Is it the end of employer-sponsored healthcare or the beginning of employer-driven healthcare?

When I posed this question to my Linked In network, many people viewed the post, some followed up for links to sources but no one commented even though healthcare is top of mind right now for many Americans.

Healthcare is an emotional topic. It’s something that everyone wants and needs but most Americans are struggling to pay for it. The healthcare jobs boom is still going strong which means the total cost of healthcare is continuing to increase. While there doesn’t seem to be a rolling average cost of healthcare per GDP publicly available to see the impact, the math is pretty simple  – more jobs means there is more healthcare being delivered which means more cost.

The total cost of healthcare will not decrease until we curb demand. 

Consumer Driven Healthcare initiatives failed.

Consumer driven healthcare initiatives such as high deductible health plans curbed demand in the short run but resulted in more costly healthcare outcomes. Americans simply couldn’t afford to pay their premiums and the patient portion of healthcare services under those plans. Consequently, they didn’t seek treatment until their health issue became a big problem. In simple terms, big problems cost more to treat. Other consumer initiatives such as pricing transparency never really saw the light of day.

Employer-Driven Healthcare

Employer-Driven healthcare is a new theory and consistent with the Republican trickle down economic policies. The assumption is that if the Republicans can tweak policies enough to get the economy to full employment, every American or at least nearly all Americans will get a job with healthcare benefits. In theory, all employers will offer benefits that are rich enough to ensure timely access to healthcare services.

Some employers are taking initiative to implement on-site and near site clinics, lower deductibles and implement wellness initiatives even though there is a perception that wellness doesn’t work.

There are ways to make wellness programs work better but the key words for an employer-driven healthcare system to work is ALL and SOME. If only some employers offer rich benefits, many Americans will continue to be underinsured or uninsured.

Medicare for All

The idea of “Medicare for All” was endorsed this weekend by former President Barak Obama. The initiative is gaining traction due to the economics and financial condition of Americans.

1/ Healthcare is becoming a bigger portion of the take home pay of low and middle income Americans which means they have less money to spend on housing, food, clothing and other life essentials that affect their health and wellbeing.

2/ The middle class is eroding to the point that it needs to be supported with social wealth-fare spending. Reportedly, $1 in every $7 is now spent to subsidize the middle class.

3/ Republicans are working to privatize Medicare. More health plans are getting into the Medicare and Medicaid business. According to the press release for Oscar Health, it is a more “lucrative” segment. Oscar [co-founded by Jared Kushner’s brother, Joshua] historically sold individual and family plans on the exchanges. Many of the people purchasing policies on the exchanges were sicker and needed more healthcare than expected.

4/ New Medicare Advantage plans are now addressing social determinants and covering many basic living costs. Bankruptcy filings are increasing in the senior population.

5/ Koch brother sponsored study reports “Medicare for All” saves $2 Trillion.

What does this mean for healthcare?

If we just look at the economic condition of many Americans and how the financial strain is impacting their health, it’s clear that we need a new universal healthcare system.

If we consider the changes underway to Medicare and the momentum of the “Medicare for All” movement, it looks like Medicare will be the underpinning of the new universal system. It’s a good thing for you because all or nearly all healthcare providers participate in Medicare, it has well established coverage standards for medical care along with a fee schedule and excludes bad actors from participation.

If we factor in everyone’s deep seated emotions about healthcare, we need a system that offers choice.

What we end up with is a two tiered system offering basic coverage for all Americans and enhanced benefits for those who choose and can afford to purchase additional coverage.

Simplicity wins:

There are plenty of models in other first world countries that can serve as a framework. The key is choosing a framework that simplifies the healthcare system for all to navigate and understand. Not only will it make it easier for all Americans to access care when they need it rather than when they can afford it. It will also reduce the cost. The administrative burden of the current system alone is estimated at 30% of the total healthcare burden in America.