Some facts I’ve learned from my experiences as a neurosurgeon.
American healthcare is an enormous medical industrial business complex. It’s current annual cost is around 3.5 trillion dollars and is 17% of GDP, soon to grow higher. There is a lot more to the complicated healthcare business than meets the eye, involving many different players including doctors, patients, insurance companies, hospital administrators, pharmaceuticals, medical device manufacturers, diagnostics, nursing, home health services and of course the middlemen medical supply companies. While many of these players are conscientiously concerned about healing the sick, there are some in the industry who are trying to make a quick buck, if not incredible fortunes. Consequently, America spends the highest amount of money per capita (over $10,000) for healthcare. In spite of such high expenditures, America’s healthcare not only has less than adequate outcomes, but also leaves millions of it’s citizens uninsured and many more underinsured. On the other hand, many OECD (The Organization for Economic Co-operation and Development) countries provide universal healthcare spending an average of around $5000 per capita. They seem to get a better for their buck!
I believe one’s impression of American healthcare depends on how wealthy one is, whether one has employer provided insurance, how good that insurance is and if one had an experience of serious personal medical illness or that of a family member or not.
Even though many American citizens swear their American healthcare is the best in the world, many others are confused and scratching their heads wondering why the system is as bad as it is. I believe one’s impression of American healthcare depends on how wealthy one is, whether one has employer provided insurance, how good that insurance is and if one had an experience of serious personal medical illness or that of a family member or not. Also, if one uses the yardstick of measuring the health of a nation as a whole, including those that are poor or unemployed or chronically sick, one’s opinion will be less than stellar. Unfortunately, the nation does not seem to be keeping its promise promulgated in the Declaration of Independence on protecting the fundamental rights of Life, Liberty and the Pursuit of Happiness to all the citizens even though it affirms that, “… all men (and women) are created equal.” Without such affirmation, the Western developed societies seem to be more equal than the USA when it comes to providing healthcare. Comparing and contrasting the American medical industrial business complex with that of Western developed nations and expressing it in brief opinion statements will not do justice to the complexity of healthcare delivery. As a neurosurgeon, practicing for 24 years in Flint, MI, I am quite aware of that complexity through my personal experience.
Like any general neurosurgeon in a community practice, I took care of patients with all kinds of health insurance plans including many uninsured patients. Patients who were insured had varying benefits depending upon how good their insurance was. Senior citizens had Medicare which was reasonably good. The poor were covered by Medicaid and other equivalent insurance companies. Unfortunately, reimbursements by these companies for physician and diagnostic services were so bad many doctors wouldn’t accept their enrollees. The patients that had comparatively better benefits were the ones that had plans provided by commercial private insurance companies like United Healthcare, Aetna, Cigna and Humana and the so called non-profit Blue Cross Blue Shield. Premiums for such coverage were not only expensive, but also kept rising in cost every year. These plans gave a false sense of good coverage as long as the employees didn’t get sick or lost their jobs.
The number one reason for personal bankruptcies in America is medical illness.
Some that were unemployed or had to buy individual insurance and not able to get group rates, found the costs prohibitive and opted to forego any insurance at all. Many who had private health insurance, mostly paid by their employers, felt their insurance was affordable, wonderful and they were happy with it. However, there were some unappreciated facts about private health insurance. One of the reasons the illusion that premiums for private health insurance were affordable was because companies would choose healthy members and deny insurance to the unhealthy with the excuse of pre-existing conditions. Also, the moment one developed any illness, like pre-diabetes for example, insurance companies denied benefits or simply terminated one’s coverage. I came across many self employed patients who lost coverage because of new treatable medical problems. Many thought they had good coverage with generous benefits only to find out that their coverage was meager, leaving them with thousands of dollars of medical expenses when a loved one in the family got sick. No wonder many went bankrupt!
