Why we can’t have Nationalized Healthcare in the US

Not only is the political will not there, financing it would bankrupt the nation

Introduction

Every insured person in the US, all 305,000,000 of you, know there is something wrong with health insurance. Most of us realize that cost is one of two contributing factors to the failure of health insurance here. Many will state that nationalized health insurance works in Denmark and Sweden, while others point to Bismarck or Beveridge models. Today we are going to discuss the merits and drawbacks of each and present a completely new alternative to all.

Political Will

People in the United States want to be left alone. They don’t want to fill out reams of forms to show them how much they are paying for government , they don’t want to do most of the work to enjoy “life, liberty and the pursuit of happiness.” There are factions on both liberal and conservative sides that are convinced the other side is simply insane. Additionally, we have all seen the unintended consequences of government interference: Rent controls in New York, CAFE regulations causing everyone to buy and drive 8000 pound SUVs, Boeing crashing planes when they had government oversight, and dozens of others.

Given that, Most people are sure that somehow someone is going to milk the system, that they will get something that someone else pays for, and that the fat financial cats are going to get even fatter.

The above two arguments are in addition to the fact that the US’ big payers have enormous political clout and will not simply disappear into the sunset without a fight.

Proposed Plans

The Beveridge Model

Named after William Beveridge, this is Britain's National Healthcare service. Healthcare is provided and financed by the national government through tax payments, just like the police force or the public library. Most hospitals and clinics are owned by the government. Costs are low per capita because the government as the sole payer controls what doctors can do and what they can charge. Countries that use this system are Great Britain, Spain, most of Scandinavia and New Zealand, et al.

The Bismarck Model

In this insurance system the insurers are called ‘sickness funds’ and are financed jointly by employers and employees. These plans have to cover everyone and they make no profit. Doctors and hospitals are privately owned. This is a multi-payer model but tight regulation gives the government much of the single payer cost control that the Beveridge model enjoys. Countries that use this model are Germany, France, Belgium, the Netherlands, Japan, Switzerland and parts of Latin America.

National Insurance Model

This is the government single payer system we hear about frequently. This system uses private sector providers and has elements of both Bismarck and Beveridge, but payment comes through a government run insurance program that every citizen pays into. Since there’s no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance.

This single payer tends to have a lot of negotiating prowess being the only game in town, so has much success in capping drug prices from pharmaceutical companies. This classic system is found in Canada, Taiwan and South Korea

Out-of-Pocket System

This isn't really a system, this is “the people with the gold get the healthcare.” Every other country in the world with the exception of the US and the previously mentioned countries, just pay as they go for healthcare or just don’t receive it at all.

The Problem with “Systems”

The one common denominator in the three ‘systems’ is government interference. They all rely on strict government control on prices and payments and all the associated agencies and paperwork and hurdles to jump through. Ultimately the governments have other goals to accomplish than just delivering good healthcare. Consequently, the systems they espouse will, have, and are, failing.

More on Government Interference

Lest we forget that government, like the law, is the lowest common denominator and should not be trusted to DO anything. Here is a last example of their heavy handed interference. Instead of persuading, educating and incentivizing, this happens:

Thank you Ellen Brown for providing this photo

Financing

Of course the elephant in the room is financing. This is the thing that the US population rails on as the reason for the healthcare failure in the US. However, the US is only about twice as expensive as South Korea, the cheapest of the Organization for Economic Co-Operation and Development (OECD) countries. Clearly the big payers are soaking up about half of everything they are paid and returning only the other half as benefits. So clearly, for-profit isn’t working.

Just as Clearly, Bismarck and Beveridge are not working either, as both Canada and Great Britain have failed healthcare systems. In fact the only healthcare systems that work are ones in tiny countries with large nationalized industries. Denmark, for example, nationalized their two biggest industries, oil and lumber. So basically, in Denmark, you work for the government or you don’t work, and even then, they take up to 55.9% of your income in taxes.

The National Health Insurance system is a combination of the Bismarck and Beveridge as we’ve established, and both examples, Canada and Great Britain, have failed. The only way to make those systems work is to have huge, nationalized industries supporting them and there is zero chance of that happening in the US.

On a side note, isn’t it a little odd that the difference between the most expensive and the cheapest healthcare in the developed world is about the same percentage as the difference between the ratio of benefits to premiums collected by the big insurers? That points to the big payers and their waste being the exact problem.

Innovation

Here is where the US shines. Matthew Harper states in his Forbes article “The Most Innovative Countries In Biology And Medicine” “40% of biomedical research articles published came from the United States.” The next closest competitor is Great Britain with about 1/10 the number of articles. Without the money flowing in the US to fund this research, we are not only condemning people who could be saved by new innovation, we are doing so all over the world.

