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Our Health Care System is Killing Us

Our health care system is killing us financially.  We spend more on health care then any other country and have very little to show for it.  It is causing inefficiencies in the job market.  The system itself is incredibly inefficient.  So, why, with all these problems, can’t we reform our health care system?  Simple, because there is big big money in the health care industry.  Just check out this Fortune 500 List of Top Industries. This big money translates to big influence in Washington.  Take a look at how much money they are throwing around Washington: Link.  Over $167 million in the 2008 election cycle alone - the health care industry certainly expects some return on their money, mainly in the form of killing or incredibly weakening any health care reform proposals.

In 2006 we spent $2.1 trillion on health care.  That is $7,026 per capita.  Health care spending is expected to continue to grow more in the future (surprise, surprise).  The most frustrating thing is that we are spending the most money per capita and as a percentage of GDP than any other industrialized nation and what do we have to show for this spending:

1)  We have nearly 46 million people (and probably climbing with unemployment) uninsured.

2)  According to a performance study performed by the Commonwealth Fund, among 19 industrialized countries, the U.S. ranked 15th on “mortality from conditions amenable to health care,” or deaths before age 75 that are potentially preventable with timely, effective care..

3)  The infant mortality rate in the U.S. is 7.0 deaths per 1,000 live births, compared with 2.7 in the top three countries.

4)  Barely half of U.S. adults receive all recommended clinical screening tests and preventive care, according to national guidelines..

5)  A 2005 study by researchers at Harvard University found that that the average out-of-pocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses..

[For more on the level of health care quality check out this compilation of facts: Link]

Besides being incredibly costly, our health care system is creating inefficiencies in the job market and killing innovation.  People are reluctant to change jobs because of the fear of either losing health care coverage or having to pay more in health insurance.  The health care system is killing entrepreneurship and innovation.

Daunted by health-care costs, a would-be technology entrepreneur in Texas decides not to start her own business. A communications expert in Washington decides not to strike out on his own. And a freelance magazine editor in Brooklyn decides to take a less satisfying corporate job.

Don’t forget those people who want to retire early but can’t because they can’t afford private health insurance and they are not old enough for medicare (wait to age 65). 

Economists call this phenomenon “job lock,” and studies suggest that it keeps between 20 percent and 50 percent of workers from leaving their current jobs.

What proposals are floating around Washington?  Well, we have the following, but unfortunately for us one of them has been ruled out by our elected officials (who receive contributions for health care lobbyists):

1)  Public insurance plan option.  This would be a government-run public insurance system.  It would be similar to medicare and would provide an option to people who are currently uninsured or underinsured.  The theory is that it would compete with private health insurance companies.  But the “devil is in the details”.  The effectiveness of the public insurance plan option for us depends on how it is structured and that is the big issue in Washington.  Ezra Klein does a great job of breaking down the structuring options.

2)  Single Payer Health Care/Medicare for All.  This is far from “socialized medicine”. 

Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private.

Here are some of the key features of a Single Payer System (as proposed by Physicians for a National Health Plan):

• Universal, Comprehensive Coverage.     Only such coverage ensures access, avoids a two-class system, and minimizes expense
 
• No out-of-pocket payments.     Co-payments and deductibles are barriers to access, administratively unwieldy, and unnecessary for cost containment
 
• A single insurance plan in each region, administered by a public or quasi-public agency     A fragmentary payment system that entrusts private firms with administration ensures the waste of billions of dollars on useless paper pushing and profits. Private insurance duplicating public coverage fosters two-class care and drives up costs; such duplication should be prohibited
 
• Global operating budgets for hospitals, nursing homes, allowed group and staff model HMOs and other providers with separate allocation of capital funds.     Billing on a per-patient basis creates unnecessary administrative complexity and expense. A budget separate from operating expenses will be allowed for capital improvements
 
• Free Choice of Providers.     Patients should be free to seek care from any licensed health care provider, without financial incentives or penalties
 
• Public Accountability, Not Corporate Dictates.     The public has an absolute right to democratically set overall health policies and priorities, but medical decisions must be made by patients and providers rather than dictated from afar. Market mechanisms principally empower employers and insurance bureaucrats pursuing narrow financial interests
 
• Ban on For-Profit Health Care Providers.     Profit seeking inevitably distorts care and diverts resources from patients to investors
 
• Protection of the rights of health care and insurance workers.     A single-payer national health program would eliminate the jobs of hundreds of thousands of people who currently perform billing, advertising, eligibility determination, and other superfluous tasks.      These workers must be guaranteed retraining and placement in meaningful jobs.

This is just one proposal for Single Payer system.  There are plenty more out there but unfortunately for us this option has been essentially killed.  The battle that is left is how much will health care insurance industry lose: a lot or little.  If there is any correlation between money and influence in Washington, it looks like we will lose this battle.