The True Cost of “Free” Healthcare

>> Scott Atlas: Now, we just heard a lot of data from John Kogan, who knows a lot more about the economics of healthcare. And I wanna move from that discussion into what we do now about health care reform. Because right now, more than ever, we're supposed to trust the government because senator Sanders and colleagues are putting forward a single payer healthcare system.

In this era where trust in the government for health has been damaged. Why is this even a proposal? Well, first of all, as John pointed out, basically, Medicare and Medicaid, as well as Social Security will ultimately and very quickly drown out all tax money for any federal expenditure that includes defense or anything else.

So the cost of health care is a problem. And the fact is that in the United States for decades, and this is 2008 data, the amount of spending on health in the United States is far greater than anywhere else. This is more recent data, 2016, that hasn't changed.

Because of those, the Affordable Care Act was instituted, or so called Obamacare. And that had two purposes, to contain healthcare costs by increasing the government regulatory authority and via new taxes. And secondly, to increase the insured population with an expansion of public insurance and with regulation of private insurance.

There were many regulations added with the Affordable Care Act, new mandates on individuals and businesses, new regulations on private insurance plans, new regulations impacting healthcare payments, and a lot of new taxes. And the result of that was that a lot of people were enrolled into insurance, the overwhelming majority into Medicaid.

Why does that matter? Well, expanding Medicaid versus expanding access to medical care or having an impact on care may not be the same thing. This is data over time to show that about half of doctors don't accept new Medicaid patients. You can call someone insured with Medicaid. That doesn't mean they're getting a doctor.

The second part of that construct is that of the doctors who have signed a contract saying they will accept Medicaid, about half do not. How do I know that? This is data from HHS and the office of the Inspector General. Almost half of primary care doctors and more than half of specialists do not accept Medicaid patients, even though they say they accept Medicaid patients.

The other part of this puzzle is that the famous Oregon experiment on Medicaid, they looked at Medicaid on clinical outcomes. And the bottom line is this Medicaid failed to improve physical health beyond no insurance at all.

>> Scott Atlas: Health outcomes under Medicaid are worse than other private insurance. Even controlling for the patients, for the medical illnesses, for the demographic, the characteristics that affect health, major surgeries cancers, heart procedures, transplants.

These are the papers I'm gonna distribute the slides at the end of this if you guys want to look this stuff up. But this is peer reviewed medical literature. I conclude the failure of Medicaid can be attributed to the restrictive Medicaid coverage itself and really unethically, leaving poorer patients isolated from the excellence of medical care that everyone who voted for the Medicaid expansion in Congress uses.

They use private insurance. I mentioned Senator Sanders. He has recently put forward in May of 2023, a new Medicare for all proposal that's a picture of the bill. The bill establishes universal federally government controlled health insurance that defines, regulates and pays for all medical care in the United States.

It explicitly in writing, outlaws private insurance competition with the government insurance. It's not just an option and therefore it ultimately controls the allocation of all medical care. Sanders was quoted in one of the newspapers in the UK recently upon introduction of that bill, as saying, we need single payer health care to end the international embarrassment of the United States being the only major country that does not guarantee health care.

Elizabeth Warren chimed in and said, Medicare for all guarantees that every American will be able to get the healthcare they need when they need it. Kennedy said a long time ago, the great enemy of the truth is very often not the lie, deliberate, contrived and dishonest, but the myth.

This is the NHS celebrating 70 years in July of 2018. And they have an NHS constitution. And in that NHS constitution in the UK, they say you have the right to receive NHS services, medical services free, free of charge. This is Magritte. This is a painting. Okay, what does that mean?

It obviously means this is not a pipe, but that means this is a picture of a pipe. That's not a pipe. When you say somebody has insurance or a constitution that says you get health care and you get health care for free, that's not the health care. That's a simple statement or a promise.

I showed the cost per country of health expenditures. How do these countries spend less on health care? How does single payer health care spend less? They hold down health care usage and I'm gonna show you the data on that. This is Canada. How do you stop somebody from seeing a doctor, you make them wait?

The average time median in Canada to see a doctor. After you've seen the first doctor, which took weeks to see the GP, and then in our system you have to have him recommend you to see the doctor that's appropriate. The average wait is 27.4 weeks at the bottom on the right.

