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HEALTH CARE IN THE U.S.A. The Problem and proposed solutions |
Bill Biega's Essays |
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Health care has become a major problem in the United States, the only industrial country without universal health insurance. Here is a proposal for a solution.
NEED FOR UNIVERSAL HEALTH CAREHealth care has become a major problem in the United States, the only industrial country without universal health insurance. In fact over 46 million people (16% of the population) have no insurance at all. The cost of health premiums has become excessively high, averaging over $12,000 a year for a family of four, after rising at more than double the inflation rate for several years1.
As a result, even large companies, that provide health insurance for their workers, have started passing part of the premium cost on to their employees. The high cost of health insurance has been a major factor in the elevated cost of American products and the resultant loss of business to foreign suppliers. This factor in turn has resulted in the rise of the trade deficit of the United States to 200 billion dollars in 2006 (of this only about 25% due to oil imports).
QUALITY OF HEALTH CAREIn discussions by political candidates, including those aspiring to become President of the United States in 2008, comparisons are made between health of citizens in the United States and countries in which there is universal health care for all citizens, such as Canada, UK, Germany, France. Republicans generally make the claim that Americans have superior health care and make numerous disparaging statements regarding the experiences of residents of countries with "socialized medicine" (that is universal health care). Unfortunately these statements ignore a wealth of statistics and literature that show just the opposite, see the table below. Note that the USA has the highest pro-rata cost of health care in the world, while having a higher infant mortality rate, lower life expectancy rate and lower number of hospital beds than any other industrial country on the list (except Argentina). As a percentage of GPD, again United States lead with 15.2%, 5 percentage points higher than the next highest countries - Switzerland, France, Germany, Norway. There is general agreement that from a TECHNICAL standpoint the most advanced treatment is available in many hospitals in the United States and some of the most successful specialists practice in these hospitals and perform highly successful operations on patients with complex health problems. Many of these specialists are immigrants who have graduated from universities in other countries. However when it comes to the accessibility of high quality treatment to the general population, the present situation in the United States is seen in a much less favorable light. Canada is used most frequently for comparisons in political discussions. However, several sources in Canada have been critical of the quality of health care in that country, which by many methods of comparison is significantly lower than that of other countries with universal health insurance (see Fraser Institute report for 2002). It is one of the few countries in which there is no requirement for any kind of co-payments or co-insurance by patients, whereas most other countries with universal health coverage require some form of co-payment for each doctor's visit or other service, and in addition many of them cover the cost of the universal coverage in part by requiring all workers to pay something towards their health coverage in the form of premiums, usually deducted from their wages.
Another point made by political opponents is that in countries with universal health care (which they call "socialized medicine"), there are long waits for admission to hospitals. This is usually the case for non life-threatening procedures. However this is NOT true for any emergency cases.
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ADMINISTRATIVE COSTSIn 1999 31% of total health care costs in USA was spent on administration, compared with 16.7% in Canada. Since then the disparity has grown as more HMO's have gone from not-for-profit to profit oriented organizations, resulting in large increases in promotional costs.The average overhead cost of American health insurance companies is 13.6% (2004) compared with 2% for government operated services such as Medicare. The administrative cost of the non-profit HMO Kaiser Permanente is 6%. The administrative cost of doctors and hospitals is greatly increased by the complexity of dealing with multiple insurance companies, in addition to Medicare and Medicaid. In the USA in 2000 there were 24.76 health care administrative workers per 1000 population (not including insurance companies), compared with 12.76 in the UK 4. This suggests that a SINGLE-PAYER system will substantially reduce the high cost of medical care. Most of the countries in the table have a single payer system, with a government agency being the payer. However several countries (France, Germany, United Kingdom) allow private insurance companies to provide additional benefits not available under the government plan, such as some non-covered specialist services, private hospital rooms etc. Regardless, all residents must participate in the standard plan. DENIAL OF COVERAGEPrivate insurance companies tend to avoid providing coverage to potential customers with any kind of poor health history. In many cases employees who change jobs lose their coverage. Likewise families with individual health insurance policies suddenly discover that they lose coverage if they move to another state. The increasing use of DNA testing to determine the danger of inherited disease probability will inevitably lead to insurance coverage being denied by private insurance companies to those with gene deficiencies. They will find ways to obtain this information regardless of privacy guarantees.All these factors demonstrate that national universal health coverage has become essential for this country. HOW TO PAY FOR UNIVERSAL COVERAGEMost proponents of Universal Coverage believe that the fairest is for it be paid for through deductions from paychecks with matching payments from employers, similar to the present system for Social Security. There should not be any salary cap as there is presently for Social Security. Present company plans would be merged into the universal system, thus all employers would bear a comparable burden. Those not employed by any company, including self-employed, would pay premiums monthly or quarterly. Those with income below the poverty level would be exempt.In addition, most believe that adults should pay a co-payment at each doctor's visit and for each prescription, with the poor being exempted. These payments, together with the savings in administrative costs would cover most of the cost of a Universal Health System. The current Medicare system for the elderly would continue, at least for the time being. HOW TO ADMINISTERMany propose that Universal Health Insurance should be administered by present insurance companies, just like the present Federal Employees Health Benefits program. However this would still cause unnecessarily high administrative costs.Proponents of a single payer system propose that the present Medicare program, which runs reasonably well, should be expanded to cover all legal residents of the country. Well running non-profit HMOs, particularly those that operate their own clinics and hospitals, like Kaiser Permanente, would become part of the overall system. To reduce costs it is essential that the system be permitted to negotiate drug prices. In addition a legal cap should be placed on malpractice suits, to reduce costs of hospitals and physicians. REFERENCES |
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| Last updated: September 2007. |
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