The number one reason for personal bankruptcies in America is medical illness. Shockingly almost 70% of those that went bankrupt had private insurance. Additionally, these insurance companies used preexisting conditions as an excuse to terminate coverage if the patient was deemed to be costing them significant medical expenses. If you lost your job, good luck with getting any kind of insurance. You may end up in ER, even for simple medical problems, increasing healthcare costs and thus becoming a burden on society. Doctors are mandated to take care of you in the ER but citizens are not mandated to get health insurance. Since the insurance companies were picking and choosing healthy enrollees and shedding those who were sick, the healthy enjoyed relatively low premiums at the expense of the sick. All that changed when Obamacare became the law of the land.
The Sick American Healthcare System & The Birth of Obamacare
Throughout my years of practice, one perplexing question has bothered me time and again; how can there be millions of citizens uninsured and many more underinsured in the USA, the most powerful country in the world with the largest economy? This question has sparked my interest to dissect and analyze the healthcare system in our country. I wanted to see if I could diagnose the root cause responsible for the ills of American healthcare. Having dealt with private insurance companies, pharmaceutical companies, device manufacturers, hospital CEOs and players in every facet of the American healthcare delivery for many years, it is not hard to diagnose the cancer that is destroying the system, if we can call it a system in the first place. That cancer is this: the fundamental principle that healthcare in America, instead of being considered a human right, is a profit oriented business driven by greed and perpetuated by a corrupt political system beholden to special interest lobbyists. It is the principal reason that underlies the uncontrollable, skyrocketing and unaffordable healthcare costs in America.
The for-profit unnecessary middlemen private insurance companies, the greedy pharmaceutical and medical device manufacturers and the so-called not-for-profit hospitals that are, in reality, for-profit are the main culprits. Some doctors and many enterprises providing diagnostics, nursing and home health services are fraudulent and add to the escalating healthcare expenditures. Since greed and profit are significant components to the American healthcare delivery business, as long as government does not regulate it, and citizens continue to pay – it is inevitable for the costs to become unaffordable. As soon as he became president, Obama made healthcare reform the first major legislation of his presidency. His intention was good in that he wanted every American to have affordable and decent healthcare. He asked The American Medical Association for help because he knew the nation was not going to accept a Scandinavian style Single Payer System and wanted at least a public option. But Senator Max Baucus, who was the chairman of Senate Finance Committee, told President Obama if he wants any healthcare legislation to be passed with filibuster proof 60 votes in the senate, he had to forget the public option. The only reason that public option did not realize, was because insurance companies realized that such an option would be a formidable competitor which could kill their companies. They made sure politicians didn’t vote and providing solid proof of the influence and grip of private insurance companies over US Congressmen and women. Obamacare was born without any public option and became the law of the land.
The Death of Obamacare
When Obamacare became the law of the land, I predicted then, that noble it might be in its intention, the Affordable Care Act (ACA) was going to fail to provide universal, decent affordable healthcare because it did not harness the root causes of greed and profit. As a consequence, many citizens experienced increased premiums, became very angry with Obamacare and the conservative Tea Party was born. This Tea Party demanded the repeal of Obamacare. During the following midterm elections President Obama lost the Democratic majority in the US House of Representatives. The now majority Republican House of Congress attempted many times to repeal and replace Obamacare without actually providing a replacement plan even though Obamacare did have many good aspects to it.
There were 45 million uninsured and many more underinsured Americans resulting in 45,000 people dying annually before Obamacare. With the ACA and Medicaid expansion, 11 million uninsured were able to get some kind of insurance and their health got better compared to when they had no insurance. Health insurance exchanges allowed many to join the individual market and get plans which suited their economic condition. As a result, an additional 11 million citizens could become insured. There were other commendable aspects to the ACA.
Obamacare banned pre-existing condition denials, eliminated limits on coverage, expanded basic benefit packages, included preventive care, and allowed children to stay on their parents’ plans until 26 years of age. Also, insurance companies were restricted on claiming high administrative costs which included private jets, dining on gold rimmed plates, incredible salaries, stock options and bonuses for their CEOs.
