Neither health nor care
Most Americans who have health insurance have it selected and in large part paid for by their employers. This appears to be the American way of handling it. Though, if personal freedom and the right of each individual to pursue happiness are core American values, then health insurance chosen and paid for by corporations is downright un-American. It means undignified patronizing. It is limiting someone’s freedom of life through an essentially not business-related dependence attached to the employment contract.
This practice started during War World II when employers offered extra benefits to attract workers, circumventing in this way government-imposed wage limitations. It is a relic of wartime government intervention into economy. What is the rationale behind expecting an employer to select and pay for the health insurance of his or her workers, and their families? The purpose of business is making a profit by selling its product. The government takes its share of this profit, and in exchange provides the infrastructure for the business to function. Laws need to be obeyed. Social order needs to be observed. Technical infrastructure--water, sewers, roads, postal service, electricity, and telephone lines–has to work efficiently. Youngsters should go to school to become qualified workers. The government takes care of these essential services by administrating them itself or by regulating and closely monitoring businesses that provide these services.
Is it too much to ask that a business be able to select its workers from a pool of people healthy enough to do the job without having to take into account the cost of their insulin injections or the cost of healing the broken bones of their children? Should not the health of the public be a part of the infrastructure like water, sewer, education, and national security? And obtained in a similar manner?
How bad is it?
The more one tries to learn about health care in the USA, the murkier is the picture which emerges.
I questioned an old man, whose father was a blue-collar worker and the sole provider for a family of six. “When one of us got sick, my mother took us to the doctor’s office around the corner and paid him $5. When my brother broke his arm, our doctor sent him to the hospital and they put a plaster cast on it. I do not recall that cost was ever a factor in getting the medical help we felt we needed”, said the old man. Later, the elaborate systems of managed health care were established in order to make medical help affordable to the general public.
Last year, we ended up spending 13.9% of GDP (gross domestic product) on health care. Most developed nations are now spending around 10% (a percentage the USA spent two decades ago), or less. However, many studies and anecdotal evidence as well indicate that they are getting better value for their money. There are two indicators commonly used to measure the quality of health care: life expectancy and infant mortality rate. In both factors, the United States ranks behind most industrial nations. 92% of the improvement in life expectancy the USA saw during the 20th century occurred before 1950, and is credited to enhancements in sanitary conditions; government-provided water, sewer and food quality control.
For people with good insurance, the American health care system is the best in the world. According to the World Health Organization, only about 10% of the US population can freely take advantage of all the benefits of modern medicine. For about 5 - 10% the system is completely out of reach, and they are getting medical care comparable to that existing in the poorest countries of the Third World. The rest of us get mediocre service.
As costs of health care go up, so do the insurance premiums. In 1998 employers spent around $4000 on health per worker, as opposed to $5162 in 2001. For 2002, the increase is estimated to be around 12 – 15%. Industry analysts agree that a two-digit yearly rise is here to stay for a while. As health insurance premiums go up, companies try to shift a bigger portion of this cost to their employees. Gimmick names may be used for new health care arrangements, but for a worker it means a larger contribution to insurance premiums, cuts in coverage, a higher deductible, or any combination of the above. The cost of health insurance has become a core issue in labor disputes, triggering many strikes.
These problems are glaring in the case of small businesses. Often they have neither enough reserves to cover rising health care costs, nor the power to negotiate good insurance rates. If in a corporation with 20 employees there is one worker or family member with a medical condition requiring an expensive ongoing treatment, the premium for the whole group goes radically up. It is estimated that the rise of health care costs for small businesses is twice the average rate. The 9.5 million individuals who buy health insurance just for themselves are facing a similar problem. As soon as they or a family member covered by the plan develop a serious ailment, their premium jumps up above the affordability level. Thus they join millions of Americans who have neither health nor care.
In 1987 31 million Americans (13% of the population) did not have health insurance. It was 40 million, 14%, in 1993. It was 44 million and 16% in 2000. That number has risen to about 45 – 46 million today. Some sources say that the number of uninsured is only about 40 million. The difference comes from different criteria used when counting those who have no health insurance temporarily when between jobs. However, all experts agree that the number of uninsured is steadily growing. 4 million Americans are on the verge of losing their health insurance this year.
