Much has been said about the ‘exorbitant’ 39% rate increase that Wellpoint had after declaring high profits. This blog will attempt to address both of these items. First off, why are there rate increases anyway ? To illustrate, sometimes it helps to put things in perspective.
Imagine you have a business. Unless you’re a non-profit company, at the end of the year, you’d like to reward the people that invested money with you (stockholders). That’s how America works…we have companies that people invest in with the expectation that they will make more money than they have put in. One of the favorite targets of Democratic health-reformers is “obscene insurance company profits”. In 2009, as of the third quarter, health insurance company profits ranked #86th, with an average rate of return of 3.3%. Heck, I can get more with a 5-yr CD at the bank-guaranteed ! 4th quarter numbers are in and it dropped further to #88 (which was actually inflated due to a one-time sale of a pharmaceutical arm of an insurance company-without that, they would have ranked #92). “But it still amounts to a boatload of money for the insurance company” is what I usually hear. Again, a bit of perspective is in order. If ALL of the profits could magically be put back into the health care system, what effect would that have ? The answer will surprise you…because health care costs are one-sixth of our total economy, eliminating ALL insurance company profits would fund our nation’s healthcare system for another 36-48 hours . Which brings us to the subject of Wellpoint’s 39% increase.
While insurance companies are a business unto themselves, they are not the drivers of health care costs. On the contrary, they are the financiers of our health care costs. The simplest way to grasp this is by buying a house. If you buy a house, most people can’t afford to pay cash up front-so they go to a mortgage company for the money, and then pay the mortgage company back a little at a time, for a fee (interest rate) and according to their conditions. If you default on the payments, they can take your house. The cost of the house is made up of all the people that worked on it, the materials and so forth. In addition to labor (doctors, nurses, hospital staff, etc.) and materials (drugs, bandages, wheelchairs, medical facilities, etc), there are many cost items specific to health care, but I’ll only outline two. The first is technology and the example I’ll give is straight out of today’s (3/17/10) USA Today—“The cost of cancer treatment is 'skyrocketing'… a new analysis shows. From 1990 to 2008, spending on cancer care soared to more than $90 billion from $27 billion. The increase was driven by the rising costs of sophisticated new drugs, robotic surgeries and radiation techniques, as well as the growing number of patients who are eligible to take them. Many older, frailer patients -- who might not have been considered strong enough to weather traditional surgery -- now have the option to have less invasive operations or more tightly focused radiation treatments, the analysis says". Today’s Seattle Times/Bloomberg reports that "The rising cost of cancer research and care, … helped reduce death rates by 16 percent over 40 years”. Medical advances cost money. Innovation comes from the private sector, not the government. I’ll agree that the reason is selfish- the lure of a big payday. The alternative is just to not try to advance medicine and/or ration it. The second item I’ll address is called “cost-shifting”. Many people have heard of it, but they may not understand it. Let’s say that your company produces a product and you charge $1.00 per item. Every year you see the regular inflation, so you add that in, so next year your price is $1.03 and so on. Now imagine that another inflationary factor is thrown in…in this case medical inflation or the cost of medical research and development…at around 12%. Now in order to continue reaping your 3.3% profit so you can continue to attract investors (and keep the ones you have) you need to raise your price to $1.15, and so on. It doesn’t stop there. Imagine if the government came to you and said, “we like your product, but we are only going to give you 70 cents.” They are the government, so you have no choice. You can’t negotiate with them. So you need to raise your costs for everyone else. That is what Medicare and Medicaid do. It gets worse. In 1986 a law was passed that said if someone doesn’t have the money to purchase your product but needs it, you have to GIVE it to them and try to collect on the costs later. If it’s more than a few thousand dollars, the person usually can declare bankruptcy and you’re still out the money. No house to repossess there. So, you have to raise your price for everyone else to cover for that. It’s gotten so bad that employers and consumers are paying $90 BILLION extra just because of the under-payment from Medicare and Medicaid, not including flat-out uncompensated care.
In fact, since 1970, the cost of treating a Medicare beneficiary has risen 8.8% a year. In today’s Las Vegas Sun, testimony was given that the $37 rate per 15-minute unit (for medical providers) hasn't been increased since being set in 1980, yet the cost of doing business has risen. And now it is going down to $21" with the proposed Medicare reimbursement cut. Is it any wonder that doctor’s don’t want to treat Medicare patients ? These are just a few of the reasons not to let the government run our health care…they undercut prices with no negotiation, stifle innovation and can’t manage the programs they have now (Medicare will be broke in less than 10 years and Social Security is holding onto $2.5 TRILLION in IOU’s from the government who raided it to pay for other programs).
