By Daniel Greening| 15th March 2021
The American Hospital Association is reporting that hospitals across America are losing, in total, $50 billion per month because of the Covid-19 pandemic. Costs of medical care are a contributing factor to 66.5% of bankruptcies filed by Americans, a statistic worsened by the recent outbreak. Unemployment is sweeping through the country, threatening the livelihoods of many households, and yet insurance companies are experiencing record high profits. Why, in one of the largest economies in the world, does there persist such gross injustice?
Healthcare in America is, for the majority, delivered through private companies, not from a centralized Governmental body. Thus, to avoid large medical bills, Americans must buy health insurance; if your treatment falls under the plan you chose, the insurance company will pay for your treatment; or at least a part of it.
Crucially tough, private hospitals cannot legallyturn anyone away. This is of a paramount importance during the pandemic ashospitals across the US are fully occupied with patients who need treatment andstaff who needs equipment. This resulted in demand for medical suppliesskyrocketing. For example, medical gowns cost around $12 during the height ofthe pandemic compared to 22 cents prior to the pandemic.
Due to this shortage of medical supplies, hospitalsfound themselves making huge losses. Healthcare accounts for approximately 17%of the United State’s GDP, so it is economically essential for hospitals tostay open, but with market forces currently working against them, this will beeasier said than done.
A lack of Government regulation is a large contributary factor to the rising prices of healthcare. On average, the USspends $1443 on drugs per person, compared to $415 in the UK. Largepharmaceutical drug companies negotiate with hundreds of hospitalsindividually, not with one Governmental oversight body. This gives the drugcompanies greater bargaining power.
Not only hospitals have been under greatduress: as has been widely reported, 20 million Americans have lost their jobsjust from February to May, due to the economic downturn caused by the pandemic.For more than a quarter of these people, their employers paid for theirinsurance plans (or at least contributed towards them) as part of benefitschemes. This adds an even greater financial burden to a household alreadystruggling with losing their source of income.