The Federal Government Paid for 28% of Total Healthcare Spending in 2016
The California Health Care Foundation released a report earlier this year on US healthcare spending. Here is the breakdown for the 3.3 trillion healthcare dollars spent in 2016:
- 28% of total health spending in 2016 was paid for by the federal government.
- Households accounted for 28% of total healthcare spending in 2016.
- Private businesses paid for 20% of total healthcare spending in 2016.
- 17% of total health spending was paid for by state and local governments.
Source: MCOL Daily Factoid Email, 10/08/2018
Federal, state, and local governments pay for 45% of healthcare spending, with employers paying 20%, and individuals 28%[i]. Medicare for all will be paid how?
As costs increase, we the people will pay more through government payments and on our own, as employers, employees, and individuals. It doesn’t make a difference if the money comes from our pockets or the government’s—it’s still OUR collective pocket.
The current state of healthcare works and yet at the same time, is broken because there is so much waste, abuse, fraud, and redundancy. In 2016, there were 18,730 investigations into Medicaid fraud, resulting in charges for 1,721 individuals.[ii] The Office of the Inspector General (OIG) reported 2016 initiatives by the Department of Health and Human Services (HHS) and Department of Justice (DoJ) recovered $3.3 billion in healthcare fraud cases and settlements.[iii] Compared to 2015, convictions for healthcare fraud increased, from 613 to 658.[iv]
Why should health plans pay for a toenail fungus cure at $1,200/prescription, when Lamisil over the counter is only $11?
What drug should cost $30,000/month to keep a child alive? The cost is insignificant to the child’s smile, but $360,000/year is out of control.
Medicare for all can work—if designed properly. As we deploy our KISS – Keep it Simple Solution™ with our clients, I will give the United States our KISS. Here is the solution: federal government-mandated basic coverage which covers everyone, whether you are employed by the government, a private employer, yourself, the military, over 65, or eligible for Medicaid. Everyone gets the same basic insurance, with the federal government holding the “paper” or stop loss over $500,000 or $1 million. Each sector can customize the rest of their program with other insurers, TPAs, excepted benefits, and the like. The United States is actuarially perfect with almost 330 million people.
Rather than continue with the dysfunctional systems we currently have in place, let’s streamline: mandate a basic plan for everyone, and cover the highest claims. As the ACA set the basic needs which should be included in ALL plans in the country, let employers and individuals customize the rest. Take the largest expenses off the table.
“Free” health care isn’t free license to do what you want. You MUST become a better YOU! If we really want to make it better, let’s look in the mirror at both the culprit and the cure.[v] Health promotion is a critical component of a healthy nation.[vi]
Obesity levels are at their historical highest, and we as a society cannot sustain the financial impact to our productivity, mortality, and expenditures any longer. Wake up!
[i] California Health Care Foundation, “Health Care Costs 101: A Continuing Economic Threat,” California Health Care Almanac, May 2018, https://www.chcf.org/wp-content/uploads/2018/05/HealthCareCosts18.pdf
[ii] Dani Henkel, “Healthcare Fraud, Waste, and Abuse by the Numbers,” 1st Healthcare Compliance, 27 July 2017, 23 January 2017, https://1sthcc.com/healthcare-fraud-waste-and-abuse-by-the-numbers/
[iii] Jacqueline LaPointe, “HHS, DoJ Recovered $3.3B from Healthcare Fraud Cases in 2016,” Revcycle Intelligence, https://revcycleintelligence.com/news/hhs-doj-recovered-3.3b-from-healthcare-fraud-cases-in-2016
[v] Steven Aldana, The Culprit and the Cure: Why Lifestyle is the Culprit behind America’s Poor Health (Mapleton, UT: Maple Mountain Press, 2004)
[vi] Gloria Coe and Joy de Beyer, “The Imperative for Health Promotion in Universal Health Coverage,” Global Health: Science and Practice, February 2014, 2(1):10-22, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4168610/