All of these costs are added to the health care we use, which is financed by the health insurance companies. Is it any wonder we are seeing rate increases ? Speaking of rate increases, that 39% increase ? It was for a demographic (group of people) in a particular age-group only on an obsolete plan. Insurance companies spread the risk over a large group of people, but most don’t spread it over everyone they have insured as that would be a bit unfair to the young healthy people (an example is New York state, where they spread it out over everyone—the premium is in excess of $600 a month). Instead, they group people together by age and gender, usually in 5-year age groups (called ‘bands’). So, there is one rate for males, say 50-54 and another for females, say 25-29. A word about females is in order here. We hear a lot about ‘discrimination’, with women paying more than their similarly aged-male companions. Again, it’s a cost issue-women can get pregnant, which is more expense and which needs to be financed. Even policies without maternity are required by law to cover complications of pregnancy which can be upwards of $1 million or more. Women also have more internal parts that need periodic checking than men. Lastly, they are more health-conscious, which means they go to the doctor more often. All this adds up to more money out than in. So, the insurance company adjusts for that. What happened with Wellpoint’s increase was two-fold. The demographic that accounted for that increase was unhealthier than expected. Also, the benefit plan that they were on was outdated, meaning that the benefits were based upon cost expectations that are no longer valid and the benefits became exceedingly rich compared with other companies’ plans. Now, when you raise rates on insurance companies plans, people typically will choose to go to another less-comprehensive (and less expensive) plan. That is, as long as the premium on the better plan is higher than the anticipated benefits. Those that are facing $100,000+ cancer treatments will gladly pay a higher premium if it means they still get their treatment for $10 instead of going to another plan that requires them to pay the first $1000 and then 20%. This leads to something called ‘adverse selection’, ultimately leading to what is known in the insurance industry as a ‘death spiral’---the amount of money coming in eventually becomes far less than the money that is going out for treatments and it can’t support itself. However, unlike the government, they can’t issue IOU’s.
I would urge our Congressmen to vote for the Senate bill if it addressed the real problems faced by health care- out of control spiraling costs- but it doesn't. All it does is put artificial restrictions and requirements on the financing mechanisms of our health care. And that is a recipe for disaster.
Wednesday, March 17, 2010
Friday, March 12, 2010
A Health Care Travesty
In times of economic downturn, there is a natural tendency to point fingers. Such was the case in Germany during the Great Depression. Among other things, several Jewish citizens held highly visible positions in Germany and Austria…they were wealthy and successful while the rest of the country was suffering. Consequently, they became a scapegoat for their nation’s economic problems, and the subsequent Holocaust is (almost) universally abhorred and has taken its place in history as the ultimate evil. Millions of lives were lost and/or affected.
Certainly nothing can ever compare with the sheer malignancy of the Holocaust and that is why you’ll never see me equate anything else with the term ‘Holocaust’. There is, however a travesty being perpetrated today that has the capacity to affect millions of people’s jobs because of the tendency to project one’s ills onto another entity, real or imagined. That ‘travesty’ is the ‘demonization’ of the insurance industry as the cause of the high cost of our health care system. When health reform first started, it was correctly being called ‘health care reform’. As the real underlying cause of the health care crisis manifested itself-that being the high cost of care in this country—the ‘movement’ was changed to health insurance reform. Ask any politician and they will agree that defensive medicine caused by runaway malpractice lawsuits, a shortage of primary care physicians caused by steadily decreasing Medicare reimbursements, a lack of transparency in the cost of care, billions in uncompensated care at the nation’s hospitals, duplicate and unnecessary testing, coupled with an entitlement mentality of the populace to choose an unhealthy lifestyle but not have to pay for it, are the real causes of the skyrocketing costs. However, it is much more palatable (and politically safe) to throw the blame at an entity that people love to hate…just give them a reason to. Such is the case with insurance companies. What would we do without insurance companies? In a few words, pay for our own dang healthcare. If we paid for it ourselves, we might have an incentive to lay off the bon-bons and get a little exercise. Much has been made about the ‘uninsured’, with some claiming 47 million Americans are ‘uninsured’. After taking out people that could qualify but just don’t want it (wealthy families, people that qualify for government programs but haven’t signed up, people between jobs that are in their waiting periods, college students who would rather buy beer than insurance, or illegal immigrants who want to stay below the radar and who know that hospitals can’t legally report them to INS) the true figure is closer to 12 million people or 4-5% of Americans. If only a fraction of the trillion or so dollars being bandied about were put to insuring those people and were coupled with common-sense reforms such as tort reform and wellness programs, we could solve our healthcare crisis.
