Fix Health Care To Fix Our Economy

Here's a riddle. It's a two-parter. How is it that the United States spends much more on health care than any other country in the world but still leaves 46 million Americans uninsured? And how is it all other developed countries provide health coverage to every citizen and still spend so much less? The answer's in the riddle. Other countries spend less because they provide coverage to everyone.

The budget hawks in Congress would be wise to remember this riddle when they listen to President Obama give his budget address before a joint session of Congress next week. We expect the President will call for a major investment in health care, including guaranteeing affordable coverage for every American. He is almost certain to repeat, as he has done numerous times before and after the election, that we cannot solve our long-term economic problems unless we fix our health care system too.

President Obama's budget release will be the first formal step in the legislative dance that the President hopes will result in the passage of health care reform - including quality, affordable coverage for all - by the end of 2009. While opponents of reform will use every argument in their arsenal, one of the biggest obstacles will be Congressional reluctance to make any upfront investment that would add to the federal budget deficit in the short term.

However, leading economists and policy experts agree that the only way to bring health care costs under control is to make big, comprehensive changes. We need to shift the focus of our health care system from maximizing revenue for health care providers and insurers to maximizing the health status of Americans.

There are a host of reasons we spend so much more on health care than other developed nations while lagging woefully behind on quality of care. The tens of millions without coverage and the tens of millions with inadequate coverage - including high out-of-pocket costs - don't get preventive care and delay treatment at the first signs of illness. They then end up in the system later when they're much sicker, and treating them is more expensive. Our private health insurers spend huge sums of money trying to avoid covering people who are sick (and costly) and trying to get out of paying claims. This translates into high administrative costs for insurers, doctors, and hospitals while individuals are hounded by bill collectors. Drug companies and medical-device manufacturers push doctors into prescribing expensive new drugs and using the latest pieces of equipment without any evidence that these new treatments are better or more effective. Doctors have financial incentives to prescribe more care even if it's not necessarily better care. And hospitals are driven to offer more lucrative services than necessary services in any given community.

For each of these cost drivers, there is a major special interest that is making major money off our health care system. You better believe they will do everything in their power to resist change. As President Obama said on the campaign trail, "[W]e are tired of watching as year after year, candidates offer up detailed health care plans with great fanfare and promise, only to see them crushed under the weight of Washington politics and drug and insurance lobbying once the campaign is over."

The fact remains though, as the President said again last week, "[T]here are some people who are making the argument that, well, you can't do anything about health care because the economy comes first. They don't understand that health care is the biggest component of our economy and, when it's broken, that affects everything." Too many of these naysayers are members of Congress who see only short term deficit figures and fail to grasp the unparalleled long-term impact comprehensive health care reform will have on our economy and the federal budget.

The sooner we act the better. As long as health care costs far outstrip inflation and other economic growth, the health care system will eat up a bigger and bigger share of the nation's income, continuing to place huge financial stress on our families, our businesses, and our government.

The President and Congress already took some steps toward controlling costs in the Economic Recovery Act, including investing in electronic medical records and investing in research to find out which treatments work best compared to others.

But there's a whole lot more to be done, and it's not hard to figure out what that is. We need to cover everyone with benefits that meet health care needs from prevention through chronic care. We need to remove financial barriers that stop people from getting care early. And we must provide people the choice of a public health insurance plan as an alternative to private health insurance, especially since there is a large and growing body of evidence demonstrating that public health insurance plans do a much better job of controlling costs than private insurance. Each of these proposals is included in President Obama's health care plan.

The hardest part of health care reform is actually going to be countering the fear-mongering about change. The interests that profit off our current system are already starting to fight. So are frenzied ideologues who think government involvement in health reform is a bad thing. We need to remind them that our government exists to work for the people it represents, and letting private insurers continue to run amok and milk the system without rules or oversight is just plain foolish.

At the end of the day the fact remains that if we are to have a healthy economy, we need to provide good, affordable health care coverage to everyone in a system based on promoting health not maximizing profit. Solving that political riddle in 2009 will be one of President Obama's greatest political challenges and triumphs.

