This paper argues that the U.S. healthcare system is fundamentally misaligned with public welfare because it is driven by the profit motives of private insurance companies. Drawing on examples of uninsured cancer survivors, skyrocketing drug co-payments, and international cost comparisons, the paper demonstrates that Americans pay significantly more for healthcare than citizens of other industrialized nations while receiving inferior outcomes. It examines 2008 presidential proposals from Clinton, Obama, and McCain, and critiques the economic logic of co-payments and moral hazard arguments. The paper concludes that a mandated universal coverage system — structured like taxation — is the only equitable solution to the growing healthcare crisis.
The paper effectively uses source synthesis: it weaves together journalists (Gladwell, Kolata, Pear) and policy comparisons to build a cumulative argument rather than relying on a single line of evidence. Each source is introduced not just to add information but to advance a specific step in the argument, from industry incentives to patient harm to policy failure.
The paper opens by establishing the structural conflict between insurance industry incentives and public health needs. It then presents human and financial evidence of system failure, compares U.S. outcomes to international peers, evaluates the three major 2008 presidential reform proposals, critiques the co-payment and moral hazard logic, and concludes with a call for mandatory universal coverage modeled on the tax system. The argument flows logically from diagnosis to evidence to policy evaluation to prescription.
The insurance industry as a business makes its profits when it can deny coverage to consumers. Individuals carry home insurance "just in case" they are afflicted by flood or fire, and the industry hedges its bets, collecting premiums from customers in the hope that nothing will occur. But in the case of healthcare, what is good for the insurance industry is not necessarily good for society. If a worker is sick, this costs the industry money, and it is therefore in the healthcare insurance industry's interest to deny that worker coverage. It is also in the industry's interest to refuse coverage to very sick people with preexisting conditions, even if it is in society's interest that these people remain as well as possible so they can work.
Increasingly, the U.S. healthcare system is becoming dominated by the business needs of the insurance industry, where the sick pay more than the well — or can get no coverage at all — just like "someone who drives a sports car and has received twenty speeding tickets in the past two years pays a much higher annual premium than a soccer mom with a minivan," even though a worker's ill health is not his or her fault (Gladwell 2005, p. 3).
Consider the example of a real estate agent who earns $60,000 a year. A cancer survivor, she has joined the ranks of uninsured Americans — one of the 6.8 million who have lost all coverage since 2000 (Pear 2007, p. 1). Healthcare consumers are a captive audience, forced to pay high prices or go without necessary medications and treatments.
"Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases. There are no cheaper equivalents for these drugs" — for some medications used to treat multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C, and certain cancers — "so patients are forced to pay the price or do without. The result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes" (Kolata 2008, p. 1).
Insurance companies justified this shift by arguing it lowers costs for healthier recipients: "The more the sick person pays, the less the healthy person pays" — although, traditionally, the entire idea of insurance was to spread the costs of caring for the sick (Kolata 2008, p. 2).
Americans spend $5,267 per capita on healthcare every year — almost two and a half times the industrialized world's median of $2,193 — and "the extra spending comes to hundreds of billions of dollars a year" (Gladwell 2005, p. 1). Despite this extraordinary expenditure, Americans visit the doctor less than people in other Western nations, are admitted to the hospital less frequently and for shorter stays for the same conditions, and report lower satisfaction with their healthcare than other Westerners. Furthermore, American life expectancy falls below the Western average, childhood immunization rates lag behind those of other industrialized countries, and infant-mortality rates rank in the nineteenth percentile among industrialized nations (Gladwell 2005, p. 1).
"2008 Candidates Health Care Proposals: A side-by-side summary." Health08.org. 6 Mar. 2008. 22 Apr. 2008. http://www.health08.org/sidebyside_results.cfm?c=5&c=11&c=16
Gladwell, Malcolm. "The Moral Hazard Myth." The New Yorker. 29 Aug. 2005. 22 Apr. 2008. http://www.newyorker.com/archive/2005/08/29/050829fa_fact
Kolata, Gina. "Co-Payments Go Way Up for Drugs With High Prices." The New York Times. 14 Apr. 2008. 22 Apr. 2008. http://query.nytimes.com/gst/fullpage.html?res=9F06EFD7163BF937A25757C0A96E9C8B63&scp=2&sq=healthy+people+cost+more&st=nyt
Pear, Robert. "Without Health Benefits, a Good Life Turns Fragile." The New York Times. 5 Mar. 2007. 22 Apr. 2008. http://www.nytimes.com/2007/03/05/us/05uninsured.html?scp=3&sq=healthy+people+cost+more&st=nyt
Sher, Jeff. "Health Care Cost: Eliminate Co-Pays." Counterpunch. 19/20 May 2007. 22 Apr. 2008.
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