A proposal for health care reform for the U. S.
By Dr. David L. Brown
Times Beacon Record, Long Island
January 16, 2009
I admitted a patient today who I previously took care of following a heart attack in July. He was discharged on the appropriate medications, which he took for a month until he lost his job and his health insurance. Without the medications, which he could no longer afford, he suffered another heart attack. Unfortunately he didn’t survive this one.
Although many Americans, President Bush among them, feel America has the best health care in the world, they couldn’t be more wrong. Health care systems are composed of three connected components — accessibility, quality and cost.
U.S. compared to other areas
In each of these areas, health care in the United States lags far behind the rest of the developed world. We have 45 million uninsured citizens and as many as 75 million under insured. Those numbers are rapidly increasing as the economy worsens. Contrary to common belief, the uninsured are not predominantly the homeless and the chronically unemployed. Rather 50 percent are employed and 25 percent are children. Only 5 percent are able to work but are unemployed.
These people are denied access to all but catastrophic care provided in overcrowded emergency rooms. It is estimated that 18,000 patients die annually from the lack of insurance. Sixty percent of the uninsured and 28 percent of the insured go without needed care because they cannot afford it. Half of all bankruptcies are caused by medical bills. Three quarters of those bankruptcies are among people with health insurance. As Martin Luther King Jr said, “of all the forms of inequality, injustice in health care is the most shocking and inhuman.”
In terms of objective measures of quality we must look at population-based statistics which reflects care delivered to the average American. I have no doubt that the quality of care we provide to the president at Bethesda Naval Hospital and the sheiks of Saudi Arabia at the Mayo Clinic is second to none. However, as a country we rank 34th in the world in life expectancy — just above Panama. Our infant mortality rate is 29th in the world — tying us with Slovakia and Poland. As a result of their limited access to quality health care, the poor have significantly reduced life expectancies and increased infant mortalities compared to the rest of the country — speaking to the injustice Dr. King addressed.
Yet despite our poor performance on these and many other measures of health care quality, the U.S. spends far more on health care than every other country in the world. We spend over 2 trillion dollars or 16 percent of our GDP. That works out to 7,000 dollars per person per year. Health care costs are increasing rapidly to the point it is projected that health care spending will increase to 20 percent of GDP by 2017. We already spend one third of every dollar raised in federal state and local taxes on health care, so further increases in spending are not sustainable.
We pay the highest health care taxes in the world. In fact, our current health care taxes amount to more than total health care spending in France, Canada and Britain. And the care in those countries, each of which has universal health care, is superior to ours by most measures of quality.
Vision for a new approach
To improve access, improve quality and control cost, we require a government funded universal health care system. Four principles shape the vision for a new approach to health care:
- Access to comprehensive health care is a human right. It is the responsibility of society through its government to ensure this right. Coverage should not be tied to employment.
- The right to choose and change one’s physician is fundamental to patient autonomy.
- Pursuit of corporate profit has no place in health care.
- In a democracy, the public should set health policies and budgets. Personal medical decisions must be made by patients and their doctors, not by corporate or government bureaucrats.
By universal care, I do not mean that all Americans have some form of insurance, but that all citizens have the same insurance that provides all necessary preventive care, out-patient care, hospital care, prescription drugs, dental care, mental health care and longterm care without co-pays or deductibles, which are barriers to access.
Many current proposals that provide for basic coverage for the poor and better coverage for those with more means create a two-tiered system of care that is unjust. Our country has already discarded “separate but equal” in education and we need to discard it in health care as well. Having everyone in the same system allows the cost of caring for the sickest who are intentionally excluded from private insurance to be spread over the greatest number of persons. Furthermore, keeping those with economic and political resources in the same system as the poor and disenfranchised will allow them to use their influence for the benefit of all.
Paying for such a system
How will we pay for such a system? We already pay enough for universal health care — we just don’t get it. In fact, we get significantly less for our money than people in many other industrialized countries. For example Canadians who live, on average, three years longer than Americans spend only $3,900 for universal care as compared to $7,000 per person per year in the U.S. for far from universal care. Although we hear a lot about waiting lines for care in Canada, Canadians utilize more hospital days, nursing home days, more out-patient visits and are prescribed more drugs per capita than Americans.
