American Healthcare

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The following is a summary of information on the U.S. healthcare system. Much of which compares the US system to the British or Canadian healthcare system, also known as the Beverige model and other forms of healthcare systems, for example, the Bismarck model found in countries like France, Germany, the Netherlands, Switzerland and Japan. Some sources of information regarding healthcare: The World Health Organization: which tracks almost every imaginable sort of data about healthcare around the world. One of the numbers it records is the percentage of healthcare spending in each country. The National Institutes of Health: part of Health and Human Services and is the primary government agency responsible for health related research and information. The National Bureau of Economic Research: a private, unbiased, nonprofit economic research organization. NBER focuses almost exclusively on the American economies. The Government Accountability Office (GAO): the unbiased audit, evaluation and investigative arm of Congress. In addition; the Congressional Budget office, American Enterprise Institute, Urban Institute and the National Coalition on Healthcare and various book authors such as; Neil Boortz, Scott Bittle, David Cay Johnston, Wendell Potter, Journalist from Rolling stone, the Washington Post, New Republic and US News.

Here are a few statistics on the subject of healthcare: the richest country in the world, the USA, ranks 37th in quality and FAIRNESS of healthcare around the world, just behind Costa Rica, and slightly ahead of Slovenia and Cuba. The area we ranked the highest is in cost. The US spends approx. 17% of GDP on healthcare costs. Canada spends under 10% and Britain less than 9%. “Socialized medicine” may be the boogey-man in the closet but in practice Americans rather like government-run medicine. The U.S. Dept of Veterans Affairs is one of the world’s purest models of socialized medicine. And Medicare covers 44 million elderly and disabled Americans. Both these programs consistently rate enormously popular with the people who use them.

Our current healthcare system already limits a patients choice of hospitals, doctors and treatments. We already experience waiting lists as long as most other industrial countries and rationing of care. Furthermore, we pay an average of 20% of our healthcare expenditures towards administrative costs. If we do nothing our current out-of-pocket employer-based healthcare costs will certainly become unsustainable with-in the coming decade.

The Affordable Care Act (Obamacare) is not the Beverige model found in Britain or Canada. It is closer to a hybrid of our current fragmented system of healthcare and the Bismarck model which shares public and private services without the complex, overlapping and often conflicting payment systems for different subsets of the population and without our dependence on for-profit healthcare. We can’t simply tinker at the edges of our current system, although, a complete overhaul is also not needed. some elements of our healthcare system work very well. Like the education and training of medical professionals, and our state of the art medical research. The U.S. does extremely well when it comes to providing healthcare but we fall far short when it comes to financing that same care.

Basically it comes down to fairness and finances. The ACA runs the risk of becoming diluted due to the political right wing and the insurance industry.

Those on the right who continue to obstruct healthcare reform and sacrifice the greater good via fear tactics and misinformation in an attempt to maintain the status quo and corporate profits cannot and should not be appeased. The reform plan is aimed at those who fall through the cracks…. the uninsured and under insured….not those of us currently on an employer based healthcare plan or a government run healthcare plan. This segment of the American populace suffers devastating losses due to healthcare issues. As just ONE example…. seven hundred THOUSAND people enter foreclosure each year due to lack of or loss of adequate healthcare. The reform plan will not deny hip replacements or medication or deny treatments or create death panels. In some countries….like Britain that system does at times deny some treatments. Unfortunately that is the ONLY example the insurance industry wants us to compare. The reform plan is not modeled after the Beverige model…. although, as I mentioned our VA and Medicare plans are an exact replica of the Beverige model. The reform plan in no way duplicates this. When it comes to Americans adopting healthcare reform, almost any model would be an improvement on our current Out-of-pocket employer-based healthcare system.