But the those pushing for health insurance reform would have you believe that the insurance companies are the root of all our health care woes. “Greedy insurance companies” has become the new mantra to rail against. Consider this- insurance companies have a 3% profit margin on average. People don’t see that; if they do, they inevitably exclaim that 3% of the total premiums taken in is a huge number. Here’s a thought experiment: Let’s take out ALL of the insurance companies’ profits and throw it back into the cost of health care. The result would be that the American system of health care would survive another 36 hours. That’s right. ALL of the health insurance companies’ profits combined would fund the health care monstrosity for another 36 hours.
But it’s such an easy target.
Certainly nothing can ever compare with the sheer malignancy of the Holocaust and that is why you’ll never see me equate anything else with the term ‘Holocaust’. There is, however a travesty being perpetrated today that has the capacity to affect millions of people’s jobs because of the tendency to project one’s ills onto another entity, real or imagined. That ‘travesty’ is the ‘demonization’ of the insurance industry as the cause of the high cost of our health care system. When health reform first started, it was correctly being called ‘health care reform’. As the real underlying cause of the health care crisis manifested itself-that being the high cost of care in this country—the ‘movement’ was changed to health insurance reform. Ask any politician and they will agree that defensive medicine caused by runaway malpractice lawsuits, a shortage of primary care physicians caused by steadily decreasing Medicare reimbursements, a lack of transparency in the cost of care, billions in uncompensated care at the nation’s hospitals, duplicate and unnecessary testing, coupled with an entitlement mentality of the populace to choose an unhealthy lifestyle but not have to pay for it, are the real causes of the skyrocketing costs. However, it is much more palatable (and politically safe) to throw the blame at an entity that people love to hate…just give them a reason to. Such is the case with insurance companies. What would we do without insurance companies? In a few words, pay for our own dang healthcare. If we paid for it ourselves, we might have an incentive to lay off the bon-bons and get a little exercise. Much has been made about the ‘uninsured’, with some claiming 47 million Americans are ‘uninsured’. After taking out people that could qualify but just don’t want it (wealthy families, people that qualify for government programs but haven’t signed up, people between jobs that are in their waiting periods, college students who would rather buy beer than insurance, or illegal immigrants who want to stay below the radar and who know that hospitals can’t legally report them to INS) the true figure is closer to 12 million people or 4-5% of Americans. If only a fraction of the trillion or so dollars being bandied about were put to insuring those people and were coupled with common-sense reforms such as tort reform and wellness programs, we could solve our healthcare crisis.
But the those pushing for health insurance reform would have you believe that the insurance companies are the root of all our health care woes. “Greedy insurance companies” has become the new mantra to rail against. Consider this- insurance companies have a 3% profit margin on average. People don’t see that; if they do, they inevitably exclaim that 3% of the total premiums taken in is a huge number. Here’s a thought experiment: Let’s take out ALL of the insurance companies’ profits and throw it back into the cost of health care. The result would be that the American system of health care would survive another 36 hours. That’s right. ALL of the health insurance companies’ profits combined would fund the health care monstrosity for another 36 hours.
But it’s such an easy target.
Wednesday, March 3, 2010
Healthcare reform column
(Originally published online at HealthNews.com August 26th 2009)
Healthcare Reform. Just say the words lately and everyone seems to have an opinion. Town Hall meetings are getting a lot of hits on YouTube lately but it’s not because of the educational content. One common thread that I see in all this is hoopla is the amount of misinformation. So this week, I want to take a look at what I see as the Top 10 Health Insurance Reform Myths:
1. Comparative Analysis will dictate what procedures doctors will be able to use with their patients. Chances are, with health reform changing daily, you’ve forgotten about this provision that was provided for in the Stimulus Package that was passed wa-a-y back in March. What this does is to investigate which treatment procedures have the best chance for success in the general public. It is investigational only and is specifically prohibited by the same law to let government force the procedures to be used.
