Health Care Reforms Part 3: To Stop Looting in the Name of Health

Being working in the domain, I am once again dealing with the major issue of contention in U.S. – health care. Everyone knows by now that the health care is skewed towards the business players in the country. While I am earning my bread and butter through this very model, there is a general agreement that the system can improve for the better. I am putting my efforts in a system to improve the single most important commodity of everyone - health. Hence the painstaking efforts should not go waste but evolve the way health care is rendered across the nation. You can earn money but cannot get back the prime health once it struck the path of downward spiral. There are some major pain points in the way health is treated and there is a need for pain killers to mitigate the same. The way health is safeguarded in the country determines the health of the nation as well. From the way things have shaped up, U.S. is in pretty bad shape from this simple indicator.

I don’t go into complex issues but rather touch upon simple things which I faced in U.S. My encounter with this health care industry started way back in 2015 when I first entered U.S. as a student. I was asked to pay around $800 for a six-month period as health insurance premium. This is the same which every college student across the country pays for a semester or two. While the college fees itself is high in the country, further pain comes for an international student in the form of this health coverage. It turns out to 1500 to 2500 dollars every year which the student needs to cough up as a premium for a year. This is equal to 1.3 to 2 lakh Indian rupees for a young and healthy person to pay as safety net in this country. There are several problems with this scenario.

1.     1. Back in India, I never paid for health insurance till 2015 or 27 years of my age. Undergraduate colleges don’t ask for this part and employers pay a nominal amount during employment as a coverage. Hence, I never paid a penny during my 5-year employment before coming to U.S. in 2015. My employer completely paid for nominal standard coverage which I didn’t avail during that period and till now either. Hence, health insurance was never paid for nor availed till this time in India.

2.    2. How come a person as young as a college student was required to pay thousands of dollars for coverage in his healthy, prime age when more than 90% don’t come for any claims for the health insurance in their early twenties.

3.     3. How come an international student and students from meagre backgrounds were required to go for loans to pay for coverage and not for treatment.

4.      4. When the coverage amount itself is astronomical, can we even spare to look at the medical treatment costs in case of an event. The high treatment costs have driven up the coverage costs and mandated everyone to get one plan or other, out of fear for these sky-high medical treatment and drug costs.

5.     5. Not just over 18 years, but kids below that age also need to be part of some plan or other and get covered in U.S. It just says that from birth to old age, every individual need to be covered by the system of insurance, pay high premiums and pay through it for any medical necessities. Remember, I never had an insurance plan for which I paid from my pocket till the present day in India.

While this is the dire situation for local students and those international students coming to U.S., health care costs get aggravated as you work as an employee in an organization or during your time as a worker after education. Consider this scenario – a just graduated 25-year-old employee in U.S. need to enroll in 5000-to-6000-dollar plan for a year. A 35-year-old need to pay $504 average monthly premium in a lowest plan before subsidies. If an employer provides coverage, which majority of them does, in a case like me, the employee will still need to contribute $1200 from his side annually. In addition to premiums, individuals may also be responsible for other out-of-pocket costs, such as deductibles, co-payments, and co-insurance, which will add to the expenses in a minor or major health care event. If a person is self-employed and needs coverage, then he needs to pay an average $6000 annually which turn out to 5 lakh rupee insurance plans which is never heard of in any other part of world.

To supplement the above, we need to understand what drives these costs. Consider the scenario again in simple terms. A young child who is overindulgent in food needs to have appendectomy (surgical removal of the appendix) due to unbearable stomach pain. According to data from the Healthcare Cost and Utilization Project (HCUP), the average cost of a hospital stay for surgery like appendicitis in the US was $17,140. This cost includes both the hospitalization and any related medical services, such as lab tests, imaging, and medications. For any child or adult, the cost is unbearable than pain. This fear drives them to take up insurance plans shelling out their complete savings. In India, it is approximately USD 340 to 1000. In government hospitals, this simple procedure is much less – costing about INR 10,000 to INR 25,000 (approximately USD 135 to USD 340). In another scenario, for a simple tonsil surgery (tonsillectomy), the average cost of a hospital stay in the US was $10,223. In India, I got it operated for just 10 thousand rupees and not 10 thousand dollars. Can I bear these eventualities without insurance in U.S. – the answer is a big NO. It should be clear by now, what is the root cause of this health epidemic in U.S. which is far dangerous than covid pandemic.

Extraction and Collection of Funds from Public

There are several factors that have contributed to the skyrocketing healthcare costs which has resulted in extracting huge funds from public in the United States:

1.     1. Administrative Costs: The US healthcare system is highly complex and fragmented, with multiple private and public payers, providers, and regulatory agencies. This has led to significant administrative costs, including paperwork, billing, and compliance, which are estimated to account for up to one-third of total healthcare spending in the US.

2.     2. Medical Technology: The US has a highly advanced medical technology sector, which has contributed to the development of new and expensive treatments, devices, and procedures. While these advances have led to significant improvements in patient outcomes, they have also driven up healthcare costs.

3.      3. Pharmaceutical Prices: The US has some of the highest prescription drug prices in the world, due in part to the lack of government regulation of drug prices. This has led to significant cost burdens for patients and payers and has been a major driver of healthcare cost inflation.

In addition to the above three simple factors, three main players have been the hotspots of raising huge funds from common citizens – 1. Healthcare Providers 2. Insurers 3. Big Pharma. US healthcare spending reached $3.8 trillion in 2019, accounting for approximately 18% of the country's gross domestic product (GDP). It means huge money is collected by several players in the industry, equivalent to trillions of dollars. Healthcare is best served when it is approximately 5% of GDP and not 18 or 20%. This just reflects commercial interests of various stake holders and taking citizens for a ride. Healthcare spending in India is estimated to be around $372 billion or just 3.6% of the country's GDP. Even the 1.4 billion population has a meagre healthcare money involved which is less than 10% of U.S. spending. This is hugely problematic with the kind of money involved in the entire sector.

The main health care players – providers, insurers and big pharma have placed themselves in the center of welfare in the health care industry. Instead of putting the ordinary citizens and patients welfare at the center, the service providers have extracted, squeezed the common citizens by prioritising their own good. Any industry will be thriving if they put customers at the center and not the players. The U.S. should stop looting funds from public, put them at center and make these healthcare reforms for the good of everyone concerned. The main reforms are to reduce the health care costs, reduce the premiums and reduce the money involved as a whole. This is an insider's view, a view from a person who benefitted from this very system, trying to put those who matter at the center of welfare.