Vermont recently announced it will move forward with its own universal healthcare system, calling it the nation’s first. Already, the plan has received mixed reviews from all corners of the industry. In this article, I discuss the danger of mislabeling Vermont’s plan as universal healthcare.
As someone who has been involved in the healthcare industry for several years in a variety of capacities (investor, analyst, researcher, venture capitalist, and consumer) I have some points I would like to add regarding this news.
Implementing a system of real universal healthcare within an individual state is absolutely impossible because the state would still be subject to the collusive, wasteful and unsustainable economic forces present within the rest of the nation’s healthcare system.
If in fact a single state were to ever attempt real universal healthcare, it would face bankruptcy in a matter of a few years, or else taxes would soar in order to support socialization of a fraudulent industry; an industry that already derives nearly 60% of total annual revenues from tax payer dollars.
This is specifically why Vermont’s proposed (and mislabeled) universal healthcare plan includes many of the deleterious features found in the current healthcare system, favoring the health insurance mafia over consumers, with high deductibles , co-pays and other out-of-pocket costs that “deter people from seeking timely care.”
In other words, Vermont’s proposed healthcare plan isn’t even close to real universal healthcare.
So is this necessarily a bad thing? To answer this question, I feel it is important to consider a few of the benefits offered by real universal or single-payer healthcare.
The strength of universal healthcare stems from several benefits, each absent from America’s healthcare system:
1) Negotiating Power of One Payer. The negotiating power of a unified single-payer system enables low-cost medical access. As a result, healthcare-related companies have little choice but to accept reasonable cost ceilings. Even the America’s massive public healthcare system (Medicare and Medicaid) is not permitted to negotiate drugs costs and other expenditures because healthcare lobbyists know that this would serve as a model for cost-effective care that could be duplicated from within the private healthcare sector.
2) Emphasis on Preventative Medical Services. Because universal healthcare provides low-cost, open access to the medical system, consumers can have what may seem as a minor although potentially critical medical ailment looked at and treated in a timely manner. Rather than the myth that this would encourage medical waste (which has been shown not to be the case) a healthcare system that provides prevention offers financial incentives to the single payer by promoting early treatment and diagnosis rather than treatment only once a disease or other medical condition has progressed to more costly advanced stages. As you can imagine, this simple measure lowers medical costs and improves mortality.
In America, health insurers do not want to provide low-cost access to early diagnosis and prevention services because they realize that most policy holders will either have changed providers prior to the diagnosis of a costly medical condition, or they will be shuttled into Medicare upon turning 65.
In other words, the private healthcare system has been designed so that insurers receive insurance premiums from you in your healthy years in return for very little benefits. By the time most people incur significant medical costs, taxpayers end up fitting the bill through Medicare. On the other hand, because healthcare inflation continues to erode the buying power of the Medicare trust fund, Washington keeps whittling down medical benefits all while raising premiums and payroll taxes. This is nothing more than a complete scam designed to enrich the medical-industrial complex at the expense of the people. Make no mistake. Washington has facilitated this scam for decades in exchange for huge payoffs and lucrative jobs from healthcare lobbyists.
If there was only a private healthcare system in the U.S., and if each consumer was required to stay with one insurance provider throughout their life, and if healthcare coverage could not be dropped for financial reasons, you better believe insurers would focus on prevention and early detection because they would be tied into the health of each policy holder for their entire life.
3) Very Little Fraud. America leads the world in healthcare fraud, in part because America leads the world in total fraud. But the healthcare industry makes its own unique contributions. In the U.S., the healthcare money trail is often confusing, passing from tax payers to corporations and back to tax payers. Therefore, Washington often turns its head to medical fraud committed by large healthcare-related corporations. Instead, the FBI and Department of Justice focus on individuals and small companies in order to create the illusion that taxpayers are being protected. This points to the problem of America’s fascist government, which partners with large corporations.
Furthermore, even when healthcare fraud (often taxpayer fraud) is discovered, corporations are merely fined, with no prison sentences for the executives in charge even though the fraud was in the hundreds of millions (and in some cases billions) of dollars. In contrast, individuals who are convicted of healthcare fraud are often sent to prison.
Nations with universal healthcare tend to be less forgiving to corporate giants guilty of healthcare fraud because taxpayers hold politicians more accountable since the government is the only entity in charge of healthcare.
4) Less Medical Waste. Each year, medical corporations from around the world devise sophisticated (written) sales and marketing strategies which focus on the U.S. healthcare system because there are no cost limits. How do I know this? Because I have seen these documents. In essence, healthcare vendors have borrowed the credo used by Wall Street, “You eat what you kill” which basically means your profits are limited only by your inability to make the sell. This adds medical waste and overutilization into an already ridiculously expensive healthcare system. In contrast, nations with universal healthcare have established firm price limits for what they will pay for a variety of medical goods and services.
Finally, the free market mentality that has engulfed America’s healthcare system has even infected physicians and other healthcare providers. Today, many providers in the U.S. are more concerned with practicing the business of medicine rather than the practice of medicine.
Even providers who are committed to the practice of medicine cannot escape the business side of healthcare. Medical device salesmen and other vendors supporting the medical-industrial complex convince practitioners that they should invest in their practice because it is a business. As a result, they often purchase their own x-ray machines, CT scanners, MRIs and other diagnostic equipment. This causes them to utilize these machines as investments rather than tools. This general phenomenon extends to the overall overutilization trends that add to healthcare inflation each year.
5) Low Rate of Medical Errors. Because universal healthcare is aligned with a single payer, the infrastructure is more focused on clinical outcomes. In addition, because universal healthcare systems know in advance (approximately) the budget they have to work with, cost-effectiveness is a natural side effect. As a result, these healthcare systems are designed to focus on cost-effective care.
In contrast, taking the advice of Harvard business professors and Wall Street analysts, the U.S. healthcare system has been modeled after an auto assembly plant, taking the division of labor approach to extremes. As a result, the physician and nurse have become more disconnected from the patient as numerous healthcare providers enter the patient treatment loop. Anytime you add more individuals into a system, you will see an increase in miscommunication. This leads to excessive medical errors. Thus it is by no coincidence that the U.S. leads the world in medical errors.
There is no question that a system of universal healthcare would provide the best solution for Americans and America. However, since a shift to universal healthcare would diminish the profitability of the medical-industrial complex, the leap to real universal healthcare is currently not possible. At the same time, the current system of healthcare in the U.S. is unsustainable. Thus, the most feasible solution is to take a stepwise approach. However, these steps must be restricted because time is running out.
In conclusion, false claims of universal healthcare by states such as Vermont pose more harm than good because the spin serves as another illusion of real universal healthcare that just might end up a national model. And by the time people realize it’s fundamentally no different than the current pseudo-free market healthcare system which accounts for 50% of the nation's personal bankruptcies, millions of Americans will be long gone, setting the stage for yet another distraction, or reckless solution so as to buy yet more time for the medical-industrial complex. Thus, I view Vermont’s proposed universal healthcare plan as nothing more than a political device.
If you want to learn more about the problems underlying America’s healthcare crisis, as well as the most viable solutions, in invite you read my book, America’s Healthcare Solution; another book (similar to America's Financial Apocalypse) that has been banned by the media, and a book that cost me a senior-level position at a healthcare venture capital firm.