In order to maintain their profit margins, private insurance companies raised premiums, pushed medical expenses onto patients in the form of co-pays, high deductibles and co-insurances. President Obama trusted insurance companies to create healthcare exchanges which would provide affordable health plans to deliver as was promised. He also promised citizens could keep their private health insurance and their doctors if they were happy with them. Contrary to the promises made by President Obama, many could not keep their insurance or doctors. Little did the President know that the private insurance companies were not interested in providing quality affordable healthcare. Their mission was to make as much profit as possible for themselves and their stakeholders. Many charged higher premiums and eventually pulled out of the exchanges, all the while making incredible profits. No wonder there was a backlash against Obamacare. Unfortunately, President Obama received all the blame instead of the greedy useless middlemen-for-profit and so called non-profit insurance companies.
The Tea Party and many Republican politicians fanned the flames of hatred towards the fear of Obamacare becoming a government take over that would turn America into a socialist country. That didn’t happen, but still many have a deep visceral hatred towards Obamacare, aligning it with the likes of socialism and communism.
It would be interesting to know, how many Americans have traveled to Scandinavian countries to see for themselves how their healthcare systems are run. I have personally come across many patients who’ve hated Obamacare, calling it socialized medicine, even though they were getting benefits by the ACA. I am surprised at the extent of animosity towards the ACA, even though millions of citizens have gained access to some healthcare as opposed to none before Obamacare. This has inspired me to pick up my camera and to go around the world to shine the light of the truth of healthcare in America and other comparable developed nations.
Healthcare in Western European Nations
As part of my journey to understand and compare the American healthcare system to that of the Western European nations, I’ve traveled to France, England, Germany, Sweden, Holland, Denmark and also the former communist countries; Czech Republic and Hungary. I’ve talked with doctors, as well as, ordinary citizens. I came to know many facts about their healthcare systems. Contrary to the USA, many of these developed nations consider healthcare a human right and not a profit-oriented business. There is no country among them with perfect healthcare systems, but they do provide better universal healthcare for much less than that of America. They do it by way of just and fair government oversight of all the players in healthcare delivery and by controlling prices. Consequently, there is a reining in of uncontrolled greed and profit. Whereas America allows greedy, profit-oriented enterprises to dictate the markets, expecting them to be fair. Unfortunately, this is unrealistic. One of our founding fathers realized this truth that government oversight is essential. Without such monitoring selfishness reigns unchecked.
“If men were angels, there would be no need for government; but men aren’t angels.” – James Madison
The democratic socialist countries have grasped this truth and implemented checks and balances over greed and profit through systems that suit their countries. We don’t have to reinvent the wheel. We can pick and chose the ones that suit our country. Here are some of facts I’ve learned through my global journey documenting healthcare systems:
- First of all, there is no free healthcare in any of these countries, including the democratic socialist Scandinavian ones. Healthcare is paid for by taxes from citizens which are progressive depending on one’s income. By the way, in Denmark and Sweden those taxes provide not only decent healthcare but also cover other costs for children up to and including university education. For that reason, they do not complain much about paying taxes (see video: https://vimeo.com/360702459). As an American citizen, I pay a lot of taxes but get zero healthcare or education relief for my family and myself. Instead, I see a lot of those taxes going towards unnecessary wars and tax breaks for the wealthy.
- In order to ensure healthy citizens enroll in health insurance to achieve lowered premiums for everybody, the government must mandate buying health insurance. I remember talking to a girl in Amsterdam, Netherlands the day before her 18th birthday. She said on her 18th birthday she has to get her own health insurance and would no longer be on her parents’ plan. With individual mandate repealed in the USA, the premiums will continue to skyrocket.
- There is an impression that some people in socialist countries are lazy, non-working moochers who still get to reap all the benefits. Sweden makes sure their government looks for jobs for the unemployed who are receiving unemployment benefits. If they refuse to take that job their benefits will be cut off. In America I see so many patients applying for disability and getting it without any significant physical or mental handicaps. The lawyers that are part of this disability benefits industry are making it worse, because they benefit financially from securing such benefits for their clients.
