The #1 Waster of Healthcare Dollars and How to Stop It

Washington steals half of out health-care dollars.

Democrats threaten government shut-down over Medicaid cuts; as Americans are bracing for another increase in their healthcare costs; and as patients wait an average maximum of 132 days to see a primary care doctor, Americans can’t seem to wake up from the nightmare called U.S. healthcare.

The rise in insurance premium costs is estimated at 7–10 percent next year. This is on top of already unaffordable family spending with the average American family expending $32,066 on healthcare in 2024 according to Milliman Medical Index.

Faced with increasing pressure on their bottom lines, employers are passing these additional expenses on to employees with reduced benefits, narrower medical panels (which means longer wait times), plus higher deductibles and copays.

Republicans plan cuts to Medicaid that Democrats and the complicit media say these cuts will “hurt families,” “increase uncompensated care,” “and lead to thousands of deaths.” Biden’s 2021–2023 lockdowns threw millions of people out of work. Unemployment made them ineligible for employer-supported health insurance. Biden then expanded eligibility, adding 17 million Americans to Medicaid rolls. More than 60 percent of these individuals have returned to work and become (again) eligible for employer-provided insurance. Cutting them from Medicaid rolls will actually increase funds available to pay for those who truly need Medicaid.

NPR business analyst Maria Aspan is clear about whom she blames for elevated costs: “insurers, drug companies and your employer,” along with the Trump administration that has “government-sponsored alternatives” it won’t use, she says.

Last year, the U.S. spent $4.8 trillion on its healthcare system. That amount is greater than the entire GDP ($4.7 trillion) of the third-most productive nation on earth, Germany.

Where is all that money going? Who is getting rich, or richer, from Americans’ “unsustainable” (Obama) healthcare spending? Doctors? Big Pharma? Insurance? Hospitals? While each does take a piece of the healthcare “pie,” none comes close to the one entity that consumes more than 50 percent of all U.S. healthcare spending.

Of the $4.8 trillion, more than half, that’s right, at least $2.4 trillion, went to pay the federal BURRDEN — Bureaucracy, Unnecessary Rules and Regulations, Directives, Enforcement, and Noncompliance activities. Our own government denied Americans more than two trillion dollars’ worth of patient care to pay…itself.

The growth of the nonclinical healthcare workforce explains where the BURRDEN money is going — to accountants, administrators, authorization agents, compliance officers, lawyers (lots of lawyers), managers, reviewers, and a multitude of people who never touch a patient. From 1970 to 2020, the number of physicians increased approximately 100 percent. As a result of Congress passing innumerable healthcare Acts with familiar names like Medicare, Medicaid, and Obamacare, the number of healthcare nonclinical workers — bureaucrats — increased by more than 4,400 percent! Taxpayer dollars funded the salaries and fringe benefits of 44 bureaucrats for every doctor.

The public often fails to recognize the cost and complexity associated with passing healthcare legislation, no matter how straightforward. Take price transparency as an example.

Medical price lists do not simply, magically appear. It requires a complex series of costly tasks between the passage of the Health Care PRICE Transparency Act of 2023 and posted lists of hospital prices for patients to see. Rules must be written and vetted to assure concurrence with existing laws and rules. Regulations must be developed which are actionable and quantifiable, including consequences for noncompliance. Directives must be distributed to give hospitals time to understand the regulations, gather, collate, and format the data in compliance with federal requirements, while maintaining secrecy of proprietary commercial information. A system to enforce compliance and punish the noncompliant. An entire bureaucratic structure must be created to accomplish all these tasks.

Not one penny of the billions expended to implement price transparency (or any other healthcare legislation) provides care for a single American patient.

Don’t blame doctors, hospitals, insurance, or even Big Pharma — they are not the big money consumers. They are playing the game according to rules established by Washington.

Blame innumerable federal Acts passed over the past six decades such as

Medicare, Medicaid, EMTALA, UMRA, HIPAA, most OBRAs, ACA, and IRA-2022.

Blame a World War II (1942) wage freeze that was never repealed, which has morphed into the disingenuous, market-distorting employer-supported health insurance benefit that denies 150 million employees an average of $25,572 of money they earned.

Blame a third-party payment system that takes away patients’ medical autonomy, supplants doctors’ judgment, and makes patients wait for care so long they die waiting in line.

Better yet, don’t play the blame game.

Identify the root cause and fix it. The problem of constantly rising healthcare costs is caused by Washington-created BURRDEN and third-party payment market distortion. The solution is to kick Washington out of healthcare. Empower patients — directly connect them with their own money and their chosen doctors without third-party payers in between.

Deane Waldman, MD, MBA, is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at the Texas Public Policy Foundation; and former Director of the New Mexico Health Insurance Exchange. He co-authored Empower PATIENTS – Two Doctors’ Cure for Healthcare with Vance Ginn, PhD. Follow him on X @DrDeaneW or visit deanewaldman.com.

Image from Grok.

Related Topics: Health Care, Government

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