The millions of uninsured bother many socially conscious minds. People are outraged when an uninsured person is asked by a hospital to pay a big chunk of cash, upfront, in order to proceed with an expensive but necessary surgery. A group of physicians who support universal health care publishes, at http://www.pnhp.org, heartbreaking real-life stories of the humiliation, suffering and unnecessary deaths of uninsured Americans.
Some industry advocates say that it’s not so bad, since about 40% of the uninsured are young people, generally healthy, often between jobs, that are taking chances. About 25% of the uninsured are children. “Most are fairly healthy; childhood illnesses are typically neither chronic nor critical”, a “Newsweek” columnist cynically comments. There is some merit to these arguments, but only so long as we are not the one caught between jobs without health insurance, and so long as our usually “fairly healthy” child does not need major medical treatment.
The underinsured is another group that is rarely taken into account: those without dental or ophthalmologic coverage, those that are postponing doctor’s visit because of a high co-payment. To see the whole picture we have to add those for whom paying medical bills is detrimental to their economical status. Unless you are among 10% of the richest, it is likely that a serious medical condition in a family will drag you down, bankruptcy included.
It is a consequence of the logic of the present system. As long as you are healthy and work for a major corporation you will likely have first-class health insurance. If your kid gets sick he’ll get the best help in the world. Though if you fall ill yourself, things may get complicated; your sickness may affect your ability to keep your job. Your condition may make you uninsurable at another workplace or if you try to buy insurance as an individual.
The practice of jacking up the premium when people need medical help begs the question of whether the product sold to us as health insurance deserves to be called “insurance” at all. If millions of healthy people pay premiums for long years, there should be money accumulated for those few who after years of paying need expensive medical care. Though this is not the way the system works. Insurance companies count premiums collected and not spent as profit. In 2001 it ranged 12 to 15%. The logic of the system is to collect the premiums from healthy people and phase these people out of the system when they become a burden. Therefore, if after paying health insurance for twenty years and barely seeing a doctor you suddenly find yourself uninsurable, then it’s not your bad luck. That’s the way it’s designed to be.
It is worth noting that the present health care system in the USA imposes unfair hardship on the most mobile and entrepreneurial among us. Those who traded their ambitions for the security of a corporate or government job do not need to worry about medical bills. Medicaid will cover those who give up on the system completely and prove themselves unfit to take any job at all. Those who acted against society will see the dentist as needed, in prison. However, when a poor person tries to work their way out of a dependence on government support, too often he or she will stumble on an even minor health problem. Small business owners need to worry as well. But when we look at the last twenty years of information technology, it was not IBM but entrepreneurs like Steve Jobs, Bill Gates or Michael Dell who shaped the industry. We may never know how many ventures are failing today due not to the faults of the entrepreneurs, but because of medical bills. The vitality of the capitalistic system in America is not in corporate giants, but in the system’s ability to quickly elevate innovative ideas into the mainstream of the economy. The present health care system, harsh as it is on the entrepreneur, is a threat to the very existence of capitalism in the USA.
In the days when my old friend’s mother took him to the doctor and paid $5, it was commonly accepted that a serious sickness like leukemia was a job for the undertaker. Today, with bone marrow transplants, undertakers have to wait. But bone marrow transplants do not come free, and neither does Gleevec, the new anti leukemia drug – it costs $28,000 a year per patient. With today’s ease in accessing information we usually know the next day about the newest drugs or therapies and expect them to be available to us. Immediately. One may criticize this approach as unrealistic, but each of us will behave that way when facing a near-death situation within our family. Our expectations have changed. This is the reality that any health care system has to take into account.
Demographics change too. Baby boomers will enter retirement age soon, adding an extra burden to the system. There is no question that we will spend more and more money to live long and healthy. The antagonizing issue is affordable access to medical care. It is infuriating when we are denied service or cannot pay for it within our means due to the peculiar logic of the health care industry. Access to the most advanced drugs and treatments is another issue. When a doctor looks straight at you and tells you that your loved one will not benefit from a new medicine or therapy, maybe you can accept it. It’s quite a different story when an anonymous clerk at the insurance company declines coverage for a treatment considered experimental.
