The Math of Bad, Expensive American Healthcare

topOccupy Math has frequently heard American politicians say that the United States has the best heathcare in the world. This statement is neither a lie nor the truth, because it lacks nuance. The United States has truly incredible healthcare for those that can pay premium prices and the worst health care in the industrialized world for the average citizen. American politicians also frequently equate universal health care with socialism, communism, or bureaucratic dystopia. All of these claims are substantially false, with just enough horrible examples to make them seem true if you yell really loudly. The current system in the US is, ironically, a perfect example of bureaucratic dystopia. In this post we look at how American health care fell down a well and became inadequate. It turns out that there are a lot of different mistakes contributing to the mess. The simple mathematical analysis technique “follow the money” may help clarify matters.

Even the people fighting the problem are deeply confused.

In an article in the Atlantic, the Commonwealth Fund, which ranks healthcare system world wide, noted that the US has the worst outcomes and highest costs. They gave the following reasons for the problem:

  1. Lack of insurance coverage,
  2. Administrative inefficiency,
  3. Underperforming primary care.

It is obvious to Occupy Math that these are not what is causing the problem in American healthcare. These are huge problems, this is clear, but think a minute. The nation that ushered in the Atomic Age, that put astronauts on the moon, that invented the microchip, and on and on, this nation cannot administer heathcare to its citizens? Lack of insurance, administrative inefficiency, and underperforming primary care are symptoms of the problem. They are not even close to being the causes of the problem.

Let’s look at some of the causes.

Given that it works well for everyone else, why do American politician fight tooth and claw against universal heathcare? The current Republic administration did gymnastics to kill Obamacare, a weak first approximation to universal healthcare, and were only turned back by rage from their constituents. In spite of sometimes appearing as dense as plutonium, these people are not actually stupid. There must be a motive that makes sense on some level. Is it possible that universal healthcare is actually bad in the unique social and economic conditions of the United States?

The arch-conservative Koch brothers put their money where their mouth was and paid for a study on the impact of universal health care. Their study showed it was a good idea. Obamacare was a rousing success in spite of being a pale half-measure. Plus, let’s say it again, every other industrialized nation has universal healthcare. Here is a really nice graphic, plotting expenditures on health versus life-span. The United States is spending the most money to die the soonest. The average lifespan of Americans is declining in recent years!

effects

The first part of the problem is this. A congressman or senator, at the federal or state level, must raise a lot of money to get re-elected. The current US health care system does not focus on health or wellness. It is focused on making money. A tiny amount of money to a large corporation is a jumbo donation to a re-election fund. If we discard morality and ethics, a legal bribe in the form of many campaign contributions gives a corporation the best return on investment possible. The politician repays the bribe by taking logically and rhetorically insane positions in support of maintaining the current system.

Why is health not an outcome of spending money?

People who are in poor health generate more revenue. The fact that much of American health care is for-profit, together with the fact the profit is not tied to the wellness of the people served in many systems, means that keeping people in a state of poor health is the best thing that the heathcare conglomerates can do for their bottom line. Which is appalling. Many heathcare organizations do not completely cover checkups. Checkups let you catch things early when they are the easiest to cure or deal with (and the cheapest to cure or deal with). This is the “underperforming primary care” that the Commonwealth Fund identified. Let’s look at another example.

This video was produced by Occupy Math’s editor, Charlotte Ashlock. The nurse leading the protest is a friend of hers. The problem that the nurses are protesting is not that they are not paid enough — it is that the hospital refuses to hire enough nurses to provide care. Many California hospitals do not meet the California state standard for the number of nurses needed to provide proper patient care. The hospital where the protest took place is horribly overworking the nurses they have. This is a hospital that pays huge bonuses to its executives — the protest is happening at a fundraiser — so they have the money to hire the nurses. Let’s lay it out: not having enough nurses results in worse health for patients and so higher profits for the hospital.

