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Health Care at the Tipping Point

Written by Cindy A Matthews

Richard Masters runs MCS Industries, the largest manufacturer of picture frames and mirrors in the U.S., but profits have shrunk in recent years in spite of their growth in sales.

Masters wanted to know why this was happening and what he could do about it, so he began investigating the cause. The documentary Fix It: Healthcare at the Tipping Point [sic] is a chronicle of what he learned and the solution for how both American business owners and their employees can prosper. (Watch it free online at

The facts Masters uncovered are both fascinating and infuriating. He discovered that MCS was paying $1.5 million a year for health insurance coverage for their employees, yet their employees’ premiums were skyrocketing and their coverage covered less of their actual health care with more out-of-pocket costs than ever before. The result was many employees skipped seeing the doctor for routine check-ups and became ill more often. (Americans see a doctor on average 4.2 times a year compared to the Japanese, who see a doctor 13 times per year. The primary reason given by Americans for not seeing a doctor?: “I can’t afford it.”) Even with company health benefits, employees could be forced to file for bankruptcy if a family member becomes seriously ill, often losing their homes in the process.

Masters learned that in the US, for every dollar paid toward private health insurance coverage, 33 cents goes towards marketing and administration costs rather than going toward providing actual health care. These administrative costs include the bloated salaries and bonuses of private health insurance companies’ CEOs, as well as paper-pushers whose job is to deny claims. The cost of health care in the US has increased at a phenomenal rate since the 1980s–more than $3 trillion is spent on health care costs yearly. Meanwhile, many Americans have no health insurance coverage whatsoever, since many businesses can’t afford the ever increasing costs of employee health benefits. Companies are forced to downsize their work forces or hire only temporary/part-time workers to avoid providing health benefits. Some businesses go bankrupt or move to countries with cheaper labor costs.

Masters wondered what could be done to bring health costs down and keep American businesses from going under because of these costs. As a businessman, he realized efficiency is key to success and private health insurers are far from efficient.  Studying different health care systems throughout the world, Masters found the answer he was looking for right under his nose. In the US, 30% on average is spent on health care administrative costs compared to Taiwan, which spends only 1.6% on administration. What’s different in Taiwan? Like most other nations, Taiwan has a single-payer health care system which covers all citizens. Masters realized the US also had a single-payer health care system already in place which uses a mere 1% of its budget to handle overhead costs–it’s called Medicare.

Masters reasoned that by extending Medicare to all Americans, businesses and self-employed workers alike wouldn’t have to deal with the nightmare of private insurance companies and their inefficient and pricey practices. Americans could lower their annual per capita healthcare costs of $8,745 to the $4,550 per capita rate Canadians enjoy through their single-payer system. He investigated the myths and propaganda generated by the American private health insurance industry against the Canadian single-payer plan by interviewing Canadian business owners and doctors who demonstrate how their single-payer health care system’s efficiency yields better returns on each health care dollar spent.

One myth debunked is that single-payer health care would be more expensive for Americans. An average Canadian family earning US$50,000 a year doesn’t pay any extra taxes or out-of-pocket health expenses, while an American family with the same income is forced to pay insurance premiums and out-of-pocket expenses on top of their tax bill. Interviews with American doctors working in Canada attest to the efficiency and high quality of health care available there. Another myth exposed: there are no “waiting lists” for surgical procedures or treatments in Canada. Added bonus: Canadians suffer none of the “postponed service/denial of service” Americans routinely receive from private health insurance providers.  Private administrators often tell health providers not to prescribe certain medications or run tests (MRIs, CT scans, etc.) without the insurer’s prior approval, sometimes forcing the patient to go through costly extra procedures first, which can delay or even negate a positive health outcome

Masters saw how private health insurance companies make medical decisions in their boardrooms instead of allowing doctors to make these decisions for their patients. Private health insurance often won’t cover a surgical procedure or drug due to a patient’s preexisting health condition–something that’s unheard of in Canada, the U.K., and other single-payer countries. Canadians have the freedom to choose their own doctors and hospitals, unlike Americans who are often told their preferred doctor or hospital is no longer covered by their HMO or private health insurance plan.

When you are ill and in need of an operation or a drug, you receive it in a single-payer health care country with no one questioning you, “How are you going to pay for it?” Everything is covered for everyone. It’s just that simple. There is no such thing as a “medical bankruptcy” in single-payer health care countries, while in the US 60% of bankruptcies deal with unpaid medical bills. 40,000 deaths per year are attributed to Americans without health insurance and 84,000 Americans die each year from preventable illnesses, ranking the US at 19th in the world for life expectancy. With the $710 billion saved annually by switching to a Medicare for all system of health care, Americans could use $70 billion of that amount to cover the uninsured and easily pay off $129 billion in annual out-of-pocket expenses incurred by everyone–with money to spare.

When even a conservative businessman such as Richard Masters applauds the humane and efficient health care system of Medicare for all, you know that Fix It is an excellent documentary every American should watch now. After all, it’s our lives at stake.


Bio: Cindy A. Matthews is a freelance writer, novelist and editor of Our Revolution Continues blog:

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Cindy A Matthews

Cindy A. Matthews is a freelance writer, novelist and editor of The Bernie Blog.