Compared to other advanced countries, Americans pay something like $8,000 a year per household in unnecessarily inflated costs under the nation’s antiquated health care system. In exchange for what amounts to an inefficiency tax, Americans get worse medical outcomes than much of the developed world.
That recent assessment by two top economists should be central to the health care debate. The urgency of reform is about more than just sympathy for the uninsured.
The stated purpose of the Affordable Care Act was to provide medical insurance coverage to the millions of Americans who couldn’t afford it, either because they’re poor but not poor enough to qualify for Medicaid, or because they have preexisting medical conditions that insurance companies refused to cover.
Part of the opposition to the act, and to other reform proposals being made today by (mostly Democratic) politicians, essentially assumes that these efforts are purely altruistic — a form of forced charity from the haves to the have-nots. But in fact, that’s never been the full extent of the reform movement.
Allowing some 20 million Americans to languish without health care coverage doesn’t take the cost burden off the rest of society; it just funnels the costs through hospital emergency rooms, where the public ultimately pays. By that point, the expenses often have become far greater because of the lack of preventative coverage available to uninsured patients.
That and other factors were driven home recently by Princeton economists Anne Case and Angus Deaton at a conference of the American Economic Association in San Diego. Addressing the health care situation from an economic perspective, they pointed out how various uniquely American factors — including what they said is an outrageously inflated profit structure for pharmaceutical companies, device manufacturers, hospitals and physicians — mean Americans pay more and get less in health care than their European counterparts.
America’s health care system costs about $1 trillion more than the next most expensive system, in Switzerland. That gap, the economists noted, translates into about $8,000 per American household. Case likened the cost to “a tribute to a foreign power, but we’re doing it to ourselves.” For all that, America continues to suffer lower life expectancy than advanced European nations.
Without specifically endorsing the Affordable Care Act or other Democratic reform proposals, the economists recommend moves that overlap aspects of those models: universal coverage, either through traditional insurance, Medicare-for-all or some combination of the two; cost controls, including limits on drug prices; and an aggressive campaign to eliminate waste and inefficiency from the system.
We already know that the preferred Republican approach of treating health care like a free-market commodity rather than a national priority doesn’t work. Figuring out what does is going to require taking the issue off the ideological battlefield and addressing reform as an ethical imperative — and an economic one.
-The St. Louis Post-Dispatch