Comments

[Brandon Broze]

Why in the world would more government spending reduce costs when the private market itself spends a lot? I don't get that logic. And it probably isn't even true. Obama's decrying the rising costs of health care and spending as a percentage of GDP, yet he wants to tell me that somehow, some way, in the Twilight Zone, if the government increases spending, it will "reduce" costs?? No, I'm sorry, but that's just not realistic. Better management of costs will reduce them, not simply throwing more money at the problem.

I mean, look how "well" we've done with public schooling. We throw more money at the problem year after year, yet we get less results. Areas that introduced choice and competition into the system have seen significant improvements. And yet some in this country actually wanna reduce choice for patients by giving it all the government. You want to reduce MY freedom and spend MY tax dollars for your silly pet project of nationalization.

[FaceReality2]

National health insurance will reduce choice?

"The French can see any doctor or specialist they want, at any time they want, as many times as they want, no referrals or permissions needed. The French hospital system is similarly open. About 65 percent of the nation's hospital beds are public, but individuals can seek care at any hospital they want, public or private, and receive the same reimbursement rate no matter its status. Given all this, the French utilize more care than Americans do, averaging six physician visits a year to our 2.8, and they spend more time in the hospital as well. Yet they still manage to spend half per capita than we do, largely due to lower prices and a focus on preventive care."

National health insurance will increase costs? The private insurance industry costs us 31% of every health care dollar in administrative costs (there is a billing clerk for every bed at Duke Hospital--900) whereas the administrative costs for a single payer system are 3%. We spend twice as much per capita on health care than any other industrialized country and don't even cover everyone. This is an efficient system?

Competition in health insurance does not result in lower costs--quite the opposite. The facts don't always fit with ideology.

See Paying for National Health Insurance and Not Getting It:

http://www.pnhp.org/publications/payingnotgetting.pdf

Re administrative costs see:

http://www.pnhp.org/publications/nejmadmin.pdf

[Brandon Broze]

Anyone who actually favors national healthcare or expanding the size of gov't to cover more people really needs to get a clue. If the private market has done as badly as you claim and can't manage costs efficiently and provide care, why would you assume the government can do any better? I'm sorry, but it does not add up, and it just is not true. Sure, in NHS countries, your healthcare is free, but things aren't necessarily better. Can't you guys come up with something other than just "expand the size of government" as a method of reducing costs and fixing the system? I swear, you guys are like children.

"I want my benefits! I want free health care! I want childcare for my kid! I want maternity leave so I don't have to leave and get paid for not working just because I had a kid. I want free food! I want free tuition!" Seriously, when does it end? How much government spending on the failed welfare state is enough?? I'm sorry, but healthcare is in no way a right. Just as education is not a right, nor are childcare, maternity leave, vacation days from work, food, or housing. Get used to it. Just because you can't afford something doesn't mean it's a "right." You have rights to life, liberty and the PURSUIT of happiness. It doesn't say you have a right to mooch off my tax dollars for happiness.

[Brandon Broze]

How about being skeptical of government for once? You welfare liberals are always decrying corporate power but say nothing about the negative effects of GOVERNMENT power. You just assume we all love government and the nanny state. Well, I don't! I don't care for my government spending my money on other individuals as redistribution. Call me selfish, I don't care. But I have a right not to have my tax dollars be taken from my paycheck or sales or wherever just so that bureaucrats and Congressmen can send it to someone else for their livelihood, rather than legitimate government programs.

You people really don't have a clue, do you? John Goodman did a big all-encompassing report called "20 Myths about National Healthcare" that you should read. It really blows away the misconceptions. All is not well in nations with nationalized healthcare.

Remember, as economists always say, there ain't no such thing as a free lunch. Universal healthcare results in higher taxes, more spending (despite the claims by this idiot writer), rationing of healthcare, less prescription drug variety, waiting lists, and so much more. Here in the US if you need surgery, you can usually get it pretty quickly. We shouldn't screw up our system and give it over to bureaucrats just because a relative few can't afford it. That's just asinine and hurts the rest of us who are currently insured who would have to live under that nonsensical system.

[Brandon Broze]

Well, well. This is not surprising. A liberal rag that repeats the tired old line that we need to expand the size of government and put MORE public money into the healthcare system, when we already have spent so much, and it really hasn't done a whole lot in the grand scheme of things. I mean, why not just expand the eligibility for Medicaid, if you're gonna spend more money on healthcare coverage? Why create a whole bunch of new programs and regulations?

