Health Care Poverty – An American Phenomenon.

Posted on | January 25, 2018 | 3 Comments

Mike Magee

With great fanfare this week, the CEOs of Amazon, JPMorgan Chase, and Berkshire Hathaway announced that they were creating a healthcare company “free from profit making incentives and constraints.” Pledging to provide their combined 1.1 million employees with “simplified, high-quality and transparent healthcare at a reasonable cost” by “harnessing technology”, their move is more about parochial cost control and segmented solutions for the “have’s” than addressing fundamental inequities for the “have-not’s”.

For stark contrast, a recent report by Professor Philip Alston, UN Special Rapporteur, on growing poverty and absence of solidarity in America, approaches the problem from the other end. Alston writes, “instead of realizing its founders’ admirable commitments, today’s United States has proved itself to be exceptional in far more problematic ways that are shockingly at odds with its immense wealth and its founding commitment to human rights.”

By whatever measure you choose – the Stanford Center on Inequality and Poverty rankings, the OECD comparisons of 37 developed nations, or the World Income Inequality Database – the U.S. owns the bottom and continues to decline. Of special concern are American youth, 25% percent of whom fall under the poverty line compared to an average 14% across all other OCED nations.

In health care, we are a walking contradiction. One of the wealthiest nations on Earth, we manage to live shorter and sicker lives than everyone else. One in every eight Americans now lives in poverty, and half of those fulfill the definition of “extreme poverty”. Over ½ a million citizens are now homeless.

Over the past three decades, wages have stagnated for the bottom 50% of Americans, while earnings for the top 1% have increased by 205%, and earnings for the top .001% have increased 636%.

These disparity figures decline further if you factor in the medical outlays of the poor and the rich. A recent analysis found that “medical outlays effectively redistributed about 1.37% of total income from poorer to richer individuals.”

Half of all uninsured people have trouble paying medical bills, and 20% of all insured do as well. In the past few years, health costs have sent an additional 7 million Americans into poverty, in part because health insurance deductibles have increased fourfold between 2006 and 2017. 90% now pay in excess of $1,300 individually and $2,600 per family in deductibles. The new poor are sicker than ever before as well, because of care avoidance and because they lack the resources for basic services.

Even as utilization of both outpatient and inpatient services and therapies have declined in the past two years, spending has increased, not decreased, as a result of aggressive corporate pricing. For example, while hospital admissions declined by 13%, spending has risen 8% over the past 5 years. That was a bargain compared to drug prices. Spending there rose 27% over the past 5 years despite decreased utilization across all classes of drugs.

Not surprisingly, a majority of Americans (66%) now cite the cost of health insurance as a major stressor in their lives. It’s enough to make you sick! And yet, that is good news for American investors in the Medical-Industrial Complex, which now accounts for 1/5^th of our economy.

What Jeff Bezos, Jamie Dimon, and Warren Buffett fail to realize is that treating health care as a business challenge and opportunity in the immediate post-WWII period was this nation’s “original health care sin.” Tinkering at the edges will have little, if any, impact. What is required now is a well thought-out, universal approach to coverage that shares risk and benefit for all of our citizens, and provides a pathway to health for all Americans.

Comments

3 Responses to “Health Care Poverty – An American Phenomenon.”

Barbara Kennedy
January 31st, 2018 @ 9:11 am

I would be interested in finding out how the CEO’s of those companies fare in their effort to develop a health care plan that will remain transparent and low cost. As a 64 year old women I have learned that I can not afford to have recommended medical tests completed without going into debt for years. And what is more sickening is that the CEO’s and other employees of insurance companies are given huge bonuses. Why is this practice allowed? The cost to consumers could be so much lower if not for the greed.
Mike Magee
January 31st, 2018 @ 9:34 am

Barbara-
Thanks so much for your thoughtful comment. Greed of course is part of the problem, which I suppose, must be expected since we have encouraged, in the name of “defeating disease”, health care as an entrepreneurial business opportunity for well over six decades. We took this course originally as Canada thoughtfully asked itself “How do we make Canada and our citizens healthy?”, and as out military built national health systems for both Germany and Japan, ravaged by WW II, as part of deliberate nation building projects. We now must return to the basic question, “How do we make America healthy?” The answer begins with universal and equitable coverage and national health planning. Anything less will simply be tinkering at the edges. Best, Mike
Olive Jason
February 26th, 2018 @ 3:10 am

This is a must read. Please do keep sharing articles like these.