Link to AAUW report: https://www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth
Thanks to Susan Voss for her thoughtful essay about the complexities of our health care system, and how difficult it is to reduce costs. (See link to Register essay below.) I don’t claim to have “the answer”, but I do suggest that the following cost saving ideas be given serious consideration.
- Medicare, Medicaid and private insurance should not be required to cover every new drug, product, or procedure that is approved by the FDA. Some are very high cost but provide only marginal improvement over alternatives that cost much less. Also, at least some covered products and procedures would likely be considered not medically necessary by most people.
- Consider shortening the amount of time that government grants a monopoly for patents. Patents are not natural property: humans have copied one another since the beginning of time. Our U.S. Constitution allows patents to be granted to encourage inventiveness, but there is no objective reason why a patent must be granted for 20 years. Why won’t five or ten years work? Maybe the length of the patent should be based on the cost to develop the patented item and whether or not government funds were used to help develop the item.
- Don’t require limits on out-of-pocket payments such as co-payments, especially for very high cost items. A person should have “skin-in-the-game” if they expect their insurance to cover very high cost items. Today, we see the opposite: drug companies offer to help pay people’s out-of-pocket costs so there won’t be so much political pressure on them to lower their prices.
- Allow both pharmacies and individuals to purchase drugs from sellers in other countries that are “deemed” to have sufficient safety procedures in place. If drug companies are free to charge lower prices in other countries, then pharmacies and individuals should be free to purchase the drugs from those other countries.
- Allow Medicare and Medicaid to negotiate with drug companies on prices they pay for the drugs that are covered by the programs. Right along with that, Medicare and Medicaid should be allowed to develop formularies (lists of drugs that are preferred over other therapeutically similar drugs), that give beneficiaries a financial incentive to use the preferred drugs and a penalty for using higher cost drugs.
Our health care wants are unlimited. Our ability to pay is not. We, as citizens, should not expect private insurance or our government health care programs to cover everything, regardless of cost. We should expect our government to NOT do things that increase costs, or reduce our choices.
What is often missing in much of the opioid crisis discussion is how our government’s policy of prohibition has made a bad situation even worse. When a person becomes physically addicted to opioids, they will do almost anything to get the drugs they want. If the drugs are not available legally, or if legal drugs cost too much, addicts will find illegal alternatives. According to the CDC, 60% of opioid deaths do not involve prescription opioids. That is, in 60% of opioid deaths the person who died was using illegal opioids. (See CDC reference below.) A significant problem with illegal drugs is that is no way to assure the quality and potency of the drugs. In the case of opioids, that leads to inadvertent over-doses because the illegal drug was much more powerful than thought.
If opioid addicts were able to readily get prescription methadone or other FDA approved opioids at reasonable costs, many deaths would be prevented. That would also take the profit out of the illegal opioid drug trade. If opioid addicts were treated under a medical model rather than a criminal model, it is likely that more opioid addicts would seek help to solve their addiction problem. But as it is, under our drug war, prohibition policy, addicts have good reason to not seek help.
CDC reference: https://www.cdc.gov/drugoverdose/data/overdose.html
The Des Moines Sunday Register published a lead article (Page 1) titled, “The rich keep getting richer”. (See link below.) Included were a number of misleading statistics or misleading conclusions based on the statistics. For example, according the think tank, Iowa Policy Project, the median hourly wage in 2016 was $16.04 per hour. 37 years ago, the average wage, adjusted for inflation, which is fair, was $15.91. The Register concluded, “This means a typical wage earner working 40 hours per week for a full year would have seen a real increase of $270.40 over a 37 year span.” While the statistics are technically true, you cannot logically conclude and that any specific person or group of people did not move themselves from a lower wage to a significantly higher wage. I’m sure it is true some people moved down while some people moved up. An interesting study would be to see how wages correlate to the number of years in the employment market. It would be interesting to know the median starting hourly rate for a young inexperienced worker versus and an experienced worker who has been in the labor market to 30 years. The fact that the average stays about the same my be a problem, but almost no one stays at the average wage for 37 years.
Another statistic was that the number of people who earned $1 million or more during specific years increased from 5,031 in 2010 to 8,325 in 2015. Their “slice” of the state’s total adjusted gross income grew 37%. Meanwhile, the number of Iowans claiming gross incomes of $40,000 to $99,999 climbed by 23% while their slice of the state’s total adjusted gross income fell 2%. First, I would venture to guess that a significant majority of the $1 million+ earners are people who sold their businesses or had other one-time income. So, again,there is no logical reason to presume that the $1 million+ club is made up of the same people year-after-year. At the same time, from 2010 to 2015 the Iowa economy was generally continuing to improve, so values and prices of businesses likely climbed. Also, in the case of an “expanding pie”, the fact that any group gets a smaller percentage of the total does not mean that their real income is not increasing.
Finally, the Register reported that their analysis of U.S. Census data showed that the bottom fifth of earners saw practically no growth in household income – going from $13,798 in 2006 to $13,848 in 2016, again adjusted for inflation. Here again, there is no logical reason to believe that the specific group of people who were in the bottom 20% in 2006 are the same people who were in the bottom 20% 10 years later. It would be interesting to know what percent of the people in the bottom 20% in 2006 were still in the bottom 20% 10 years later. My guess is there would be some, but not a majority.
As a society we need to make sure we don’t put hurdles in front of people who are trying to improve their lot in life. In many cases this means removing government created regulatory barriers to entry into certain jobs. The Register has done very good work exposing job licensing regulations that are in place more to protect existing businesses from competition and to protect the profits of licensing education businesses, than to protect the public. Yet, the Iowa Legislature has done precious little to address this real problem for low income workers who are trying to work their way up in our economy.
Link to Register article: https://www.desmoinesregister.com/story/money/business/2017/11/25/most-iowa-wages-have-stagnated-but-rich-keep-getting-richer/818770001/
The Des Moines Register recently reported that Wellmark Blue Cross Blue Shield has been accused of violating federal HIPAA privacy regulations in the case of a patient with severe hemophilia. (See link to Register article below.) As reported, a representative of Wellmark was discussing the high cost of health insurance at a Rotary Club meeting last March. She gave an example of an extreme case that was costing $1 million per month. (ACA – Obamacare – prohibits insurance companies from placing any limit on the amount it will pay for patients.) She did not identify the patient by name, but described him as a 17 year old male with hemophilia. Maybe she should not have mentioned the age or sex of the patient, but that information alone did not identify who the specific patient was, and should not be considered a violation of federal privacy regulations.
Wellmark and other insurance companies must be able to cite specific high cost cases that are causing health insurance premiums to rise to unaffordable amounts. How can we openly debate ways to contain health care costs if we don’t know what is causing the high costs? Can we really afford to require insurance companies to pay out unlimited amounts for any patient? I recently heard that the last remaining company to offer individual health insurance policies in Iowa may charge more than $30,000 per year next year for a couple who are 55 years old. Health care wants are unlimited. Our ability to pay is not. We need to debate whether or not government should prohibit health insurance policies from having limits on how much they pay out for individual patients.