KEY TAKEAWAY: [inlinetweet prefix=”” tweeter=”” suffix=””]In 2016 America spent $10,348 per person on health care, roughly twice as much as the average for comparable rich countries[/inlinetweet], according to the Kaiser Foundation. That is 17.9% of GDP, compared with 10.7% elsewhere. The average health-insurance deductible for individuals with employer-provided coverage reached $1,505 last year, compared with just $303 in 2006. Meanwhile [inlinetweet prefix=”” tweeter=”” suffix=””]the 25 largest drug companies enjoyed annual average profit margins of 15% to 20%, compared with average profit margins of 4% to 9% for the largest non-drug companies[/inlinetweet]
If there is money to be made, you can bet that companies will find a way to squeeze every dollar they can from it. This is true of our health care system. Today employees are seeing their raises negated by higher health insurance costs.
According to a report published in March by the minority staff of the Homeland Security and Governmental Affairs Committee,[inlinetweet prefix=”” tweeter=”” suffix=””] prices for the top 20 drugs prescribed to older Americans rose by an average of 12 percent annually[/inlinetweet] during this five-year span. For seven of these drugs, the total increase was more than 100 percent.
Older Americans spend a big portion of their income on prescription medications. According to the Centers for Disease Control and Prevention, [inlinetweet prefix=”” tweeter=”” suffix=””]91 percent of people over age 65 take at least one drug, and one in four has difficulty paying for them[/inlinetweet]. But seniors aren’t alone. In 2016, Americans spent nearly $330 billion on prescriptions, about $1,000 for every citizen.
Companies demand more simply because they can. [inlinetweet prefix=”” tweeter=”” suffix=””]“Prices are set at whatever the market will bear,”[/inlinetweet] says Aaron Kesselheim, an associate professor of medicine at Harvard’s Brigham and Women’s Hospital. “That’s the fundamental principle behind drug pricing in the U.S.”
In the meantime insurers are also making out like bandits. CEO compensation of some of the biggest insurers is out of control.
What does all this mean? It’s more ammunition for a single payer system which we are moving closer to. It’s not a matter of if, it’s a matter of when.