Healthcare

“Cover everyone, involve everyone, control costs… and stop making us buy our medications from Canada.”

Why should we care?

Healthcare affects us all. We usually think of healthcare in personal terms (“what will happen to me or my family?”) or national terms (“the fight over Obamacare”), but healthcare is also a regional issue. Small town and rural regions like the 21st Congressional District are different from suburban or urban areas. We have different health problems (more of us smoke and use chewing tobacco). Delivering care in our region is different (long distances, winter weather, lack of providers). And our local hospitals are “anchor institutions” for our communities. Hospitals in our region are often our leading employers and bring educational opportunities (nursing and technology training) and technological advances to our communities.

The United States has the best hospitals, doctors, nurses, and support staff in the world. It is our healthcare financing system that does not work well, particularly in rural regions like the North Country. Our system is too expensive, does not control costs well, burdens our small businesses, and causes some citizens to go without the care they need. Our system gives excessive rewards to pharmaceutical and supply companies instead of the local hospitals which are so important to our communities and lives.

Our current system particularly hurts the 21st Congressional District and other small town and rural areas. We all “pay in,” yet the flow of money is directed out of our hospitals and communities and into large corporations like the pharmaceutical industry. Their profits are staggering, while our community hospitals struggle to hire nurses and staff.

What do we need?

The 21st Congressional District and the United States needs a health care system that: (1) covers everyone, (2) requires some personal investment, and (3) is sustainable because it can control cost.

We cannot run the healthcare system efficiently unless everyone is covered. Care for serious illnesses is too expensive. Even care for routine procedures like knee replacements can far exceed an individual’s ability to pay. Uninsured patients with serious illnesses strain the budgets of our local hospital, reducing their ability to offer the services we need and hurting our local economies. Covering everyone does not mean the government should own hospitals or employ doctors and nurses. Nor does covering everyone mean paying all expenses. All Americans need to be involved in healthcare by paying a share and being healthier. In the 21st Congressional District, this means we need to work on smoking—our rates are above average. Our system must have the tools to control costs. Like any business, it must be able to use the free market to obtain the best prices for the drugs and supplies.

The Federal Government must tackle these challenges. With the right changes to Medicare, it can.

How does Medicare measure up?

Medicare (which covers seniors) is a very popular program which is accepted across the country and sets the rules for healthcare payment. Medicare covers everyone who is older (goal #1), requires personal responsibility for about 20% of expenses (goal #2), but does not control medication costs (goal #3).

Why can’t Medicare control drug costs?

Congress prevents Medicare from controlling its drug costs. When the FDA approves new drugs,  the price is set by the manufacturer. The pharmaceutical companies can charge whatever they wish and we pay. Thus, while Medicare has controlled spending on hospitals and doctors, it has been unable to control spending on drugs (as we all know after a visit to the pharmacy) because the law prohibits it from developing a competitive bidding process. Since Medicare supplies almost one-third of prescription drugs in the nation (and the percentage is rising), uncontrolled drug costs are straining our system.1 Our prices are higher than anywhere else in the world. It is a disgrace that American citizens turn to Canada to buy medications discovered, developed, tested, and produced in the United States—medications usually developed at institutions funded by American taxpayers and by scientists educated at American taxpayer expense.

What other business can charge whatever it desires, knowing it will get paid? Allowing drug companies to set the prices of medications worked to grow the pharmaceutical industry, but now threatens to collapse the healthcare system. The Federal Government can control costs by requiring Medicare to negotiate with drug companies in a bidding process which fosters reasonable competition. A reasonable competitive bidding process for drugs and supplies (like any business would do) will not strangle the pharmaceutical industry. The rewards for making new drugs will be fair and the system will be sustainable.

Currently, the VA (along with the Department of Defense, Public Health Service, and US Coast Guard) negotiates drug prices.2 These reduced prices are still attractive to pharmaceutical companies.

Why is this plan good for the 21st Congressional District?

By making drug and supply costs competitive, we will control costs. Healthcare dollars which currently go into the pharmaceutical industry will stay with local hospitals and healthcare institutions.

Who opposes allowing Medicare to use the free market to control drug costs?

The pharmaceutical industry, which has been reported to spend more money lobbying than any other industry. Along with our academic institutions and educational system supported by taxpayers, the pharmaceutical industry makes important drugs which save and extend our lives. But they need to price their products in a free market system.

How could this change healthcare?

Making Medicare a sustainable program which controls drug costs using the free market is the first step which will allow the expansion of a stronger Medicare plan to younger Americans. An expansion of a sustainable Medicare program will allow us to cover all our citizens, stabilize our local hospitals and networks, and remove part of the burden of providing health care from businesses. It will leave room for private insurance and will involve us all. It will use the free market to control drug and supply costs. And it will mean all Americans have access to their healthcare system—the best healthcare system in the world.

  1. This is clearly explained in “The Facts on Medicare Spending” at the Kaiser Family Fund website (kff.org).
  2. A visit to the VA website (va.gov) and the Office of Acquisition and Logistics shows the significant savings they have achieved on some expensive drugs. Download the Pharmaceutical pricing file and compare FSS (standard) prices with Big4 (the group) prices to see some examples.

“of the people, by the people, for the people.”

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