Healthcare Financing

Healthcare financing is a huge issue in terms of global health. Every year, money is being poured into ensuring the health of individuals. Yet, where is this money going? Is it being spent wisely?

There are two issues. I will try and tackle them both in this post.

Issue 1: Countries, such as the U.S., spend a ridiculous amount of money on healthcare. I believe the latest statistic is that healthcare is 16% of the GDP. Yet, the health of our citizens is actually not very good. In fact, there are 47 million people in the U.S. without healthcare. This is scary, because healthcare costs are continuing to rise. Dr. Shahi even mentioned that a large percentage of bankruptcy’s filed in the U.S. are caused by the expense of treating health conditions.
How is this possible in a country that spends SO much money on healthcare? A lot of people say that the very health system is not sound. A system of health insurance jacks up the price of healthcare while simultaneously making it hard for people to access necessary health services. It was mentioned in class that a health savings account may be a better solution. I will get back to this later.

Issue 2: Countries, such as Burundi, spend very little on healthcare, due to lack of resources. I believe Burundi spends something like $2 on healthcare per citizen. How can countries such as Burundi, then, even ensure the health of their citizens?

I gave a presentation in class (along with my colleague, Mark Krel), that I believe partially addresses issue 2. There is a need to prioritize healthcare needs and invest accordingly. There are a number of interventions that can be delivered that are effective but also give the most bang for the buck (and are often not too expensive). For example, delivering basic childhood vaccines is very cheap, effective, and can drastically reduce a number of long term health complications. Investing in such an intervention (such as a country-wide vaccination program) can be a very effective solution.

It is of utmost importance that governments of developing countries take disease prioritization as a top priority. They must do everything they can to invest wisely and make smart choices. This can be difficult. Many cost effective health interventions rely heavily on sound governmental policy. For example, one cost effective intervention proposed was a tobacco tax. Taxing tobacco will likely discourage people to smoke and thus reduce many long term health effects. Yet, many governments have been opposed to such a measure.

Now, back to issue 1: The debate between health insurance and a health savings account. Here is my issues with a health savings account. Suppose you save a certain amount of money for your healthcare needs. Then, you get diagnosed with a rare, expensive disorder, such as leukemia. If you count the treatment, plus hospital stays, plus ancillary care, you are talking about a pretty expensive disease to treat (some say around $400,000). What if you haven’t saved enough money? Thus, I still believe it is impossible to rely solely on a health savings account.

Of course health insurance has its holes as well (as we all know too well). Insurance companies want to make a profit, exclude high risk customers, deny treatment, etc.

So, what is the solution? I believe, in this case, the government must step in and actively control prices. Right now, esp. in the U.S., the private sector has way too much control on healthcare costs.
Of course, I can’t really say whether I have any specific ideas on how costs should be countered by the government…so please feel free to leave comments!!