Our current healthcare system punishes the poor

The healthcare market is unique. This month’s column will explore some of that uniqueness. Most of us know there are major problems in U.S. health insurance and healthcare. If we hope to solve those problems, we need to understand how the current market works.

Healthcare Focus

I’d like to look at three aspects of the healthcare marketplace. 1. Is there an appropriate role for deductibles and copays in health insurance? 2. Is there useful choice in our healthcare insurance and care systems? 3. Is there effective price competition?

By Mark Brakke

According to the CIA World Fact Book, the United States is 48th for life expectancy. That is correct. 47 countries in the world have longer life expectancies than the United States. At least some of this gap is due to delay in seeking care due to no insurance or poor insurance.

tively treated. Second, because the plan they bought is the least expensive and has the highest deductibles and copays, they may very well have expenses they cannot afford and will become indebted or even bankrupt.

ter bet than trying to grab market share via lower prices. That is why $25 worth of insulin is being priced at $300.

Consider televisions. The television market is both complex but also optional. The consumer has many choices. Small TV or large? Broadcast TV or cable? One streaming network or multiple streaming networks? Watch a little or watch a lot? As television broadcasts are a source of news and entertainment, one also has the option of not using it and getting one’s news and entertainment free from radio and the public library.

Contrast that with healthcare. Very few people want to use medical care. People want to be healthy and able to work and play. Think about the common existence of copays and deductibles in health insurance. When copays and deductibles were put in health insurance policies, the rational was the presence of the copay or deductible would prevent overuse of the medical insurance. Ask yourself: Does that make sense? Your physicians will tell you they want to see you at the beginning of an illness, not after you have been ill for weeks or months. Why? Many medical problems are most easily treated at the beginning of the illness. Delay in diagnosis and treatment may mean a less effective treatment and an increased risk of permanent disability or death.

Careful analysis shows that copays and deductibles make medical insurance less effective. People avoid care as they are trying to avoid medical expense and medical debt and in the act of delaying care they often cause themselves permanent harm. A variety of studies demonstrate this. For example, look at life expectancy.

Next let’s look at choice — real choice. At times the insurance industry pushes back on our desire for rational, affordable health insurance by saying effective changes would limit choice. What choice are they referring to? Healthcare costs in Australia are half that of the United States; but Australians life expectancy is 14th in the world, not 48th like ours.

Let’s look at another measure of the effectiveness of healthcare, maternal mortality (deaths related to pregnancy). Australia has three deaths per 100,000 pregnancies. The United States has 21 deaths per 100,000 pregnancies. Looking at other prosperous countries, one finds similar results. Their healthcare costs are far lower than ours while their healthcare outcomes are better.

Unfortunately, we cannot buy Australian health insurance the way we might buy a foreign-made motor vehicle. In fact, choice has been increasingly restricted in the United States as a result of the creation of healthcare systems and the contracts between those systems and insurance companies creating networks. Some of the health insurance options lock the patient into a network of hospitals and clinics; sometimes preventing the patient from seeing the best or most convenient doctor.

Another example of unhelpful “choice” is the creation of tiered insurance plans. We are offered the choice of bronze, silver, gold or platinum insurance. Bronze costs the least and platinum costs the most. Why is this bad? People with low incomes typically buy the cheapest plan. When they get sick they are reluctant to go to the doctor because their insurance has poor coverage. When they eventually get so sick they cannot avoid care, there are two problems. Sometimes their problem can no longer be effec-

It is not reasonable for people who have the bad luck to become seriously ill to then have the burden of huge medical debt. Sensible health insurance should cover all serious illness without the risk of bankruptcy.

Finally let’s look at competition. After being a practicing physician for 41 years and studying the healthcare literature on business practices, I am sorry to tell you price competition in the medical industry is almost nonexistent. Hospitals merge with potential competitors and become large systems. Hospitals buy physician clinics and control pricing in both the hospital and the clinic. Pharmaceutical companies buy competitors to avoid competition. When there are potential competitors, as in the insulin market, the manufacturers have decided that high prices on their market share is a bet-

The healthcare market is unique. The failure to recognize this fact and restructure the market for the benefit of the consumer has led to the current situation where the United States has the highest healthcare costs in the world by a factor of two; while we have the worst outcomes compared to other prosperous countries. If we continue to treat healthcare like an optional consumer product, we will continue to have a healthcare situation which is unduly expensive and brings financial ruin to many.

Mark Brakke is a retired family practice physician. He cared for patients in Coon Rapids, Minn. for 41 years during which time he was on the boards of directors of two health insurance companies. He currently is on the board of the educational non profit Health Care for All Minnesota (HCAMN.org). v