(This Is The Fourth Segment In A Four Part Series)
The current system is not only burning a hole in our public deficit but adding an untenable amount to our unfunded liabilities. Meanwhile, both houses of congress are debating ideas that tinker with healthcare’s current paradigm: Allowing interstate exchange competition; transferring the federal penalty revenues from the federal government to the insurance companies; adding work requirements to Medicaid recipients; cutting the Medicaid budget related to Obamacare; incentivize providers for quality care; replacing the current subsidy program with tax credits for those not covered by an employer; removing the individual mandate; and expanding the scope and number of group health plans. One plan under consideration reduces health insurance premiums by removing benefits, such as: pregnancy/maternity; mental health/substance abuse; prescription drugs; emergency services; hospitalization; outpatient care; laboratory/diagnostic tests; preventative/wellness; pediatric care. Wow, I guess my question is: What’s the point of insurance if it doesn’t actually cover anything? None of these exclusions reduce healthcare costs, they simply shift the burden off of the insurance company and on to the patient. The idea of insurance is to spread the risk among the largest possible pool of subscribers, not to reduce the size of the pool. By increasing the pool, an insurer can afford to cover everything.
In other words, dancing around the edges of a bad system doesn’t change the fact that it is a bad system that requires a major overhaul!
We should remember that all groups lobbying congress are smart enough to make arguments that, on their face, sound as if they are in the public’s interest. In fact, all of these corporations and associations that represent healthcare entities, are only interested in advancing the interests and earnings of their corporations and/or their members. Conservative republicans in congress believe, on philosophical grounds, that a free market, private enterprise approach will solve our current healthcare crises. And everyone in congress is terrified of butting heads with the entrenched healthcare interests. But, the current systems at play have enjoyed government protections designed to enrich the players and feed their monopolistic tendencies. They bear very little resemblance to free enterprise as envisioned by Adam Smith.
Sorry conservatives, there is not a feasible free market approach that can even come close to fixing our convoluted, cobbled-up healthcare nightmare.
What We Should Do
First, rather than spending $70 billion per year on a hodgepodge of grants, programs and departmental research, we should create a federally funded patent pool. All pharmaceutical and medical device companies that want to sell products in the U.S. would be required to participate in pre-competitive R&D. (This is currently an experimental program at the Structural Genomics Consortium, Oxford University.) In addition to commonly shared therapeutic goals, all dead-end research would be compiled, if appropriate, re-examined and included in the consortium’s work-load. All participating companies would share in the research costs and investments. When drugs are approved for phase III trials, the commercial sponsors would be allowed to purchase the product rights and bring them to market. The idea is to reduce and in some cases, eliminate waste and redundancy. Under the current system, each drug company wants its competitors to waste time and resources. They are always looking for an edge to stay on top; hoping for the next drug monopoly. The goal of this plan is to create an infrastructure that fosters cooperation at the R&D stage, while still allowing companies to compete for the manufacturing and marketing of the final products. (Clay, Alexa and Phillips, Kyra Maya (2015) The Misfit Economy, Lessons in Creativity from Pirates, Hackers, Gangsters, and other Informal Entrepreneurs, Simon and Schuster Paperbacks, Simon and Schuster, Inc., New York, page 101)
Second, the prices paid for prescription drugs sold in the U.S. would be mandated to not exceed the average prices paid (for identical drugs) in all other approved countries.
Third, a commission would be established to oversee the Food and Drug Administration. This group would work closely with European Medicines Agency, Health Canada, Australia’s Therapeutic Goods Administration, Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) and others to determine and approve drugs, which are approved in other countries but stalled by the FDA. It would also fast track generic drug company approvals.
Fourth, Congress should authorize Eminent Domain Condemnation for the patents of all drugs deemed life-saving or critical to the health and well-being of its citizens. This is a drastic legal tool and should be reserved for those drugs which serve relatively small markets and are outrageously priced. The research would become public domain. Companies would compete to manufacture and market the drugs, which of course would require FDA or commission approval. A legally mandated royalty would be paid to the current patent holders.
In this country, we believe in the freedom of choice and that the free enterprise system is the best way to achieve prosperity. We have always been wary of too much government control, and after Hitler, Stalin, Mussolini, and Mao we have 20th century evidence to back up the American way of life. However, as a country, we have also concluded that government can be a force for good. I’ll give you some examples: We believe that everyone has a right to drive on our roads; send and receive mail; be protected from foreign adversaries; and participate in public education. It is just as American to believe that everyone has an equal right to adequate healthcare.
Aside from the United States, every other civilized country has looked at healthcare and decided that only a singular, unified system will work. And I agree. Given the purchasing power and clout of the United States government, we should have the lowest healthcare costs per capita, not the highest… And with a unified, single payer system, everyone in the country could be covered and as a nation we would not be paying a penny more! Nationalizing health insurance, would increase federal expenditures, but that isn’t the most important factor. The question is: will less wealth be drained nationally under the current system or under a national health insurance program. The evidence overwhelmingly is that our current system costs the country far more than if we were to switch to a unified national system.