Health Care Costs Are Killing the Middle Class

Any solution to the health care crisis in the United States must focus in part of slowing the soaring costs of health care and health insurance. Americans spend more on health insurance than in any other advance economy and the cost are rising faster than in any other advanced nation. The consequence is that the middle class is suffering an ever tightening financial squeeze as costs go up and more and more employers shift cost to employees. "Medicare for All" does nothing to lower much less slow soaring costs as a column in the Washington Post points out.  Rather, it merely shifts how skyrocketing costs are paid without addressing the underlying problem.  Obviously, one thing that needs to be done is to end the gouging of patients by the pharmaceutical industry.  Another is to end the empire building of hospital systems that focuses more on a monopoly game against other providers than on the delivery of medical services to patients.  Here are column excerpts:

The idea that most middle-class Americans have been treading water economically is conventional wisdom. It is already playing a role in the 2020 campaign, as the Democratic presidential candidates propose policies (Medicare-for-all, free college tuition at state schools, subsidies for child care, to mention a few) intended to relieve the financial stress on millions of middle-income families.

But the conventional wisdom is wrong — or at least misleading. Although the squeeze is not a myth, it’s highly localized: uncontrolled medical spending. This is crowding out other spending, from wages to defense budgets. If we don’t stabilize health costs (and there is little sign that we will), we should expect the squeeze to continue indefinitely. Income inequality would also probably worsen.

We now have a new study from economist Richard Burkhauser of Cornell University that illuminates health care’s peculiar role. . . . . In recent decades, the median income of U.S. households has grown slowly, stagnated or declined. In 2018, according to the Census Bureau, the median household income was $63,179; in 1999, it was $61,526.

But wait: The official figures don’t count health insurance, whether private or public (employer-paid insurance, Medicare and Medicaid — federal health coverage for the elderly and poor).

The simplest definition included labor income: wages, salaries, farm income and self-employment. Defined this way — and adjusted for inflation — median income has dropped 21 percent from 1970 to 2016. This explains why so many Americans feel squeezed.

However, that’s not the end of the story. A broader definition of income includes all labor income, interest and dividend payments, Social Security, other government transfers and — most important — the value of private and public health insurance. Under this definition, median income rose 68 percent from 1970 to 2016. By this definition — and reflecting the impact of health insurance — typical households have enjoyed a slow increase in living standards over nearly half a century. 

Which definition of income to believe? Why, both, of course.

We have the worst of both worlds. We don’t count health insurance as a form of earnings that would improve median income. . . . . because health spending is concentrated among a relatively small proportion of people. In 2016, the top 5 percent of patients accounted for half of all medical spending, according to data from the Kaiser Family Foundation. By contrast, the lowest 50 percent of spenders accounted for only 3 percent of total spending.

Sanders’s approach is self-defeating and ultimately undesirable. It makes us hostage to explosive health spending. We can’t control what we refuse to control. Almost any systematic effort to curb spending is subject to attack as cruel or immoral, despite the obvious reality that not all health spending is of the same value.

In the early 1960s, before Medicare and Medicaid, which were enacted in 1965, health spending was about 2 percent of federal outlays. Now it is nearly one-third, at $1.3 trillion.

Corporations compound the pressures on take-home pay as frustrated companies shift more health costs back on their employees through higher premiums and deductibles. This, too, intensifies the middle-class “squeeze.”

Total health spending is now about 18 percent of the economy (gross domestic product), about twice the level of many advanced societies.

The effects are felt keenly by middle-income Americans and the poor, because the high cost of modern medicine consumes more of their incomes. We have created a monster, inspired by good intentions, that is slowly and menacingly taking charge of our future.

Broken Health Care: As Insulin Cost Soars, Americans Drive to Canada

The myth continues that America has the best health care in the world.  To the extent this myth is true, it applies only to the very wealthy to whom cost is no obstacle. For millions of other Americans, even those with insurance, the system remains severely broken and remains a drive force in pushing individuals into bankruptcy.  Even if one does not need surgery or an extended hospital stay, prescription drug costs are sky high, often even for generic brands - I recently paid $545.00 for a generic drug that I need to deal with side effects of my proton therapy AFTER my insurance company made its co-pay.  Unlike so many others, I fortunately will not need to keep getting refills.  In the case of insulin, those who need it, need it it on a continuing basis and American pharmaceutical companies are proving to be rapacious at best.   Meanwhile, the federal government does nothing to bring down costs.  As a piece in the Washington Post reports, some Americans now travel to Canada to get insulin at one tenth (1/10th) the cost paid in the USA.  Here are highlights:

As their minivan rolled north, they felt their nerves kick in — but they kept on driving.  At the wheel: Lija Greenseid, a rule-abiding Minnesota mom steering her Mazda5 on a cross-border drug run.

