The Problem
There is a storm on the horizon that is fast approaching. We have the technology and the information needed to see it is going to hit us, but we are doing little to stop it. There is no question that it will hit us, and hit us hard. We have the tools necessary to stop it, but none of us are willing to make the hard decisions necessary to stop it.
I am talking about the collapse of healthcare in America.
My name is Chuck Cole. I have been an Insurance and Investment Advisor since 1984. I am writing this book because, since I first got my Health Insurance license, I saw the many problems with our way of delivering medical care in the United States. Most people feel that the problems with healthcare affect the blue-collar working class, and the poor people the most. It does affect those people more than the top 5% of income earners in America, but it affects all of us in ways we might not have thought about. The problems in our health delivery system not only affect people, but naturally affect, hospitals, doctor’s offices, and even health insurance companies. What we do not think about is the effect on American companies both big and small as well.
I have the unique situation where my wife is a Nurse Practitioner. She worked in the cancer fields early in her career, but over the past 10 years she has worked in orthopedics and trauma. She has friends and colleagues who are from many different countries all over the world, who talk about the difference in healthcare delivery between the countries they are from, and the United States. They all seem to have the same story. The United States has the best hospitals in the world; however, they are dumbfounded in the way we deliver that care. And because of our delivery system, it leads to the reasons why we are way behind many industrialized nations in most measurable healthcare categories. I will be talking in more detail about these problems for the next several chapters.
Please read the entire book before you make a judgment. I have had conservatives tell me they are totally against my ideas until the book goes into detail about why changes must be made a certain way. After reading the complete book, at the end of our conversation they agree it is probably the only way to fix the healthcare problem.
The same thing goes for the Liberals who believe in Medicare for all. They believe healthcare should be free and run by the government. Once again after reading the entire book, most of them agree this is the best way to fix our healthcare crisis.
After I wrote the first draft of this book, I gave the draft to a focus group and asked them what they liked and disliked about the book. More than one person said the book needed an outline upfront so the readers know what is coming. I thought about what they said for a while and I think they were right. The beginning is filled with statistical information that is very important to the book, but if the reader believes that the entire book is about statistical information, they might not read the rest of the book. The test group found in the end that the information all makes sense, but readers need to know up front where I am going with the statistical information.
I would like to start out now by giving you a map of this book, showing you what you are going to read. The first part of the book shows many of the problems America is facing in the American healthcare system; while the second half shows how these problems can be fixed. There are 14 chapters in all. They are as follows.
The first chapter is the introduction (part of which you are reading now), and statistics which spell out the problems in the American healthcare system. This chapter alone will make you shake your head and ask yourself, how did healthcare in America get this bad?
The second chapter goes into the many varies types of healthcare insurance, and why the average American has a hard time figuring out how each type of insurance works. Americans need a basic knowledge of the different types of health insurance plans, and how they work, so they can make an informative decision when purchasing a health insurance plan.
The third chapter goes into detail about the vast bureaucracy that hospitals and doctors face each year, and the impact that has on the cost of healthcare. The amount of bureaucracy in healthcare has increased to levels way beyond the average American’s imagination. This chapter gives insight to just how bad it is, and how it is getting worse every year.
The fourth chapter talks about health insurance companies and the problems they face, as well as the problems they have created. There is a misconception in the public that all healthcare companies are making a bundle of money. For many healthcare insurance companies, that is no longer the case.
The fifth chapter talks about the Affordable Healthcare Act or what most Americans know it as Obama Care. I talk about why it was created, and why it does not work. Although, it does work very well for some Americans, especially those with lower incomes or those with chronic health conditions. But overall, it does not and will not work in the long run. I will talk about who gets hurt by the Affordable Healthcare Act, and why many health insurance companies are getting out or have already gotten out of selling “Obama Care” plans.
The sixth chapter talks about new problems in healthcare.
So, after you have read the first six chapters, and are all depressed, I will tell you all is not lost. There is a way out of this colossal healthcare mess.
Chapter seven starts with the basic changes that are needed to fix the healthcare problem in America. These are broad changes that must be in place for the plans to work. The chapter does not talk about the plan itself. I describe them more as principles that must be in place, before we even talk about the plan.
Chapter eight goes into details of the plan. This chapter describes the parts of the healthcare plan that must be in place to make it work. This chapter details the plan itself. After describing the details, it goes into the types of health insurance plans that would be available, and which ones should be eliminated entirely.
