Can we ever tame high healthcare costs?

Americans are not happy with our healthcare and its costs. PBMs, insurers, hospitals, and prescription drugs all take their toll on a for-profit healthcare system that focuses on the balance sheets, not patients. Despite this, Americans still refuse to make the sacrifices needed to prevent chronic healthcare problems. There are no easy answers, but finally, Congress is set to tackle the rising costs.

Eighty-six percent of the nation’s trillions in annual healthcare expenditures are for people with chronic and mental health conditions. These costs can be reduced by addressing the issues of lousy health behaviors.

In a study published in CA: A Cancer Journal for Clinicians, researchers led by Dr. Farhad Islami at the American Cancer Society analyzed national cancer data and calculated how many cancer cases and deaths can be attributed to factors people can change. These included smoking, exposure to second-hand smoke, being overweight or obese, drinking too much alcohol, eating red and processed meats, eating too few fruits and vegetables, not exercising, exposure to ultraviolet radiation through activities like tanning, and six cancer-related infections (including HPV).

Among more than 1.5 million cancers in 2014, 42% were traced to these factors, as well as 45% of deaths in that year.

  • More than half of us now regularly take a prescription medication—four, on average.
  • Americans take more pills today than at any other time in recent.
    History (see “Pill Nation: The Rise of Rx Drug Use”)—and far more than people in any other country.
  • An estimated $200 billion per year is spent in the U.S. on the unnecessary and improper use of medication, for the drugs themselves and related medical costs, according to the market research firm IMS Institute for Healthcare Informatics.

PBM’s: Villains or Partners?

The higher the drug’s price, the higher the PBM fee at the pharmacy. So they are not incentivized to drive upfront prices down as much as possible. They are taking costs based on the list price, but the net worth that the PBM is paying for the drug is much lower than that because of rebates.

PBMs have become a cause for alarm because they allegedly drive up drug prices and interfere with patients’ medication access. It’s become so bad House Republicans have launched an investigation into the companies that manage drug benefits, dialing up the scrutiny of the middlemen who play an essential role in how much medicines cost.

The House Oversight and Accountability Committee said Wednesday that it has sent letters to CVS Health Corp.’s CVS Caremark, Cigna Group’s Express Scripts, and UnitedHealth Group Inc.’s OptumRx—the largest pharmacy-benefit managers—seeking documents about the drug-price rebates they negotiate and fees they charge.

In addition to seeking records about rebates and fees from the PBMs, the committee asked the companies for documents related to their relationships with Zinc Health Services, Ascent Health Solutions, and Emisar Pharma Services, three so-called group purchasing organizations that the PBMs formed to help negotiate rebates.

Then there are administrative costs.

Administrative spending accounts for 15–30 percent of health care spending. The US spends more on health care administration than comparable countries. At least half of administrative spending is wasteful.

  • According to a new JAMA report, despite efforts to control healthcare costs, the U.S. spends about twice as much as other high-income countries on medical care.
  • Administrative costs accounted for 25 percent—or more than $200 billion—of total hospital spending in the United States.
  • The U.S. is also spending much more on pharmaceutical costs. The U.S. spending on pharmaceuticals per capita was $1,443 compared to $466-$939 for the others.

Quality of healthcare in the US

For the first time in Gallup’s two-decade trend, less than half of Americans are complimentary about the quality of U.S. healthcare, with 48% rating it “excellent” or “good.” The slight majority now rate healthcare quality as subpar, including 31% saying it is “only fair” and 21% — a new high — calling it “poor.”

Since 2012, public satisfaction with healthcare has trended downward among middle-aged and younger adults while remaining high among those 55 and older, whether this change (seen across party lines) stems from rising healthcare costs for those not on Medicaid or perceived differences brought about by the ACA.

Public satisfaction with the total cost of healthcare in the U.S. is fairly typical of what it has been over the past two decades, with just 24% satisfied and 76% dissatisfied. The percentage satisfied has averaged 22% since 2001, only once straying more than a few points from that — in 2020 during the pandemic, when 30% were satisfied.

Meanwhile, amid high inflation in 2022, 56% of Americans report being satisfied with the total cost they have to pay for healthcare — the lowest Gallup has measured since 2016. The lowest in the trend was 54%, recorded in 2006.

Perhaps reflecting their increasing concerns about healthcare quality, Americans’ perception that the U.S. healthcare system is in a crisis has grown to 20%, the highest since 2013. However, the 68% overall saying it is in trouble or has significant problems is similar to the figure in most years from 2002 to 2021.

Majority of workers say they are satisfied with their employer’ health benefits

Most workers who receive health insurance through their employer-provided plan said they are more satisfied with the coverage they receive through work than with the current health insurance system.

This was a takeaway from research conducted by Locust Street Group presented at a webinar by America’s Health Insurance Plans (AHIP). The research was part of AHIP’s Coverage@Work campaign, which aims to educate policymakers and the public about the value of employer-provided coverage.

The survey showed that although 54% of the 1,000 adults surveyed said they are satisfied with the current health system overall, 67% said they were satisfied with the coverage they receive through their employer.

Why changes are coming

Three-quarters of Americans give U.S. healthcare affordability a D or F rating, according to a poll from Gallup and West Health.

Over 5,000 Americans were asked to grade the U.S. healthcare system overall regarding affordability, equity, accessibility, and quality. 44% of Americans gave the entire system a poor or failing grade. One in 3 said healthcare affordability deserved an F.

Maybe it’s because a quarter of Americans owe $10,000 or more in medical debt, even though half of them have health insurance that’s supposed to minimize excessive healthcare costs.

A survey found that carrying health insurance doesn’t make much difference in whether you have to take on medical debt — it merely caps how much debt you’ll owe.

According to the survey, 69% of respondents who pay for their own health insurance reported medical debt, as did 61% of respondents with policies through their employer and 59% with no health insurance.

The ACA was just the first step in healthcare reform. Both parties understand that voters are highly concerned about healthcare and its costs. Eli Lilly, perhaps sensing the changing winds, lowered the price of their insulin to $35, but we still have a long way to go.

We, as a nation, have to decide if healthcare should be available to everyone without regard to insurance. Should cancer patients have to decide if life-extending treatments are worth wiping out their savings? Should hospitals be allowed to charge patients $12.00 for ibuprofen?

There is a lot of work to be done, but my feeling is that eventually, healthcare will have to become non-profit. People over profits.