- Regarding insurance company profits, Western governments make sure there is a decent benefit package and ensure a limit on CEO profits and salaries. In spite of it, the more the insurance companies are involved in healthcare delivery the more expensive the system becomes. That’s why Switzerland, which has significant participation by these companies, costs close to what America costs per capita.
- As far as pharmaceuticals, in France patients don’t pay much for drugs. The country does not allow price gauging. Also PhARMA dictates the prices. The PhARMA lobbyists influenced politicians to forbid Medicare, the largest health insurance entity in the world, to bargain for discount prices through its economy of scale. How is this fair market economy as they claim America is?
- Device manufacturers in Germany sell directly to hospitals with one of their employees as a liaison to make sure there is smooth supply of devices and the medical personnel are properly trained. They are also available to troubleshoot. In America, there are layers upon layers of distributors. A national distributor that contracts with a regional distributor who in turn contracts with state distributors. The state distributor then contracts with sales people for different locations in the state. No wonder a spinal pedicle screw in America costs 50 to 100 times that of the actual manufactured cost and is many times higher than in other countries.
By the way, the health insurance companies, which are unnecessary middlemen to begin with, also have middlemen; middlemen for middlemen! They are called insurance agents or brokers who are actually recruiting enrollees by promising comprehensive benefit packages but delivering skimpy benefits and denying claims for medical costs. They add unnecessary administrative and profit costs which then explains unaffordable premiums. While patients are going into debt or bankruptcies, brokers and CEOs of the insurance companies they are channeling the enrollees to live lavishly and fly around in private jets.
- Doctors get paid more in the USA upfront but pay for health and education and other ancillary services like nursery care later. One of the orthopedic surgeons I talked with in Paris, told me that in France taxes are taken out upfront for education, healthcare and other services so the doctors’ take home pay is less but evens out.
- Hospitals are paid like global budgets and non-profit hospitals are generally managed as such, not as for-profit as done in America. By the way, the CEOs of these non-profit hospitals in America make millions without ever putting a single dollar of their own money as an investment. They play with hospital money. In England the hospital administrators get salaries, not huge bonuses.
- Even the ex-communist countries like the Czech Republic and Hungary, abandoned the communist political system but kept state run universal healthcare system.
- Every citizen in Canada, our neighbor to the North, gets a Medicare card which covers their essential healthcare needs from birth till death. The emergent care is taken care of appropriately. Of course, many Americans ask the question, why do Canadians wait longer, than in America for non-emergent healthcare interventions? That is the wrong question to ask. As Americans, we should instead be asking a different question; how can we allow 30,000 citizens to die annually due to lack of healthcare in the most powerful country on earth? Everybody knows, it is always better late than never.
Obamacare is not perfect, but Trumpcare will be worse. President Trump said, during his presidential campaign in 2016, that he was going to provide the best healthcare for cheaper prices and it was going to be “easy.” The moment he became president, he said nobody knew healthcare was so complicated. He may be the only one that thinks healthcare is easy. As long as President Trump surrounds himself with cabinet members who are ex-lobbyists, like Alex Azar who was a PhRMA lobbyist, pharmaceutical costs will remain uncontrolled. Trump’s idea that private insurance companies can be trusted to bring premiums down is pure wishful thinking. Additionally, his plan to privatize Medicare and Medicaid will only make healthcare unfortunately more unaffordable.
Unless government oversight either eliminates or significantly reins in the greed and profit in the medical industrial business complex the ills of American healthcare will not be cured. It is time to create a society that is true to the fundamental American principle of guaranteeing Life , Liberty and the Pursuit of Happiness to all citizens.
- Highest-paid health insurance CEO earned $22M in 2016
- The National Health Expenditure Accounts (NHEA)
- The Organization for Economic Co-operation and Development
- This is the real reason most Americans file for bankruptcy
- FACT SHEET: The Affordable Care Act: Healthy Communities Six Years Later
- Health Insurance That Doesn’t Cover the Bills Has Flooded the Market Under Trump