America's Economic Future Requires Health Care Reform
Dr. Margaret Flowers
Maryland Commons
February 23, 2009
We are told reforming health care is impossible in tough economic times. However, it is not only possible, it is necessary for economic recovery.
Health care costs are rising 2.5 percent faster than the nation’s gross domestic product. At this rate, health care will consume as much as half of household income by 2018.
In a global economy, American businesses cannot compete when the cost of health care is so high. Does it make sense for the auto industry to spend more for health care than for steel?
The current situation is unsustainable; we must enact fundamental, comprehensive reform to create a system that works.
Let’s look at some of the reasons why Americans spend two to three times more for health care than other industrialized nations. These nations have better health outcomes with longer life expectancy, fewer infant and maternal deaths and fewer preventable deaths. Yet in America, we spend more.
- Private health insurance companies spend 31 percent of their dollars on administration, much of it to deny or restrict needed health care. In the private, investor-owned health insurance world, profits come before health care. As a result, from 2000 to 2004, the top 14 health insurance corporations in the United States had profits of 117 percent, greatly outstripping the 5 percent profits seen by the Standard & Poor’s 500 corporations. In contrast, public programs, such as Medicare, spend 3 percent on administration.
- Americans pay up to nine times more for medications because prices are not negotiated. Other industrialized nations use bulk purchasing to make medications affordable while allowing pharmaceutical companies to make healthy profits.
- Because of co-pays and deductibles, Americans often delay getting medical care early in an illness, when it is usually easier and less expensive to treat. Many wait so long that their illness becomes life-threatening.
- Americans do not get adequate preventive care. Even those with health insurance only receive about half of recommended preventive care. Prevention is the key to keeping people healthy and saving money.
How did this situation happen?
With health insurance tied to employment, the U.S. is unique. To attract and keep employees during World War II, when wages were fixed, employers offered extra benefits, such as health insurance. Around that time, other nations created health systems independent of employment.
In the 1980’s, Wall Street investors were trained to take on health care as a profit-making venture, thus causing the shift to viewing health care as a commodity and patients as consumers. Since then, health care costs have skyrocketed and the health of our society has plummeted.
The U.S. is ranked 37th in the world; Maryland, despite its wealth, is ranked 32nd in the nation for health outcomes.
Currently, when a person becomes seriously ill or injured and loses his or her job, health insurance is lost. This may mean dying from lack of care or suffering great financial hardship. If the goal of having health insurance is to get health care when it’s needed, the market approach has failed.
We need bold reform, not tinkering around the edges. The government must play a larger role, not to correct the market, but to remove medically necessary care from the market; it didn’t belong there in the first place. Access to health care is a public good. A healthy society is a productive society, and a productive society can turn the economy around.
Private health insurers function to finance health care. Instead of trying to regulate private insurers, which is costly, the most efficient way to finance health care is to use a single public payer, such as Medicare. Medicare for all would pay health care providers directly and providers would remain the same. A single public payer would save around $400 billion per year in administrative costs and allow bulk purchasing of medications, further reducing costs.
Did I say remove health care from the market? Yes, that is, for medically necessary care. Private insurers would still provide supplemental plans for the rest, such as elective surgery.
There are more reasons why using a single public payer is better. The existence of hundreds of different insurers and plans costs the average doctor’s office 20 percent of its overhead for paperwork. And private insurers undermine the integrity of the physician-patient relationship by refusing to pay for care, essentially practicing without a medical license. This is causing physicians to go into “boutique practices,” or leave clinical medicine altogether.
Maryland has a serious physician shortage. Insurers also restrict where patients can go, charging more if the patient goes “out of network.” Under a single public payer, patients would choose their health care provider without penalty, leading to healthy competition among providers.
For businesses, many of which are crushed by health care costs, removing this burden would allow wage increases and the hiring of more employees. There would be less incentive for American businesses to move offshore, where health care costs are lower, such as Europe or Canada.
There is a state bill called the Maryland Health Security Act (HB 1186, SB 881) and a national resolution called HR 676. Both would create a health system based on a single public payer. To learn more or become involved, go to www.mdsinglepayer.org and www.guaranteedhealthcare4all.org
It is time to set aside ideology and enact health care reform to provide everyone with continuous access to health care from birth to death, simply and less expensively. This is what a civilized society does.