Her daughter, who is 13, has Type 1 diabetes and needs insulin. In the United States, it can cost hundreds of dollars per vial. In Canada, you can buy it without a prescription for a tenth of that price.

So, Greenseid led a small caravan last month to the town of Fort Frances, Ontario, where she and five other Americans paid about $1,200 for drugs that would have cost them $12,000 in the United States.  “It felt like we were robbing the pharmacy,” said Quinn Nystrom, a Type 1 diabetic who joined the caravan that day. “It had been years since I had 10 vials in my hands.”

Like millions of Americans, Greenseid and Nystrom are stressed and outraged by the rising costs of prescription drugs in the United States — a problem Republicans and Democrats alike have promised to fix.

Insulin is a big part of the challenge. More than 30 million Americans have diabetes, according to the American Diabetes Association. About 7.5 million, including 1.5 million with Type 1 diabetes, rely on insulin.

Between 2012 and 2016, the cost of insulin for treating Type 1 diabetes nearly doubled, according to the nonprofit Health Care Cost Institute.

Some pharmaceutical companies, under pressure from U.S. lawmakers, have tried to reduce the cost for some patients. But many who rely on insulin still struggle. Large numbers resort to rationing — a dangerous and sometimes deadly practice.

Some diabetics and their families are taking matters into their own hands. They meet in coffee shops and strip mall parking lots to exchange emergency supplies. An unknown number travel outside the country to buy the lifesaving drug for less.

None of this is recommended by U.S. officials, and some of it might be illegal under Food and Drug Administration guidelines. But the organizers of the caravan — their word, a nod to the migrants traveling in groups through Mexico to the U.S. border — are speaking out about their trip because they want Americans to see how drug prices push ordinary people to extremes.

“When you have a bad health-care system, it makes good people feel like outlaws,” Greenseid said.

Barry Power, director of therapeutic content with the Canadian Pharmacists Association, said the group is tracking both U.S. drug-buying proposals and reports of cross-border trade closely but has yet to see a disruption to Canadian insulin supplies.

He said insulin prices in Canada are controlled through policy, including price caps and negotiations with manufacturers.  “This is something the U.S. could do,” he said.

Elizabeth Pfiester is founder and executive director of T1International, a British-based nonprofit that advocates for people with Type 1 diabetes around the world.

“It’s kind of a myth that America has the best health-care system in the world, because it is set up to allow Americans to go bankrupt or die because they can’t afford their medicine,” she said.

Pfiester grew up in the United States. One of the reasons her organization is based overseas, she said, is that the cost of treating her diabetes in the United States is so high.
They see buying in Canada as a short-term emergency measure and a way to call attention to U.S. pricing — not the answer.

“I don’t think that the solution is going outside the United States,” Greenseid said. “The reason they have lower prices is because they have put in regulations to make sure their citizens are not paying too much. We have not yet made that decision in the U.S.”

LaShawn McIver is senior vice president for government affairs and advocacy at the American Diabetes Association.  “Insulin is not a luxury, it is a matter of life and death,” she wrote in an emailed statement. “Action to reduce the high out-of-pocket costs that endanger the lives of the millions of Americans who depend on this medication is critical and urgently needed.”

Dealing With a Cancer Diagnosis; The Importance of Healthcare Coverage

I have debated whether or not to write about my latest challenge for a couple of weeks. I want no pity or sympathy.  When this blog first began, it was intensely personal as it described my often extremely turbulent coming out journey.  To my surprise, I had men from around the globe reach out and tell me that my hearing saga had helped them in their own journey.  Over time, the blog morphed into something much more political given the need for gay rights advocacy.  

