I hope you are in good health—as the costs of medical care are exorbitant.
There are many reasons for the staggering cost. The graph shows the percentage of the economy devoted to the “health” sector. The red arrow shows one author’s opinion of the reason for the inflection point in the 1960s: the FDA’s gaining power to require proof of effectiveness as well as safety for approving a drug.
Another major event in 1965 was the passage of Medicare and Medicaid, which dramatically increased prices of hospital services overnight. The smaller increase in the 1940s was related to the use of employer-paid health benefits to attract workers, circumventing wartime wage and price controls. Third-party payment has become increasingly predominant since then. Costs continued to increase after the “Affordable Care Act.”
The FDA’s intended mission was to prevent unsafe drugs from entering the country, but Congress also gave the FDA the discretion to determine whether a drug was “effective.” The FDA decided that extensive and costly data needed to be compiled. As a result, the cost of bringing a drug to market has soared (possibly 1,000-fold) and it takes almost 10 times as long to gain approval. Companies cannot afford to seek approval for drugs that will not return the investment. FDA approval allows expensive products to be sold within America’s medical monopoly, which lobbyists can then get third-party payers (“insurers”) to subsidize.
The 2018 Right to Try Law was an attempt to fix this issue by allowing patients in certain cases to take medications that had only undergone safety but not efficacy testing, but this did not go nearly far enough.
U.S. life expectancy and health measures are no better and sometimes worse than in nations that spend far less. A huge proportion of U.S. spending provides no benefit to patients and harms them by blocking innovation and subjecting the sick to managed-care barriers.
The Association of American Physicians and Surgeons (AAPS) advocates restricting bureaucratic powers and returning control of medical spending to patients. Insurance is for reimbursing subscribers for a covered loss, not for paying “providers.”
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