What else could $700 billion buy?
Universal health care could be achieved in the U.S. with a fraction of the cash handed to failing banks. The solution–a public insurance pool that gives all Americans an alternative to the for-profit health insurance system and provides a mechanism for bulk purchasing prescription drugs–is good for the economy because it moves capital by giving more Americans a stake in the system.
Arthur Garson's piece this week in the Christian Science Monitor does the math on health care spending and finds that the $700 billion spend to bailout Wall Street is just about enough to cover the costs of one of the biggest waste centers in our economy: unnecessary health care expenses. According to Garson, by cutting unnecessary expenses the U.S. could provide coverage to the 45 million uninsured with $100 billion and still have $600 billion left over for Wall Street.
Here's how it pencils out:
** $2.1 trillion = current spending on health care in the U.S.
** Of that $2.1 trillion, 1/3, or $700 billion, is wasted on overpriced prescription drugs, insurance company overhead and profits, unnecessary procedures, and administrative waste.
Alan Sager of Boston University estimates that 50% of health care spending in the U.S. is wasted on profit and administrative waste, unnecessary services, excessive prices, and fraud by caregivers and insurers. Insurers like Blue Cross Life & Health take 50% of every dollar spent on individual health policies for profit and overhead. In another example, Sager estimates that if the U.S. paid Canadian prices for brand name prescription drugs, $60 billion would be saved. That $60 billion in savings could be captured and used to buy
prescription drugs for the 70+ million people who have poor or no drug
coverage.
And lower prices are good for the economy: when prescriptions are more affordable, more patients can afford to buy them. Drug makers would recoup money lost due to the cut in price even accounting for the added cost of producing more medications.
How do we leverage the nation's buying power to rid waste and get health care for our dollar? By giving all Americans the option of joining Medicare, or a non-profit, publicly accountable health care system like Medicare, that allows us to negotiate bulk discounts on prescription drugs like Canadians already do and circumvent wasteful private insurers. Such an approach would allow for standardization of billing and electronic medical records, thus reducing administrative waste.