Gynecology, 32 weeks. This is to get your first treatment. If you just want to see the gynecologist, it's 15.7 weeks. We're talking weeks here. And then another 16.4 weeks to start treatment. General surgery, 9.5 weeks to see the surgeon, 10.3 weeks to get the surgery. Brain surgery, 45.7 weeks to see the neurosurgeon, and then another 13 weeks to get the surgery.

That's 58.9 weeks to get your brain surgery.

>> Scott Atlas: And on and on. Well, how does that compare in the US? This data was met with outrage by the New York Times when it first came out back in 2014, which They surveyed waiting times to see the doctor, to see the specialist, for the lowest priority.

Okay, either normal checkup or something very, very minimal. These are not super sick people, where you would be expedited. And this ranged from 2.1 weeks to 4.1 weeks to see the doctor in the US. These specific areas I'm gonna compare to Canada. Cardiology for US patient, 3.8 weeks, Canada, 6 weeks to see the cardiologist.

Another 10.3 weeks to get the first treatment. OB-Gyn, for routine checkup, 4 weeks in the US, about 4 months to see the gynecologist. In Canada, another 16 weeks to get something done. Orthopedics, 2 weeks versus 16 weeks plus 32 weeks in Canada. Family practice, 3 weeks versus 9.2 weeks plus 9.6 weeks.

>> Scott Atlas: In England, the paradigm of single-payer healthcare, with all due respect to my British people in the audience here. In their free care, which costs 153 billion pounds per year, by the way, they now have 7.4 million patients on waiting lists. 3 million patients in the UK are waiting more than 4 months.

And there are 371,000 waiting more than 1 year for treatment, including almost 30,000 who need surgery waiting more than 1 year after referral from their GP. Half of neurosurgery patients are waiting more than 4 months. 41% of cancer patients in the category of being referred for, quote, urgent treatment are waiting more than 2 months for their first treatment.

By the way, you'll note that parliament there in 2013 even felt it necessary to issue a statement of, quote, zero tolerance for people waiting more than a year for care. Just the idea that that has to be issued as a statement should be very frightening to you, but they can't even meet that.

This is their data. This is the NHS. This is official government data I'm showing you, by the way. They set a standard in the NHS in England. They thought it was acceptable that if they can meet a target of 85% of patients with cancer diagnosed, who need urgent treatment to get the first treatment.

They said it's good if they can get 85% of those to be treated for existing cancer needing urgent treatment within two months. They said if they can do that, they're a success, which, okay, I don't know how they came up with that. Here's their data. 40% of people can't even get that.

Even for the lowest priority check-ups and purely elective, routine appointments, the US wait times are far shorter. This is all comers, by the way, this is not just people like me with private insurance, all comers, United States.

>> Scott Atlas: What about drugs? Most new drugs that are developed are cancer drugs.

The overwhelming majority, by the way. This is the most recent data on the access to cancer drugs that are new. And when a new cancer drug is developed, it's very important, particularly if you have cancer. In the world, at the time of this, there were 54 new cancer drugs.

And the question was, how many drugs were available in your country within two years in green, or within the total length of this study in blue, or not available? US, almost every one of them. This is not US-developed drugs necessary, this is all the world's cancer drugs. This is what you get in the UK, 38 drugs, France, 23, Japan, 17, Mexico, 13, on and on.

The NHS, believe it or not, has a budget impact test. This is what happens when government bureaucrats control health care. They decided that arbitrarily, if a drug, even though it was effective and cost-effective, was going to cost their system beyond a certain amount, they were not gonna allow it.

And they were gonna sit there and try for, they gave themselves 3 years to negotiate the drug. Remember, most new drugs are cancer drugs.§ And what does that mean if they said a specific number of, say, in what they did, 20 million pounds per year? That means that by definition, the more people that need the drug, the less likely it will be approved, because it's more expensive for more people.

There's a total amount of dollars here. For instance, a dementia drug for Alzheimer's that didn't exist at the time of their rule, it would have to cost less than 29.6 pounds per year per patient to be approved. Now, there are new drugs for Alzheimer's, they cost about $1,200 a dose.

A dose, not a year. They will not allow these drugs. Alzheimer's is the number one public health problem in the world. This is a list of drugs that would not be and were not approved in the UK. These are very commonly used drugs in the United States and anywhere with good medical care.