After all, that's what this whole debate is about: coverage. There are (allegedly, though not really) 47 million uninsured. But that leaves 253 million who ARE insured. I'd say the capitalist healthcare system has done pretty well being able to insure 85% of the country. Yet you idiots only focus on the 15% that don't have it and say nonsense like claiming we have a "broken" healthcare system. Sure, there are flaws, like with any system, but simply socializing the system or increasing the red tape is certainly not gonna do us a lick of good.

In fact, it's primarily regulations that drive up insurance costs! When you force insurers to cover every treatment and drug imaginable, that's a lot of cost that has to be made up in the form of premiums. Hello?? Does this get through to you guys? Or do you just assume healthcare is somehow a "naturally" expensive industry whose costs cannot be lowered by anyone except government?

[freshnotbitter]

What's beginning to worry me most is the popular political theory these days that we must not do anything because the ecomony comes first. Health care is the economy. Actually it is the only part of the economic pie in which there is growth because we keep discovering new things to do with diseases so there is new demand for services every day. So why not fuel the growth with more dollars, i.e., covering the uncovered? Are we to believe it makes more sense to give the money to the auto industry which is reducing the production of cars? I think a lot of people have this whole problem backwards.

[hellenist]

Hey all you one payer planners. Here's a fact i would love to see someone explain. When Medicare was started, way back in the early LSD days of the early 1965 it was projected to cost by the mid 90s (projected by the government mind you, not some wack-job think tank) to by 9 billion dollars, instead it ACTUALLY turned out to be over 100 billion. 11 times more.

That's like contracting for a $200,000 home and, after moving in, getting the bill and being told the construction costs ran "a little over," so the bill is really $1,1 million. OUCH

Yeah I want the government to limit competition and become the sole provider.

sure

[FaceReality2]

You jump to conclusions, hellen. You assume that because health care costs have risen precipitously, it is because of government inefficiency. Quite the opposite. Our private insurance system is the most inefficient system in the world. It takes 31 cents of every health care dollar and adds no value at all. Every other industrialized country spends half or less than half than we do, covers everyone, and has better health outcomes. Educate yourself and stop getting all your opinions from Rush Limbaugh. See:

http://www.nybooks.com/articles/18802

"The French can see any doctor or specialist they want, at any time they want, as many times as they want, no referrals or permissions needed. The French hospital system is similarly open. Given all this, the French utilize more care than Americans do, averaging six physician visits a year to our 2.8, and they spend more time in the hospital as well. Yet they still manage to spend half per capita than we do, largely due to lower prices and a focus on preventive care."

Sounds like a nightmare, doesn't it?

". . . the wait times are largely hype. A 2003 study found that the median wait time for elective surgeries in Canada was a little more than four weeks, while diagnostic tests took about three (with no wait times to speak of for emergency surgeries)."

[healthnutz]

medicare and private insurance cost so much for many reasons, not just administration costs. For one, we are not exactly a healthy nation. We have no culture of healthy habits, we can expect to be sick. Also, we know we can't cure diseases but we treat these people over and over again at an extraordinary cost. New, expensive tests and devices get ordered more than necessary, which don't cure diseases, and costs add up. Also, we treat everybody, mandated by government, which means needless tests even when nothings really wrong. those who come here illegally and expect what everybody else gets. Don't get me wrong, I truly feel we have the best healthcare in the world. In all honesty, where in the world can an illegal from mexico without a dime in his pocket come into the er at a hospital and the next day be getting open heart surgery? When you have endless demand for healthcare in a country full of very sick people and insurance is paying with a blank check
in a market-based, profit driven healthcare industry, of course your doctor is going to come up with all kinds of ways to help you. Every test, operation, consult he does for you makes him more money, but might not help you live longer.

[MDCambridge]

There should be no profit motive in health care: it is not a market economy that is self-regulated by supply and demand! If it were, drug companies would not be able to increase the price of their drugs without demand going down. The AMA would not and should not have control of the number of doctors being graduated from medical schools.