2. Individual Responsibility Mandate infringes on individual freedoms. This law says that everyone has to pay to be in the system whether they want to or not. While technically true, since everyone would have access to healthcare by law without preexisting conditions, without this law, nobody would sign up and pay until they needed medical care. Without money, the system would go broke.
3. Public Plan can coexist with the private market plans with no disruption. This is false. As one Economy Professor at Harvard said, “it’s simple economics.” As of the date of this writing, President Obama may have taken it off the table for that very reason.
4. Health Insurance is the reason health care costs so much. Actually, the opposite is true. Health insurance is nothing but healthcare financing. Americans have among the best healthcare in the world. That, plus innovation and new drugs, costs money. Health insurance pays for that, hence the cost goes up.
5. Formation of Death Panels is unequivocally false. What the provision provided for was to have Medicare pay for end-of-life wishes that seniors discuss with their doctors now at their own expense. As of the date of this writing, such provisions have been stripped from the two bills because of this hysteria.
6. The number of uninsured was originally touted as 46 or 47 million (depending upon who you asked). Most media rounded up the figure to an even 50 million. In reality, the number is closer to 16 million that are truly “uninsured” and can’t get insurance. The other roughly 30 million is made up of (1) people that qualify for some sort of government program, but for whatever reason don’t sign up, (2) families that make over $75,000 a year that choose to self-insure, (3) college kids who have come off their parents policies and are awaiting coverage, as well as (4) other people who are in the waiting period at their employers. Lastly, the millions of undocumented workers are counted in this category as well.
7. Socialized medicine is “bad,” when in fact it is neither bad nor good…it simply is. Most medical and pharmaceutical advances come from America due to the profit motive and the risk/reward of the free market. Socialized medicine would curb and/or eliminate that. The current system also employs millions of workers from doctors to claims representatives to (yes, even insurance brokers). A socialized system at this point would cause a catastrophic economic shakeup greater than the auto, financial and banking industries combined.
8. Insurance companies are floating in money but in reality 87% of money insurance companies take in is spent on claims. 10% is for administrative expenses. Only 3% is profit.
9. The high cost of prescription medicine is because the U.S. doesn’t have price caps. In fact, one factor of high prices is that other countries DO have caps. Drug companies make up their huge R&D costs, advertising costs, lost income from generics and failed drugs by charging higher prices in America because other countries have these caps.
10. Voting against the President’s plan is voting against reform. This is the biggest fallacy I see. Virtually everyone (that understands it) wants reform, insurance companies included. Something as complex as our system needs careful thought to fix, not rushed judgments that we may wind up regretting.
Next week we’ll look at the top 10 reasons why reform is necessary.
Until next time, stay healthy!
Healthcare Reform. Just say the words lately and everyone seems to have an opinion. Town Hall meetings are getting a lot of hits on YouTube lately but it’s not because of the educational content. One common thread that I see in all this is hoopla is the amount of misinformation. So this week, I want to take a look at what I see as the Top 10 Health Insurance Reform Myths:
1. Comparative Analysis will dictate what procedures doctors will be able to use with their patients. Chances are, with health reform changing daily, you’ve forgotten about this provision that was provided for in the Stimulus Package that was passed wa-a-y back in March. What this does is to investigate which treatment procedures have the best chance for success in the general public. It is investigational only and is specifically prohibited by the same law to let government force the procedures to be used.
2. Individual Responsibility Mandate infringes on individual freedoms. This law says that everyone has to pay to be in the system whether they want to or not. While technically true, since everyone would have access to healthcare by law without preexisting conditions, without this law, nobody would sign up and pay until they needed medical care. Without money, the system would go broke.
3. Public Plan can coexist with the private market plans with no disruption. This is false. As one Economy Professor at Harvard said, “it’s simple economics.” As of the date of this writing, President Obama may have taken it off the table for that very reason.
4. Health Insurance is the reason health care costs so much. Actually, the opposite is true. Health insurance is nothing but healthcare financing. Americans have among the best healthcare in the world. That, plus innovation and new drugs, costs money. Health insurance pays for that, hence the cost goes up.