Drugs for heart failure, heart disease, eye disease, etc. What about access to critical care? This is the capacity of ICUs in critical care beds, by country, per 100,000 population or per 100,000 seniors, who generally are the ones who need ICUs in critical care. The United States is on the left, to the right are the other countries.

What about advanced imaging, MRI and CT scanning? US is in gold, Canada and Great Britain are in red here. Why does this matter? Because every single patient with cancer gets an MRI and a CT scan. Almost everywhere in the world, they need it. Almost every patient with a surgical disease, except for an emergency surgery, and even they get a CT or an MRI.

This is mainstay medical diagnosis. This is not some kind of fancy test. Well, you'd say, okay, what about the access? Does it really matter? Well, I'm gonna take a look at some of the most common diseases. You could go through every disease, but this is the most common, cancer.

Better, statistically significantly better survival in the United States versus Western Europe for all cancers as well as every major cancer. Access to cancer screening tests might be something the government could do, by the way, you'd think. Except the US has higher access to screening tests for mammograms, pap smears, PSA, colonoscopy, sigmoidoscopy than Canada in this data.

What about treatment for chronic diseases like high blood pressure? New York Times, again, was shocked at the appalling low percentage of people in the United States that got treatment once already diagnosed with high blood pressure, only 53%. And that is shockingly low. It's shocking evidence of how complicated our dysfunctional health care system is.

They didn't bother looking at all the other countries. 25% of people in England diagnosed with high blood pressure get actual treatment, and on and on. What about the outcome of treatment? Successful control of high blood pressure. This is mundane medicine. But it's super common and very important as a risk factor for many, many diseases.

The United States has the best control of high blood pressure and the OECD was forced to say the US has the most diagnosed high blood pressure and also the fewest people with measured high levels after treatment. That's just simple good medicine. You have to ask yourself, would Medicare for All of under the Sanders proposal change today's Medicare or impact access to medical care?

This is background knowledge. The payment for medical care in the United States by Medicare and Medicaid programs is not just far lower than private care, it's below cost. Discontinued, this is the most recent data I have, but it's no different. There's a huge underpayment of government insurance for medical care, not just underpayment compared to private insurance, below cost 60% of what private insurance pays and 60, 80% for doctors visits.

This is a projection to 2090 from the government that chose the payment for Medicare and Medicaid versus private insurance down way below private insurance till 2090. When you replace private insurance, Medicare for All by definition will cut payments by more than 40 percent to hospitals and 30 percent to doctors now treating patients.

I'm not here to protect incomes for doctors and hospitals. This is the point, this is the CMS itself saying this. By 2040, approximately half of hospitals, two-thirds of skilled nursing facilities and over 80% of home health agencies lose money per patient. That's current system, that's not talking about getting rid of the supplementary payments from private insurance.

The access and quality of medical care in America depends on higher payments from private insurance if you wanna keep it the same level. There's something also interesting that no one talks about. Only 20% of people on Medicare rely solely on Medicare. 78% supplement their care with private insurance.

>> Scott Atlas: This is the most recent data to show you the source. You have to ask yourself, why would 80% of seniors on Medicare choose to pay for private insurance to supplement or replace traditional Medicare, if pure Medicare was so satisfactory? This is the grand irony. The single payer systems pay with their taxpayer collected money for private insurance and private medical care.

NHS England now pays for private care, up 27% in 2 years. About half of hip and knee replacements are paid for by the NHS to go to private doctors because they can't deliver the care. 50% of the total NHS budget increases go for private care. About half of Brits earning more than 50,000 pounds a year by private insurance in addition to paying their taxes for their NHS.

Sweden has privatized a lot of their medical system and pays for private care, including for drugs, pharmacies, and nursing care. Denmark pays for private care, even outside the country. If you can't get care within a certain amount of time, Denmark will pay you to go to a private hospital, even if it means going outside Denmark.

The governments of England, Finland, Ireland, Italy, the Netherlands, Norway, Spain, Sweden and Denmark, all now spend taxpayer money on private care to solve their failures. These are the facts. The American health care is the gold standard of excellence for the world, based on the data, not on surveys asking people opinions.

