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Soulful Sundays: Healthcare (Part I)

"There's no difference between a pessimist who says, 'Oh, it's hopeless, so don't bother doing anything,' and an optimist who says, 'Don't bother doing anything, it's going to turn out fine anyway.' Either way, nothing happens." -Yvon Chouinard

"No country can be strong whose people are sick and poor." -Theodore Roosevelt

I have only ever been a hospital patient twice in my entire life. Once when I was born (which would have been unnecessary had my mom known about midwifery-assisted homebirth), and once when I was twenty-three. The second time was an absolute necessity. I fell seventy-five feet off of a granite cliff in Boulder Canyon, landing mere feet from Boulder Creek as a bruised and bloody mess. I had been rock climbing with two friends when some of our equipment failed. The result was ten fractured bones including a C2 hangman's fracture, a broken humerus, and a broken mandible. My climbing partner broke his pelvis, his neck, and his spine. We are forever indebted to the quality of healthcare that we received during our recovery including the surgeons, the critical care unit, and the rehab professionals. As a healthcare provider myself, I am writing this piece (and its second part) from a place of immense respect for the people who dedicate their lives to helping others heal. Part one will be an exploration of the nature of the American healthcare system. Part two will be a troubleshooting manual on how we can make it better.

Let's start with some concrete statistics taken from the United States government. In 2020, 10% of Americans were uninsured. The remaining 90% participated in some kind of private insurance (60%) or government-funded programs like Medicare and Medicaid (30%). The annual National Health Expenditure in 2020 was at an all-time high of $4.1 trillion, which was 19.7% of the Gross Domestic Product. This works out to each American spending an average of $12,530 per year on healthcare, three times what the average was in the year 2000. Despite the increased health spending, the United States is still last in wellness metrics when compared to every other industrialized country.

The disparity between our nation's health spending and its outcomes has been the topic of much criticism, becoming progressively worse since the 1980s. Grasping the how and why of this conundrum is complex, to say the least. The healthcare system in the United States has historically been a private industry with some state-by-state funding. With the creation of Medicare and Medicaid in the 1960s, the system shifted toward a quasi-socialist structure to help support the elderly and the poor, but in doing so it changed how health costs were calibrated.

Instead of being controlled by open market influences, private insurance plans, as well as the costs of healthcare services, became tied to the prices established under Medicare and Medicaid. In other words, these government-subsidized programs set the baseline cost for the rest of the industry, driving prices up. We can use a similar example from the world of agricultural subsidies to better understand this. The US government pays farmers not to plant corn in order to create an artificial supply deficit. The result is higher corn prices, but this only benefits the farmers still growing corn. Because the production costs for corn are so high, most small farmers elect to take the subsidies or end up selling out to corporate-managed farms that can afford the overhead. Either way, we have fewer farmers and higher prices. In healthcare, we also have fewer providers and higher prices.

Health insurance premiums and health insurance payouts have been rising steadily since the 70s. As a result, not-for-profit and small-scale insurance groups have been all but eliminated from the marketplace, resulting in market control by only a handful of companies. The same has happened in the pharmaceutical industry, which has become obsessed with maximizing profit and swallowing up smaller innovators (thanks to the inane regulations set by the FDA). Furthermore, medical providers are being corralled into large group practices due to the expenses and complexities of liability insurance and medical billing. The cash-based, family doctor has become a relic from the past, where they used to be the norm. Consequently, the end consumer is stuck with the raw deal of either paying too much for insurance or risking bankruptcy and credit destruction if they opt out of the system.

Are there any benefits to the system that we have created? Sure there are. The United States is the place to be if you are a business visionary in the healthcare space. You can become very rich, very quickly. We have the highest-paid surgeons and doctors in the world, which attracts a lot of national and international talent. US-based pharmaceutical companies are the best at bringing innovative products to scale (notice how I said they are not the best innovators, though). If you need life-critical care, the US hospital system is great at delivering it (for which I am personally grateful). However, it is absolutely terrible at treating chronic coniditions. One thing that the American healthcare system has done a very good job at is convincing its citizens of the necessity of health insurance at the expense of preventative care.

Very few plans have adequate coverage for lifestyle-based medicines like functional medicine, acupuncture, chiropractic care, personal training, or organic groceries. In a pure profit model, this makes sense at the surface level. Money that people spend on preventative care reduces their need for prescriptions and chronic care, both of which are far more lucrative to the health insurance company. But are they really? The logic of spending more money upfront to prevent catastrophe later seems like a great way to save resources. The big problem is that these giant companies are incentivized to lose money. Government regulations require that anything over a 20% company share of collected premiums must be returned to the members. By increasing their liability with inflated costs, these companies can drive up their profits, unfortunately. I hate being cynical, but this is the reality.

So how can the individual learn to beat the house, so to speak? We have a few options: leave the casino, learn to count cards, or become the house. Tune in next week for part two as I discuss these and more. The realistic-optimist side of me will be writing that one. :)

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