Cyrus Javadi: Universal healthcare not viable without cost control

About the writer: Rep. Cyrus Javadi, a married father of five, is in his second term representing Clatsop and Tillamook counties in the House. In his private life, he owns and operates a Tillamook dental practice encompassing five providers and an extensive support staff. He also blogs on Substack, where this commentary originated. A native of Utah, he earned his dental degree in 2008, and initially practiced in Astoria. He recently switched his party affiliation from Republican to Democrat.

At some point in any failing enterprise, someone in the room finally asks the most dangerous question: “Are we actually making enough money to run this thing?”

After four essays walking through the slow unraveling of American healthcare — the math that doesn’t work, the history that boxed us in, the carnival financing tricks we pretend are normal and the tourniquet known as Obamacare — it seems only reasonable to finally ask the question everyone keeps circling: “OK, so what’s the answer?”

At the Capitol, this is the moment when the conversation stops being a conversation and turns heated debate. Quickly.

Someone says single payer with the confidence of a man who believes he has just discovered fire. Someone else says free markets with equal conviction, as if healthcare were simply a poorly run cable company in need of better branding and a customer-loyalty program.

Everyone nods vigorously at his own opinion. No one listens very carefully. And, the problem is kicked down the road. Again.

Which makes sense. Americans like fixes. It likes clean answers. It likes the idea that somewhere in Oregon — or Washington, D.C. — there exists a Big Lever. Once pulled, it causes costs to fall, access to rise, wait times to shrink and hospital billing departments to disappear in a cloud of morally satisfying smoke.

The problem is this: Healthcare is not that kind of problem.

Healthcare is not a broken appliance. It’s not even a complicated machine. It’s more like an old house remodeled by six different owners, each of whom fixed the thing bothering them most without ever touching the foundation.

The windows don’t line up. The floors slope slightly toward the kitchen. And everyone keeps arguing about paint colors, pretending that creaking noise is just the wind.

Let’s make a quick return to the tourniquet, because people keep forgetting about it.

The Affordable Care Act was never designed to fix American healthcare. It wasn’t a master plan, it wasn’t a cure and it certainly wasn’t elegant.

It was a tourniquet that stopped the bleeding in a system already quietly failing.

It forced participation. It ended the practice of treating sick people as actuarial mistakes. It cut uncompensated care roughly in half, from $40-50 billion a year to about $28-30 billion. It slowed medical bankruptcies. It kept hospitals open long enough for us to keep arguing about what comes next.

Premiums went up — a lot. It was not because insurers suddenly discovered greed in 2010, but because the system finally had to acknowledge something we had spent decades avoiding: modern healthcare is expensive to deliver.

Since 2019 alone, hospital labor costs are up 21-25%, supplies 18-20%, pharmaceuticals 13-15% and construction costs 25-30%. Contract labor have spiked even higher.

You don’t need ideology to understand what that does to prices, but a calculator helps.

See, the mistake wasn’t applying the tourniquet. The mistake was pretending we could leave it there forever without curing the gaping wound underneath.

While we argued about Obamacare, everything underneath it kept changing. Labor got scarcer. Medicine got better, thus more expensive. Technology advanced like it had somewhere urgent to be. People lived longer — and with more chronic disease requiring more care over more years.

We kept pretending the payment system would somehow absorb all of that. But it didn’t.

Once you strip away the slogans, there are really only two ideas serious countries return to, and they are not opposites. They are siblings who refuse to sit next to each other at dinner.

The first is universal, government-run insurance. Everyone pays in. Everyone is covered. Prices are set. Budgets exist.

Canada is the usual reference point. No choice. No options. No out-of-pocket expenses. If you need it, you go to the doctor. No bill afterward.

The second is mandatory universal coverage with private insurers operating under strict rules. This is Switzerland’s answer.

Participation is required. Benefits are standardized. Prices are controlled. Subsidies make it affordable.

You get a few choices, but they are more cosmetic than functional. You have to contend with payroll taxes and out-of-pocket expenses, but you go to the doctor when you need to.

Both systems work by rationing care. They just ration it differently.

Yes, rationing happens either way. And news flash: We already ration care in the United States, as well. We just do it through deductibles, networks, prior authorizations and geography instead of waitlists.

If you live near a major academic center, you enjoy the illusion of abundance. If you don’t, you learn quickly that choice means driving farther.

Here’s where things get uncomfortable.

The United States spends about $13,500 per person per year on healthcare. That’s roughly 17.3% of its Gross Domestic Product. But the average among wealthy nations is closer to $6,500 per person and 9-10% of GDP.