Chapter nine is a very important part of the plan that talks about a topic that most Americans are unfamiliar with. It is a part of every Medicare Advantage plan sold in America today. It is called the Star Rating program. I have seen this program in place since the first time I started selling Medicare Advantage plans. What the program does is grade the performance of every Medicare Advantage Plan sold today. The Centers for Medicare and Medicaid grade each plan using over 60 different objective criteria. In my experience as an insurance agent, it has been a great tool to keep insurance companies in line, as well as protecting the consumer who purchases a Medicare Advantage Plan.
Chapter ten, Prescription Coverage. This chapter dives into the complicated world of prescription drugs. Their high cost, and what should be done. When you read this chapter, you will see both sides of some of the main problems with prescription drug cost. Can we do anything to lower the cost? Should we do anything to lower cost?
Chapter eleven, how do we pay for everything? Great question, right? Is it not the biggest problem with healthcare? I have given this a lot of thought over the years, and examined just about all the possibilities of funding. The funding must be something that everyone can afford, and fair to everyone. After much thought, I have, in my opinion, the best solution. You will have to read the chapter to see what I am talking about.
Chapter twelve talks about other problems in America this plan will fix. One of the biggest problems, other than healthcare in America, is the underfunding of Social Security. Without cuts in benefits or higher taxes, the Social Security fund will run out of money to pay for Social Security payments at current levels. Congress seems unwilling to cut benefits or raise taxes. The longer we wait to fix this problem the bigger the problem becomes. The plan I am proposing will take care of that problem without raising taxes or cutting benefits. Another problem in America is race relations. This plan can help some with that problem as well.
Chapter thirteen goes into the negative aspects of the plan and who it would affect the most. No plan can exist without some downside, and ignoring those downsides would be irresponsible. So, we will face the problems upfront.
Chapter fourteen is a summary of what you just read, and some final thoughts. Do not do what many readers do and go to this chapter before reading everything. Some things in the summary will not make sense unless you read everything in the book.
I am not trying to be political when writing this book. If I thought the Republicans had all the right answers, I would tell you. If I thought the Democrats had all the right answers, I would tell you. The truth is that to fix the problems that we currently have in healthcare, we must use ideas from both sides.
You may start reading the book and stop once you come across something you do not like. Please take my word for it. Later in the book it will be explained, and you will come to realize this is probably the best way to handle the massive problem of healthcare in America.
You will be reading a lot about the problems, and what is to come if nothing is done. But do not worry, later in the book I will talk about a solution that will work. The solution will not only take care of the Healthcare problem in America, but like I said earlier, also help with other major problems like funding Social Security so it does not run out of money in the next 10 years. I have seen articles where Social Security can be underfunded by 20% by 2033.
More importantly, it has the key elements that both the Democrats and Republicans want in healthcare. Democrats and Republicans will have to compromise to incorporate the ideas outlined in this book into law. In the past when both parties compromise, generally what you get is legislation that works.
I hear it all the time: “We have the best medical care in the world.” That may be true of the type of care you get at the better hospitals in the major metropolitan areas if you have good insurance, but that is not true for all Americans in all areas of the nation. What I am talking about is the way we deliver healthcare to all Americans, and what we can do to make it much better.
The United States spends around $11,945 per person on healthcare per year in 2020. That is around 40% more than the next closest country Switzerland at $7,138 per person according to healthsystemtracker.org. Below is a list of top industrialized countries in the world, and what they spend on healthcare per person per year.
United States $11,945
Switzerland $7,138
Germany $6,731
Netherlands $6,299
Austria $5,899
Sweden $5,754
Comparable Country Average $5,756
France $5,564
Belgium $5,458
Canada $5,370
United Kingdom $5,268
Australia $4,919
Japan $4,691
You may look at the figures and say that we spend the most, because we have the best overall system. However, the statistics tell us something else.
If you go to the World Health Organization’s website at www.who.int, they keep track of several different health categories. When you look at the United States, and compare any category with other countries, the only category where we come in first is cost of healthcare per person. The statistics I am talking about are things like: Infant mortality rate, life expectancy, so on and so worth. We do not have the best healthcare in America, only the most expensive. There is a lot of information on this website, and anyone interested in healthcare should visit the site. There is much you can learn from it.
The biggest problem we are facing is not where we are now as far as healthcare cost per person in the United States, but where we will be 10 years from now.
The website usafacts.org lists the percentage increase in medical cost since the year 2000.
2000 13.3%
2001 14.0%
2002 14.9%
2003 15.4%
2004 15.6%
2005 15.6%
2006 15.7%
2007 16.0%
2008 16.3%
2009 17.3%
2010 17.3%
2011 17.2%
2012 17.2%
2013 17.0%
2014 17.2%
2015 17.4%
2016 17.7%
2017 17.7%
2018 17.6%
2019 17.6%
2020 19.7%
If you take the average increase in healthcare cost over the past 10 years it comes to 17.63%.
