The U.S. healthcare system splits consumers into narrow categories based on age, income, employment status and a number of other identifiers, and that fragmentation alone has led to a significant amount of wasted time and resources, according to Uwe Reinhardt, PhD, Princeton economist, speaking at the National Council for Behavioral Health annual conference on Tuesday.
“It is horrendously expensive to administer,” he said of the system. “Twenty-five percent or more goes for administration, and that’s just paper pushing.”
Some $190 billion could be attributed to excess administrative costs in 2009. By comparison, Germany spends less than half—about 12%—on its administration.
“I personally think it’s not defensible,” Reinhardt said.
In total, healthcare spending represents 18% of the GDP—and growing. But for all that investment, the United States isn’t getting higher quality when compared to other developed countries, where healthcare represents about 10% of GDP.
Reinhardt said behavioral health is positioned between a rock and a hard place, where the rock is the growing incidence of behavioral health conditions and the hard place is the threat of reduced funding resources. The GOP health policy proposal would have made the situation worse for behavioral health providers, who are already paid too little, he said.
Additionally, the plan would have taken $1.2 trillion out of the system, mostly taking funding away from programs that serve the poorest populations, including voters who supported President Trump in the election.
“You hose the very people who voted for you,” Reinhardt said. “This is novel in politics.”
He spoke of the increase in suicide and overdose in the lower middle class and said he doesn’t believe Congress or the president are aware of the critical need for behavioral health services. The time to speak up and make legislators listen is now, Reinhardt said.
But the administrative infrastructure and funding challenges point to a larger fundamental issue, he said.
“We have never agreed in the United States what the social ethic of our health system should be: To what extent should I be my sick brother or sister’s keeper?”