They have the best survivals from cancer, the best access to treatment, the best treatment outcomes for the serious chronic diseases, the most frequent usage of screening tests, the fastest access to new drugs, the best access to safer, more accurate diagnostic technology, the quickest access to life changing surgeries, the fastest access to specialists.

And the US is the number 1 source of the world's leading innovations in healthcare by every possible metric. I wrote that book that compiles a lot of the data, if you wanna get it, to see the sources. If the US healthcare is so good, why would anybody wanna reform the system?

Well, first of all, the government plans are unsustainable. I just mentioned that the demographic realities are very important in healthcare. Specifically, somebody asked a question about this. We don't just live longer, but we live longer and get diseases when we're living longer. And the Affordable Care Act caused serious problems because it expanded government insurance, which I think is expanding Medicaid, and saying you did a great job for poor people, to me is grossly immoral.

There's not a single Congressman who would accept Medicaid for their family, not one. And the second part is that the new regulations caused higher premiums and consolidation, reducing competition and choice. There's basically two models on how to fix healthcare. I'm on the side of a competition based, consumer driven system on the left here, which means removing regulations that shield consumers from caring about the price and block competition.

Healthcare is the only good or service that we use and then only later get a bill for it, we have no idea what it's gonna cost. You guys probably aren't old enough to be sick, but when you use a hospital, you get the bill later, you don't know what it costs.

And frankly, you don't care because of the third party, very, very high percentage of payment somebody else is paying, quote unquote. My view is the primary point of health reform is to increase access to high quality care, not to say people are insured. The competition based consumer driven model basically involves three sorts.

1, incentivize and equip patients to care about price and to seek value and that means they need to be paying directly for their care, and there are ways to get that done without increasing their financial burden. 2, increase the supply of medical care. There are obstacles, monopolistic practices by doctors and a complete lack of transparency.

They control the market and they don't want that to change. And 3 is reforming the tax code. That is one of the biggest errors probably in all tax codes which incentivizes more spending on health care. I'm not gonna go through the detail of this because I don't have time and I was warned to allow time for questions.

So this is a book that I wrote, came out during COVID, you can get it for free. I told the people here to make sure everybody can get it for free. It's a very detailed, concise plan that I advise presidential candidates to put forward. This is a very important quote, I think one of the smartest things that one of the smartest people in policy ever said.

One of the great mistakes is to judge policies and programs by their intentions rather than their results, and I think we're all well meaning. I have no problem with the intent of people to design these programs, but I think we need to look at reality. It's been said here earlier this week by several people that reality matters, the evidence matters, not just wishful thinking.

Now, I wanna finish this with just some remarks that I give when I speak in college campuses, I think it's sort of bigger picture than any single issue here. I think one of the biggest things exposed by the COVID pandemic is that we all have to learn to be critical thinkers.

We have a burden as individual citizens here, to take it upon ourselves to look at the data, to understand the data, to read, and to make the best decisions for ourselves and our families, it's a free country. The era of accepting what so called experts say simply based on their titles alone must be over.

We don't delegate decision making just because somebody has credentials, we should have all learned that now. The second big part of my message here is we have a disastrous void in courage in this country. CS Lewis said, courage is not simply one of the virtues, but the form of every virtue at the testing point.

If our country is to survive, we need good people, individuals with integrity, and there are many to rise up. What does that mean, rise up? Rise up means speak up, this is a free country, people fought for these freedoms. We are not just allowed, we are expected to speak up in a free society.

We need you guys, your generation, to reinstate the moral backbone, the ethical compass of this country, the basic human civility of citizen to citizen. We cannot have a civil society if it's filled with people who refuse to listen to anyone with opposing views. We keep electing leaders, including several presidents in a row, who simply do not understand that after they are elected, they become leaders for everyone, even for those who did not vote for them.

So I'm gonna echo my colleague John Kogan in saying, okay, it's very difficult at times to be in public service, but it's very important, you can't be dissuaded by seeing how rough it can get. We need young people to come in, make sure we have a free exchange of ideas, make sure we have a discussion, and make sure we have everything we need to maintain.

Really, a free society, that is the model for freedom, the hope for freedom, for the entire world, it's not just the United States. The United States is the model for freedom, that's why millions of people come here from all over the world. Lastly, but not least, we have to never forget what GK Chesterton said, right is right even if nobody does it, wrong is wrong even if everybody is wrong about it, thank you.