An Effort To Improve Our Healthcare System
Set forth below is my letter to four Republican members of the U.S. Senate (who are that body’s only medical doctors) in an effort to enlist their help in convincing President Trump to support legislation creating a health insurance company owned and operated by the federal government. This would be the first step in eliminating private healthcare insurance companies which are the single largest source of waste and inefficiency burdening our healthcare system.
I had previously felt that eliminating the more than 1,000 private healthcare insurers would be a near- impossible task because they, along with the medical profession and the pharmaceutical manufacturers, are major sources of political donations making it exceedingly difficult to pass the legislation necessary to facilitate their demise. What has changed is that we now have a Republican Party that controls all three branches of our federal government; and all three have displayed an uncanny willingness to do whatever President Trump asks them to do. Adding to that is the fact that Trump has managed to take actions which are alienating his political base; and, in view of the results of the recent elections, is becoming increasingly desperate to take actions that will restore his public image and his political support.
We should find out in the next two weeks just how desperate Donald Trump has to be to display any concern for the health and welfare of the people who elected him as their president. So far, he has staunchly held to his position that the federal government’s involvement in assisting Americans to obtain their healthcare needs is a misuse of its resources and has employed a variety of tactics to overcome the efforts of Democratic members of the Senate to fund the federal government.
Senator John Barrasso
Senator William Cassidy
Senator Roger Marshall
Senator Rand Paul
Gentlemen:
I am writing to you to seek your support in rectifying the current sad state of the our nation’s healthcare system. In doing so, I presume that each of you, as a licensed physician, share my concern about this situation which only seems to be getting worse. In June of 2024 I addressed this issue in an article entitled “Our Sick Healthcare System” which appears on my blog and which you can access at https://www.seeing-clearly.com/blog/our-sick-healthcare-system. I began that piece with the following confounding and distressing facts:
“Our doctors are among the world’s finest; our hospitals deliver healthcare services unmatched by any other country; and our Center for Disease Control and National Institute of Health are models envied by public health agencies worldwide. Nevertheless, our healthcare system remains an embarrassment because, despite these strengths, it ranks relatively low compared to other developed nations, even though our per capita healthcare expenditures far exceed theirs.”
That low ranking (somewhere between 14th and 64th worldwide depending on the rating agency) of our healthcare system is largely based upon the fact that 28% of adult Americans are not able to obtain the healthcare services they need because healthcare costs in our country are so high (specifically, more than twice per capita than in other countries). Moreover, the life expectancy of Americans is three years less than in other developed nations and our healthcare results in many cases are poorer. Underlying these facts are that we waste roughly 30% of the monies we devote to healthcare and many of the actions our healthcare professionals take are wasteful, if not wholly unnecessary. Yet another underlying cause is that our healthcare system focuses almost entirely on curing illnesses which is far more costly and less effective than efforts to prevent those same illnesses.
What is also disturbing is that significantly rectifying this sad situation could be rather easily achieved. That’s because we finance healthcare expenditures through over 1,000 private and governmental entities; and the private healthcare insurers absorb roughly 20% of the monies they receive as compared to between 1-3% of the monies absorbed by our Medicare and Medicaid Programs. In addition, private healthcare insurers have a plethora of differing rules which greatly increase the administrative costs of our healthcare providers. The answer to improving our healthcare system therefore largely lies is replacing private health insurance with no more than a handful of governmentally administered health insurance program. This assertion is supported by the fact all of the countries whose healthcare systems are deemed superior to ours utilize a single-payor funding system.
Like you, I generally subscribe to the proposition that “there is nothing that private enterprises can do that governments cannot do more inefficiently.” However, the vast differentials in the administrative costs of private healthcare insurers and the Medicare and Medicaid Programs clearly indicate that this principle does not apply when it comes to healthcare insurance programs. It’s not just that private healthcare insurers siphon off monies in the form of administrative costs and profits, but they waste inordinate sums of money in trying to figure out how to pay and avoid paying claims. In addition, their payment systems are based upon the individual procedures and medical tests performed which provides an incentive for medical service providers to perform many unnecessary services. In short, this is a form of the cost-plus pricing system that plagues our defense industries and which entrepreneurs like Elon Musk and Palmer Luckey have demonstrated are highly wasteful.
As I pointed out in my article noted above, our heavy reliance upon private healthcare insurance is a quirk of history caused by wage controls imposed during World War II. By the time the Clinton administration tried to create a single-payor system in the 1990s, private healthcare insurance was so deeply ingrained in our economy that the single-payor proposal never even reached the floor of Congress. The Obama administration tried to achieve the same result by including a “public option” in the Affordable Care Act, but that feature was left out of the final Bill when Senator Kennedy died, causing the Democrats to lose their 60-seat control in the Senate. Nevertheless, resurrecting the “public option” could effectively bring about the elimination of the private healthcare insurance industry because of the vast differential (roughly 17%) in their operating costs. As explained below, this could facilitate a number of additional cost savings.
Securing the enactment of a “public option” should not be overly difficult. First, the Senate’s filibuster rule should not pose a problem as there should be sufficient Democratic members of the Senate who will support this legislation as long as it is relatively free of poison pills. With your assistance, it also seems possible to secure President Trump’s support as well. That will virtually guarantee a high level of Republican support in both the House and the Senate notwithstanding the strong opposition of the healthcare insurance industry, the pharmaceutical industry and the medical profession (as discussed below). The key is to gain the President Trump’s support.