Every generation struggles in its own way to redefine the core values of the American political system. In the mid-19th century, it was slavery. Later, there were labor rights, women’s’ voting rights and racial discrimination. Today it is fairness in access to affordable health care.
By the end of the 19th century wealthy Western European nations had each established a framework for government-regulated public health care systems. There were several failed attempts to create a similar system in the USA. The last one was during the first term of the Clinton presidency. At a certain point in 1994 it seemed possible that a universal health care system similar to the one existing in Canada could be established. At the pivotal moment, the insurance industry launched a massive media campaign labeling advocates of health care reform as proponents of big government in the socialistic style.
It is worth recalling that, during that political debate, the Canadian system was either a remedy for all our problems or a bureaucratic monster. But it was never explained to the American public. Americans do not actually know how Canadians do it; they rejected the so-called single payer system because the insurance industry succeeded in putting a “big brother” sticker on it.
When in 2000 the World Health Organization rated health care systems in different countries and put the USA in 37 place, that report roused only a few sarcastic mentions by political commentators in the USA. America is the world’s leading nation and whatever Americans do, by virtue of it being done in America, it is the best in the world. No one in the USA seems to be interested in how public health is handled in France, Japan, Germany, UK or Sweden, to mention just a few countries with high scores. No one was intrigued by what Oman or Morocco did to rank higher than the USA. Americans cannot even comprehend the thought that something done in America is not the best in the world. Canadians learning about the American health care system sounds about right - the other way around does not seem to be appropriate.
Almost every day there is news about a mega-merger. Large capitalistic corporations join forces to take advantage of the large-scale economy. On the other hand, the health care industry in the USA is deeply fragmented. There are at least 1500 players, and the administrative cost of this system is estimated at around 25% or $100 billion yearly. The overhead of the government-run Medicare and Medicaid programs is around 3%. By consolidating all health insurance corporations, overhead cost can be cut in the range of $100 billion. Were it legally possible, the insurance industry would have done it long ago. That kind of consolidation can be made only if the system was run by a government-controlled agency. In that instance, that $100 billion saved would not be pocketed by the insurance industry. The government would retain it. Coincidentally, $100 billion is just enough to provide health care to all those presently uninsured.
It is a valid concern that government involvement will make a system more socialistic. Within the last ten years I’ve had at least five health insurance plans, but all of them sent me to the same hospital when I needed care. I’ve had no control over the price and selection of services provided. I believe that at least in one instance a bureaucratic procedure delayed the medical treatment, causing me unnecessary discomfort and time out of work, and created the need for additional surgery that amounted to 60% of the total cost of handling the incident. There was no one to talk to about it. Even a minor medical procedure in a hospital generates a flow of invoices from various doctors and agencies demanding money from the patient despite the fact that those services were covered by insurance. And, usually, there is no one at the insurance company available for help in solving these problems. There are no market forces at play here; the existing system looks to me very socialistic.
Every bureaucracy is inefficient, annoying to deal with, and – likely – corrupt. Our choice is not between government bureaucracy and no bureaucracy at all. We can opt for the present system where insurance companies operate with the goal of creating profits for their shareholders or we can go for an agency serving public good. We can stay with the current bureaucrats, whom we cannot even sue for wrongdoing which harms our health, or we can select administrators who answer to elected officials. We can wait for the “enronization” of the health care system, or we may entrust the best democracy in the world with keeping the system in check.
The future of the health care system in the USA exemplifies how we define the capitalistic system today. Henry Ford is known for paying his workers well enough so they could afford to buy the cars they were manufacturing. When we see hospitals having difficulties in securing health care for its workers, we have to realize that the capitalists of today try to outsmart Ford’s venerable formula. The success of every venture, and capitalism itself, is in finding that golden formula for sharing profits, the formula that satisfies most of the involved and leaves enough for the next investment. It concerns many observers that within the last decade a very few accumulated the wealth, leaving the rest unsatisfied and impoverished. In this context, health care reform is not just an administrative issue. It defines the capitalistic system, as we want it to be today.
Written in 2002
Copyright © 2007 by Henryk A. Kowalczyk
