How to Fix the American Healthcare System
Most medications available in the United States are much cheaper outside the US. Granted, these medications often bare different brand names when this is exceptionally true. In order to drastically lower the costs of the majority of US pharmaceuticals, new federal laws could allow for the tariff-free import of foreign medications that have a composition that is identical to FDA-approved American drugs. It is highly likely that American pharmaceutical companies would fight tooth and nail to prevent this type of legislation, most likely citing various risks to the American healthcare system and patients. Let’s explore and assess these potential risks. Additionally, let’s examine methods for drastically lowering the costs of healthcare services in the US. With regard to healthcare services, I am referring to patient activities like seeing a general practitioner, getting a surgery, and other activities such as having an MRI scan.
To lower the costs of healthcare services in America, the US could implement a para-healthcare system. Let’s call it a 2-market system (one traditional and the other competitive/affordable). This second system would compete with the current AMA-based healthcare system in the US. In summary, this system would allow for licensed medical doctors from other countries to convert their medical licenses to similar US medical licenses and practice medicine legally in the US with limited red tape. Again, here, it is highly likely that there would be pretty substantial pushback from the AMA, US-based private practices, and the remaining US healthcare establishment at-large.
Let’s dig into the pharmaceutical companies’ most likely objections, and then progress into the healthcare service providers’ most likely and strongest arguments.
Pharma Argument 1. These laws would create an anti-competitive environment for US pharmaceutical companies
On the contrary, these policies might be likened to the epitome of competitive incentives, requiring established pharma companies to price medications similarly to the discounted prices often offered outside the US. Regarding foreign manufacturers who produce medicines at a lower cost and export to the US, the primary competitive-market beneficiaries are consumers due to fairer pricing.
Pharma Argument 2. This will hurt American pharmaceutical profitability, and thus create massive waves of pharma employee unemployment.
The easiest counter-argument here would be to compare the millions of patient lives that could be saved to the thousands of US pharma employees that would likely be laid off. Instead, let’s examine a different type of cost-benefit analysis.
Health insurance prices would likely plummet with this new system or one resembling it, perhaps as much as 60–80%. This would free-up a substantial amount of income for US residents to spend on other necessities and luxuries alike, stimulating growth across the US economy. This type of economic growth usually results in booming job markets.
Pharma Argument 3. Safety concerns: foreign entities don’t have the same safety protocols and this could lead to harm to Americans.
Most patients, especially in developed nations and those with advanced medical standards, seem to be getting on quite fine with their government-approved medications. If an American is traveling overseas and gets sick, they will likely be prescribed some of these medications where they are. It is completely legal for them to take these medications while abroad of course (and this can often be a life-saver when it’s needed). If American policymakers were sufficiently worried about the harm of foreign medications in these nations, these strong concerns would be represented in travel warnings or even punitive sanctions as to drive change on a humanitarian basis, a popular method lately. This representation is essentially nonexistent. Again, most of the types of medications that would be prescribed when our example American was abroad, are likely very similar or identical to medications they would receive in the US. Of course, the US will likely need a new (lean) agency for approving like-like foreign medications under this new 2-market policy.
Pharma Argument 4. Allowing this import of foreign, identical medications would hurt research funding for new pharma products and harm innovation.
This is a fair argument. However, there are a few possible solutions. One solution is to compromise: give US pharma companies a 10-year allowance to exclusively distribute their medications and equipment to Americans. After that, foreign competition is allowed. Regarding innovation: it is often said that nothing spurs innovation like necessity. This policy could actually help pharma companies by disallowing excessive complacency.
There are other arguments that would emerge from stakeholders in the established pharma system in the US, but the above 4 are potentially the most important areas of address.
Next, as we proceed with US healthcare service provision companies like private practices and hospitals, let’s similarly examine their key arguments against the previously proposed para-healthcare system that US citizens could opt into.
Healthcare Provider Argument 1. Foreign doctors don’t have the same quality standards as American healthcare providers.
Many of the previous counter-arguments to pharmaceutical company concerns apply here as well. However, let’s examine the question of service quality. The US is pretty famous for its competitive markets and allowance of consumer choice. A para-healthcare system made up of licensed practitioners from developed counties (and other nations with advanced medical standards) provides for new consumer choices. On the topic of safety, it’s more than just caveat emptor, but remembering that citizens with similar standards of living get on just fine with those standards (and can, in some instances, receive better patient outcomes).
Healthcare Provider Argument 2. US laws around healthcare are so entrenched in legal frameworks and legislation that this type of para-healthcare system would never work.
While US healthcare laws are extremely supportive of incumbent price healthcare interests, the enactment into law of a para-healthcare system would allow essentially for the operation of a sandbox-system outside of the traditional frameworks, which would remain in place. Specifically, litigation around medical malpractice and negligence would need to be prevented through a requirement of arbitration-only conflict resolution prior to patient care within the para-healthcare ecosystem. This would mitigate the many risks to these types of para-healthcare policies that would be brought case-by-case in courtrooms that could lead to legal crises.
Healthcare Provider Argument 3. This will lead to lower quality of patient care across the board in the US
In that situation, the US would need to transition from a visit subscription/prescription model to a patient outcome model. Currently, healthcare providers are financially incentivized to keep US patients returning for care, as US providers receive more revenue each patient visit. While ethically, there certainly is no incentive, there is indeed the financial incentive among healthcare providers, unfortunately. This is not great for American patients. Therefore, to maintain similar or even better quality of care in this newly proposed system, healthcare providers could transition into a model based on positive outcome turnover versus retaining existing customers.
Affordable healthcare is a real possibility in the United States. Previous Obama-led healthcare policies (while valiant) mostly ran into legislative hurdles with time due to their rooting in medical insurance markets versus the root causes of overpriced medical products and services which contributed to high insurance premiums. However, Obama-era policies laid the groundwork, at the very least, for a 2-market system by making healthcare pricing information across the US much more transparent than it was previously by orders of magnitude.
Once pharmaceutical and healthcare provider costs fall with these types of proposed policies, competition within the US healthcare insurance industry will result in much lower insurance premiums for Americans in need. Furthermore, uninsured Americans would have much greater access to critical medical services due to the 2-market system.
No one should die on the street because they can’t afford basic medical attention. Similarly, no one should lose their life-savings to save their own or a loved one’s life. This shouldn’t happen in America or anywhere else in the world.