Now, having learned that I have prostate cancer - thankfully, not an aggressive type and with an extremely positive prognosis - I opted to talk about this latest chapter in my life in the hope that others will get themselves checked out and, if necessary, get treatment. From my research, prostate cancer is among the most common forms of cancer in men - its causes are unknown and, in my case, I have no family history of prostate cancer. It is also one of the most survivable when discovered early and properly treated.  One of the big problems, however, is that it often has few discernible signs until well advanced at which point mortality goes up and the treatment options become more sever with more permanent impairment.  The bottom line: get tested regularly and ignore the thoughts of some in the medical community that an annual PSA test is of uncertain effectiveness or involve srisks (candidly, it is simply a matter of giving some blood). It's your body and you need to be your own advocate.

So how did I come to be diagnosed?  It began with a simple annual physical (the cost fully covered by my insurance) which included blood work, including a PSA - prostate-specific antigen - test that showed a somewhat elevated result (things from sex, to running, bicycle riding to strenuous workouts can cause results to be elevated - who knew?). As follow up, over a period of months I had additional PSA tests and the results remained consistently somewhat elevated.  As a result, an MRI was done which showed a small lesion.  This in turn lead to a biopsy - a truly unpleasant experience - that confirmed I had a problem.  I actually got the news while driving to court one morning with the doctor telling me "I have bad news and good news"after I stated I did not want to wait for an office visit to get the news: the bad news is you have cancer, the good news is that if you have to have it, you have the best type to have. An office consultation followed with the husband at my side where the list of options was discussed: (i) do nothing and monitor the situation through annual PSA tests and annual biopsies - I said "no thank you "to annual biopsies since one was more than enough, (ii) surgery, (iii) chemotherapy, (iv) traditional radiation, or (v) proton therapy.  I immediately rejected the surgery option - which can result in serious, lasting effects - and chemotherapy having seen my late sister go through that nightmare. I ultimately opted for proton therapy, the least invasive and most state of the art treatment option.  Thankful, a proton therapy facility is only ten minutes from our home. 

There are some preparation procedures one must undergo in order to receive proton therapy treatments, but none are as bad as the diagnostic biopsy procedure. The treatment sessions themselves take 30 minutes or less and while there are side effects, all in my case are manageable and far better than those that would come with the other treatment options.  One big issue for those considering this type of treatment is that the treatment regime lasts for up to or even over nine (9) weeks of daily treatments and proton therapy facilities are not located in many states.  The other big issue is the cost and whether or not one's insurance will cover the treatment regime.  Fortunately, between Medicare and my Anthem supplement, my treatments are fully covered, although one of the drugs I'm on to deal with side effects is ridiculously expensive - the pharmaceutical industry continues financially rape American patients - and the out of pocket cost is significant. 

One thing this experience has also taught me is the need for healthcare coverage for all - coverage that covers preventive measures and diagnostic testing.  Without healthcare coverage, many men will never get what could be life-saving testing and only when pronounced symptoms from advanced cancer will they seek treatment, probably via an emergency room visit.  By that point, the chance of surviving may have been be lost.  The same holds true for stripped down insurance coverage that either (i) does not cover diagnostic tests and/or (ii) leaves one with financially devastating co-payments.  Sadly, America's healthcare system - if one can even call it that - callously condemns some to death and/or financial ruin.  Not surprisingly, with prostate cancer, European nations with national, universal healthcare coverage have higher survival rates that in the USA. I have long been an advocate for national healthcare coverage - now, with this experience, I believe it is even more necessary.  We need to stop treating some lives as disposable. 

To men reading this post, I hope the take away is to get tested and do not procrastinate. One client I shared my story with admitted that he had not been tested in years - he plans to rectify the situation and will be getting tested. I hope others will do likewise.  I also hope that anyone diagnosed will study their options and not blindly follow doctor recommendations.  Unfortunately, too many medical practices are now owned by hospital systems that urge physicians to direct clients for treatment at their facilities, whether or not they can provide the optimum treatment regime.  In my case, the Hampton Proton Therapy Institute is not affiliated with either of the two dominant hospital systems and, but for my own research (and having a friend who had undergone proton therapy), I might have been pushed to seek a different treatment regime.  Currently, I have my treatment sessions early in the morning and have missed no days of work and have a very positive prognosis.