The Bismarck model is a better system than the Beverige in many ways, most importantly, the ACA is not intended to replace our system….just to compliment it by providing affordable insurance to those who are uninsured or underinsured. For the sake of discussion, the Beverige model and Bismarck are LESS EXPENSIVE systems. We spend about 17% of GDP on our healthcare as compared to 10% and still LESS in some countries. And as I mentioned earlier, our administrative costs are 20% ….the highest administrative healthcare costs in the world. And the worse part is that in spite of this cost, our healthcare outcomes rank us far below other industrlised nations who spend significantly less AND are able to insure everyone. One thing remains certain, without some immediate attention this issue will surely become a financial nightmare for companies, individuals and entire industries in the decade to come. Same as the Medicare and Social Security issues which will require a straightforward, intelligent dialog to resolve. The angry rhetoric, misinformation and subsequent political obstruction from insurance special interests and right wing groups seeking to sacrifice the greater good for personal and financial gain serves no useful purpose. In the end, we pay a lot more, get a lot less, and still millions of Americans remain uninsured.

In many other countries citizens benefit from “health service” not health insurance, which in many cases still includes house calls. An over whelming majority who seek immediate medical care are treated that day or the next, which is also true in America. But other countries do not spend vast sums on reviewing claims for payment and billing, a deadweight drain on our economy. We wouldn’t consider police insurance, fire insurance or educational insurance. We pay taxes for these services. Much like a lifeguard, these are essential services for a civil society paid for by taxes. If our home were on fire we wouldn’t expect the fire department to check to determine if the policy was paid before putting out the fire at your house. Or if a child was caught in a rip tide we wouldn’t expect the lifeguard to see if the child’s parents had paid in advance before jumping in to save her. Or to determine if the coverage includes Tuesdays before noon when the sky is cloudy. But this is exactly what we do in our current healthcare system, because we use a business model instead of a service model.

Complex bureaucratic systems to approve or deny healthcare based upon subparagraph K of page 454 of a contract is uniquely American healthcare. Other countries do ration healthcare, as a matter of policy….. not profit. Furthermore, Each US health insurer strikes it’s own deals with health systems and each company has different ways of processing payments and reimbursements. The result is American hospitals and doctors employ teams of people to deal with the red tape. For what it’s worth, the stimulus bill included $19 billion dollars to assist with a national electronic medical records system. All this doesn’t even include the cost of marketing. The French for example pay almost nothing for marketing, American hospitals, health insurance companies and drug corporations spend over $30 billion a year on advertising and promotion. An enormous portion of healthcare dollars to encourage us to come back and spend MORE of our healthcare dollars. Here are a few stats: The percentage of GDP spent on healthcare costs by country is:

United States…17%

Switzerland……11%

Japan……………8%

France …………11%

Germany………10.7%

Canada…………9.8%

Sweden………..9.1%

Britain………….8.3%

Mexico………….6.5%

Taiwan…………6.2%

By the end of 2013…the US percentage is estimated to be 20%. As mentioned, the US healthcare system is an out-of-pocket employer-based-for profit system. Most Americans are covered by health insurance, Medicare or Medicaid and can get medical treatment at any given time. Yet more than 40 million Americans who are to young for Medicare and to well off for Medicaid go without health insurance. For these people medical care is mainly an out of pocket issue. Short of active labor or being on the verge of death the uninsured have to pay for their care and often cant afford to. In addition the uninsured don’t get early diagnosis of potentially fatal diseases like diabetes, high blood pressure, or cancer and are therefore more likely to suffer and die from these diseases if they are able to even get treatment. The typical comments suggesting charities and churches raise money and treatment funds for those who lack healthcare and are unfortunate enough to get a serious diagnosis, is simply not realistic. The annual number of cancer diagnosis alone is 1.5 million at an annual treatment cost of $ 93 billion dollars. The numbers available which reflect the percentage of the 1.5 million uninsured diagnosis would suggest to me that all the school bake sales and church coffee can collections in the world would not begin to address such an enormous personal financial burden and national health crisis. We need to get serious about the lack of affordable healthcare.

