Per capita healthcare spending in the U.S. was over $15,000 in 2024. That’s around 2,5 times the OECD average for member countries and most of those countries provide universal care. U.S. healthcare spending is projected to grow faster than inflation over the next several years, reaching over $24,00 per capita by 2033, or roughly 20% of GDP. This is an untenable situation, especially if we want universal healthcare, which would require coverage for another 25 million Americans.
We obviously need to come up with a less costly healthcare system that performs well and serves all Americans. Here are some ideas on what that system would look like, bare bones version:
Universal - All legal residents can access health services without incurring financial hardship.
Continuity: Leverage existing structures like Medicare, private insurance and employer-provided insurance.
Mandatory Insurance: Like Switzerland, require all legal residents to have health coverage through insurers (private, public, or non-profit).
Clinically Necessary Care: Covers evidence-based care known to provide significant benefit for specific conditions, aligning with quality standards. Includes preventive care.
Benchmark Pricing Incentives: Healthcare providers set their own fees, which would be transparent and assigned benchmark scores (based on comparison with average fee for same service in local region). Healthcare consumers pay the difference if they choose providers who charge above the benchmark, or receive a portion of the savings if they choose providers who charge less than benchmark.
Competitive Market: Benchmark pricing incentives requires competitive market conditions, but not all localities have robust hospital or physician competition, especially in rural areas. Where there is a lack of competition, financial incentives would be available to access lower cost care outside local areas.
Consumer Choice: Increases provider options through regulatory and scope-of-practice reform allowing non-physicians, such as nurse practitioners, to offer care without physician supervision. Benchmark pricing comparisons would include non-physician and physician prices for comparable care, with the same financial incentives.
Lower Administrative Burden: Reduce physician time on medical documentation and inbox tasks by utilizing scribes (including AI) for documentation and upskilling staff for inbox tasks, such as responding to patient emails, and standardized processes like prior authorization.
Subsidies: Funded jointly by federal and state governments. States would provide direct premium subsidies to households where insurance costs exceed a certain percentage of their income. Providers would not know if a patient is receiving government assistance. The same benchmark pricing incentives apply.
I’ll elaborate in future posts.
Next: Why Universal Healthcare?