The murder of UnitedHealthcare CEO Brian Thompson cannot be condoned in any way. The reaction to his killing, with some on the Left expressing pleasure at the appalling crime, has been shocking.
The incident nevertheless highlights the utter failure of former President Barack Obama to resolve public dissatisfaction with the nation’s healthcare system with his signature legislative accomplishment, the Affordable Care Act.
Almost every promise Obama made about what it would do has proven false. It has not cut the budget deficit, slowed medical spending, saved lives, lowered health insurance premiums, improved the quality of care, or let patients keep doctors they liked. That’s quite a list of failures.
The public is more unhappy with the healthcare system than they have been in decades. According to Gallup, over 80% of people said they are dissatisfied with the cost of healthcare in the United States, a 16-year high. The percentage of those who said quality is either “excellent” or “good” has fallen to 44%, down from above 60% in 2012.
The U.S. now spends more than $3.6 trillion on healthcare each year, up $1.4 trillion since Obamacare became law. The average insurance premium for a family of four now tops $25,000 a year, double what it was in 2010, as health costs have continued to rise faster than inflation.
Many people blame health insurance companies, but this is misplaced. While there has been significant consolidation in the health insurance sector since Obamacare became law, the net profit margins of insurers are far below other sectors. The average net profit margin for the largest 500 firms in the U.S. is almost 12%, nearly double that of UnitedHealth Group. The average net profit margin for the entire health insurance industry is just 3%.
Health insurance companies are taking in record-high insurance premiums but also paying out record-high reimbursements to healthcare providers. Therein lies the problem. Obamacare not only did nothing to lower healthcare costs but actually made the problem worse by rigging payment schedules to incentivize consolidation in the provider sector. Thanks to these regulations, half of the metropolitan areas in the U.S. now have just one or two healthcare providers.
Although Obamacare made the healthcare system worse, the market before it existed was also dysfunctional. The roots of that dysfunction go back to wage controls enacted during World War II, and ripping that system up by the roots is apparently politically and practically impossible.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Instead of focusing on Obamacare as the talisman of healthcare policy, Congress should focus on undoing the specific regulations that encourage provider consolidation, forcing states to repeal laws that make building new hospitals more expensive and pressing medical schools to expand the number of doctors they train each year.
As with housing, the solution to rising healthcare costs is not to subsidize more demand through more health insurance mandates and higher health insurance subsidies. The answer is to increase supply by identifying barriers created by the government that are preventing more healthcare provider competition.