A Little Reality Injected into the Great American Health Care DebateAug 16 '09 Write an essay on this topic.The Bottom Line Once again our elected officials will ignore public interest in preference for special interests. What's wrong with the current American healthcare system? American per capita spending on healthcare ($7129 per person) is twice that of any other industrialized nation, yet almost 46 million Americans have no healthcare coverage. Several key indices of national health (such as life expectancy, infant mortality, incidence of obesity and hypertension, and immunization rates) reveal that American healthcare is less effective overall than healthcare in many other nations, despite the fact that our technology is the best in the world and our healthcare professionals are the best-trained. In the words of President Obama, our healthcare system is "not making us healthier," it is "bankrupting families," "bankrupting businesses," and "bankrupting our government at the state and federal levels." The current system of payments also results in "too many specialists and not enough primary care physicians." Why is the American healthcare system performing so poorly? In comparison with other countries, a much larger percentage of American dollars spent on healthcare are siphoned off into profits and inflated salaries – by the insurance industry, healthcare providers, and the pharmaceutical industry. Thirty-one percent of dollars spent on healthcare in America go to the insurance industry. The American Pharmaceutical Industry is one of the most profitable corporate sectors in the world. Many hospitals and other healthcare facilities operate on a for-profit basis. Salaries for many categories of healthcare professionals in the United States tend to be much higher than their counterparts in other countries. Will Universal Health Care solve these problems? Not in the form that such legislation appears likely to assume. Extending health coverage to those currently without it is a moral imperative, but if the cost inefficiencies of the healthcare system are not simultaneously reformed, the result will be to increase two of the current problems: bankrupting businesses and bankrupting government at the state and federal levels. Common sense indicates that providing healthcare for an additional 46 million people will add to overall healthcare expenditures, unless some kind of new efficiency of a significant nature is built into the system. Without some increase in the cost-effectiveness of healthcare, some segment of our society (present or future) must pay for the additional medical care. On the other hand, any genuine improvement in the efficiency of the system would have to impact one or more of the three powerful interest groups involved: the insurance industry, the healthcare providers, or the pharmaceutical industry. Will the Cost-effectiveness of the system be improved by legislation this year? No! The health insurance industry, led by UniversalHealth Group, Aetna, and WellPoint have mounted an exceptionally vigorous lobbying effort, directed especially at the pivotal Blue-dog Democrats, a voting block that will have to be on-board for any healthcare legislation passed this year by the Democrats. The insurance industry expects to emerge more profitable if any healthcare legislation is passed this year. Their primary overt tactic has been to convince lawmakers that the insurance industry's data-crunchers and wellness experts help to contain healthcare costs. The underlying tactic is, of course, the roughly $10 million/year donated by the health insurers to the campaigns of federal officials. Representative Mike Ross, leader of the Blue-dogs says, for example, "If United has something to offer on cutting costs, we should consider it." Insurance companies do, in fact, help to constrain payments to healthcare providers by setting limits on reimbursements for various procedures, but, meanwhile, they consume 31% of healthcare dollars for that meager service. Ross is spearheading the resistance to a government-run insurance option that would compete with private-sector companies. The insurance industry knows that any such option would undercut private plans and force the insurance industry to accept lower profits. Ross says, "We have concerns about a public option if it's not done on a level playing field." If a public option is designed to operate on a level playing field, then it would, by definition, be one that resulted in no reduction in insurance industry profits and hence no cost savings. As for the profit margins of the Pharmaceutical Industry, one news report indicated that Obama has already cut a deal with that industry promising not to interfere with drug pricing. Big-Pharma is already in trouble because drugs accounting for about half of the $383 billion-worth of patented drug sales will lose patent protection within the next five years. Introduction of generic alternatives typically reduces the price of a drug by 85% within a year of patent expiration. Drug prices will be coming down over the next five years with or without healthcare reform. Healthcare providers, meanwhile, are under no risk of reductions in compensation for various procedures as long as they have the option of billing patients for any difference between what insurance companies pay and what the healthcare providers choose to charge. Any extension of medical insurance to the 46 million Americans currently lacking coverage will only add to the profit margins of healthcare providers. Without cost reform, who will pay if coverage is extended to those currently uninsured? 1) The Wealthy, to the extent that Obama is able to increase taxes on that group. 2) The Middle Class, if Obama finds it necessary to renege on his promise not to increase taxes on families earning less than $250,000 per year. 3) Some of those currently uninsured, if, as seems likely, the legislation mandates that every individual purchase coverage. Not every individual currently without insurance will benefit from insurance. Part of the reason Democrats want to force more young and healthy individuals to purchase insurance is so that their premiums will, in effect, help pay for the medical care for older and less healthy individuals. Mandatory insurance bilks those people who are healthier than average, avoid smoking and drinking, and maintain personal fitness precisely because insurance companies group people together, charge fees based on average outlays, and skim a significant percentage of payments off the top for the industry's own salaries, operating expenses, and profits. Mandatory insurance will merely force everyone to participate in the same broken healthcare and medical insurance system, like it or not. 4) Employers and/or Employees, if current healthcare benefits are taxed or if additional small employers are required to provide insurance. Some marginal jobs will disappear. 5) Future Generations of Americans. Since all of the foregoing contributions are unlikely to provide more than a small fraction of the full cost of Universal Health Care, without cost reform, most of the cost will ultimately be deferred to future generations, as an add-on to the already spiraling national debt. The voiceless, vote-less future Americans are devoid of political clout and thus easily victimized. Medicare is already being charged against the taxes of future Americans; Universal Health Care, if passed, will be as well. What should be done (but will not be done this year because Our Democracy is hostage to special interests): A healthcare system for America that would be reasonable, fair, and cost-effective would include: 1) Universal Coverage 2) Board-determined limitations on procedures to those with reasonable cost-effectiveness 3) Incentives for maintaining wellness 4) Single-payer insurance plan, national or regional, public or quasi-public, non-profit, with public accountability 5) No out-of-pocket payments for approved procedures 6) Free choice from among licensed healthcare providers 7) Free choice to purchase additional procedures and healthcare at personal expense 8) Prohibition on for-profit healthcare Instead, what we will get will be either: 1) No change from the present mess, or 2) An increase in wasteful, inefficient spending by adding another 46 million people to the current, under-performing healthcare system, further burdening future generations with debt. Bottom-Line: This issue is not about being a Democrat or a Republican. The plans being floated presently by the Democrats (the ones with any reasonable likelihood of being passed) are even worse, overall, than the status quo, even though, and partly because, the objections being articulated by the Republicans are mostly phony scare-tactics, designed to serve the various interest groups they represent.  |
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