Health Care Crisis in the US
Do we want a world in which only the wealthy can afford medical care?
Copyright © 2002 Dorian Scott Cole
The old formula of "employers providing health insurance" doesn't work in a nation where job security is only a haunting memory. Most businesses in this country are small to medium size, and the majority of US employees work for these small to medium size businesses. Most employees are not in grand corporations with gigantic benefits plans, and even large corporations now lay off regularly and indiscriminately. There is no such thing as job security with medical benefits, and someone needs to raise the curtain on this secret for the Democrats (and probably the unions). Similarly, someone needs to tell the Republicans that when people lose their jobs, they usually don't have wads of money stuffed in their pockets with which to purchase benefits. Partisan politicians have debated health coverage for years, and, locked into the ideologies of their great-great grandfather's day, they have no response except to veto anything that looks even remotely like health care improvement and run to the press screaming "Social Security is under attack," poisoning the public, especially the vulnerable.
We need to have a hard look at the effects of competition in the healthcare industry. Most insurance companies, because of competition, have steadily mutated the idea of insurance into a form of protection that is only for non-risk clients. Insurance companies don't like competition, and they especially don't like risk, the very thing they were invented for. They don't want to take the risk of having to pay death benefits or health care expenses; they only want to collect premiums from those who are unlikely to need benefits. Many companies either won't insure those with preexisting conditions and those at risk, or they make the premiums exorbitantly high so insurance is out of reach for those who need it. Even companies now have to pay more to insure those the insurance companies feel are a greater risk. It gets worse. Health care insurers have for years routinely move into a market under some pretend name, issue enough small group policies to make some money, and then moved out, leaving those they had insured in the lurch, often with medical bills unpaid. Their pretend name is banned from the state, only to come back under another pretend name. It should be a national scandal.
The pharmaceutical companies are also struggling with competition. No one doubts the efficacy and benefit of most medicines. But competition and other factors have driven the pharmaceutical companies to advertise directly to consumers about medicines that require a great deal of medical sophistication and testing in order to prescribe. Advertising has definite benefits to some patients, and advertising is effective, but is advertising and product promotion the most cost-effective method for informing consumers? Pharmaceutical companies spend $16 Billion annually on promoting their products, and in a US population of 280 million, that's $53.00 for every man woman and child in the US. This is a highly inefficient way of doing a business that should be driven by pragmatic decisions. Direct to consumer advertising, which accounts for $2.5 billion of that spending, drives the consumer's price for some medicines to double, so that senior citizens and those with low incomes can't afford them. The highest priced drugs are targeted at the elderly. This is on top of skyrocketing medical costs that seniors can't afford. And the Baby-boom generation is rapidly over-inflating the roles of this group so that the problem is taking on enormous proportions. Partisan politicians hold hearings on pharmaceutical costs, but the problem and solutions don't fit into their ideology. Where is their cradle to grave corporate health plan again?
We have reached an impasse in the medical care field. Attempts to deal with rising medical costs have nearly been exhausted by the public and medical peripheral companies. Insurance company and managed care pressure has helped shorten hospital stays and eliminated unnecessary costs and procedures, but it is becoming widely recognized that managed care has reached the limit of its effectiveness. Pushing further in the managed care area leads to absurd results in care that reflect badly on a collective venture that already suffers from customer dissatisfaction over patient rights and care. Medicare won't pay for pharmaceuticals, the total financial outlay for which often matches the retired person's income, and Medicaid eligibility formulas also rule retired people out because they make "too much income." Only the legislature could write such a formula. The elderly often live to shuffle money from their limited income sources to the pharmaceutical companies. It is a bit of a different story ending than Soluent Green, but is being connected to a pharmaceutical company through a money-for-medicine exchange tube a better ending? (For those unfamiliar with the story Soluent Green, the dead were processed and fed as processed food bars to the unwitting living.)
Is there an end in site to rising medical costs? Not really. While similar high tech fields like electronics peaked in the 1980s after about twenty years of development, leading to fewer innovations and stabilization of costs, not so with medicine. We can't afford medicine now, and innovations in medicine will not peak for at least another twenty years. I have nothing against pharmaceutical, and other high tech medical companies, and expect that costly miracle technology after costly technology will continue to be researched and brought our way... but at what price?
Every year, each of us will have available to us improved medical care in the form of more medications, more biotech modifications, more testing, and more healthcare, but will we be able to afford any of it? We are soon approaching the choice of spending all of our resources on healthcare - and this still not being enough - or just dying at age 40 when our bodies start to deteriorate, or at any age when we need medical care that is beyond our reach. That choice is already here for many people, including the retired, the poor, the under-unemployed and the unemployed. This, by the way, while VA hospital facilities are empty from lack of demand and being shut down, and nurses can't make enough money to afford to stay in nursing, even if they love it.
Are we creating in our medical field a utopia for the select, where only a few wealthy, low-risk people can afford insurance and medical care? What is our philosophy... if you can't get a high paying job, then you are too useless to get medical care, so just die? Or alternately, owe your soul to the company store? Aging costs too much, so just die? If the medical industry, the people, and the news media can't bring about change, then the politicians must. But can politicians stop serving partisan ideologies? We should ask ourselves, "What kind of world are we creating for ourselves?"