So, what are we going to be paying per person for healthcare in the United States in the year 2030?
$60,585 per person
That number should scare every American.
So, if you are a husband and wife, are you and your spouse going to have an extra $121,170 a year for healthcare in 10 years? Or if you have a family of 5, you could be paying over $300,000 a year for healthcare. How is that going to work?
The Federal Reserve Bank tries to manage inflation by raising interest rates so that Americans buy less. How is raising interest rates going to slow down Americans using healthcare? The answer is simple, it is not. It is just going to compound the problem. Medical expense are going to be the number one expenditure in the future, and Congress and the President are doing nothing to contain it. Nobody in Congress wants to do anything about it, because they feel there is no good answer. The Democrats tried to fix some of the problems, but in doing so they created new problems that did not exist. I will talk more about Obamacare in the coming chapters.
The Federal Reserve Bank tries to manage inflation by raising interest rates so that Americans buy less, but how is raising interest rates going to slow down Americans using healthcare. The answer is simple it is not. It is just going to compound the problem. Medical expense is going to be the number one expenditure in the future, and Congress and the president are doing nothing to contain it. Nobody in Congress wants to do anything about it, because they feel there is no good answer. The Democrats tried to fix some of the problems, but in doing so they created new problems that did not exist. I will talk more about Obamacare in the coming chapters.
Look above at the increase each year in medical expense. The lowest increase was 13.3% in the year 2000. The largest was 19.7%. If you graph the increases, it is almost an increasing straight line. I used an average of 17.63% in my future expense calculation. What if I used an increasing interest rate? That number could be $100,000 per person, and $200,000 for a husband and wife in 10 years.
Something must be done today to get medical expenses under control or it will create an economic disaster in the future. One that will take decades for us to dig out of.
Usafacts.org is another excellent website I encourage everyone to visit.
There are many other issues with healthcare that are affecting Americans.
Another issue with American healthcare is the lack of choice. Many Americans get their healthcare through their employer, but there are many problems with this.
The first problem with employer healthcare coverage is you are stuck with whatever plan, and health insurance company, your employer choices. Many employers choose a plan based on premiums, not quality. Employees may be stuck with a health insurance company that is difficult to deal with especially when it comes to paying claims. The company you work for may wish to give you quality coverage, but they might not be able to afford it.
The second problem with employer paid health insurance is the number of doctors and hospitals available to you. This is especially true with HMO plans. You may live in an area that is a long distance to the nearest doctor or hospital that is covered in your health insurance plan. As a result, you may not go to your doctor on a regular basis, or go to a hospital when there is something wrong, because it is located too far away.
The third problem is the coverage you employer provides may not fit you or your family’s healthcare needs. An example of what I am talking about is you or a family member may need certain therapies which have limited or no coverage at all. Your next-door neighbor’s employer’s health plan might have adequately coverage for that type of health problem. The problem is, you cannot join your neighbor’s health insurance plan. You are stuck with your employer’s insurance plan. Another example is prescription drug coverage. A drug that you need may not be covered under your prescription drug formulary, but other plans may cover the prescription drug you need.
The fourth problem does not concern the employees, but the employer. Companies spend too much time and money on providing healthcare for their employees. I have heard it hundreds of times during my career from company owners. They constantly complain about how much of a headache providing healthcare for their employees is. Small companies, from 10 to 100 employees, company owners can spend weeks working on health insurance for their employees. That time could be better used growing their companies.
Healthcare is a major factor in employee retention for most companies. Many employees make their decision on whether to stay at a company or look elsewhere for employment based on the healthcare, or the lack of healthcare insurance, provided by the company.
Health insurance is a problem that most American companies’ international business competitors do not have to worry about, or pay for. It puts United States companies at a disadvantage right away when producing products for the international community.
Most companies would benefit greatly by not having to provide health insurance for their employees.
If companies did not have to provide insurance for their employees, they could distribute the cost of the health insurance to all their employees. Where the companies could make money is eliminating the cost of providing and administering the healthcare coverage.
Another problem with employee health coverage is the stress it leaves on the employee and his or her family, if they have one. Many times, when an employee hears rumors of the company downsizing, the first thought is, what will I or my family do if someone gets sick? Or worse yet, how will I or my family members still be able to receive the healthcare we currently need?
Yes, there is COBRA insurance that will provide coverage anywhere from 18 to 36 months depending of the circumstances surrounding you no longer being employed. The problem is the cost of COBRA insurance is very expensive, and the worker may not be able to afford the coverage, especially if the worker is no longer employed.
The bottom line is the availability of health insurance is a constant stress point for most Americans and it does not have to be.