5. Formation of Death Panels is unequivocally false. What the provision provided for was to have Medicare pay for end-of-life wishes that seniors discuss with their doctors now at their own expense. As of the date of this writing, such provisions have been stripped from the two bills because of this hysteria.
6. The number of uninsured was originally touted as 46 or 47 million (depending upon who you asked). Most media rounded up the figure to an even 50 million. In reality, the number is closer to 16 million that are truly “uninsured” and can’t get insurance. The other roughly 30 million is made up of (1) people that qualify for some sort of government program, but for whatever reason don’t sign up, (2) families that make over $75,000 a year that choose to self-insure, (3) college kids who have come off their parents policies and are awaiting coverage, as well as (4) other people who are in the waiting period at their employers. Lastly, the millions of undocumented workers are counted in this category as well.
7. Socialized medicine is “bad,” when in fact it is neither bad nor good…it simply is. Most medical and pharmaceutical advances come from America due to the profit motive and the risk/reward of the free market. Socialized medicine would curb and/or eliminate that. The current system also employs millions of workers from doctors to claims representatives to (yes, even insurance brokers). A socialized system at this point would cause a catastrophic economic shakeup greater than the auto, financial and banking industries combined.
8. Insurance companies are floating in money but in reality 87% of money insurance companies take in is spent on claims. 10% is for administrative expenses. Only 3% is profit.
9. The high cost of prescription medicine is because the U.S. doesn’t have price caps. In fact, one factor of high prices is that other countries DO have caps. Drug companies make up their huge R&D costs, advertising costs, lost income from generics and failed drugs by charging higher prices in America because other countries have these caps.
10. Voting against the President’s plan is voting against reform. This is the biggest fallacy I see. Virtually everyone (that understands it) wants reform, insurance companies included. Something as complex as our system needs careful thought to fix, not rushed judgments that we may wind up regretting.
Next week we’ll look at the top 10 reasons why reform is necessary.
Until next time, stay healthy!
A better healthcare system (??) Part Deux
France's system has been called the best in the world. My previous blog described how France is attempting to meet the challenges of an aging population, and increasing medical costs the same way that all health care systems do...raising taxes and limiting services. The argument has been made that while flawed, France's system does work, and with vastly better outcomes. Furthermore, I illustrated the demographic and cultural differences that exist between the two countries, leading to an inherently unhealthier U.S. population, to which the argument was made that if people had access to healthcare in the U.S. that our general health would be improved. I intend to mitigate the first argument, and to expose the other arguments as being incorrect.
The statement was made that the income tax rate in France is less than what that person is paying in the U.S. in response to my assertion that France has had numerous health care tax increases since 1986. Income taxes are but one form of taxing the populace. Since 1985, when France first ran a deficit on it's healthcare program (which continues to this day), the following taxes have been implemented.
1986 -- Increase in health-care payroll taxes.
1988 -- Creation of a special tax on medication advertising to help fund health care.
1990 -- Introduction of the CSG, a new tax levied on all types of income to help fund health care.
1991 -- Increase in health-care taxes levied on payroll.
1993 -- Increase in CSG rate. Coverage of doctor consultation is reduced.
1996 -- Increase in health-care taxes. A new health-care tax is levied on private health-care plans
1999 -- New tax levied on drug makers when their revenue exceeds a pre-defined level.
These are just the tax increases. Increased out-of-pocket costs, reduced doctor reimbursements, increased bureaucracy (there are 43 various government agencies overseeing the French system) and facility closures are occurring at a faster and faster rate. So, while the French system may 'work' at this point in time, it's future viability is seriously in question (so much so that the prime minister stated in 2007 that the system is 'bankrupt'). Just how long can a 'bankrupt' system survive ? Not exactly a model to emulate going forward.
As far as having better outcomes, let's take a look at a few examples. SARS, a childhood respiratory disease,is a serious illness that can cause death. A full 14% of French babies that contract SARS die. The figure in the the U.S. is 0% statistically. Furthermore, 5.3 people in France vs 3.4 people in the U.S. per 100,000 people die of a particularly hard-to-treat cancer, stomach cancer. As far as cancer deaths overall, another "working" socialized medicine program that was held up as an example has the HIGHEST cancer death rate (the Netherlands). Better outcomes indeed. As far as prevention goes, (as an example), 91% of Americans are immunized by age one for measles as opposed to only 85% of French citizens. There are many more examples; space and time limits their inclusion.
