My wife was in the hospital for about 3 hours this past January.
Wednesday she was not feeling well and had a 101.9 temp. We tried Advil. It did not reduce the fever. She hates going to doctors and you think it is going to get better. Thursday she had 102.8. She tried Tylenol and Aspirin. Fever staid high. It did not budge. She drank tons of water and got sleep, but Friday morning she was 104.5. At this point with no medication working, I knew whatever it was, it was serious.
We went to MDNow, the local emergency medical place near our home. They tested her and found Influenza A, the most popular real FLU and one that could be deadly. She was weak and could hardly stand up. And they wanted her to get intravenous at a hospital. So we agreed and off she went to the hospital.
Now most of you know the rest of the story. I will cover it, but basically most of you have had this event happen. This is not a serious injury health care story. This is the same average/basic story of everybody and a health care emergency at least every couple years.
The REAL average yearly healthcare cost per family in US was $25,826 in 2016 going up to $26,000+ in 2017. See this article. It is not fake news. The average family income in the US is $55,775. Can you do the math? It’s 55,775 divided by 25,826. That’s 46%. Unreal And Not Sustainable.
We got to the hospital and my wife was given an IV with fluids for about 2 hours. After 2 hours she started to feel better and they talked about her not staying over night because she was getting better. Luckily we did not stay over night, because as I found out the Blue Cross plan I have does not cover overnight hospital stays. Huh? How can you even write a policy like that.
So what was the final bill. Can you guess?
The total cost was around $9000, between ambulance, hospital and doctors.
And of course 5 weeks later I am still getting bills.
Luckily we did have coverage this time. It was Blue Cross, through the Affordable Health Care Act coverage [That is the official name, which they refer to as Obamacare], which I am on for about 30 more days, before I switch to employer coverage.
Imagine we had a real problem. Imagine you are in a car accident. I see one every day as I go to work. And one on my way home.
Someone let me know that they received a $150,000 bill for a 20 minute procedure to realign their vertebra. He said he had 95% coverage. He had to pay $7500. But somebody is paying for these bills, whether it is an insurance company or the US government in the case of Medicaid. Don’t fret about my coverage, Blue Cross picked up the bill, not you. You just subsidized the coverage through tax credits, and in it’s infinite wisdom is a major problem, because it leads to no accountability at all.
Ok, so here is the deal. The Affordable Health Care Act is like a small band-aid on a full body wound. The Health Care Act is not the real problem. It is a symptom. And quite frankly fixing The Health Care Act ain’t going to do much of anything, because there is no scenario that makes any sense to me with fixing the Health Care Act.
Yet something has to be done.
Let me give you several scenarios to choose from and the outcome in my mind.
Scenario 1. Healthcare with Free Market Capitalism
The current administration introduces the concept of competition among healthcare providers, without the power of the US Government setting medical prices, meaning free market capitalism, ultimately reducing insurance company profits, their payouts and how much dollars they can make as they fight it out among each other. This will probably mean HSA accounts where you can put pre-tax dollars away for a rainy day. And like other tax breaks, the government will end up making a lot less revenue from taxes this way.
And the result is:
A complete collapse of the healthcare insurance industry. And just like the Big Banks being too big to fail, the government will have to step in and take over. For the economy and startups this will lead to a stock market crash, lack of capital, and probably high inflation. While market competition sounds like a reasonable strategy, healthcare providers do not ultimately tell hospitals and pill companies what price they are getting paid. The hospital and pill companies set the prices. If there is less money to go round at Blue Cross, there is less money and ultimately they could or will lose. In fact introducing competition means the power of larger insurance companies will be weakened. The doctors, hospitals, clinics and pill companies set the prices, so what will happen is health care companies will exit the market or announce bankruptcy as they are forced into deals that lead to losses. And the coverage we will get will be reduced to nothing. Are the hospitals going to reduce their prices? The answer is no and no again. The end result for us is our coverage will disappear over night if you are on the health care act and when corporations are faced with paying out 30% or more of their employee costs to healthcare, they will offer plans that are virtually not coverage. I also think it will lead to Scenario number 2.
Scenario 2. Medicaid For All
A future administration announces Medicaid For All, where there is an option to use Medicaid services for a fixed monthly price, where the government sets the price of medical hospital bills and pill prices. I don’t see any other way that makes sense right now. It is an option and it is not pie in the sky. Only a court and a government body can tell these medical facilities they have to reduce their prices. Hospitals are not in a competitive market place where we look for other choices, another hospital down the road for instance. That is not happening. When you need a hospital you go to one and at that moment it actually is a monopoly on your health prices! At least they could put the prices on the beds and rooms so we could understand what we are getting like McDonalds and calories.
Under a future President DiCaprio, a single payer system is a real possibility. But very unlikely in this administration, who are fundamentally way off the farm on this one. But who knows, maybe the While House will come to the same conclusion I have. But trust me Congressman and Senators completely understand a solution like this. That is exactly the plan offered to them by the US Government. I don’t even think they have out of pocket expenses when they go to the hospital. They never see the bill obviously. Congress gets a special medical plan most people don’t know about. Now, if you are still not in agreement with me, wow, what will it take? In fact, a central health plan is what 95% of the world gets in Europe, Canada and most everywhere else. And businesses are not responsible for the coverage. And businesses should not be responsible for coverage. We are the only country that does this in the world. And while this may have negative impacts on the some industries like insurance it will finally free corporate america and ultimately startups from the burden of these unbridled healthcare costs.
Scenario 3. Do Nothing.
Do nothing strategy. Ok, this is really not a good long term strategy. And it is a likely possibility, because the current congress really does not want to touch this and wants to not piss anybody off, so they will put off doing anything for at least a year or 2 or 3. Just leave it for President DiCaprio to deal with! Leaving things the way they are, where the insurance companies get a kickback in the form of tax credits paid by the US Government and set by the industry that are increasing by 20–30% a year means ultimately at this rate either the US public or the US government will end up spending billions that will line the pockets of insurance companies, hospitals and pharmaceutical companies. So, something has to be done and soon.
So how does not doing anything and not fixing the healthcare system tank the US economy, wreck havoc for many startups and generally paralyze our economy?
We know healthcare costs 46% a year per family against a family’s earnings now under the hood. I say under the hood, because most of us don’t feel the pain till we leave an employer. If you have to pick up half these costs and you are not working full-time, it just feels like a mac truck driving over you. If that number reaches over 51% then aren’t we all just going to work to pay most of our earnings and taxes for medical?
Once it hits this critical level, we are at a point, where something has to give and it will initially be startups. Members of a tech startup company, similar to independent consultants need to have coverage if they have a family. I am now at a full-time job and can no longer work as a consultant because I need coverage I can’t get properly though the Healthcare Act. Are all startups founded by 19 year old college students? The answer is no. Most are 35 to 50 and have years of experience and a family to worry about.
So, something has to happen here. I ultimately predict that President DiCaprio will come in and solve the whole thing with Medicaid For All. Go Mr. DiCaprio, run for president! I wish it weren’t this complicated. And while you are working full-time you just got a small mosquito bite of reality. Imagine not having a job and dealing with this. It used to be at my last full time job coverage was $280 a month and 10% of costs out of pocket for me 10 years ago. Maybe it would cost me $4000 all said and done a year. Today you may be getting a $600 monthly bill at work now for family coverage with a yearly $6000 deductible out of pocket. That means you may be paying $13,000 without a serious healthcare problem and you are not on the Health Care Act, yet. Just wait till your employer tells you that the Health Care Act is the health care plan! It is coming soon to your doorstep.
Do you think I am wrong here? Anybody?