The government shutdown is ostensibly a battle over healthcare: what to do about the expense, healthcare’s unaffordability. Republicans want to focus limited resources on the truly needy and legally resident by cutting subsidies to and enrollment of Medicaid people who aren’t eligible and don’t need Medicaid. Democrats want to preserve Affordable Care Act subsidies to protect the coverage of millions added to Medicaid under Biden.
Americans need to return to their roots: innovation, capitalism, personal responsibility, and freedom.
The basis for both arguments is the impossible-to-pay-for — literally unaffordable — expense of both healthcare, the system, and health care, the service.
In 2024, when the median American family income was $105,800, the average family expended $32,066 on healthcare costs. The U.S. spent $4.9 trillion (17 percent of GDP) on its healthcare system, an amount greater than the entire GDP of Germany. Former President Obama spoke accurately when he described U.S. healthcare spending as “unsustainable,” and then he spent $1.76 trillion on Obamacare (i.e. the ACA).
Recently, Colorado tried to address affordability with its Public Option that “requires insurers to meet premium rate reduction targets … that can compel hospitals to lower prices.” The approach emulates United Kingdom’s (U.K.) single payer — National Health Service (NHS) — which does not have an affordability crisis. How do they do it?
In the NHS, supply (money and providers) and demand (for medical care) are determined by the government, not by 69 million British consumers. The government says how much it will pay for goods and services, thereby fixing the prices. The NHS also dictates the care Britons may receive: what, when, by whom, where, and even if care will be provided.
As a result of this central economic control is that the U.K. expends 10.9 percent of GDP and $6,032 per capita on healthcare in contrast to the U.S. with more than 17 percent of GDP and $14,885 per person in 2024.
The obvious solution is to emulate the NHS — apply central economic control. Adopt single payer healthcare. There are two problems: financial and medical.
Estimates for the cost of a single payer healthcare system in the U.S. range from $32 trillion (Mercatus Center) to avowed socialist, Bernie Sanders’ admission of a $40 trillion price tag over ten years. Those amounts are 29 percent to 36 percent of the combined annual GDP of all nations on earth.
The effect of U.K. single payer on availability of medical care is even more ominous than the financial impact. The budget is tightly controlled by limiting access to care. At present 6.3 million Britons (9 percent of the entire population) are on waiting lists for medical care. Patients in the U.K. wait months to years for care. Lengthy wait times for care increase the mortality for serious illnesses such as cancer. The phrase death-by-queue — patients dying waiting in line (a queue) for medical care — was coined long ago for Britons covered by the NHS. There are reports of NHS paying bonuses to doctors for the number of patients placed in hospice.
Death-by-queue has been reported here in both Medicaid and the VA system.
If the U.S. adopted the NHS single payer model that would drive the nation into bankruptcy, and millions would die needlessly.
The answer to U.S. affordability crisis lies not in spending more nor in cutting costs as the NHS does. The solution is to spend efficiently.
Dollar efficiency in healthcare is defined as those dollars that produce patient care. Dollars spent on nonclinical activities are not efficient. Some overhead, technically “inefficient” spending, is clearly necessary for any organization or industry to function. However, of the $4.9 trillion the U.S. expended on healthcare last year, approximately half was inefficient as it paid for federal BURRDEN — bureaucracy, unnecessary rules and regulations, directives, enforcement, noncompliance — activities that produced no patient care.
If federal BURRDEN were eliminated or dramatically reduced, U.S. healthcare would become dollar efficient. Care would become affordable and accessible. Instead of more regulation and more government control, we need less, much less. The U.S. should deploy the free market, restore personal responsibility, and return medical autonomy (freedom) to all Americans, whom we call We the Patients.
The following steps are a good start to resolving the affordability crisis.
- Transfer the money (average $23,968) to employee paychecks that employers are currently sending to insurers, tax-free if placed in a new “no-limit” HSA.
- Allow consumers to shop for both care and insurance using the HSA funds. Providers and insurance companies would compete for individual consumer spending, not contracts as they do now.
- Block grant Medicaid to the states and allow them freedom to design and operate their Medicaid programs “without federal interference,” as specified in the original 1965 Medicaid Act (Section 1801).
- Dramatically reduce federal BURRDEN as most is unnecessary, burdensome, costly, and dollar inefficient.
To solve the healthcare affordability crisis and simultaneously improve access to medical care, Americans need to return to their roots: innovation, capitalism, personal responsibility, and freedom.
READ MORE from Deane Waldman:
Where Have All Our Healthcare Dollars Gone?
DOGE Is Missing $2 Trillion in Healthcare Waste
Rage Against the (Healthcare) Machine
“Dr. Deane” Waldman, MD, MBA, is professor emeritus of pediatrics, pathology, and decision science; former director of the Center for Healthcare Policy, 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.