more than doubled. “In 1980 US life expectancy was 73.61 years, while the peer group was 74.7 years and in 2022 US life expectancy was 1)76.4 years and the peer group averaged 82.2 years.” (Peterson KFF, Oct. 23, 2023, by Teleeford, Wager, Arnin & Cox). “Moreover,2) adjusted mortality in 2020 in the US was 1,034.3 per 100,000 while in the peer group it was only 766.1.” 3) Maternal mortality rates per 100,000 live births in 2020 were US 23.8 for Canada 8.4, Sweden 7, Switzerland 1.2 and country peer group average was 3.6 deaths.4) Number of Cesareans per 1,000 live births were 320 in the US and 210 for comparable country average. (Peterson KKF). 5)Infant mortality up to age five the US placed 33rd out of 37 nations, when compared to the Organization for Economic Co-operation and Development (OECD) countries at 6.2 deaths per 1,000. With only Turkey, Mexico, Columbia and Chile placing behind the US.. 6) In adult obesity the US is ranked 13th out of 193 countries at 42.4%, with no country in the peer group even close. [World Factbook CIA-2016-2024].
Above are the byproducts after 14 years of the Affordable Care Act., proven to be anything but affordable. During the period leading up to and including the Affordable Care Act notice that Medical Insurance, (Insurance which required pricing human health risks differently) had been erased. The so-called medical insurance companies were being price regulated in compliance with Medicaid and Medicare. Government by taking away the monetary incentive to lead a healthy life, discouraged Americans to manage their health. “Today 42.4% of American adults have an obesity Problem. . . that has increased 26% since 2008.”[healthinfo@NIDDK.NIH.GOV]. Taking the higher pricing of medical coverage away for obesity lead to many Americans being less attentive to their health and has dramatically increased the cost of medical care. Today legislatures are moving to reduce the cost by flooding the market with expensive fat reducing pills rather than addressing the lack of self-oversight.
Sharp Contrast Between the US System and the Swiss Decentralized System
The Swiss Universal Healthcare System requires the purchase of a insurance policy by each citizen. and requiring a 10-20% co-pay. transferring part of the cost to individuals for use. The Swiss government only sets prices for medication
There are 26 Cantons (regions or states) and 60 independent insurance companies. Each Canton is responsible for oversight of its medical services and medical insurance and if needed providing subsidies. Unlike the American system, the Swiss system is decentralized and transfers all the coverage cost and a portion of the use cost(deductible) to the consumer. Although the total expense of medical services in Switzerland is 11.3% of GDP, the cost to the Swiss Government is only 2.5% of GDP, unlike the centralized US government which bears 53% of medical costs are 9.2% of GDP, where the total expense is 17.7% of GDP. According to a 2023 ranking by Statista, the Swiss system ranked 3rd while the US ranked 19th. In a recent study by US News with Sweden ranked first in medical care, the Swiss were ranked 6th and the US was ranked 23rd. In a recent study by World Population Review, Best Healthcare in the World-2024, Singapore ranked #1, the Swiss were 10th and the US was 69th.
The US is spending 6% of GDP more than the Swiss and a group of 13 peers that totals $1.6+ trillion a year. Yet on a number of metrics, they are performing worse, including longevity, why? Is the US centralized system failing to encourage participants to chose healthy behaviors? If so, why? Are individuals who bear a cost in their healthcare more likely to take care of their health?
In Conclusion
Laws this Century, Health Care Choice Act 2005, Revised in ’07, HIMMAA, Law-1955 in 2006, which amended Title One ERISA and The Affordable Care Act, like so many of our Federal Agency Laws came into existence because the bureaucracies of California and Massachusetts were doing terrible jobs of managing healthcare in their states and going broke in the process. So the Federal Bureaucracy stepped in nationalizing a failed system and claiming they were making it affordable. “I will pay for the Affordable care Act by using the interest charged on student loans.” Obama.
The correct conclusion likely would have been that bureaucracies are unable to handle doctor patient centric relationships by imposing national medical systems. Although the early legislation up to Obamacare often cited the Swiss system, the implementation of the cumulate laws that created today’s dysfunction always transferred decision making from the states and individuals to the Federal Government.
During the same time many in the political class gained political power by promising Medical Care to all and convincing the citizenry they were entitled; giving birth to a culture where medical coverage was an entitlement, a social right. Today the sad fact is that Drug Cartels recruit on our emergency room policies “good Samaritan care” consequentially leading to 33 hospitals entering bankruptcy and 12 shuttering their doors in ’24.
Costless care in America has led to improper diet, obesity currently 42.4% of adults, one of the highest rates in the world. Also, to a flurry of medical malpractice suits and elevated malpractice insurance that has caused 100,000 doctors to leave private practice over the last 12 months and matriculate to hospital systems for employment and 11 hospitals to shutter during ’24. Although the expense of Government controlled medical care in the US is clearly a major driver toward insolvency, the federal government by taking the price out of care for countless millions causing millions to diminished their involvement in their own care, with dire consequences to health and cost.
Note 14 peer group countries cost of medical care percent of GDP:
Germany: 12.7%, France 11.9%, Japan 11.5%, Austria 11.4%, United Kingdom 11.3%, Switzerland 11.3%, Netherland 11.2%, Canada 11.2%, Belgium 10.9%, Sweden 10.7%, Portugal 10.6%, Spain 10.5%, Finland 10.2%
Natural Ways to Clear Zombie Cells (preview of a future podcast)
When cells can no longer divide in the aging process they become Zombie cells. These cells play a harmful role in our overall health. “Harmful stimuli that produce Zombie cells include: Obesity, high blood sugar, DNA damage, oxidative stress, excessive alcohol intake, impaired immunity. [Reducing Zombie Cells Can Keep Us Younger, by Yuhong Dong, July 3, 2024.] Experiments are ongoing to repress the effects of Zombie cells and extend life. The author, Mr. Dang suggests four life style changes that can greatly reduce Zombie cells and add years that don’t require pharmacological remedies, particularly of interest to older folks.
1) Caloric restriction- Intermittent fasting can reduce food intake and decrease Zombie cells in the large intestines, slow down aging and increase longevity.
2) Autophagy- From the Greek word, eating of self, brakes down waste between aging or diseased cells, preventing the formation of Zombie Cells. Dietary supplements such as resveratrol, curcumin & spermidine are believed to induce autophagy while benefiting heart and brain.
3) Moderate Exercise-Exercise will decrease the presence of Zombie cells in critical organs, heart, liver, kidneys and adipose tissue (body fat).
4) Meditation- Practicing a type of meditation focused on love and kindness enhance immune function, repress inflammatory signals and mitigate brain shrinkage.
Have a blessed week! From Sunshine & Transparency
Tony Christ