As a country of 325 Million citizens, we spent $3.3 Trillion in 2016 for the diagnosis, treatment, & management of our health issues. Out of these 325 Million people, 1,658,370 were diagnosed with cancer and 589,430 people died from it. This cost us about $387 Billion. 610,000 Americans died from heart related issues which cost us $340 Billion. Healthcare related fraud costs us $270 Billion.
We pay $1 Trillion in premiums to our beloved health insurance companies (~600 different ones) and it costs us $600 Billion in administration costs for our hospital systems, health clinics, pharmacies, labs, and healthcare providers just to figure out how to bill it. Patients, hospitals and doctors absolutely hate insurance. Our healthcare system alone kills 250,000 people from medical errors and costs us tens of billions each year!
It’s not just the costs that hurt. 60% of all our bankruptcies are because of astronomical medical bills that are caused from the whole healthcare system inefficiencies. These are personal bankruptcies that affect families for generations.
Family Practice Physicians are getting so burnt out from dealing with the insurance companies and playing the government game that these wonderful people who love practicing medicine are making the decision to quit and retire early. In fact, we’re going to be at a shortage of 25,000 primary care doctors in the next 5 years.
The costs of student loans (close to $400 Billion in 2015) for medical school are so high that many people choose to go the specialist route where they can ‘bill’ for more money.
How do we really pay for healthcare?
We pay for healthcare with dollars held out of our paychecks by employers, roughly $1.1 Trillion a year. This money (USD) is then sent to 300+ for-profit health insurance companies across the country whose sole financial mission is to take our hard earned money and to profit off it. How do they do this? These insurance companies are basically investment banks in which they purchase stocks, bonds, and real estate holdings in order to generate returns from our hard earned premium dollars. So just to clarify, we give money to these huge insurance ‘banks’ for them to invest with, they profit, and then they don’t give us any. Sound fair?
Making it even better, these insurance companies who are supposed to be looking out for your health invest BILLIONS in fast food companies — the same fast food companies that are causing obesity, diabetes, & heart disease.
The health insurance industry cares about making money, and it doesn’t care how. These companies will invest in products and services that contribute to significant morbidity and mortality if doing so is going to make more money. It’s sickening.
To take it further, how do these FOR PROFIT insurance companies make a higher profit? They increase our premiums (their revenue) and decrease the amount of services they will pay on (their expenses). Higher revenue minus less expenses equals more profit for health insurance companies — at the expense of patients and the physicians. The more premium dollars they have to invest with also equates to more investment income, leading to more profit.
How did we get here? What happens if we continue with this model?
Back when I first learned about the unethical ‘gaming the system’ some compounding pharmacies were taking part in, it frustrated me. It frustrated me to know greedy people were out there taking advantage of innocent doctors and patients by pushing these transdermal medications not because they were the best treatment for the ailment, but because the patient’s insurance would pay the most. To make matters worse, every time I met or talked with one of the owners/reps in this game, they never once expressed concern for the patient’s best outcome. They could care less. Their #1 business goal was if a patient came into see one of their doctors, that patient would leave with a prescription (or three). That’s it, plain and simple. The game is about money, not the patient’s well-being.
However, I will have to note that I personally believe that some transdermal pain creams are extremely better than our current trend of knocking back opiates by the bottles.
Even though I’m a capitalist at heart, I knew that this business model seemed broken. I knew it had to cause problems down the road and that it was not sustainable. So, I took it upon myself to research the entire industry to find out where the real problem existed.
Over the next year, I researched the industries & business models of pharmacy benefit managers, distribution companies, pharmaceutical companies, their marketing strategies, and the lobbyist for these companies. Chart after chart, story after story, my eyes were being open to a world I didn’t know was this perverse. And this was just on the pharmaceutical side. After I wrapped my mind around that part of the puzzle, I attacked the actual hospital & physician piece. Then it just got uglier.
For the most part, physicians and the other health professionals that practice and/or assist with a patient’s care journey are just cogs in the wheel. With the ever increasing regulations and rules to abide by, and with the constant looming possibility of being sued, practicing medicine just isn’t rewarding anymore. It certainly isn’t fun. As with human nature, there are going to be health professionals who go into medicine for the wrong reasons — money, power, fame. These are the people that give medicine a bad rap, such as the pharma company, Mylan, who increased the price of EpiPens — a life saving treatment for millions — by 400% or the Martin Shkrelis of the world who want to take medications that people rely on and jack the price up so much that these people can’t afford it — all to make a higher return on their investment. This is not morally right.
From all this research, it led me to one root cause — and that is how we (the consumers) pay for health care to the producers. It’s as simple as that. What I’m saying is that I’m pointing my finger at the for-profit insurance companies for setting up an environment with the perverse incentives that have enabled the whole mess our healthcare system is in today.
Why do we think our for-profit insurance companies, who are incentivized to pay doctors as little as possible AND give patients as little care as possible, belong in the load-bearing middle? Do we really need to ask why we pay more for worse health outcomes than anyone else? The need for disruption is clear, but it can?t be accomplished by being an insurance company.