Changing the model from a free-market system to a universal health system will eliminate the middle profit-taking insurance companies that compromise the quality of health care by being an economic drain on the system and serving no real purpose other than to reduce the number of people covered for the sake of shareholders.

The solution must be more systemic than insurance coverage; otherwise, you are fixing a leaking roof by just getting a bigger bucket.

[hellenist]

Nor should their be any profit motive in the food procurement industry, or the electricity industry, or the gas and water industry, or the car industry or the clothing industry.

We should all expect the goodwill of our brothers and sisters to bring us our food, clothing, electricity, gas and water. That would be so much better than that nasty profit motive. But I need to go now, I am going to work, for profit, because i don't really like to give my time away for free. See you later--in the USSR

pr

[FaceReality2]

Yeah, and let everybody hire their police and fire protection too. Get rid of the public school system too.

BTW, Texas deregulated electric utilities, and now Texans pay the highest rates in the nation. Competition sure brought down prices, didn't it?

The belief that the private sector can always provide services more efficiently than the local, state or federal government persists in the minds of the wingnuts in spite of the evidence to the contrary. It is like a religious belief.

[MossyOak]

One of the biggest culprits in the health care crisis is over-prescribing medications. Doctors are often nothing more than drug salesmen, programmed in medical school to learn which drugs to prescribe instead of how to cure. So many of the drugs people take are not only unnecessary, they are actually intended to create other problems down the road. Some things like high blood pressure and cholesterol can easily be controlled by diet and other methods, but doctors always push the pill solution because it's easier. It takes too long to inform but only a second to write a script.... plus there's that free trip to Hawaii for meeting sales quotas. I've actually attended a dinner hosted by a drug company where they tell doctors... "Sell X amount of The Purple Pill and we'll send you and the wife to Hawaii." And who picks up the tab? Not the insurance companies. Reigning in the drug companies has to be a major arm of any plan.

[jimjaf]

There is no evidence -- NONE -- that other countries spend less on health because they insure everyone. They do spend less, for various reasons, including barring certain procedures, tests and drugs that are, rightly or wrongly, readily available to many Americans, paying providers less and, yes, saving a bit on administrative expenses.

The idea that covering all will somehow lower either the cost per person or the total national health bill would appear to be untrue. In any event, there's no evidence to document it.

[MossyOak]

Sorry, that's not true. In any insurance, whether auto, health, home... the larger the risk pool, the cheaper the premium. These risk tables are available everywhere within insurance companies. Adding 50 million people to the pool alone will bring the costs down. Insurers have gotten away with being allowed to only cover people they want to, leaving those 50 million in the dust. Every one of those uninsured people who needs medical care are what's making your premium go up.

Also countries that provide health care do so in a not-for-profit manner. Where do you think the $100 billion profits accrued by health insurances companies came from? Your pocket.

[jimjaf]

well, wait a minute here, I'm confused. my costs are higher because I'm paying for care given to the uninsured? so they're getting the care they need and the problem is that they're not paying for it? I had thought the problem was that the uninsured were being denied needed care. guess I got it wrong.

so if they buy insurance, increasing the total amount spent, my premium will go down to reflect the fact that they're paying their own way. and the total profit to the insurance company will rise because they're selling more policies.

on the other hand, the adverse selection question suggests that it will cost more to insure those who now lack coverage than those who already have it because we know that they're sicker. enlarging the pool by putting sicker people into it seems like an odd strategy to lower costs. guess the logic's too sophisticated for me.

[cam]

You should read this article: http://www.dollarsandsense.org/archives/2008/0508harrison.html

"... Americans may well underestimate the degree to which they subsidize the current U.S. health care system out of their own pockets. And almost no one recognizes that even people without health insurance pay substantial sums into the system today. If more people understood the full size of the health care bill that they as individuals are already paying—and for a system that provides seriously inadequate care to millions of Americans—then the corporate opponents of a universal single-payer system might find it far more difficult to frighten the public about the costs of that system. In other words, to recognize the advantages of a single-payer system, we have to understand how the United States funds health care and health research and how much it actually costs us today."

[maxfax]

"At the end of the day the fact remains that if we are to have a healthy economy, we need to provide good, affordable health care coverage to everyone in a system based on promoting health not maximizing profit."

