How Can we Fix our Healthcare System?

Source: Health Catalyst

The economic principle I’m exploring is: “Institutions are the "rules of the game" that influence choices"

My research question to help me study the economic principle is: “What should the government change to make healthcare in America better?”

The article “A Practical, Non-Partisan Solution to America’s Healthcare Crisis” published by A Medium Corporation demonstrates this principle by offering up several different solutions on how we can reduce the costs of healthcare in America and fix the system overall. 

First, one solution could be to create fair prices for prescription drugs. The article goes on to state that “EpiPen, for example, costs more than $600 in the United States compared to $290 in Canada for the exact same allergy treatment. A popular drug for high cholesterol, Crestor, costs $730 in the U.S. but $160 across the northern border. Abilify, a drug to treat depression, is more than $2,636 for a 90-day supply in the U.S. but only $436 in Canada.” All of these different examples show how flawed our pricing is on essential drugs that many people desperately need. One thing that America can do to decrease the price of drugs is to use their purchasing power to negotiate lower drug prices. Canada is already doing this, and it is working with “13% of each healthcare dollar going to pharmaceuticals”, compared to America’s 22%.

Secondly, another way to help improve our healthcare is to increase our citizens negotiation power. The article states that “In Germany an appendectomy costs $3100, but here in America it costs more than $13,000.” The reason that Germany’s procedure is so much cheaper is because “they use the collective bargaining power of their citizens to keep fees in check”. In America, we have our insurance companies “negotiate” fees with our medical provider, which essentially forfeits any negotiation power that US citizens have. If we were able to have this kind of power, then we could negotiate fair prices and overall healthcare would be cheaper as a whole.

Thirdly, we could extend the Medical fee schedule and make it a National fee schedule. Doing this would take advantage of America’s single-payer system and allow the free market to keep fair competition in check. Doing this would instantly lower the cost of medical care, and reduce health insurance rates. It would also make costs for medical procedures more transparent, instead of the current system in which you don’t really know how much it costs until you get the bill. Lastly, making the medical fee schedule a National fee schedule would make it easier for insurance companies to enter the market and increase healthy competition between companies, and with good competition comes lower rates for everybody.