But wait! There are state standards for the number of nurses — where is the enforcement? The enforcement is non-existent. When patients are endangered by a lack of resources, the nurses fill out a form, an “assignment despite objection form”, which is supposed to provoke action. At this hospital alone dozens of such forms have been filed to no effect. Why? Occupy Math does not have the facts, but the forms are processed by people that currently have no motive to pay attention to them. The system is corrupt on multiple levels.

Worse, the forms documenting lack of resources have no official status — the right to have the forms at all is the result of action by the nurses’ unions — but there is no required process for dealing with them. It is legal for a hospital to file these forms in the trash. This lack of enforcement is in part due to the Governor of California being lobbied by the California Hospital Association.

To put the cherry on the sundae of stupidity, California has, as a standard, that the emergency department is required to have nurse ratios of 1:1 for trauma, 1:2 for critical care, and 1:4 for visits. The nurses endanger their professional certification by working below these levels. Let’s look at another reason American healthcare is dropping the ball.

MS

Drug prices

The individual pictured above is Martin Shkreli, now in jail for securities fraud, but famous for raising drug prices (hundreds of percent) just because he could. His actions led to at least thousands of deaths — but this was all completely legal because drugs are a for-profit industry with weak to non-existent regulation in the United States. Like Al Capone, he was taken down for financial irregularities. This lack of regulation is another effect of the simplicity of bribing American lawmakers. Click Martin’s name for a thoughtful analysis by the Toronto Star.

In 1923, University of Toronto medical researchers Banting and Macleod received the Nobel Prize in Medicine for one of the most important, and most controversial, breakthroughs in modern medical history: the discovery of insulin and, with it, the ability to manage the symptoms of diabetes. These researchers sold the right to manufacture insulin for one dollar to insure its application would be as widespread as possible. Drug companies have recently steeply increased the price of insulin. Americans are dying because they cannot afford insulin and yet manufacturing insulin has been getting cheaper and easier because of biotechnology improvements.

EpiPens are emergency treatment for anaphylactic shock, an extreme allergic reaction. They are single-dose injectors for epinephrine, which heads off the allergic reaction. The manufacturer recently raised prices 400% and then dropped it back to a 200% rise in the teeth of incandescent outrage. In the meanwhile, many people died for lack of EpiPens. The company did no research and did not develop the device; they just bought the rights to it. They did not improve the device in any way — and for most people that need this technology, their insurers (employers) paid the horrifically inflated price. This represents a judgment that the poor and unemployed do not in fact have a right to life even though the right to life is one of the founding ideals of the nation, appearing in the Declaration of Independence.

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Let’s review the problem

This is the first half of the problem. American healthcare has the goal of making money, not keeping people healthy. In Canada, where Occupy Math lives, the government manages healthcare and controls drug prices, just like everywhere but the United States. In the US, the drug companies are squeezing the public for every dime they can. Many heathcare companies are maximizing profits by not maintaining their clients in good health. There are exceptions. Kaiser Permenete, for example, has doctors on salary rather than a fee-for-service basis. This means that Kaiser make more money by keeping the people in its network healthy.

The second half of the problem is that the corrupt money-based health care system can protect itself at very low cost by giving small (to them) amounts of money to politicians. The problem of campaign finance reform is a giant part of the health care problem, but also many other things. The way American politicians get money for their campaigns is what make the United States a plutocratic oligarchy rather than its nominal governmental form of a democratic republic.

If we follow the monetary motivations, mathematics shows that the current regulatory structure in the United States strongly encourages poor, expensive healthcare and puts the lives of those on the margins of society at substantial risk. The preservation of Obamacare by popular rage suggests there is still some hope of change in a good direction. Occupy Math hopes that this post is helpful to you in providing context for the insanity that is American health care system. As always, Occupy Math would love to have suggests of other topics for posts in the comments.

I hope to see you here again,
Daniel Ashlock,
University of Guelph,
Department of Mathematics and Statistics

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