The best that can be said is that France's system is beset by the same problems that affect all healthcare systems--cost. The difference is that the French people lead a healthier lifestyle (reflected in the fact that over 30% of Americans are obese, compared to less than 10% of French citizens). The argument was made that if the American people had access to health care that perhaps they would change their lifestyle to a healthier one. This argument falls flat on it's face for two reasons: #1 is EVERYONE in America has access to health care...just not access to the major financing mechanism for health care--insurance. A regular office visit in Nevada is around $85. Additionally, there are low-cost clinics, FREE clinics, Planned Parenthood and Quick Care centers for those that can't afford $85. #2-- the main cause of the health disparity between France and the U.S. is the obesity rate. From grade school (remember the food pyramid ?), television advertising (Healthy Choice meals, "get your 5 servings of vegetables in a V-8", yogurt, fiber, ad nauseum), support groups (weight watchers, jenny craig), gym and gym equipment advertising, food labels, laws against trans fats--we have been inundated with the perils of being obese. We don't need to go to the doctor to be told we're fat and need to quit smoking. It's all around us. Again, it is people's CHOICE to engage in these behaviors; a trip to the doctor won't magically change that. Additionally, disease management: hypertension, cholesterol, diabetes, etc. (all caused by obesity), requires the patient to take responsibility...a majority of hospital admittance is due to the failure of PATIENTS to manage their own diseases to the point where they have to go to the hospital. Where a trip to the doctor WILL help is in uncovering an unknown and non-apparent condition such as cancer. The U.S. already has among the best cancer survival rate in the industrialized world. Even then, a regular self breast exam in the shower will uncover more cases of breast cancer than mammograms and is free. Yet, the majority of women don't even do that...While doctor visits may be affordable (or free), what of catastrophic diseases (such as kidney failure for example) for people without an ability to finance it (i.e.through insurance)? The fact is, ANYONE can get dialysis if they need it...just ask UMC hospital in Nevada, which treats numerous ILLEGAL ALIENS to the tune of MILLIONS of dollars per year for free. The EMTALA act made that possible...passed in 1986, it made it illegal to deny care to someone based upon their ability to pay (or even citizenship).
As I said in my previous blog, it's always easier to point the finger of blame outward rather than in the mirror. However I think I'll close with a sentiment expressed by those in the know regarding health reform--You think health care is expensive now ? Just wait until it's free.
The statement was made that the income tax rate in France is less than what that person is paying in the U.S. in response to my assertion that France has had numerous health care tax increases since 1986. Income taxes are but one form of taxing the populace. Since 1985, when France first ran a deficit on it's healthcare program (which continues to this day), the following taxes have been implemented.
1986 -- Increase in health-care payroll taxes.
1988 -- Creation of a special tax on medication advertising to help fund health care.
1990 -- Introduction of the CSG, a new tax levied on all types of income to help fund health care.
1991 -- Increase in health-care taxes levied on payroll.
1993 -- Increase in CSG rate. Coverage of doctor consultation is reduced.
1996 -- Increase in health-care taxes. A new health-care tax is levied on private health-care plans
1999 -- New tax levied on drug makers when their revenue exceeds a pre-defined level.
These are just the tax increases. Increased out-of-pocket costs, reduced doctor reimbursements, increased bureaucracy (there are 43 various government agencies overseeing the French system) and facility closures are occurring at a faster and faster rate. So, while the French system may 'work' at this point in time, it's future viability is seriously in question (so much so that the prime minister stated in 2007 that the system is 'bankrupt'). Just how long can a 'bankrupt' system survive ? Not exactly a model to emulate going forward.
As far as having better outcomes, let's take a look at a few examples. SARS, a childhood respiratory disease,is a serious illness that can cause death. A full 14% of French babies that contract SARS die. The figure in the the U.S. is 0% statistically. Furthermore, 5.3 people in France vs 3.4 people in the U.S. per 100,000 people die of a particularly hard-to-treat cancer, stomach cancer. As far as cancer deaths overall, another "working" socialized medicine program that was held up as an example has the HIGHEST cancer death rate (the Netherlands). Better outcomes indeed. As far as prevention goes, (as an example), 91% of Americans are immunized by age one for measles as opposed to only 85% of French citizens. There are many more examples; space and time limits their inclusion.
