As a European I still can’t understand the American health insurance, as why is it like this? Who profits with this system? As far as I know a vast majority of the population has to pay exorbitant bills while not having the funds, so why it is still going and hasn’t changed to a more affordable one?
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Money. If you want the longer answer, keep reading.
Here’s a few numbers to get started. There are about 600,000 Medical Insurance employees in the US. Gross turnover in healthcare is about $4.5 trillion per year, or 20% of US GDP (UK 9%, Canada 11%). The US has about 40 MRI machines per million citizens, Australia has about 14 (using Aus for geographical / wide distance similarities, this will be explained later).
There is a tremendous amount of money involved. More than the national GDP of Germany. So much so that to move to a Universal system, it would impact the economy harder than 2008 and Covid combined. Think of it like housing. The governments in Europe also let housing go up because it makes it look like the GDP is growing. Taking the waste and corruption out of US healthcare would lower US GDP significantly, put a lot of people out of work, and have many knock on effects to tertiary industries.
When healthcare is a business, patients are customers and hospitals are companies. If your clinic or hospital doesn’t have a an MRI machine, your customers will look elsewhere. So what to do? Buy an MRI machine. In Germany if you go to a hospital that doesn’t have an MRI machine, they simply direct you to another local hospital that has one because they are not competing businesses. So you need less as MRIs are not commonly required. But in a private system, if you want that customer’s money, you need to have one, and then you need to justify the expense by giving everyone an MRI.
The incentives are not as good as Universal Healthcare. If a doctor leaves a sponge in you, what happens? Well, you’ll need to rent the bed for another few nights, incur the cost of another surgery, anesthesia, etc. This isn’t such a bad thing for the private company that is preforming the procedure. Insurance has to pay it regardless of fault. Doctors commonly make up fake surgeries and bill the insurers and there is no set price list to be checked against, no market standard, so inflation rises quickly in the US.
The US government likes this. CIGNA, AETNA, etc., make huge donations to politicians from both parties and neither party wants that to change. Obama helped the Insurance and Medical companies greatly while he was in power. When Presidents leave office, they typically go on speaking tours and collect money from the industries they helped. Obama went straight to medical conferences and was paid $400,000 for just one speech to the medical community, and much more from numerous other engagements. This is because the “Affordable Care Act” was designed to drive more money into the private system and it worked very well. Insurers and clinics got tens of millions of new clients, and profits have skyrocketed since the ACA came into effect.
Prior to Obama, Bush signed into law that Medicaid and Medicare (the US equivelent to Universal coverage for emergencies and those over 65) was barred from negotiating the price of medicines with pharma companies. No collective bargaining. This helped increase the government expenditure on heathcare up to about $13,000 per person today ($6,500 in Canada, $5,000 in the UK for reference). Profits went up, pharma companies started charging $100,000 for cancer drug regimens, and of course insurance premiums rose with inflation. Gues where Bush got a lot of his speech money from after his Presidency?
The government spends about $13,000 per person to cover only some emergencies for uninsured people / people who can’t pay, verterans and those over 65. Meanwhile Canada pays $6,500 and covers everyone for everything. Try to imagine the corruption level and waste. Then on top, companies and / or individuals pay an average of $6,000 (ind) to $12,000 (fam) per year to insurance to access hospitals through insurance (often with significant out of pocket from deductibles even on top of that). Cleaning this up would drop economic output by trillions.
So. It won’t ever change, because A) it drives the economy / jobs, and B) it’s a campaign war chest for politicans on both sides. In short – Money.
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