Charlie Munger: US Healthcare System is “Immoral” and Inefficient
Renowned billionaire investor Charlie Munger, who serves as Warren Buffett’s right-hand man, has recently expressed his strong criticism of the US healthcare system. Munger considers it “immoral” due to its exorbitant costs and widespread wastefulness.
In an interview with CNBC in February, Munger went as far as comparing US healthcare providers to scavenging vultures waiting to prey on a dying animal. He described the situation as a “disgrace” and highlighted the unnecessary expenses and high insurance costs plaguing the system.
Munger pointed out that Singapore provides better healthcare at only 20% of the cost compared to the US. However, he expressed uncertainty about replicating Singapore’s success, as those profiting from the current system fiercely resist any significant changes.
Despite being nearly 100 years old, Munger himself does not face the burden of healthcare costs, given his substantial net worth of over US$2.5 billion. Nevertheless, he does not hesitate to express his disdain for healthcare providers.
“They control boards of directors, cities, and states, so I don’t know how they would fix the cost problem. They are totally out of control. Warren tried, with Amazon, and failed. Everyone has failed. Everyone in the US has a record of failing when it comes to the cost of our medicines,” Munger concluded.
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In 2021, Haven Healthcare, a joint venture formed by Amazon, Berkshire Hathaway, and JPMorgan to address healthcare costs and improve outcomes, announced its closure after just three years of operation.
The main issue faced by Haven was that each of the three founding companies pursued separate projects with their own employees, rendering the joint venture redundant.
Munger, drawing from his more than 35 years of experience as the chairman of the board of Good Samaritan Hospital in Los Angeles, has also highlighted inefficiencies within the medical field. He likened a terminally ill patient to a helpless prey in the grasslands of Africa.
During an annual meeting of the Daily Journal, Munger criticized the healthcare provided, stating, “‘So much of the healthcare we provide is wrong, very expensive and wrong. It’s ridiculous. Insurers pay providers a small percentage of what people pay.’“
In 2018, Munger predicted that if Democrats gained control of all three branches of government, there would be a push for a single-payer healthcare system. He emphasized the need for a government-driven overhaul and suggested a universal healthcare system with an opt-out option as a viable solution.
Warren Buffett shares similar concerns and has referred to the healthcare system as a “parasite on the economy.” He believes that the private sector can contribute significantly to reducing costs.
“It is Wrong to Keep Prioritizing Profits”
A recent investigation by Kaiser Health News-NPR shed light on the alarming prevalence of medical debt in the United States. The study revealed that over 100 million Americans are burdened with medical debt, with approximately a quarter of US adults owing more than $5,000.
In 2017, Munger also criticized hospitals that administer chemotherapy to individuals who are too sick to recover. He described it as “stupid” and highlighted the physical and financial toll it takes without providing any real benefits. He stated, “‘It’s not an exaggeration to say it’s bad.’“
Considering his advanced age, Munger expressed that he would only consider chemotherapy if it guaranteed positive results. He emphasized the importance of recognizing when further treatment is futile, stating, “‘But there comes a time when the game is over, and then you have to stop trying. It is wrong to keep prioritizing profits,’” he said.