The discussion over health care has gone off track. While the media show some people shouting about death panels, the private health care and insurance industries are pushing for legislation that raises their profits and our medical costs even further. So let’s put the discussion back on track with a few important facts.
We’re last among developed countries.
Last week it was reported that the projected life expectancy of newborn Americans now surpasses 78 years. However, reading past the reassuring headline reveals that 78 years only puts us in 30th place among developed countries. A newborn Japanese person can expect to live five years longer, and American infants die at a rate twice that of Swedish children.
Ellen Nolte and C. Martin McKee of the London School of Hygiene and Tropical Medicine categorize all recorded deaths in 19 of the world’s highest income countries according to whether these deaths could have been avoided “in the presence of timely and effective health care.” The incidence of such avoidable deaths constitutes a clear measure of success for a country’s medical system.
Nolte and McKee find that among the 19 countries in the 2002-2003 study, the United States had the highest failure rate. Specifically, if the U.S. medical system had been as good at eliminating avoidable deaths as the three best performers — France, Japan and Australia — then 101,000 fewer Americans would have died per year.
Also, the other 18 countries reduced avoidable deaths by an average of 17 percent between 1997-98 and 2002-03, but the United States could muster only a 4 percent improvement. We are falling further behind.
But we spend much more.
Incredibly, the United States spends about twice as much per person on health as other developed countries. We spend more than 16 percent of our national income on drugs, doctors, hospitals, physical therapy, out-patient procedures and Band-Aids, while countries such as France, Britain, Japan, Canada and New Zealand spend between 8 and 10 percent.
Where have we gone wrong?
The U.S. health care system provides very uneven coverage. About 50 million Americans lack health insurance. When they get sick or responsibly seek preventive health care, they pay out-of-pocket at rates well above those who have insurance or are covered by Medicare, Medicaid or veterans benefits.
The uninsured are most often people employed at very low wages, unemployed people or chronically ill and disabled people who are routinely refused private insurance coverage. Hence, they often go without care.
There are at least another 50 million “underinsured” Americans whose insurance plans have high deductibles and co-payments and payment caps that kick in well below the cost of any serious illnesses or accident. The underinsurance problem is reflected in the fact that about 70 percent of private bankruptcies happen when people face extreme medical bills. In the end, 35 percent of all people filing bankruptcies in the United States have insurance.
Fortunately, the solution is staring us in the face.
The failure of the U.S. system is due to the lack of universal coverage and preventive care. The system’s high costs are the result of its confusing mixture of profit-maximizing private health care providers, monopolistic private insurers, tax-funded p ublic programs and assorted public subsidies, which interact under regulations designed and often written by lobbyists for the private sectors of the industry.
The solution to the performance problem is straightforward: Establish a “universal” health care program that makes preventive, emergency and standard elective medical care equally available to everyone. The solution to the cost problem is also surprisingly straightforward: Provide universal coverage by extending the successful Medicare program to everyone.
Medicare works well for people over 65, and its costs are substantially lower than private insurance plans. Medicare pays out about 97 percent of its expenses for actual health care, but only about 70 percent of private insurance company expenditures pay for their customers’ actual health care. Many other developed countries have Medicare-type programs, and, as a percentage of national income, they spend only 60 percent as much as the United States spends on all private and public health care.
Overall, we will spend less for better health care.
The U.S. government already pays about 45 percent of all U.S. health care expenditures through Medicare, Medicaid, the VA and other public programs. Include the implicit cost of exempting medical insurance premiums from income tax, and the government effectively pays for nearly 60 percent of all U.S. health care. So taxpayers already pay the cost of a typical single-payer universal health care system that would cover everyone.
For this price, a single-payer universal program would provide fully portable coverage. A single-payer universal program has more incentive to provide preventive care and eliminate avoidable illnesses.
And, Americans would be richer by the remaining 40 percent of total health expenditures now eaten up by insurance company profits, misleading advertising, overpriced prescription drugs and the excessive need for emergency care caused by the lack of regular preventive care.
What kind of a country are we?
Since the continuation or extension of the status quo will eventually bankrupt our government, the practical need for health care reform is obvious. But we also face a clear moral issue: The current dysfunctional private/public system created by years of special interest politics allows 101,000 people to die from preventable causes each year.
Extending Medicare to all is the smart and right thing to do.
Dr. Hendrik Van den Berg is a Professor of Economics and the University of Nebraska-Lincoln.
3 comments
(1) Keep the high profits coming to insurance companies.
(2) Do everything possible to make the Obama presidency look like a failure.