President Trump has previously demonstrated that he cares very little about the healthcare of Americans. (Sad, but true.) He totally botched the handling of the Covid-19 pandemic because he was more interested in his re-election than in combatting the pandemic. It has been estimated that notwithstanding his support of Operation Warp Speed (which may have been the single greatest achievement of his first term as President) somewhere between 300,000 and 400,000 Americans died unnecessarily due to his actions. That number of deaths almost rivals the number of American fatalities in World War II. Specifically, he abandoned the efforts of his two predecessors in preparing to address a pandemic; he allowed almost two months to pass before taking any meaningful actions to arrest the spread of the virus; he reopened the economy too soon against the advice of his healthcare advisors; he embraced Dr. Scott Atlas’ advice to pursue a “herd immunity” strategy which was absurd when you consider how fast the virus was mutating; and he failed to encourage Americans to become vaccinated with the highly effective vaccines developed as a result of Operation Warp Speed.
During his current administration he has taken numerous other steps that will further setback healthcare in America including cuts to the Medicaid Program, cuts to the budgets of the NIH and CDC and curtailment of vaccinations in the face of growing evidence that Covid and measles cases are increasing. These efforts have nothing to do with eliminating fraud and waste, which can best be achieved by installing better internal controls and utilizing analytical procedures as the accounting profession did in October 2002 to improve the detection and prevention of financial frauds.
Despite President Trump’s seeming lack of concern over the health of Americans, I believe that he can still be convinced to endorse the creation of a “public option” and the elimination of restrictions on negotiating prescription drug prices. That’s because what he really cares about is his own public perception which right now is in a state of decline. To distract from this reality, he has orchestrated an effort to float the notion that he should be awarded a Nobel Peace Prize. As hard as he may be trying, that goal seems to be out of reach; and his current deference toward Vladimir Putin is certainly not helping him. Nor is his support of Israel’s efforts in Gaza likely to win him any votes on the Nobel Committee.
His Big Beautiful Bill may be appealing to his wealthy donors, but it’s certainly not helping him with his voting base. Its cuts to social welfare programs and his imposition of record high tariffs are starting to impact working class Americans who are quickly discovering that their “strongman” is not championing their causes. Moreover, his immigration policies are largely targeting individuals who support vital areas of our economy; and that too is likely to adversely influence his supporters when food prices increase as a result of reductions in the agricultural and meat packing workforces. Nor is his handling of the Jeffrey Epstein and Ghislaine Maxwell matters working in his favor. Those scandals are not going away and they too tend to underscore who President Trump really cares about.
What President Trump needs now is a popular victory that will enhance his personal image and give Republican legislators a realistic chance of salvaging their majorities in the 2026 elections. His efforts to limit voting rights and increase gerrymandering are not likely to be popular with an American public which still believes in the concept of democracy. Moreover, those efforts could very easily backfire if his supporters come to realize that giving him greater power will not improve their current economic plight; and that doesn’t even take into consideration that the Blue States might reciprocate in kind. What could really help is for President Trump to carry out his promise to enact legislation that is better than the Affordable Care Act that will actually help bring down healthcare costs. Doing something positive that Obama was unable to achieve should have great appeal to him.
There are many positive aspects to such legislation which will give President Trump a lot of talking points; namely,
It will greatly reduce healthcare costs by eliminating private insurers that consume roughly 20% of healthcare premiums to support their own operations;
It will greatly reduce the administrative costs of healthcare providers by eliminating the necessity of their complying with a multitude of paperwork requirements imposed by the over 1,000 private insurance companies and result in total cost savings of roughly 5%;
It will enable Medicare, as well as other governmental health insurance programs, to negotiate prescription drug prices which will reduce total health insurance cost by at least 5%;
The foregoing reductions in healthcare costs will enable an even greater reduction in the healthcare subsidies paid out by the federal government under the Affordable Care Act;
Eliminating the multitude of individual healthcare insurers will make it possible to broadly institute preventative healthcare measures which will further reduce total healthcare costs; and
By concentrating the funding of healthcare in the hands of a few governmental programs, it will facilitate the institution of internal controls and analytical procedures that can actually reduce fraud and waste.
President Trump can thoroughly expect that creating a public healthcare insurance program will be opposed by the nation’s private healthcare and prescription drug insurers. They, of course, will have the opportunity to compete with the governmental healthcare insurers and, like any other private business entity, the burden will be on them to prove that they will be more effective in reducing healthcare costs. The current 17% differential in administrative costs, however, indicate that this is not a likely probability.
Similarly, there may be resistance from hospitals and medical service practice groups who will argue that the government is trying to establish “socialized medicine.” While the elimination of private healthcare insurers will give the governmental healthcare insurance entities greater bargaining power with healthcare providers, eliminating the private healthcare insurers will free up roughly 30% of current healthcare costs enabling healthcare providers far more economic freedom than they currently enjoy.
Lastly, the pharmaceutical manufacturers may oppose changes in the sources of funding for their products. They have no legitimate meritorious arguments for their opposition since prescription drugs costs in the U.S. are at least twice as high as they are in other countries and their profit margins are more than twice that of the nation’s 337 largest manufacturing companies. Indeed, President Trump could encourage their support by simply suggesting that the federal government will require pharmaceutical companies to negotiate with it for the right to produce drugs created through research projects funded by the federal government.
I sincerely hope that you will bring this suggestion to the President’s attention and encourage your Senate colleagues to support it.
Sincerely,
Dan L. Goldwasser