Even being very rich and skilled doesn't qualify you to fix the biggest mess in America's economy. Warren, Jamie and Jeff are about to find out.
Much digital and real ink has been spilled over plans by Warren Buffett, Jamie Dimon of JPMorgan Chase and Jeff Bezos of Amazon to create a joint venture aimed at lowering health care costs for their employees. Big health stocks have tumbled, too, on the prospects of being disrupted, especially by the Seattle giant. Some naive souls have mused that this could be the start of something big for all Americans. What if Amazon could do for this what it did for books?
Because the joint venture is so murky, let me offer a shortcut for the three worthies: Elect a majority in Congress that will enact universal healthcare for all Americans.
Otherwise, the American health-care “tapeworm,” as Buffett called it, is likely to defeat all their technological and financial engineering cleverness. They may disrupt, sure, with the consequences falling on the rest of us, while they see some savings for their employees. At the end of the day, if they’re honest, they’ll admit the reality. There’s a reason every other advanced nation has some form of publicly financed universal coverage.
Health care is an epic market failure as practiced in the U.S. Efforts at using market forces and fads, from incentives and HMOs to massive consolidation, have not worked. The United States spends more than twice as much on health care as other advanced nations do, as a percentage of GDP, and studies show that it’s almost all a function of high and rising prices. Not only that, but American health outcomes generally trail advanced nations with universal care.
In other nations, health care is seen as a human right. In America, it’s an industry. Not surprisingly, the sectors of that industry have done everything they can to maximize profits, while protecting their power from political interference. This is why President Barack Obama had to make so many compromises with the industry, especially insurers, to cobble together the Affordable Care Act. It’s why universal-care proposals from Truman to Nixon to Clinton were defeated as “socialized medicine” taking poor Harry and Louise’s doctor away.
Drugmakers spend ever-increasing amounts on marketing, less on research for drugs — especially if the products don’t promise massive returns. Device makers often operate in a regulatory gray zone. Massive health conglomerates create monopolies. Insurance companies send indecipherable bills, while employees lucky enough to get health coverage must pay more. Prices keep going up.
Malpractice and “defensive medicine” are not the big drivers. Rather, the market forces that provide for low prices and abundant choice in a functioning market economy don’t work for health care.
The reason is fairly simple. Patients are not “consumers.” They’re sick, with worried family members, navigating a highly complex system. They’re usually tethered to one primary care physician (working long hours) and one health system. They can’t go shopping, even if time, physical stamina and legitimate (and safe) competing options existed.
The reforming trio of Buffett, Bezos and Dimon are actually already conceding defeat. Remember, Buffett has been a longtime proponent of universal care. Dimon is a centrist Democrat. Bezos has been cagier about political affiliation, but supported same-sex marriage, criticized candidate Trump and owns the Washington Post, the paper doing the best watchdog journalism of this corrupt administration.
They know that Republicans are sabotaging Obamacare, even if they haven’t yet been able to pull off outright repeal. A “blue wave” taking Congress this year is not assured — and even if it did, Democrats would face the same highly effective tactics by the health-care industry to protect its privilege. If anything, the health situation is likely to get worse. Maybe these three can affect change at the margins, and at least use the system to their companies’ advantages.
Otherwise, three rich guys walk into a bar… The joke’s on us.
Today’s Econ Haiku:
Bringing income home
Get a hefty tax break for
Doing the right thing