We have to be careful then to only target the waste and profiteering and leave the scientists and innovators alone to be productive and save lives.

The Solution

As established earlier, the medical loss ratio (MLR), the difference between what is paid in premiums and what is received back as benefits from the big payers, is about 50%, the same amount that the least expensive OECD countries are cheaper than the US. This points to the big payers and their waste, as the problem. Eliminate them and the price of healthcare drops to the lower end of the OECD average.

So let’s take a look at what the health insurance company does. At the base level your health insurance company has three inputs: a doctor, a patient and a procedure. It has one output, a check to pay for that procedure.

That is it.

The solution, of course, is to put health insurance companies, with their criminal, murderous, profit margins, out of business, and we are going to show you how, right here and right now. First, you don't want greedy, profit-above-everything, business people in charge of your healthcare. The Commonwealth Fund identified several problems in their paper “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” That basically boiled down to two problems:

Health insurance is too expensive
Patient education is largely ignored

When we address these two problems, we fix the US healthcare system.

The Concept

If we automate the process between the input and the output, then we have eliminated everything the insurance company does. The only other thing we need to address is the way to educate, persuade and incentivize the patient on how to live a healthy lifestyle. That would result in fewer claims, causing reduced rates for everyone.

The Execution

We at Sentia have designed and developed a solution that completely automates health insurance. We provide the Electronic Medical Records (EMR) system to the practice, and when they document a patient encounter, we pull out the procedures performed and pay for them in real time. There are no networks, no adjudication, no denials, no medical coding, no big buildings, no people, no delays and most importantly, little to no cost once the system is built. For this service we charge $10 per month plus the actual cost of the risk. Remember that we proved with their own documentation that your health insurance company only returns 50% at most, of your premiums as benefits. We can return the 50% they waste to the patient, in lieu of the previously stated $10 per month, plus the actual cost of the risk. There are other efficiencies we will explain, and a way to manage chronic, behavior-based disease.

Patient Education

Also remember that treatment for chronic, behavior based disease consumes 84%, or $3.7 trillion of the $4.4 trillion spent on healthcare each year in the US. The average of avoidable deaths per 100,000 in OECD countries is 225. In the US it is 335, or about 1/3 higher. If we could bring the US average down to the OECD average, we would save about $1.2 trillion. That is a further reduction in costs of about a quarter.

How do we do this? We offer financial incentives for people who live a healthier lifestyle as measured by our built-in health and wellness system. This system takes into account measurements taken at the primary care physician’s practice, like height, weight and blood pressure, plus things screened for in blood work. Additionally, there is a mental health screening right in the wellness package. This system looks at all these factors and then prescribes patient education based on the results. At Sentia, this is part of the system. We can tell when the patient opened the patient education and how long they spent reading it, and offer a small discount for simply doing so. A larger discount is offered for reading and following the education, as evidenced by better results in the patient’s health assessment.

The Finances

Let’s look at big round numbers. Let’s say we can save the patient about 50% on their health insurance up front. Let’s say that we save the people of the US another 25% by being educated about healthy living and getting to the average OECD deaths per 100,000. We know that eliminating medical coding, providing a free EMR to the practice and putting compliance and efficacy reporting into that system will save each and every practitioner an additional $77,000 or about 2% of the total. If we total all that up, we see more than 75% savings. That means that we would have not only the best healthcare on the planet but also the cheapest.

Conclusion

We have shown a way to save more than 75% from the cost of health insurance and have addressed both of The Commonwealth Fund’s two conclusions about health insurance in the US: cost and education. We have all of this written and deployed in a prototype application. The only thing we really need to get this all started is to clean up that application and turn it into an enterprise system with logging, administration and redundancies in hardware. We will need funding, probably about $10 million over the first year. For comparison, United Healthcare had revenue of $371.6 billion and net earnings of $22.3 billion in 2024. With about 50% upfront savings we should service and retain 90% or more of the 330 million insured people in the US. That gives us a revenue of $36 billion.

This figure shows that this is a viable business proposition.

We have shown a way to make patients healthier by educating them on the consequences of their behavior, and a way to capitalize on that to the sum of $1.2 trillion or about 25%. If we add that to the process automation savings of our solution, we are in the ballpark of more than 75% savings in total. We already have the best doctors and the best equipment; we just need to implement the above detailed framework to give them all the tools necessary for success.

We have this system in prototype now, fully functioning.

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We have built a comprehensive health information system to keep the patient healthy and on the right track with the ability to incentivize healthy living. Implementing this system should be fairly simple and will completely revolutionize the way healthcare is paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable.