Health Care Reform - Book Excerpt
Chapter 10: Consumption has been the Problem; Smart Consumerism is the Solution
Let’s consider the fact that no matter what, some people in our society will need to obtain health care insurance coverage from a government system. These people simply are not and will not be able to manage insurance decisions and financial responsibilities on their own. They may include the mentally handicapped, the truly disabled, and elderly citizens who grew up expecting the system to provide for them. They may be physically able and need only a little assistance because they work in noble and necessary professions like teaching, food services, low-paying labor, and the arts-professions that tend do not pay extremely well.
Our neighbors’ ability to maintain their optimal health via wellness programs and health care services affects us, too. Think about the spread of communicable diseases like tuberculosis or bird flu. All the personal health insurance coverage and money in the world cannot protect us from acquiring disease if we are infected in a public location. Access to health care services is just as beneficial to society as access to education, and the value of educating the entire population in order to help our citizens become productive in some line of work is limitless. We can’t work if we don’t maintain at least some level of health. With a healthy population, we can continue to be leaders in innovation, production, and education, and maintain our country’s desirability to visiting and immigrating foreigners.
Taxes can be burdensome, but paying for health and education of our population as a whole is a good investment. When one sees what illness, crime, and lack of education does to a child, it can create some strong feelings of sadness. Government investments for health, safety and education are the solution to end the despair. Although America has its share of problems, we are still well off in many ways, and even the poorest of poor in this country have far better living standards that many other people in the world.
So do we really need to do anything? Yes. For your own edification, you might way want to review the 2005 reform paper, by Victor R. Fuchs and Ezekiel J. Emanuel as published in Health Affairs (Volume 24, Number 6, November/December 2005). The article cites several indicators that could cause additional pressure for health care reform. Reviewing their list along with where we are in 2008, positive indicators include:
- the continuance of a major war,
- a budding recession,
- large-scale unrest supporting a presidential campaign whose success can be largely credited to the promise of change,
- a national health crisis - we have a major problem with obesity,
- dissatisfaction with employment based insurance, and
- a financial crisis with Medicare (elucidated below).
Health care costs are the number one fiscal challenge to our economy, and to make matters worse, these costs are growing at a faster rate than our economy. The United States has a significant debt problem. As of December 31, 2007, our public debt exceeded $5 trillion, but that number is misleading. The Federal Government is able to borrow money from Social Security and other trust funds. This borrowing has a legal limit, but that limit was raised three times between 2004 and 2007. Such borrowing masks the road our fiscal policies are leading us down. In 2007, for instance, if you include the unseen debt created by borrowing from trust funds, our real debt was over $9 trillion. And that number still doesn’t include other obligations like the gap between what’s promised and what’s funded in Social Security and Medicare benefits, veterans’ health care and more. Adding those obligations, our national debt in present dollars is estimated at $53 trillion. It’s hard to imagine that amount of money so in January of 2008, the Government Accounting Office (GAO) Comptroller brought it home in his testimony before the U.S. Senate. To pay off the $53 trillion dollars we owe, he said, it would cost every household $455,000 or $175,000 per person, in 2008 dollars.
The GAO report (GAO-08-411T) recommends that any major health care reform effort:
- Provide universal access to basic and essential care services
- Impose limits on federal health care expenditures
- Implement national, evidence-based care practices standards / guidelines
- Require all Americans to assume more personal responsibility and accountability for their health
Other information from that same GAO report is worth noting here. The fact that many insured individuals are isolated from the true cost of their care is one problem. (It is impossible to change behavior when one is unaware of it.) Also notable is a study that attributes 27% of the health care costs increase from 1987 – 1998 is due to obesity. There is a higher rate of health care expenditures for obese patients.
The first step in reforming our health care system is acknowledging that we cannot do it all, and it will never be perfect, but we can do better. Many reform advocates believe it is possible to make some changes that would create better access to health care services, encourage more appropriate utilization of those services, and decrease some of the inequality we are experiencing today.
Definitions of Concepts and their Meanings
Universal coverage simply means that everyone has access to obtain health care insurance coverage. This is not the same as a single payer system. It is important to point out that these two concepts are very different. Universal coverage can offer Americans more choices in their health care insurance, health care providers, facilities, etc without being tied to a government-dictated delivery system.
If fully enabled, universal coverage would mean that every citizen has health care insurance to assist them in two ways:
- Access to care - (unisured people have a difficult time getting primary care services today)
- Payment for care - (the cost of care can be a financial challenge)
Universal health insurance coverage is a great goal and will get some of the patients using emergency rooms for their primary care back into physicians’ offices. This, however, does not address the fact that we are experiencing a shortage of primary care physicians, who we need in order to provide the care itself. (Association of American Medical Colleges report in 2006). If and when we obtain universal health insurance coverage, we still may not be able to have access to care services in a timely manner.
Quick Review of What We Have Today
For complete information about health insurance and how the various insurance types work, please see Chapter 1 where they are categorized and subcategorized at length. This is a very brief overview of what we have today, along with some of their associated problems.
| Employer Based Health Insurance* | Governmental (Federal and State) Health Insurance* | Self-insured or Not insured (Regarding Health Insurance) | |
| Problem # 1 | Disadvantage to employer for international competition | Medicare has been an open-ended entitlement verified by cost increases | Healthier population does not enter the risk pool |
| Problem # 2 | Administrative costs are not factored into total health care system costs | Costs are difficult to predict and control | Costs to purchase health insurance are higher when the risk pool is smaller |
| Problem # 3 | Distorts labor market decisions (employer hiring and employee job changes) | Adds incentives for extended visits and more expensive testing | HSAs are mostly tied to high deductible health plans (HDHP) |
| Problem # 4 | Job changes resulting in discontinued coverage can cause negative health outcomes | Medicare Part D (prescription drugs) alone will consume 7.5% of GDP by 2035 | HDHPs can create financial exposure for a low income family |
| Problem # 5 | Can be perceived as a greater (tax) subsidy for higher paid employees | Medicaid & SCHIP programs cause state financial pressures, moving funds from education and public safety to health care | Insurance paid for with post-tax dollars creates a financial inequality when compared to employer based insurance plans which are paid for without taxing to the subscribing member first |
| Problem # 6 | Limited choices for employees | Administration for means-testing is expensive |
(*Book source noted the employer based and governmental problems Victor R. Fuchs and Ezekiel J. Emanuel as published in Health Affairs, Volume 24, Number 6, November/December 2005)
Reform Options
For the purposes of this overview, the ideas presented are culled from the most debated discussions. Over the years, and especially in 2008, some of these ideas continue to morph, creating nuances of change. Several states, for example, have already taken action to encourage and/or mandate health care insurance coverage. Let’s look at the four major reform options being discussed at a national level.
The front-running national health care reform options include:
- Status Quo – no major changes
- Single Payer System – one governmental system that influences care choices and reimburses providers for that care
- Universal Coverage with Multiple Payers - Healthy Americans Act and the Vouchsafe voucher system, which feature significant government intervention and change
- Consumer-Driven Health Care – allowing market forces to drive and determine change, with minimal government intervention and change
To appreciate the details of these options, review a proposed immediate action item, and learn what you can can do in support of your own health, please continue reading Chapter 10.
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