How has American healthcare gone so wrong?
The U.S. is spending trillions of dollars for substandard care, and patients are suffering.
We all have bad weeks. Mine recently made me marvel at the astonishing dysfunction of our healthcare system. In calling out the system I intend no disrespect to the talented and heroic overachievers in nursing, pharmacy, medicine and the other providers who fight the system every day on behalf of our patients.
Despite such efforts, the sad but undeniable fact is that our healthcare system — the way the U.S. distributes and pays for healthcare — makes it the most expensive failed enterprise in the history of human civilization.
Part of what set me off that week was a series of examples of my patients’ chronic struggles to access mental health services. After years of poor funding and a deluge of demand since the pandemic began, providers are in short supply. Scarcity is coupled with barriers imposed by insurance networks. Absent reasonable access to services, primary care doctors like me become the psychiatrists of first and last resort, pushing the bounds of our competence. But what else can we do?
A second part of the week’s grind was the latest obstacles to drug therapy. The costs are so high for so many medicines that even insured patients struggle. Take Ozempic. There’s no generic, and it’s a financial stretch at nearly $900 a month, but it helps my diabetic patients — until last week, when they couldn’t find it. Why? Because of its newly recognized use for weight loss. It’s suddenly so popular that pharmacies run out. How can a system allow wealthy individuals looking to shed a few pounds to use their cash to elbow aside diabetics who actually need the drug?
A third conspicuous failure of our healthcare system, looming in the background every week for physicians like me, is hospital funding. Hospitals have survived for years by collecting high fees from commercial insurers to subsidize losses from treating Medicaid and Medicare patients. With a rise in the cost of care, and a shift toward patients on government plans and away from private insurance, even the most prestigious and well-managed hospitals, both locally and nationally, face an emerging flood of red ink. Many are cutting costs sharply to preserve solvency. In a rational system, the revenue that supports critical institutions like hospitals would not be subject to perennial financial crises.
These are only a few of the ways that the U.S. healthcare system’s failures now weigh on physicians. Here’s something else that should be haunting every American: The costs of this failing system challenge comprehension. As a comparison, World War II appropriately set the benchmark for unrestrained public spending, as the U.S. government poured almost $6 trillion (in current dollars) into the military from 1940 to 1945. We now spend more than $4 trillion on healthcare each year. What do we get for that staggering sum? Statistics compiled by the Organization for Economic Cooperation and Development tell an embarrassing story. On critical rankings such as life expectancy at birth and deaths from avoidable conditions the U.S ranked near the bottom.
Why has the U.S., the world leader in drug and healthcare technology, fallen so far behind? Because the system stopped serving the public long ago. It serves the needs of those profiting from healthcare. Powerful lobbies representing insurance companies, drug companies, doctor groups and others block meaningful reforms.
The insurance industry poses the greatest obstacle. Its administrative overhead cost is around 17% of revenue, compared with Medicare, which spends only 2% of operating expenditures on administration. If a federal single-payer system — like “Medicare for all” — saved even 10% of what insurers are wasting on administration, the extra billions could revolutionize care. That sum could expand mental health care, subsidize drug access and stabilize hospital funding.
As we pay more and more for substandard care, increased attention inevitably will be drawn to the system’s conspicuous weaknesses, especially administrative waste. Overcoming the special interests and solving the problems will prove no small task. The inertia of our political system required the Depression to enact Social Security. Improving insurance access through the Affordable Care Act required an influx of legislative reformers inspired by the financial crisis of 2008.
I’m not sure what national calamity will be required to overcome the status quo this time, but American healthcare’s failures certainly are mounting. When inevitable major reform finally occurs, those like me who make our living in healthcare deserve input. But the patients who pay the bills and live and die in our system deserve changes that would prioritize compassion over profit.