Because we pay for health care through a patchwork of private insurance companies, one third of our health care dollar or $2,300 per person per year goes to administrative costs and profits. Replacing private insurers with a national health program would save about $1,150 per person per year or $350 billion annually that is currently wasted on billing, marketing, underwriting and other activities that sustain insurers’ profit but divert resources from care. Combined with what we are already spending, this is more than enough to provide comprehensive coverage for everyone.
Removing profit from health care
If we agree that health care is a right, then for-profit entities have no place in the provision of an inherent right. Creation of a government financed health care system will eliminate the inherent conflict in having for-profit companies involved in health care. The fiduciary responsibility of a for-profit public company is to provide a profit to their shareholders — not to ensure the best health care for their customers. As Milton Friedman wrote: “few trends could undermine the foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money as possible.”
It is inherently obvious that in any health care insurance business, maximum profits can only be achieved by insuring (taking premiums from) the healthiest persons who are least likely to need care and constructing barriers to prevent having to pay for the expensive care of those who need it most-essentially, insuring the healthy. That kind of mercenary strategy has no place in a civilized health care system. In fact the United States is the only place in the world with a thriving for profit health insurance industry.
You may ask “can government run an industry more efficiently that for profit companies?” The answer is an unequivocal yes. The administrative overhead of Medicare or the Canadian health system is about 3 percent. It is at least four times higher than that in the private sector in the U.S.
Another reason to take profit out of health care is because it discourages preventive care. Thirty-one cents of every health care dollar is spend on hospital care while only 3 cents of every dollar is spent on prevention. As we all know, for-profit companies function on a maximal one-year time horizon. Thus, there is no incentive to spend on, or encourage, preventive care today which may not result in a benefit for 20 years. On top of that, in the current environment, people change health care coverage on average every two years. For-profit companies do not want to pay for prevention only to have a competitor company reap the benefit years later.
In addition to eliminating private insurance, for-profit investor owned hospitals, imaging centers, dialysis centers, nursing homes and the like would be banned. These entities have higher administrative costs, reduced expenditures on clinical staff to offset those costs and score lower on most measures of quality than their non-profit counterparts.
Opponents of universal care funded by the government claim that government bureaucrats (as opposed to corporate bureaucrats) will be making medical decisions. But the system is government financed, not government controlled. Individual decisions are left to the patient and doctor.
Proposed system
Private doctors would continue to be paid on a simplified fee schedule or could become salaried employees of hospitals or capitated groups. HMOs that only provide insurance would be phased out. Successful non-profit plans like Kaiser and Group Health would continue to exist but would be funded by the government. Medications would be purchased wholesale.
Quality would be improved by requiring adherence to evidence-based practice guidelines which are currently applied to only about half of patients in the U.S. Of interest, the highest adherence rate to guidelines is in the federally run Veterans Administration health system.
Ultimately, changing to a publicly financed system will save money but the initial transition will probably require revenue in excess of the health care costs currently borne by the government through taxes. Thus, a universal public system would be financed by retaining funds already collected for Medicare and Medicaid. The gap between the current public funding and what we would need would be financed by a payroll tax of 7 percent on employers and an income tax of 2 percent on individuals. The payroll tax would take the place of all other employers’ expenses for employees’ health care. The income tax would replace all current insurance premiums, co-pays, deductibles and other out-of-pocket payments. For most people a 2 percent tax would amount to less than what they currently pay. The 7 percent payroll tax is less than the 8.5 percent most large companies pay.
Furthermore, no employer would gain a competitive advantage over another because they scrimped on health care benefits. And health insurance would no longer be relevant at the bargaining table between employers and employees. Our businesses such as GM will become more competitive as less of the cost of health care has to be passed on to consumers. Health insurance costs add $1,525 to the price of every GM car made in the U.S. If the same car is made in Canada, health care costs add only $197 to each car. In fact Warren Buffett has said that GM is no longer an automobile manufacturer but rather a health benefits company that happens to make cars.
It is encouraging that President-elect Obama feels strongly that health care reform should be a national priority. However, his proposals for reform are piecemeal modifications of the existing dysfunctional systems. Similar reforms have failed to control costs or improve access when tried in several different states.
In conclusion, it is time for the United States to join the rest of the world and ensure universal health care. Having the government fund the program is the most just, equitable and practical solution.
Dr. David L. Brown is chief of cardiology at Stony Brook University Medical Center. The opinions of columnists are their own. They do not speak for the newspaper.