Famous billionaire Mark Cuban was recently interviewed by The Bulwark about the disaster US healthcare has evolved into. Cuban is committed to changing healthcare in the US and has gone so far to attack the drug pricing fiasco by starting Cost Plus Drug Company to offer generic drugs at the lowest possible prices. Cuban identified Pharmacy Benefit Managers (PBMs) as the primary culprit for high drug prices in the US. These middlemen, while claiming to lower prices for the consumer, actually insert themselves between the pharmacies and drug makers to glean as much profit for themselves as possible. This is why those PBMs are generally owned by huge corporations who are either buyers or sellers of drugs. Like all businesses, PBMs exist to make as much profit as possible. This is the basic commandment of capitalism. Shareholders only care about the amount of profit made off of a particular gross sales amount, so there is no actual incentive for a PBM to lower costs to the consumer. In fact, the incentives are exactly the opposite. If the cost goes up, and the PBM "cut" (percentage) stays the same, the PBM makes more money.

The drive for ever larger profits is the main villain in US healthcare. When I was a child in the 1950s health insurance was largely unknown in the economy. In that era the providers of drugs and healthcare obeyed the normal rules of free market capitalism. If you charged too much, people would seek out other providers. My family doctor had a corner office a block down the street and he would make house calls if I was too sick to come to his office. He was more a friend of our family than an impersonal salesman of medical services. Those were what we old folks call "the good old days." And it is virtually impossible to return to that era.

Cuban doesn't have any really good idea of what to do next. He only knows that the proposals of both the left and the right are clearly unworkable. The left focuses primarily on government assistance to pay the ever-increasing costs of healthcare while the right wants to eliminate government payments entirely, leaving only the rich able to afford healthcare. The poor can just die as quickly as possible, and the right believes that solves a lot of problems since the poor won't be able to find good-paying work once AI takes over.

Cuban does recognize that government should pay when people can't. And "can't" is defined by some "affordability" standard where people pay what they can afford to pay for healthcare. But this idea also fails to address the problems caused by capitalistic companies buying up healthcare providers to create monopolistic control over the entire healthcare industry (which is exactly what we should expect capitalist companies to do). For the past decade or so the pattern has been for hedge funds to buy hospitals and for hospitals to buy individual medical practices (groups of one or more doctors with support staff). Meanwhile, a few huge insurance companies, each with their own preferred PBM, are monopolizing the availability of health insurance, and as monopolies do, they drive up the costs to the consumer and the employers who still provide health insurance to employees. These insurance companies are "cost plus" operations who have every incentive to cause costs to increase because they claim a percentage of the amount flowing through their company as profits. If the costs go up, the insurance company profits go up. This is the same pattern as the PBMs.

Healthcare for elderly folks (like me) is subsidized by payroll taxes on working Americans. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total, with the possibility of an additional surcharge on high-earning individuals. In addition to that, Medicare enrollees pay $202.90 per month for Part B coverage., while Part A coverage (hospital stays) remain free. Above that amount most retirees will pick from one of two options, traditional Medicare or Medicare Advantage (Part C). Most Advantage plans also include Part D coverage for prescription drugs. Traditional Medicare doesn't cover drugs so people who elect that option will normally pay an additional amount for Part D coverage. It is all very complicated, and one reason many seniors pick Medicare Advantage is that it operates largely like the employer-based healthcare plans they used during decades of working as an employee.

While there are huge variations from individual to individual, the typical retiree pays $6,000 to $7,000 per year "out of pocket" for healthcare. For a retired couple, $14,000 per year for healthcare is a huge percentage of the average $24,000 social security benefit. With about 69 million people on Medicare the out of pocket cost approaches $500 billion, the Part B premiums add about $168 billion more, and the payroll tax adds about $340 billion. The grand total is just over $1 trillion, or about $14,500 per retiree per year.

For comparison, the Veterans Administration pays roughly $150 billion per year to provide "no cost" healthcare to about 9 million veterans with an average cost of about $17,000 per veteran. In general, veterans use more healthcare because they don't pay anything (unless they volunteer to pay for something extra, like an extra pair of glasses). With roughly 342 million people in the United States, if we kept the current "fee for service" payment model and use the VA cost average of $17,000 per person it would cost nearly $6 trillion to give VA-quality healthcare for free to everyone in the USA using the current system of providing healthcare services. The 2.9% Medicare payroll tax raises only about a third of one trillion so the tax would need to go up to 18 times higher, or about 52% of payroll (split between employer and employee in some equitable fashion) if we wanted a "free for all" healthcare system using the current system of doctors and hospitals. People aren't going to like that system at all. We can't afford the healthcare which we need. It is too expensive.

Which gets us back to Mark Cuban. He is looking for ideas on how to provide better healthcare to everyone for far less total money. If we continue to allow corporate profits to determine who gets healthcare, when, and where, a lot of us will die sooner than we otherwise ought to die. Please post some ideas in the comments and I will try to relay them to Cuban.