Fixing the health care system: Four facts to focus on when reading election year health policy stories

michael joynerThe following guest post is by Michael Joyner, MD, a medical researcher at the Mayo Clinic. These views are his own. You can follow him on Twitter @DrMJoyner

It’s an election year, which means that candidates, political parties, and interest groups are shopping their plans for how to fix our health care system in the news media. For example a group in Colorado says it wants to replace the state’s Obamacare plan with a universal single payer health care system that would cover everyone. House Speaker Paul Ryan has offered a “Republican plan” that has been rated as both “flimsy” by the Washington Post and “better than good” by Forbes. According to the Wall Street Journal, Hillary Clinton has talked about Medicare for 50-somethings. The Trump plan seems to be in flux, but some attempts have been made to project its financial impact compared with proposals made by Clinton. There are also persistent reports about shorter life expectancy in the U.S., and what that says about our health care system.

Camden, New Jersey, U.S.A. - May 11, 2016; Presumable candidate for the Democratic party Hillary Clinton visits MD Andersen Cooper Cancer Center in Camden, New Jersey during a campaign stop in South Jersey.All of this means that the politics of health care and health care “reform” are never ending.

Facts about health care spending

However, to paraphrase the late Daniel Patrick Moynihan, “Everyone is entitled to their own opinions, but they are not entitled to their own facts.”  So here are some facts that seem to get lost in the political posturing and news reports about health care in our country.

  • The U.S. spends about 17-18% of GDP on health care. This is well known and there is little debate about it.  Of note, other rich countries spend between about 9-12%.
  • Less well known is that about 65% of health care costs in the U.S. are either paid for or subsidized by the taxpayers (see table below). Most of this is Medicare and Medicaid, but it also includes other government programs, subsidies in the tax code and health coverage for public employees.healthcare expenditures
  • Do the math and you’ll find that 65% of U.S. health care costs adds up to somewhere between 11-12% of GDP–around the high end of what other developed countries spend. So the “government” in the U.S. already finances about as much or more of health care costs than in other rich countries.
  • There are various estimates of how much over treatment, low value treatment, or just plain waste there is in the system. However, a reasonable rule of thumb might be about a third of health care spending is “wasted” one way or another.

When I try to pull the big picture ideas from points 1-4 above together, it seems to me that there are more than enough resources to get the vast majority of people a reasonable package of health care coverage. There are numerous approaches used in other rich countries and not every rich country has a single-payer system. Most have a mix of public and private systems, and most countries have figured out a way to get almost everyone covered. In the U.S., by contrast, about 11% of the population is still uninsured.

One other caveat is that life expectancy in America is shorter compared to other countries, and we are an outlier when it comes to “life expectancy” per unit of money spent.

life expectancyHowever, even if someone waves a magic wand and gets all Americans covered with high-quality health insurance tomorrow, don’t expect the life expectancy curve to get fixed anytime soon. It is estimated that at least 50% of the U.S. life expectancy gap is due to gun violence, accidents, and drug overdoses–things that can’t be fixed simply by getting everyone health insurance.

Universal health care is within reach, but isn’t a panacea

My bottom line is that plenty of resources are devoted to health care in the United States. Getting everyone covered isn’t a matter of resources; it’s a matter of using those resources more effectively.

Similarly, health care coverage isn’t the only thing keeping us from catching up to other nations with respect to health care outcomes. Gun violence, addiction and other issues will continue to set us back regardless of our how good our health insurance is.

Michael Joyner has done preclinical technical consulting for GSK, Amgen, Boston Scientific, Edwards, and Nonin on issues related to physiological monitoring, cardiovascular disease and diabetes.  He is on the board of Xcede, a startup focused on tissue sealants.  As a clinical anesthesiologist he prescribes no drugs or products related to his consulting. You can follow him on twitter @DrMJoyner.

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Liz Tily

July 6, 2016 at 11:53 am

I’m frustrated with the billions spent on healthcare for diseases that are 100% preventable. Example, heart disease and type 2 diabetes. I feel like prevention is so underrated. The meat and dairy industry are so powerful and there’s so much money in processed food that the power of healing through healthy eating is never mentioned by government. A whole foods plant based diet could save our system. Why doesn’t anyone care?