Agreed 100%. The only problem, Republican obstructionists are not keen on the everyone covered concept versus the profit based one. In fact they're diametrically opposed to "coverage to everyone."

Sad, huh?

[greyhound2]

Why is fixing health care such a mystery when there are 36 countries which do a BETTER JOB at sometimes half the cost than the US. Why not look at the many, many examples available and pick and choose the best from each. There are many people who want to talk and discuss how to fix the system on and on when so many examples are already available. Why do people insist on reinventing the wheel?

[rbuck]

Regarding private insurance and "choice" of doctors. Private insurance profits by reaching exclusive agreements with a pool of doctors (usually). This pool of doctors becomes your network, and usually your only options for treatment. The doctors who benefit from these captive patients then agree to charge lower rates to the insurance company. Unless you are wealthy and paying for your own services someone is managing your care. If there was a single payer system there would not be a need for "networks" and you would be able to locate and use the most qualified doctors versus only the ones in the network.

To the point about medical devices and drug companies. While it is true that bringing a drug to the market is expensive, it is important to look at expensives individually. Lots of innovations would not be possible without research from public universities and the NIH. These private companies are able to use this public research to begin developing drugs for private companies.

[LeighAnnes]

I was wrong. The U. S. is 37th on the ranking:
1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain
8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands
18 United Kingdom
19 Ireland
20 Switzerland
21 Belgium
22 Colombia
23 Sweden
24 Cyprus
25 Germany
26 Saudi Arabia
27 United Arab Emirates
28 Israel
29 Morocco
30 Canada
31 Finland
32 Australia
33 Chile
34 Denmark
35 Dominica
36 Costa Rica
37 United States of America

[historymatters]

"Our private health insurers spend huge sums of money trying to avoid covering people who are sick (and costly) and trying to get out of paying claims. This translates into high administrative costs for insurers, doctors, and hospitals while individuals are hounded by bill collectors."

I think this sums up a huge part of the problem. Health insurance companies broke their contracts with their customers. You should be able to expect that if you pay your premiums and go to the doctor within their network, then your health care will be covered. But they're like all insurance companies, they'll do whatever it takes not to pay what's owed so they can keep more money for themselves. Our current health care system is an example of how, once again, the so-called "free market" with (at best) lax government enforcement of minimal standards is a complete failure, especially when it comes to vital, basic needs.

[LeighAnnes]

The entire concept of "health insurance" is uncivilized. Sick people have the right to health care. Period.

[SharlyFarley]

Even better: I put to you a case of a young couple, both employed, and receiving health insurance through their jobs. They have no credit card debt. They buy a foreclosed house for $70,000. He gets sick, and loses his job because he's had too many days off. He gets sicker. She struggles, but still covers the mortgage - just not most of his bills. He goes to the ER a lot. She collapses and loses her job. Loses health care, gets sicker. House is foreclosed on, car is repossessed. True story. They're living at my house because I love 'em. Neither can work, she's on disability, he's still trying for it. Meanwhile, I'm having a tough time getting them treated because doctors don't see uninsured patients. Some do, so it's going on my credit card. You can see where this is headed...Had they had decent health care to start with, they wouldn't be dependents, and they'd still be living in their own house. Those people who think health care for all is a luxury are idiots.

[Nomccain]

Americans have been duped by our own government for many years on this issue. The Insurance Industry in the country has paid billions of dollars to elected officials to keep universal health care off the agenda and swept under the rug. The reason, they, along with the drug companies and the AMA are making too damn much money to let us have one. That's a fact! I don't care for Michael Moore, but his documentary, "SICKO" clearly illustrates the corruption and hypocrisy of our government on this issue and will infuriate you if you have the guts to watch it. Universal Health care works well in Canada and in the UK and people are happy with it despite what the American politicians say. If you do your own research on this issue, you will discover that you've been lied to and deceived. As usual, the dimwitted Republicans see this as another giveaway program or socialism. Their way has worked well hasn't it?

[LeighAnnes]

The drug companies yes. The AMA not so much anymore. Most of the doctors I know are for a Universal Healthcare plan. I've also read many editorials in our local paper. I live in a small city with a big medical school.