Canada spends about $6,300 per capita, roughly 11% of GDP. Germany spends $8,100 per capita, around 12% of GDP. Switzerland, whose system is often cited as Europe’s “expensive” one, spends about $9,800 per person, still far below what we do. Japan only spends about $4,800 per capita, just under 11% of GDP, while maintaining the highest life expectancy in the world.

So yes, we pay dramatically more. But here’s the part most comparisons conveniently skip:

Those countries also have lower labor costs, healthier populations, fewer specialists, fewer high-tech interventions, smaller geographic footprints and broad cultural acceptance of limits Americans openly reject.

Japan has 12 hospital beds per 1,000 and Germany 7.9. The U.S. has 2.8. You don’t need to guess how that affects surge capacity.

Physicians in the U.S., especially specialists, are paid two to three times what their counterparts earn elsewhere. That isn’t greed. It’s supply, training cost, malpractice exposure and opportunity cost all rolled together.

And our population is sicker.

Six in ten American adults have at least one chronic disease. Four in ten have two or more. Obesity sits around 42%, roughly double the average for the world’s 38 free-market OECD democracies. Diabetes runs about 11%, compared to 4-7% for other OECD nations. And no financing model escapes those realities.

Here’s the sentence that ruins everyone’s favorite talking point: Universal coverage solves how we pay for healthcare. It does not, by itself, solve how much that healthcare costs.

You can nationalize insurers tomorrow. You can regulate them into polite submission. You can replace every executive with a golden retriever wearing a lab coat. If labor remains scarce, drugs remain expensive, and medicine keeps advancing faster than the system that pays for it, prices will keep chasing costs.

Every country that “solved” healthcare did so by explicitly controlling prices, volumes, workforce supply and technology adoption. Not vibes or not slogans. Actual constraints.

They decide how many specialists to train. Which drugs they will pay for — or not. What kind of wait times they will accept as a tradeoff.

Americans say they want European healthcare. But they recoil from European decisions.

Here’s the number that quietly explains why American healthcare feels so expensive, even before you get sick.

It costs about $2,700 to $3,000 per person every year just to run the U.S. healthcare system. Not to deliver care. Not to pay doctors or nurses. Not to buy drugs or MRI machines. Just to move money around.

That’s the cost of billing departments, coding teams, prior authorization, network negotiations, utilization management, claims appeals, employer benefit offices, compliance staff and an insurance ecosystem so complex entire careers are built on knowing which box to check on which form for which payer on which day of the week.

By comparison, Canada spends roughly $500 per person on administration, Germany $400 to $500. Despite relying on private insurers, Switzerland comes in around $600 to $700. Japan runs one of the leanest systems in the world at $150 to $200, thanks to a single national fee schedule and minimal billing variation.

The United States spends 18-20% of all healthcare dollars just on administration. For most wealthy countries, it’s 3-7%.

Even if America somehow matched European prices for doctors, hospitals and drugs tomorrow (no miracles required, just pretend) it would still be spending roughly $2,000 more per person every year simply to operate the system. That gap alone is larger than what many countries spend to cover an entire citizen’s healthcare.

This isn’t because Americans are uniquely inefficient people. It’s because we built a financing system that treats complexity as a feature.

It features multiple payers, nonstandard prices, constant network churn and prior authorization as a cost control. What’s more, employer-based insurance serves as a middleman and pharmacy benefit managers skim value in ways even experts struggle to fully explain.

Every layer added to manage cost creates another layer that has to be managed.

Managed layers need staff, staff cost money and someone eventually gets handed the bill. It could be the patient. Or the employer. Or the hospital trying to keep its doors open.

So, what’s the fix?

Here’s the answer, but it won’t fit on a bumper sticker:

We have to choose a universal financing system and pair it with real cost control.

That means admitting healthcare is not a normal market. It means standardizing prices where markets don’t function. It means expanding the workforce instead of treating burnout like a personal failing. It means simplifying administration so clinicians spend less than 25% of their time feeding billing portals collectively costing $90 billion a year.

It means confronting drug pricing where 2-3% of prescriptions drive half of all spending. It means acknowledging consolidation raises prices, but also that thin margins force survival mergers. And it means accepting out loud that better medicine costs money, whether we pay through premiums, taxes or time.

Obamacare bought us time.

We spent that time arguing about whether the tourniquet caused the wound. It didn’t.

Now, time is running out. And choosing nothing is still a choice — just one in which the system keeps deciding for us, hospital by hospital, county by county, mile by mile.

Which is fine. Unless you think healthcare matters.