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Healthcare: A Problem Without a Solution?

Healthcare has been all over the news this week due to the Obamacare (aka the Affordable Care Plan) replacement bill that the Republicans pulled from a vote at the last minute. You would think that providing healthcare and healthcare insurance is something that politicians could come together on, but they never can.  Why is that?There are a number of topics that make a subject especially controversial, and healthcare happens to have three of them; money, politics, and death. 

  • Money: At the root of most good controversies lies a common thread: money.  Let’s make no mistake here, healthcare is a big business.  How big? In 2015, it is estimated that total US healthcare expenditures were $3.24 trillion, and the projection for 2018 is $3.78 trillion.  This represents about 17% of our GDP.  It is estimated that $618.7 billion of that, or about 20%, was spent on Medicare, and that $496 billion of that, or 16% of the total, was spent on Medicaid. Those numbers alone mean that there are going to be lots of powerful companies, lobbyists, and politicians involved in decisions about healthcare. 
  • That brings me to point number two, which is politics.  Whenever there is big money involved, politicians are sure to get involved.  In this case, some political involvement is inevitable, as the government operates two of the largest health insurance options, Medicare and Medicaid, and regulates other insurance companies.  They also approve drugs via the FDA, and are involved in many other ways.  Because they are already involved in so many ways, we often find the government meddling in the provider side of healthcare as well, regardless of whether or not that is a good idea (it isn’t, in my opinion).  This is of course a hotly debated topic, with Democrats generally advocating for more government involvement (Universal Care, mandatory health insurance, etc…), and Republicans advocating for less government involvement (repealing Obamacare, no mandatory health insurance, offering insurance across state lines, etc…). 
  • The third thing that leads to healthcare being a highly-debated topic is that it involves something that is inevitable for all of us, but everyone wants to avoid, which is death. Death also draws religion into the argument, which just fuels the fire.  This further divides the topic into those that have strong feelings on abortion on both sides, as well as an individual’s right to choose their own treatment plan or opting out of treatment.  There are so many personal feelings wrapped up in the issue of death and dying that it is hard to have a reasonable debate about the facts.

Healthcare isn’t a topic that is divided along party lines, either.  There are probably as many different opinions on the topic as there are lobbyists in DC.  And there is no one-size fits all solution to the issue, either.  Needless to say, the whole thing is a mess right now, and I’m not exactly sure if there is a good solution out there that fixes every problem with our system.  However, there has to be a better solution than what we currently have, as evidenced by these statistics:

  1. According to the BLS, healthcare costs nearly $9,403 per person in 2014.
  2. Helathcare for a typical family of four covered by an employer plan is over $23,000, nearly double what it was 10 years ago. 
  3. It costs almost $250 billion to process the 30 billion or so healthcare transactions done in this country every year.
  4. 3 out of every 10 tests have to be reordered because the results are lost.
  5. The average retired couple will spend about $245,000 out of pocket in healthcare-related costs over their retirement.
  6. 5% of Americans make up 50% of healthcare spending.
  7. 1% of Americans make up 20% of healthcare spending.
  8. 20% of Americans make up about 80% of healthcare spending.

You would think with the amount of money that America spends on healthcare that we would have the best outcomes and the longest life expectancies, but you would be wrong.  Of 12 other high income countries looked at in a 2013 report by the Commonwealth Fund, we had the highest spend per person with the worst outcomes and the lowest life expectancy. Obviously some changes are needed.  However, is Congress the right place for these changes to be determined?   

Check out these statistics from moneymunk.com. They are eye-opening!

Also look at this Guide to Combating Medical Debt at the Simple Dollar.