The real issue is that the US leads the world in healthcare spending. Unfortunately our outcomes do not reflect this cost at all. The reason our national healthcare costs are so much higher than any other country is the way we manage our healthcare system and the multi-layer complexity of our current employer-based model. As an example from the chart…the French spend about $3,165 per capita each year for a health system with significantly better outcomes in a system that still covers everyone. The US spends more than $7,000 with marginal outcomes and still leaves tens of millions without coverage. France spends about 11% of GDP on healthcare costs. The US spends almost double that. A study by Bank of America stated: If Americans could get our current healthcare costs down to the level of France…apx 10%…we would save about $600 BILLION annually. The US healthcare system, even with it’s built-in inefficiencies, with that savings alone, would meet the basic healthcare needs of ALL Americans who are currently uninsured. The NBER states: The US is the only country that relies on a profit based health insurance system to pay for essential and preventive care. Comparatively this remains the most expensive possible way to pay for a nations healthcare. All developed countries aside from the US have decided that basic health insurance remains a non-profit system. In those countries the insurance plans are sometimes run by government and sometimes by private entities….which exist only to pay individual medical bills, not to provide dividends for investors. Therefore eliminating the significant administrative costs and profit margins associated with this type of healthcare system. I understand that every organization, public or private, business or charity has administrative costs. But the US private healthcare industry has the highest admin costs of any other healthcare in the world….without equitable outcomes.

The W.H.O recently reported that the Out-of-pocket model of healthcare is generally found in poor countries. Although, as these poorer nations industrialize and move out of poverty they often use their new wealth to develop some kind of national healthcare system. The SEC has reported in their filings:                 Most for-profit insurance companies maintain a medical loss ratio of about 80%, which is to say that 20 cents of every dollar people pay in premiums for health insurance doesn’t buy ANY healthcare. When Arnold Schwartzenagger proposed health reform in Cailf in 2007…the opposition labeled it “ArnoldCare”          He included a requirement that health insurers spend at least 85 cents of every premium dollar on actual medical bills….the initiative was trounced as the boogey-man in the closet….”Socialism” and it never came to a vote. One area the US leads the world with regards to healthcare is medical training and education and research and development. But where we fall far short is the financing of that system. No other country in the world would dream of managing a healthcare system the way we do. Any reform that continues to rely on our fragmented structure of overlapping and conflicting payment systems for various sectors of our society and continues to remain with an employer-based, out-of-pocket, for-profit system will remain unsustainable.

Each year healthcare cost rise significantly and as a result the NBER reports employer-provided health insurance has risen 80-90 % since 2000.            Between 2003 and 2004 alone, premiums increased more than 11% while wages increased only 2.3%. Additionally, soaring healthcare premiums do more than increase the numbers of uninsured, It also contributes significantly to unemployment and pushes more full-time workers into part-time positions. The GAO reports that a 34% rise in premiums during the 1990’s contributed significantly, despite strong economic growth in the decade, to the number of uninsured which grew 3 percentage points to 15.7% of the population. Further suggesting the direct correlation of healthcare costs and spending to the current unsustainable American healthcare system.

This is the financial argument for healthcare reform. Once you look at the facts and not just the rhetoric there is little room to deny healthcare based upon costs. The other argument is the moral issue….very simple.. People have a right to basic healthcare…… the richest country in the world, the USA, ranks 37th in quality and FAIRNESS of healthcare around the world, just behind Costa Rica, and slightly ahead of Slovenia and Cuba. As Americans we should protect and ensure all citizens receive the basic requirements of life….food, clothing, shelter, constitutional protections, and basic healthcare. Individuals should not have to enter in bankruptcy due to a lack or inadequate healthcare, of which the U.S. Internal Revenue and factcheck.org estimates at 550,000 per year. Families should not loose their homes in foreclosure due to a lack of healthcare….of which the US Courts estimate the annual number of foreclosures to be one million plus. Their conservative estimates place healthcare related foreclosures over 500,000 per year. A rate that hovers around 50% conservatively.  Families and individuals should also not have to loose their healthcare with a job loss and uninsured individuals with catastrophic illness should not be denied potentially life saving early diagnosis and treatments due to a lack of health insurance.

Its time the Republican led Congress put an end to mock votes repealing the ACA….34 times and counting. Its time we as a nation begin to get serious about our healthcare and consider universal coverage for all our citizens.

 

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