Pass Real Healthcare Reform

smallest premiums possible on Medicare.

Cost of a quality healthcare for all is a very important issue and must be addressed now. Our GDP expenditures on healthcare have gone from five percent in the early sixties to about eighteen percent now. Premiums and out of pocket expenses on healthcare are unaffordable for many. We need to address this out of control cost issue at the national level without sacrificing choices, quality of care and its wide accessibility. Unfortunately, this issue has become an idealism war that can only hurt our society. We can’t let that happen. America was built on choices and freedom for our people, not socialism! We must have the courage to implement common sense solutions that work for all. I believe that competition and sane regulations will bring costs down for all. Quality of care in the US is good, and with healthy competition and technology to help, we can achieve even better. I have compiled a list of very sensible paths that can lead us to a very cost effective and high quality health care for all.

US healthcare GDP share has grown from around 5% ($27B) in the early sixties to over 18%($3.7T) of the GDP currently – a 136x increase in total dollars spent on healthcare! In inflation adjusted terms it would be about 23x higher expenditures now than in 1960. We have roughly doubled in population since 1960, so in terms of expenditure per person, the expenditures on health would be 3x higher today than in 1960. What are the contributing factors in the cost of increased healthcare costs? And, what have policymakers done in the past many decades to remedy the situation.

Some major factors to consider are: Technology, Coverage and intensity of use, Demographics, and cost increases beyond average inflation.

Technology has been a significant factor in expenditure increase that includes devices, diagnostic equipment, complex procedures, advanced drugs, etc. A CMS analysis says that roughly a quarter of the expenditure increase is due to the technology factors. The benefit of technology in healthcare is that there is about 10-year higher life expectancy now. However, we need to pay attention to very high costs of newer technologies and procedures. Competition is the only way to create better prices and lower costs. We need to come up with creative ways to reduce costs of drug development, and not have the USA pay for most of the cost recovery. I will promote policies for healthy competition to reduce cost of technology and advanced medicine in healthcare.

The inflation in healthcare area has been about 1% higher than the average inflation in the US over the last sixty years. This means that over 60 years, same thing is about 2x more than the average inflation adjusted cost. This is an area to examine for policy makers to ensure that the existing laws encourage competition to reduce prices for drugs, as well services and procedures. I intend to focus heavily in this area.

Additionally, due to the shift of demographics in the last 60 years, where we have lesser (36% vs. 21%) percentage of kids, and larger (9% vs.17%) percentage of older people, the total healthcare expenditures have increased. We need to take care of our seniors, and I will support their health coverage with the smallest premiums possible on Medicare.

Lastly, another factor that has contributed to higher expenditures per person is the extent of health coverage and its use. The wider coverage and who pays for it becomes important in this context.

Before Medicare and Medicaid, which were instituted in 1966, 56% of the US healthcare expenditures were the responsibility of households/individuals, and 14% were contributed by the Private sector. Government paid about 23% of the healthcare expenditures. Today, government pays about 45% of the total expenditures, households at 28%, and private sector at 21%. The role of government has increased 100%, and the inflation adjusted healthcare costs have increased by 100% in parallel. I intend to focus on this area and critically examine the arguments made by my socialist opponent, Ro Khanna, who claims that by going to one-payer system – the government – costs will come down. This claim is highly exaggerated and with unrealistic assumptions.

My opponent, Ro Khanna, has NO idea on how to pay for $about 3T expenditure of “Medicare for all” outside of the premiums contributed by the private sector, and or individuals into the government run system. And lot of his stated assumptions on savings from Insurance industry profits are wrong, which made only $28B last year. Even if you add savings from the drug purchases, it would contribute another $20-$30B to the one-payer system. Even taxing the top 1% (anybody making $421K or higher) at 100% rate will not pay for the “Medicare-for all” proposal. It is just a pipe dream with zero understanding of the problem. Most people agree now that the incremental $3T per year cost of “Medicare-for-all” system is not fundable. All it will do is to increase costs, decline healthcare quality substantially, reduce health innovation, and take choices away from you.

People must have options in healthcare. We need a system that provides choices at very competitive prices.

I want to propose bills that would realize cost goals that will be sustainable. We must look at creating more competition through: streamlining distribution chain of medicines, increase sources of supply of drugs and technology, and increase supply of trained health workers. We must change regulations that suffocate innovation, competition, and services. Specifically, I will pay immediate attention to the following:

  1.  Change the law on Drug imports: Drugs sold by the same company abroad can be imported and sold here.
  2.  Each drug must have 2-3 US suppliers. Licensing of patents to other companies to increase suppliers should be encouraged.
  3.  Role of NIH and similar government institutions should include finding inexpensive alternatives to high priced medicines and equipment to be licensed to private sector.
  4.  Medicare and Insurance companies must publish actual prices paid for procedures, hospital stays, and drugs for all public to see. People can then negotiate on care costs, deductibles, and Insurance premiums.
  5.  Encourage more insurance products, which allow simple procedures and ailments to be excluded from insurance. People can manage their own costs for simple procedures and ailments, and pay premiums only for the serious procedures and hospitalization.
  6.  Reduce the extra-ordinary length of a medical doctor training. The US medical schools should admit students after 2 years of college, like elsewhere in the world. Publish number of healthcare workers needed such that public sector can increase such college seats.
  7.  Give Tax incentives to encourage opening of small clinics for administering primary care. It will create better care at competitive pricing, as it will reduce overhead hospital costs.
  8.  Examine rationale and efficacy of direct to the consumer drug advertisements. US, and New Zealand are the only two countries that allow direct to consumer drug advertisements. We need to change the regulations, such that consumer is protected on side effects, effectiveness of the drug, prices, and alternatives.
  9.  Examine rationale and safety of the current universal vaccine requirements for children. We need a renewed examination of the safety of certain vaccines, and assess their long-term risks. Family and children must be made aware of such risks and given choice of taking or opting out of any vaccination requirements.
Ritesh Tandon for California Issues
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