Tuesday, March 20, 2012
The Complexities of Health Care
I’ve been concerned about the rising cost of Health Care for 10 years or more. One day our company sat us down and told us that our insurance company was merely an underwriter, and that they were paying the actual cost of our health care. Human Resources showed us examples of overcharging and mistakes on some employee's medical charges. They advised us to look over our detail billing and report any discrepancies. It really hit home when it became personal. About a year later, when I was thinking of retiring, Human Resources told us that existing retirees were the biggest drivers of our healthcare costs, and that they were considering increasing the cost of existing and future retiree’s premiums. I don't remember anyone complaining because we understood but lucky for us, they never followed through.
I am not an expert on health care but I am very interested on hearing varying opinions.I even have the entire Act on my iPad and several magazine articles on the subject.
Sunday night CNN's Fareed Zakaia hosted an excellent documentary about how other countries were dealing with their rising cost of health care. Fareed's guest was T.R. Reid, the author of " The Healing of America: a Global Quest for Better, Cheaper, and Fairer Healthcare." Mr. Reid found that government is more efficient at handling healthcare because their overhead is a low 5%, whereas private insurance companies hover around 20 to 25% because of advertising and other costs to satisfy their shareholders. He also said that healthcare is not an ideal product for the free- market because they cannot accurately forecast their costs for the next year. Later in the show, they showed how the free market could work, with conditions.
The fact is, 5% of the people in the United States account for 50% of our healthcare costs, so that information stuck out like a sore thumb. I saw an excellent example how one of the poorest cities in the nation, Camden, New Jersey, took that problem head on. They found out that 30% of the healthcare costs came from one area, so they concentrated on those people and now there are seeing their healthcare costs go down. They found that the average American will go to the doctor or hospital once or twice a year, but these people were averaging about 14 times a year, and one person went 435 times.
Unfortunately, politics wins over economics' in the fight for health care reform. For example, Switzerland had a problem similar to ours where people did not buy insurance and ended in emergency rooms; insurers were screening out people with preexisting conditions and their cost are raising fast. This conservative country barely passed an individual mandate and reformed their system to look like our current Affordable Health Act. Switzerland which has a population of 8 million, healthcare cost is 11% of GDP, and ours is 17% and rising. The country ranks higher than we do on the Heritage Foundation's Index of Economic Freedom. Their healthcare plans are not tied to employers, and their citizens can choose among endless companies and can change every year. The only drawback to that system is these citizens need to be aware of what they are buying.
By several measures, Taiwan has the best health care system in the world. About the time, the Clinton administration was trying to overhaul our healthcare care system. Taiwan sent their experts all over the world to study different plans. Taiwan is a strong free- market economy, but it decided to go with a single private insurer. It's basically a Medicare for all but with one private insurance company. They showed how a “smart card" allowed the insurance companies and government to see that actual cost in real time. Medicare takes about two years to reconcile their invoices with their payments, a reason fraud is prevalent Taiwan spends 7% of its GDP on health care and went from having 41% uninsured to just 8%.By comparison, their clinics stay open 11 hours a day and their doctors sees ~200 a day and gets paid $12 per patient, while their American counterparts get $100 per patient.
The Affordable Health Act is not perfect, but the fact remains we need to stop the rising cost of health care, and we need to insure as many people as possible. Conservatives say that regulations are an impediment in our efforts to compete globally, but they don't mention how companies spend tens of billions of dollars to provide health care to their employees and retirees, while Canada, Germany, Japan, and Great Britain spend next to nothing.
The Democrats lost the message war after they passed the Affordable Health Act, and they are still losing it. I just saw a poll where 52% thought that the Supreme Court had already struck down the individual mandate. The upcoming legal challenges against the individual mandate will be very interesting. Will the five Supreme Court judges appointed by Republican presidents make it partisan, thus angering the Democrats in an election year? Will the Supreme Court to go with the precedent and give broad powers to the “commerce clause" as they have in the past? It will be an interesting case because the Supreme Court might decide to split the issues and leave the Act in place.
I saw a Kaiser Poll yesterday that had 41% for the Affordable Health Act and 40% against and 19% not sure. I would like to know where you stand on the issue. Is it status quo,don’t know enough about the issue,whatever, or repeal the Act and why?
This is what I think. We won’t be able to go with one insurance company because that’s picking winners and losers, and we won’t go with a single- payer universal health care system, where it’s total government because the outcry of socialism will be so load we will all have to wear ear muffs. We won’t institute a system like the Cleveland and Mayo Clinic where the hospital gets a block grant for a procedure and then they divvy that up between the hospital,doctors and other employees.I do know this,we are a hybrid nation,so unless we get a complete domination by a party ,we are either going to have to improve the one we have or take a little from here and a little from there but we will still be saddled with rising costs.
Does the GOP alternative of individual Health Saving Accounts,buying across state lines do the trick? Will you be willing to give up not being turned down for pre existing illnesses or having your children on your policy until age 26?
I'm convinced that we will never do anything about the high rate of obesity or that we will come to grips that we are a older nation because we are a freedom loving people. If 30% of the people get all upset because the first lady mentions eating more veggies, I can’t expect for anyone to do anything about contributing factors.