The United States will spend more than $2 trillion on health care this year, which is more than enough to pay for comprehensive health care for everyone. That includes $200 billion (10%) on prescription drugs. Yet we will continue to see adverse health outcomes, including death, because millions are finding that health care is simply unaffordable. It is a national disgrace that people will die merely because they could not afford to purchase their prescriptions and other essential care, even though we are spending enough to provide for them.
The problem is not the affordability of drugs; the problem is the highly flawed and fragmented system with which we fund all health care, including drugs. We depend not only on public programs such as Medicare and Medicaid, but also on private plans, both employer-sponsored and individually purchased. Charity, intended or not, and public clinics and hospitals represent other major sources of funding.
Rather than the affordability of health care, much attention has been directed to the affordability of insurance plans. For tens of millions of Americans, insurance is simply unaffordable, and they go without coverage. For those who do have insurance, more costs are being shifted to the individual to control the prices of premiums. Some of this is in the form of reduced benefits, such as more restrictive formularies, but a greater portion of the shift is in the form of increased cost-sharing. Typical of these user fees that are applied at the time of accessing services are the high co-pays, out-of-pocket expenses, and step formularies required with upper-tier drugs.
Since we are spending enough to provide comprehensive care for everyone, and yet so many fail to receive the care they need, it is obvious that much of our health spending is not providing value. Where is the waste? One major source of waste is that our fragmented system of funding care is administratively complex for the payers, and it places an even greater administrative burden on the healthcare delivery system. Hundreds of formularies administered by innumerable PBMs are obviously much more burdensome than a single, comprehensive, national formulary for evidence-based Medicare (EBM), which would automatically include everyone and would use a single automated billing system.
Healthcare systems with a strong primary care infrastructure have been demonstrated to provide higher quality care at a lower cost. Yet primary care is in dramatic decline in the United States. A unified system of funding care would establish incentives to encourage expansion of the primary care infrastructure.
Many studies have confirmed that allocation of our healthcare resources is flawed. Some geographical regions are underserved, but others have excess capacity in high-tech services. It has been shown that this excess capacity results in a significant increase in the delivery of high-tech services without any commensurate improvement in health outcomes-and frequently with lower quality and patient-satisfaction ratings. A single funding system would provide data that would identify these wasteful deviations, enabling the application of appropriate adjustments in resource allocation.
We spend more for health care here than in other countries. A single monopsonistic purchaser for the healthcare system could negotiate fair prices. For pharmaceuticals, negotiations would cover costs, fair profits, innovation, and research expenses but would exclude waste such as excessive marketing expenses. Physicians would be able to negotiate appropriate rates, and hospitals would negotiate global budgets. Americans want a first-class healthcare system, so they'd support the funding of legitimate costs and fair profits, just as they support the funding of schools, highways, and police and fire protection.
Several decades of reform efforts have demonstrated that building on our flawed system of funding health care has only increased costs while leaving too many without access to affordable care. We have enough money to pay for health care for everyone. We need only the political will to dismiss the incompetent insurance middlemen running the system and replace them with a single national health insurance program. With our own public system, we would finally be in a position to demand high-quality healthcare products and services for everyone.