A system with ever-rising costs and ever-less protection:
- Premiums rise for all, but especially those with greatest need and often least ability to pay.
- Lack of affordable comprehensive coverage.
- Inadequate coverage can lead to inadequate treatment.
- Inadequate coverage can lead to bankruptcy.
- Interrupted coverage as well as no coverage can lead to bankruptcy.
- Coverage can be interrupted by the medical need itself.
- Health-care coverage related financial disaster can affect rich and poor alike. In fact, the middle class is far more likely than the poor to find itself bankrupted since the poor don't have enough to face bankruptcy. Medical expenses can be so high they overwhelm the rich as well.
Currently, rather than absorbing many of these rising costs in their coverageinsurance companies and employers shift them onto the consumer and the government. They are not contained. This is called cost-shifting. Consumers see this in
- Increased copays, deductibles.
- Corporation cancellation of retirement coverage leading to increased burden for individuals, Medicare.
- Excluding increasng numbers of conditions from coverage meaning individuals or states (try to) pay for treatment of the most expensive problems.
Administrative chaos reins:
- Healthcare providers must deal with a myriad of diagnostic guidelines, insurance forms, coverages and payment structures.
- Administrative costs overall for the U.S. are equivalent to at least 31.0 per cent of health spending. Canada's national health program has costs amounting to about 16.7 percent.
- Administrative personnel were 27.3 percent of all health care work force employees in 1999, excluding almost 1 million life and health insurance company employees and 724,000 insurance brokerage employees.
Insurance companies need to make profits.
- They try to eliminate consumers who are likely to cost them money. In this country, the 1 percent of the population that needs the most healthcare accounts for 30% of all health care spending, the most expensive 50% (which includes the above 1%) accounts for 97 percent of all health care spending, and the generally well 50% of the population accounts for a mere 3 percent of the healthcare spending. Since half the people in the country are okay, with only minor problems, they are the most desirable customers since less of their premium goes to pay for healthcare. They also are unlikely to be aware of the difficulties of the sicker members of our society in buying insurance, since if insurance companies have anything to do with it, those sick guys pay a lot more.
- An important concept: very few of us will die instantly while completely healthy. We will end up drifting into the more expensive care categories as we age and/or acquire chronic health problems. Some of us will drift in and out of the high-cost categories. If we can only think of ourselves as a bunch of individuals, each one for himself, we will condemn most of us to misery when we are older and sicker and can not afford the insurance rates. By sticking to the idea that it's okay to pay for a bit more than we use right now, we are insuring that there will be enough to help us out when we need it. It's not just compassionate, it's self-interested to do this. Similar principle with Social Security.
- Insurance companies would rather not have to deal with the unexpected or the great cost of the very sick. They try as hard as they can to cover people who need as few of their services as possible. This doesn't really make the insurance companies villains: it means that they operate within the context of a free market system rather than outside it.
Some resources I used:
Note: Since I am not writing this blog on assignment for anybody, I take liberties and am lazy about alphabetizing, and formatting my source lists. I do, however, try hard to be accurate and reliable, to report things as they are written by others, and to use credible resources.
Blumberg, Linda J. and Nichols, Len M., Health Insurance Market Reforms: What They Can and Cannot Do, Urban Institute, 1995, http:// www.urban.org/urlprint.cfm?ID=5870.
Butrica, Barbara, Goldwyn, Joshua, Johnson, Richard W., Understanding Expenditure Patterns in Retirement, Center for Retirement Research at Boston College, January 2005, http://www.bc.edu/centers/crr/paper/wp_2005.3pdf.
Geyman, John P., Myths and Memes about Single-Payer Health Insurance in the United States: A Rebuttal to Conservative Claims, International Journal of Health Services, Volume 35, Number 1, Pages 63-90, 2005.
Hall, Douglas, Commercial Health Insurers: Intermediaries in Health Care Finance, New Hampshire Center for Public Policy Studies, 2004, http:www.nhpolicy.org
--- What is HIPAA [The Health Insurance Portability and Accountability Act of 1996], Office of Medicaid and Medicare, Department of Health and Human Services, http://www.cms.hhs.gov/hipaa/hipaa1/content/more.asp
Many ideas, insights, facts and paths for exploration come from the ever-useful and interesting items that apppear on Don McCanne's Quote of the Day Mailing List, [email protected] , http://two.pairlist.net/mailman/listinfo/quote-of-the-day
This mailing list sends short clips from articles and proceedings from journals, magazines and presentations addressing issues pertinent to our healthcare coverage system. They support the concept of a single-payer system, but McCanne includes a fair amount of dialogue on the subject.