Toward an answer - a number of things need to be addressed.
To adapt to the world that we create, we need to find effective ways to make the system work for us. Part of our world system is the idea of competition. We live in a very competitive world - this is the hallmark of the Western world and has become the dominant hallmark of the world. One downside is, competition drives corporations to find greater profits by doing things like parsing the market to insure lower risk groups... and we as stockholders demand this from corporations. Regulating actions like these through creating laws threatens to damage corporations and take away jobs and income security. Regulation is the last recourse.
The dilemma is, even though we as individuals may care very much that everyone has health insurance and adequate medical care, "competition" rides roughshod over anyone standing in the way, leaving the unprepared in the dust. Ideally we individuals who make up the competitive world would force the insurance and medical industry to address this issue. In some ways we do. Hospitals and the counties that they are in typically won't turn anyone away and do "write off" a large number of medical treatments each year. In reality, these "free" treatments simply inflate the medical bills of the insured and paying individuals. This is one reason why hospital medical costs are so high, such as $10.00 for an aspirin. Caring people have adapted. However, those who need medical care but are unwilling to burden the system without paying, simply do without medical care.
Why are people unprepared for medical expenses? Many who work for companies that provide medical benefits, rely on the company to provide them. When their job ends, which is another hallmark of a competitive world, their insurance ends. If they manage to scrape together some income they can continue their company insurance through COBRA. But chances are, they will have more pressing needs for their money, like keeping food on the table, a roof over their heads, their transportation going, their children in school, and paying inevitable late charges on their bills and vehicle tags, so medical coverage ceases. Two very bad things can now happen. If the person develops a medical need, he has no way to pay for it. If the person develops a medical condition, he may no longer be able to cover that condition or even get insurance. He may be faced with either living with the condition untreated or having extensive medical bills that turn his dreams to tears. Yet the person whose job didn't end faces no such problems. We are overly dependent on undependable jobs for medical benefits, and this needs to be addressed.
Another reason why many people are unprepared for medical expenses is that they don't work in jobs that provide them. Those jobs typically don't pay enough so that people can purchase medical insurance. And people take risks - having a medical need seems far removed from the immediate future for most people - so they sacrifice insurance to be able to afford other necessary things. By nature, people take risks that they shouldn't, and this needs to be addressed.
A third reason why people are unprepared for medical expenses is that there are two very different worlds that collide. The medical system is in league with the insurance system, and anyone out of that exclusive circle won't be able to afford it. Medical procedures and insurance coverage advance in lock step. The medical system is set up for those who are insured, and powerful forces within the system are unlikely to lower their own compensation to extend medical care to those less fortunate. The entire medical industry is like an exclusive club for which many simply can't afford the dues. Those who are locked out of the medical insurance are unlikely to ever be able to afford medical services, and this needs to be addressed.
Medical coverage should not be something that people lose whenever their fortunes turn, and getting medical care for most conditions should not force people into a lifetime of slavery. No civilized society would honor these negatives as values.
How then can we devise a system in which we get around the continual exclusion of benefits for any risk factors by the insurance industry; how can we make insurance portable so that it is no longer attached to a perishable job; how can we make it so uninsured individuals can afford insurance and will purchase it; how can we make it so the medical and insurance systems don't spin out of control leaving the individual behind; and how can we devise a system that will provide medical care to any person in need without creating a government sponsored financial disaster for the entire US?
One potential way is to insist that every person pay for some form of comprehensive medical insurance, and make certain that everyone has available to them a way to pay. So comprehensive medical insurance, without restrictions, must be made available to everyone, and, following the tax plan of negative taxation to those who are below a certain level and with children, medical insurance would be paid for those who fall below that same level. Those who want a completely portable plan would be able to purchase it through the tax system just like social security, and would always have the option of being in this plan. Those who prefer a plan supported by their employer or an independent plan, would have the option of directing their contribution to that plan, and paying the excess. Those coming off of preferred plans where they have had the benefit of paying premiums for miminum risk, would have a steeper rate to pay when joining the government supported plan, to keep things equitable. Private insurance companies would provide coverage at typical rates, not the government, and choice of medical provider would be maintained, and the typical 80% benefit would be maintained. This would prevent slipping into government sponsored health care facilities.
The cost of such a program? What is the current cost of human misery, death, broken dreams, and an old age of exchanging all of your income for medicine? That is the real cost that we somehow shove under the carpet.
How can requiring everyone to have medical insurance be justified? Illness, medical conditions, and accidents strike every person walking the face of the earth without warning. No one can pretend to be risk free. Medical need is as predictable as aging and the need for Social Security. Additionally, government sponsored programs like Medicare and Medicaid could be folded into such a system, and even government sponsored but company paid programs like Workmans Compensation could be folded in, reducing the cost of administration of all of these programs and making them all more flexible.
Another question we need to look at is, "Is every institution and service in the world benefited by competition? Or are we being blinded by propaganda about the 'competition' ideology?" The recent deregulation of natural gas in some states has caused price increases rather than promised decreases, and re-regulation is being considered. Perhaps the medical field is not much different.