The best that can be said is that France's system is beset by the same problems that affect all healthcare systems--cost. The difference is that the French people lead a healthier lifestyle (reflected in the fact that over 30% of Americans are obese, compared to less than 10% of French citizens). The argument was made that if the American people had access to health care that perhaps they would change their lifestyle to a healthier one. This argument falls flat on it's face for two reasons: #1 is EVERYONE in America has access to health care...just not access to the major financing mechanism for health care--insurance. A regular office visit in Nevada is around $85. Additionally, there are low-cost clinics, FREE clinics, Planned Parenthood and Quick Care centers for those that can't afford $85. #2-- the main cause of the health disparity between France and the U.S. is the obesity rate. From grade school (remember the food pyramid ?), television advertising (Healthy Choice meals, "get your 5 servings of vegetables in a V-8", yogurt, fiber, ad nauseum), support groups (weight watchers, jenny craig), gym and gym equipment advertising, food labels, laws against trans fats--we have been inundated with the perils of being obese. We don't need to go to the doctor to be told we're fat and need to quit smoking. It's all around us. Again, it is people's CHOICE to engage in these behaviors; a trip to the doctor won't magically change that. Additionally, disease management: hypertension, cholesterol, diabetes, etc. (all caused by obesity), requires the patient to take responsibility...a majority of hospital admittance is due to the failure of PATIENTS to manage their own diseases to the point where they have to go to the hospital. Where a trip to the doctor WILL help is in uncovering an unknown and non-apparent condition such as cancer. The U.S. already has among the best cancer survival rate in the industrialized world. Even then, a regular self breast exam in the shower will uncover more cases of breast cancer than mammograms and is free. Yet, the majority of women don't even do that...While doctor visits may be affordable (or free), what of catastrophic diseases (such as kidney failure for example) for people without an ability to finance it (i.e.through insurance)? The fact is, ANYONE can get dialysis if they need it...just ask UMC hospital in Nevada, which treats numerous ILLEGAL ALIENS to the tune of MILLIONS of dollars per year for free. The EMTALA act made that possible...passed in 1986, it made it illegal to deny care to someone based upon their ability to pay (or even citizenship).
As I said in my previous blog, it's always easier to point the finger of blame outward rather than in the mirror. However I think I'll close with a sentiment expressed by those in the know regarding health reform--You think health care is expensive now ? Just wait until it's free.
Tuesday, March 2, 2010
A Health Care Success Story (??)
Whenever we talk of ‘socialized’ medicine systems, opponents of those systems refer to Canada and the UK’s system to illustrate the shortcomings of a governmental health care program. However, Canada and the UK’s system are but two examples. Proponents of government health care inevitably point to the ‘successes’ of various socialized systems as their basis for having a socialized system that works. In the interest of fairness, let’s take a look at the gold standard of government-run health plans as determined by the World Health Organization. In 2000, the WHO recognized France’s system as the number one health care system in the world.
The truth is that France has had continual challenges in balancing their health care budget and has made incremental changes for the last three decades, including SIX tax increases specifically for health care while reducing benefits and increasing out-of-pocket costs. In 1990, general revenue taxes supplied 7% of French health-care expenditures. By 2003, the general revenue figure had ballooned to 40%, with no end in sight. The French national insurance system has been running constant deficits since 1985. Since the WHO report, some of the changes implemented to help contain costs have been steadily increasing fees, reducing reimbursements to both health care providers and patients and facility closures. Ironically, France is borrowing ‘Western’ health care ideas to contain costs. In 2004, France had a number of far-reaching reforms, including coordination of care through one ‘primary’ physician who must be consulted first before going to a specialist. Failure to do so results in reducing the reimbursement to the patient by almost 57% ! France currently spends the most of any European country as a percentage of its GDP (11%) compared to the U.S.’s 17% and it continues to grow. Without drastic action to contain costs, France’s system could face bankruptcy as evidenced by France’s Prime Minister Francois Fillon, who stated “The truth is that I am the head of a state that is in a state of bankruptcy due to its financing plan.”
