Obamacare is not the best deal for America but Trumpcare would be worse

US policy makers need to move beyond senseless references to ‘single payer’ and ‘socialized medicine’

August 2, 2017 21:58

DEMONSTRATORS PROTEST in front of Washington’s US Capitol. (photo credit: REUTERS)


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An American born today has a life expectancy of about 80 years.

A Japanese infant, 85. In other words, compared with Japan, about 850,000 more Americans die prematurely every year. A similar account would follow a comparison between the US and each of its other major political and economic allies including Australia, Canada, Israel, the countries of Western Europe and the Scandinavian countries.

Any attack on US soil would have to decimate large or densely populated areas to match the number of casualties currently suffered by US citizens simply because of inadequate medical care.

The number of annual premature deaths in America also includes a toll of roughly 62,000 men and women ages 20-39, the common age range of active military service. This number likely exceeds any reasonable estimate of casualties that this age group might incur in active service in global conflicts today, including those in the Middle East and the Korean peninsula.

The total number of preventable deaths in the US includes about 315,000 working-age adults (ages 25-64). In addition to this loss, the rather unique role American employers play in the health insurance of their employees increases labor costs and is detrimental to employment.

The consequent combined losses in productivity and wages probably outweigh the output lost to jobs outsourced to China and Mexico.

The differences in longevity and mortality between the US and its major allies cannot be exclusively attributed to variations across countries in access to, and quality of, health care. However, these variations do play a major role in accounting for these differences, which cannot be solely attributed to variations across the countries in environment, education, income and lifestyle.

In addition, the average Japanese citizen makes an annual contribution of $4,250 toward health care while the average American contributes twice that amount despite their lower health status. Here, again, this dismal account of American comparative health care costs does not change dramatically when comparing the US to any of its other aforementioned allies.

This cost difference follows in part because Americans foot some of the bill for medications and other technology used in the other countries where, due to regulation and centralized purchasing, equipment manufacturers and drug companies often cannot recover in full the sunken development cost of new technology. American patients pay this cost because they are exposed to monopoly powers more than their counterparts in other countries are. Yes, some poor Americans pay for the healthcare of some rich Europeans. And while we are on the subject of “fairness,” I dare say that this American subsidy may amount to more than the US is paying above its “fair share” to NATO.

How much worse a deal can America get? While it may be difficult to imagine, one need look no further than the proposals currently being considered by the American Congress.

Instead, dream of a place where every American – regardless of income, age, employment status, location, disability status, or other life circumstances – receives adequate care in a timely manner by a provider of choice, with minimal (if any) out-of-pocket payments.

This American dream is reality in the other countries, with a lower financial burden overall and a higher life expectancy than can be expected in the US today.

The Affordable Care Act (ACA) has been a step in the right direction. It has improved access to medical insurance and care, and – if not repealed – could contribute to the improved health of Americans in the long term. Nonetheless, the ACA falls short of effectively aiming at goals these countries have clearly achieved despite each having their own unique systems.

Indeed, rather than backtracking, reform efforts in the US should be pushing forward toward adopting the principles that America’s closest allies have accepted and tested over the past three decades: First, each system grants universal entitlement to a core set of medical benefits that are based on medical conditions and indications, not on employment status, place of work, income, age, or the level of one’s mandated contributions to the system.

Second, these benefits are funded through mandated individual or household contributions, usually income-based, that need not be collected exclusively in the form of general taxation.

Third, to sever the link between a citizen’s or resident’s contributions and his or her entitlement, contributions are first pooled and then distributed to national fund holders – either multiple competing plans or one non-competing state administrative agency – that act as purchasing agents for their membership or constituency. This distribution is based on the criteria of need and efficiency.

Fourth, participating plans must accept all applicants who want to enroll regardless of preexisting conditions.

Fifth, citizens or residents retain the right to obtain additional medical benefits, if they so choose, by the use of private funds i.e. – paying for services out-of-pocket or through privately purchased supplemental medical insurance.

In addition to the demonstrable gains in population health and lower cost, the implementation of these shared principles enhances economic activity in two ways. First, employers play only a minimal role in the health insurance market: work and hiring decisions are separate from health care issues. This boosts employment and helps employers and employees make more efficient employment decisions than we find in the US today. Second, universal entitlement to core medical benefits funded through mandated income-based contributions frees household spending decisions from the horrors of medical bills and debt, thereby unleashing consumption expenditure for the benefit of the entire economy.

US policy makers need to move beyond senseless references to “single payer” and “socialized medicine” when they are really referring to a variety of successful health care systems that share the above common principles and therefore a fundamental common real world attribute: they provide their citizens with better health for lower cost.

The shared principles can already be found in the US Medicare, Medicare Advantage and Federal Employees Health Benefits programs. Indeed, the simplest approach for the US would be to “universalize” and modify Medicare to include all age groups.

The US cannot afford to wait for a public health disaster with casualties on the level of Pearl Harbor or 9/11 (for instance, an uncontrolled outbreak on US soil of SARS or Ebola) to finally come to its senses, recognize its vulnerabilities and establish a national health care system akin to those of its closest allies. As is, the US health care system is America’s most serious – not probable but actual – homeland security challenge.

The author is a senior researcher and health policy program chair at the Taub Center for Social Policy Research in Israel.

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