Buried by Healthcare

We Americans have a big problem. The cost of healthcare is bankrupting our government and lowering our standard of living. This problem will get worse even if dramatic steps are taken to address it. The problem will get dramatically worse if we take the wrong steps or no steps at all.

Here are a few examples of how the cost of healthcare affects us right now. A fairly common 15 percent increase in health insurance costs not only eats up any potential wage increases, it often forces employers to lower their employees’ salaries even though their overall compensation expenses increase.

Five years ago, total government spending on healthcare was $859 billion.  Five years from now, the amount will increase to $1.58 trillion. That $721 billion increase will likely be the difference between balanced budgets and more government debt.

Adjusted for inflation, the U.S. per capita expenditure on healthcare in 1990 was $4,634. In 2010, the per capita amount was about $8,300. Currently, a family of four average Americans needs $36,000 annually just to pay for healthcare. By 2018, that same family’s healthcare bill will be over $52,000. That’s $4,333 per month.

I see four basic causes of America’s big problem. The first is demographics. Older people need more health care and Americans are getting older. Second, as medical technology improves, more medical problems can be treated. More treatment means higher costs. Third, Americans can’t agree and don’t want to even discuss healthcare ethics. How many blood pressure pills should we give a patient with advanced Alzheimer’s? Should assisted suicide be legal? Is healthcare is a privilege or a right? (I’ve found that many people consider it a privilege when other people need care, but a right once they need care and run out of money). And lastly, our healthcare delivery system is inefficient. Too much money is spent on billing, verifications, forms and malpractice. Too much time is spent by patients and healthcare providers trying to figure who will pay for what.

I have some ideas on how to address these root causes and I intend to share them with you over the next few weeks.