While cost continues to be the biggest challenge affecting every country’s health care, perhaps the most telling is the general health of the underlying population. Opponents of free market health care routinely state that the U.S. spends the most on health care but has poorer outcomes, living on average two years less than our French counterparts. Is this a result of our health care system or Americans’ choices ? The answer may surprise you. Seventy-four percent of health care spending in the U.S. is directly related to preventable conditions such as heart disease, diabetes and cancer. Obesity is the main cause of the first two, smoking and other lifestyle choices account for a large part of the third. Why does U.S. health care cost so much more than France’s with lesser outcomes ? Consider that the U.S. leads the world in obesity with over 30% of its population considered clinically obese. It is generally accepted that two thirds of Americans are either overweight or obese. Compare that to less than 10% of France’s citizens being clinically obese. So, is it that difficult to understand that treating 90 million sick Americans costs more than treating 7 million French citizens ? Another factor is America’s lawsuit-happy culture. While malpractice claims themselves account for a negligible percentage of health care spending, the fear of malpractice leads to wasteful and redundant practices that are estimated to be as much as $60 billion a year (or 3% of overall medical spending). Malpractice cases in France are brought before their regions' government-appointed review board that determines how much compensation (if any) should be paid out of a national compensation fund
Simply because something works in another country is no basis for implementing the same program in America. Demographics and cultural differences account for the majority of America’s health care problems. It’s not the failure of the U.S. style of health care that is responsible for our system’s high cost and lower outcomes. It may not be popular, but the real blame lies with the American people’s lifestyle choices. While American’s certainly have the ‘freedom’ to choose their own lifestyle, they should understand that with freedom comes responsibility for the choices they make. It is not the fault of corporate America or American’s health care providers for American’s health care woes. It’s always easier to point the finger of blame outward than it is to look in the mirror.
The truth is that France has had continual challenges in balancing their health care budget and has made incremental changes for the last three decades, including SIX tax increases specifically for health care while reducing benefits and increasing out-of-pocket costs. In 1990, general revenue taxes supplied 7% of French health-care expenditures. By 2003, the general revenue figure had ballooned to 40%, with no end in sight. The French national insurance system has been running constant deficits since 1985. Since the WHO report, some of the changes implemented to help contain costs have been steadily increasing fees, reducing reimbursements to both health care providers and patients and facility closures. Ironically, France is borrowing ‘Western’ health care ideas to contain costs. In 2004, France had a number of far-reaching reforms, including coordination of care through one ‘primary’ physician who must be consulted first before going to a specialist. Failure to do so results in reducing the reimbursement to the patient by almost 57% ! France currently spends the most of any European country as a percentage of its GDP (11%) compared to the U.S.’s 17% and it continues to grow. Without drastic action to contain costs, France’s system could face bankruptcy as evidenced by France’s Prime Minister Francois Fillon, who stated “The truth is that I am the head of a state that is in a state of bankruptcy due to its financing plan.”
While cost continues to be the biggest challenge affecting every country’s health care, perhaps the most telling is the general health of the underlying population. Opponents of free market health care routinely state that the U.S. spends the most on health care but has poorer outcomes, living on average two years less than our French counterparts. Is this a result of our health care system or Americans’ choices ? The answer may surprise you. Seventy-four percent of health care spending in the U.S. is directly related to preventable conditions such as heart disease, diabetes and cancer. Obesity is the main cause of the first two, smoking and other lifestyle choices account for a large part of the third. Why does U.S. health care cost so much more than France’s with lesser outcomes ? Consider that the U.S. leads the world in obesity with over 30% of its population considered clinically obese. It is generally accepted that two thirds of Americans are either overweight or obese. Compare that to less than 10% of France’s citizens being clinically obese. So, is it that difficult to understand that treating 90 million sick Americans costs more than treating 7 million French citizens ? Another factor is America’s lawsuit-happy culture. While malpractice claims themselves account for a negligible percentage of health care spending, the fear of malpractice leads to wasteful and redundant practices that are estimated to be as much as $60 billion a year (or 3% of overall medical spending). Malpractice cases in France are brought before their regions' government-appointed review board that determines how much compensation (if any) should be paid out of a national compensation fund
Simply because something works in another country is no basis for implementing the same program in America. Demographics and cultural differences account for the majority of America’s health care problems. It’s not the failure of the U.S. style of health care that is responsible for our system’s high cost and lower outcomes. It may not be popular, but the real blame lies with the American people’s lifestyle choices. While American’s certainly have the ‘freedom’ to choose their own lifestyle, they should understand that with freedom comes responsibility for the choices they make. It is not the fault of corporate America or American’s health care providers for American’s health care woes. It’s always easier to point the finger of blame outward than it is to look in the mirror.
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