Health Care Can Be Cured: Here's How
Americans are burdened with a costly, hugely dysfunctional health-care system. In a new book, a pair of investigative reporters offers a fresh remedy based on a successful model we're all familiar with.
Monday, Oct. 04, 2004
This is the picture of health care in America. We spend more money than anyone else in the world - and yet have less to show for it than other developed countries. That's one reason we don't live as long. We don't adequately cover half the population. We encourage hospitals and doctors to perform unnecessary medical procedures on people who don't need them, while denying procedures to those who do. We charge the poor far more for medical services than we do the rich. We force senior citizens with modest incomes to board buses to Canada to buy drugs they can't afford in America. We clog our emergency rooms with patients because they can't get in to see their doctors.
We spend more money treating disease than preventing it. We are victims of rampant fraud and overbilling. We stand a good chance of dying from a mistake if we are admitted to a hospital, and we kill more people with prescription drugs than with street drugs like cocaine and heroin. We have an endless choice of health-care plans, but most people have few real choices. We are forced to hold bake sales, car washes and pancake breakfasts to pay the medical bills of family members and friends when a catastrophic illness strikes.
Americans tend to believe they have the best health care in the world, but in truth it is a second-rate system and destined to get a lot worse and much more expensive. The simplest and most cost-effective remedy is one that is considered untouchable in the U.S. because of the huge lobbying forces arrayed against it. Indeed, neither presidential candidate has come close to offering such a comprehensive solution. The remedy: provide universal coverage and create one agency to collect medical fees and pay claims. This would eliminate the staggering overlap, bureaucracy and waste created by thousands of individual plans. Under a single-payer system, all health-care providers
= doctors, hospitals, clinics would bill one agency for their services and would be reimbursed by the same agency.
=Every American would receive basic health care, including essential prescription drugs and rehabilitative care.
=Anyone who needed to be treated or hospitalized could receive medical care without having to wrestle with referrals and without fear of financial ruin.
Radical? We already have universal health care and a single-payer system for everybody age 65 and over: it's called Medicare. For years, researchers and health-care professionals have advocated a similar plan for the rest of the population, but no plan has ever got far in the legislative process because of fierce opposition by the health-care industry.
To discredit the single-payer idea, insurers, HMOs, for-profit hospitals and other private interests play on Americans' long-standing fears of Big Government. In truth, it is the private market that has created a massive bureaucracy, one that dwarfs the size and costs of Medicare, the most efficiently run health-insurance program in the U.S. in terms of administrative costs.
Medicare's overhead averages about 2% a year. In a 2002 study for the state of Maine, Mathematica Policy Research Inc. concluded that administrative costs of private insurers in the state ranged from 12% to more than 30%. That isn't surprising because unlike Medicare, which relies on economies of scale and standardized universal coverage, private insurance is built on bewildering layers of plans and providers that require a costly bureaucracy to administer, much of which is geared toward denying claims.What kind of agency would administer this Medicare-like plan for the rest of us?
== Halt the existing practice by which insurers squeeze doctors through unrealistically low reimbursement rates. The same for
hospitals and nursing homes that squeeze nursing salaries and staffing levels.
==Reverse the costly but seldom discussed health-care trend of overdiagnosis and overtreatment - something no market system will ever do.
While many Americans suffer from a lack of health care, a growing number get too much.
Once the basic care package is in place, its scope could be expanded as the system realizes savings derived from standardization, more efficient computer technology and the end of market-based health-care management, with its required profits, stock options and generous executive compensation.
Individuals could supplement their basic government-supported coverage through private insurance. Wealthier citizens could continue to get whatever care they wanted and pay for it. But they would still be required to pay the earmarked taxes, just as everyone must contribute to Medicare and Social Security.
Similarly, hospitals would be free to accept a certain percentage of cash-paying patients from outside the USCHC plan.
As for prescription drugs, a good health-care system would strive to prescribe fewer pills, especially since the effectiveness of many drugs is questionable. The USCHC could negotiate the best possible drug prices, something that Medicare is forbidden to do by Congress.
Many Americans fear that a universal health plan would cost too much, even though the market system has already given the U.S. the world's most expensive health care.
They fear the long waits they have heard about in Canada, even though comparable waiting times for tests and procedures are commonplace in many parts of the U.S.
Lastly, they fear government-decreed rationing, even though health care is already rationed in the most inequitable of ways.
Despite all the fears, change will come, ultimately from two sources: working Americans who are disenchanted with ever rising costs and shrinking care, and U.S. corporations, which are increasingly refusing to pick up the added costs.
They can't afford to, because America's privately funded system puts U.S. companies at a disadvantage to their competitors in the industrialized world, where health care is funded by government. GM says the cost of providing health care to its workers and retirees totals $1,400 for each vehicle sold in the U.S., more than the cost of steel.
America's health-care system is in critical condition, and we find ourselves at a turning point. We can continue to hold bake sales to finance it, or we can do what every other civilized nation on earth does take care of our citizens.