Are we paying for other countries to have better healthcare?
A recent report by the commonwealth fund states that Germany, Britain, Australia, New Zealand and Canada recieve better healthcare than we do. The same report states that we pay twice as much for our healthcare. Is this a sign of inefficiency or is the story being told just one side of the proverbial coin? I believe that the report is biased since it is only looking at the outcome and not at the cause of the problem.
One of the biggest costs in providing healthcare, for most insurance companies, is their drug benefit program. Since drug companies supply these drugs, drug companies must bear a significant portion of the blame for the cost of our healthcare system. However, even this statement only tells part of the story.
Most drug companies must try to meet or exceed their previously declared profits and must continue to grow to meet shareholder expectations. Accordingly, most drug companies have a minimum amount of profit that they must declare each year. I assert that a disproportionate portion of these profits comes from the pockets of the American patient.
All the countries in the Commonwealth report have universal healthcare. Since the governments are trying to meet the needs of an entire country, they can negotiate the lowest price possible for their drugs. This price is accordingly lower than the price an individual patient would pay.
Since drug companies must make a minimum profit to remain viable to shareholders, a drug company’s source of profit must be from countries that do not have universal healthcare. The US public frowns on drug companies victimizing third world countries with the prices that the modernized countries must pay. Since much of the third world is safe from modernized country drug prices, and much of the modernized world has universal healthcare, the remaining patient population, US patients for the most part, must pay more than their fair share towards the profits of the drug companies.
So, before the Commonwealth report goes decrying the state of US healthcare system, it may need to consider whether we are paying for other countries to have these better systems.