The American health care system is in a downward spiral. Costs are soaring, wait times are growing, people are sicker than ever, and the quality for care is poor when compared to the pricing. This is not to say that there aren’t great doctors and nurses, because there certainly are throughout the industry. But, the system as a whole is in chaos.
First, let’s look at where America stands in comparison to the world in some key performance metrics, and there is no place better to start than average cost of healthcare for one year. According to the Organization for Economic Cooperation and Development (OECD), the average annual per capita cost for healthcare is a whopping $9,024. Of the other OECD countries, the closest in terms of cost is Switzerland, which has a per capita cost of $6,787. If you think that is bad, the average per capita cost for an OECD country is $3,620, which makes the U.S. 2.5 times more expensive than average. With a premium like that, one would expect that healthcare quality would be best of the OECD. Well, think again. According to a The Commonwealth Fund report which compared health outcomes from the U.S., Australia, France, Canada, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, and the U.K, the U.S finished dead last when compared to the other ten countries in health care quality. At least the U.S. has been consistent – the U.S. also finished last in the comparisons for 2004, 2006, 2007, and 2010. For as much money as average Americans spend on health care each year, these results are utterly embarrassing for the health care industry.
To add further insult to injury, a 2016 study performed by Johns Hopkins found that medical errors are now the third leading cause of death in the U.S – trailing only heart disease and cancer while overtaking respiratory diseases. Overall, medical errors are said to account for 10% of all deaths in the U.S, which is a pretty high figure given it is the most expensive health care system in the world.
As mentioned before, the industry is too large for one single cause to be problem, and today, we will focus on the proliferation of pharmaceutical sales. The existence of pharmaceutical companies is of the Jekyll and Hyde nature. On one hand, they research and develop new drugs and treatments, but on the other hand, the need to always increase profits can come at the expense of the well being of patients. In the end, more sick people means more customers, and curing people means losing customers; creating the textbook perverse incentive situation. So, insert pharmaceutical sales representatives here. Pharmaceutical sales representatives are no different than Jim and Dwight on The Office in that their sole job is to sell the company’s product. They do differ in the products they sell though. Instead of paper, pharmaceutical representatives sell drugs that affect the well being and health of humanity. To put their presence into perspective, there were 1,045,910 doctors and approximately 59,000 pharmaceutical representatives as of 2013. To break that down further, that equates to one pharmaceutical representative for every 18 doctors in the U.S. That means there is quite a bit of time for each representative to interact with doctors and sell their product. And like most sales representatives, they are talented at selling their product – even if it isn’t the most cost effective or beneficial for the consumers, also known us patients. If this worries you, ProPublica had a genius idea to create a tool that allows you to see how much your doctor has been paid by pharmaceutical companies: check it out here.
Evidence of the growing influence of pharmaceutical companies can be seen in the sizable increase in the number of prescriptions written from 2009 to 2016. In 2009, doctors prescribed roughly 3.95 billion prescriptions throughout the U.S., and in 2016, the number had grown to 4.45 billion per Statista, which is an increase in 500 million prescriptions. The increase isn’t too surprising. If you watch the smallest amount of TV, you will see at least a couple commercials for a new prescription drug claiming to do all sorts of wonderful things – then at the very end, they will rattle off a laundry list of rather terrible side effects. And potentially, another prescription is required to cope with the side effects of the first prescription. It’s a vicious circle. This also would help explain a story published by CBS in 2013 which claimed that 70 percent of Americans took prescription drugs and at least 50 percent had more than one prescription. With numbers like that, is it any surprise that the country is facing an opioid epidemic?
Another alarming reason for the increase could be the pharmaceutical industry’s payments to doctors for prescribing their drugs. What? You didn’t know your doctor may be receiving money from drug companies if he or she prescribes you their drug? Well, now you do. The finding was identified by ProPublica and reported by NPR here. The whole set up seems like a major conflict of interest waiting to happen, and truthfully, there is no reason it should be allowed. While there is no national law preventing this, New Jersey is at least doing their part to prevent it in the state, just take a look at our article on that: New Jersey Proposes Rules To Curb Drug Company Payments To Doctors.
In addition to the obvious issues discussed above, the pharmaceutical industry has also been successful in a phenomenon known as “regulatory capture.” Regulatory capture occurs when individual people, usually high ranking people, working in the industry being regulated take high ranking positions with the regulatory agency and vice versa. A simple Google search on the “revolving door” between the CDC and the pharmaceutical industry will bring up dozens upon dozens of studies and articles highlighting how intertwined the industry has become with the CDC.
Once regulatory capture happens, the industry effectively operates without regulation. Then, capitalism takes over and the companies pursue only higher profits, with no regards for the safety of the consumers.