Why are Americans so worked up about health care reform? Statements such as “don’t touch my Medicare” or “everyone should have access to state-of-the-art health care irrespective of cost” are, in my opinion, uninformed and visceral responses that indicate a poor understanding of our healthcare system’s history; it is current and future resources and the funding challenges that America faces going forward. At the same time, we all wonder how the healthcare system has reached what some call a crisis stage. Let’s try to take some of the emotion out of the debate by briefly examining how health care in this country emerged and how that has formed our thinking and culture about health care. With that as a foundation, let’s look at the pros and cons of the Obama administration’s healthcare reform proposals, and let’s look at the concepts put forth by the Republicans.
Access to state-of-the-art health care services is something we can all agree would be good for this country. Experiencing a serious illness is one of life’s major challenges, and to face it without the means to pay for it isn’t very comforting. However, as we shall see, once we know the facts, we will find that achieving this goal will not be easy without our contribution.
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These are the themes I will touch on to try to make some sense of what is happening to American health care and the steps we can personally take to improve it.
A recent history of American health care – what has driven the costs so high?
Key elements of the Obama health care plan
The Republican view of health care – free market competition
Universal access to state-of-the-art health care – a worthy goal but not easy to achieve
What can we do?
First, let’s get a little historical perspective on American healthcare. This is not intended to be an exhaustive look into that history, but it will appreciate how the healthcare system and our expectations for it developed. What drove costs higher and higher? To begin, let’s turn to the American Civil War. In that war, dated tactics and the carnage inflicted by modern weapons of the era combined to cause ghastly results. Not generally known is that most of the deaths on both sides of that war were not the result of actual combat but of what happened after a battlefield wound was inflicted.
To begin with, evacuation of the wounded moved at a snail’s pace, which caused severe delays in treating the injured. Secondly, many wounds were subjected to wound care, related surgeries, and amputations of the affected limbs, and this often resulted in the onset of massive infection. So you might survive a battle wound only to die at the hands of medical care providers who, although well-intentioned, their interventions were often quite lethal. High death tolls can also be ascribed to everyday sicknesses and diseases in a time when no antibiotics existed. In total, something like 600,000 deaths occurred from all causes, over 2% of the U.S. population at the time!
Let’s skip to the first half of the 20th century for some additional perspective and to bring us up to more modern times. After the Civil War, there were steady improvements in American medicine in understanding and treating certain diseases, new surgical techniques, and physician education and training. But for the most part, the best that doctors could offer their patients was a “wait and see” approach. Medicine could handle bone fractures and increasingly attempt risky surgeries (now largely performed in sterile surgical environments), but drugs were not yet available to handle serious illnesses. The majority of deaths remained the result of untreatable conditions such as tuberculosis, pneumonia, scarlet fever, measles, and related complications. Doctors were increasingly aware of heart and vascular conditions and cancer, but they had almost nothing wo treat these conditions.
This very basic review of American medical history helps us understand that until recently (around the 1950s), we had virtually no technologies wo treat serious or even minor ailments. Here is a critical point we need to understand; “nothing to treat you with means that visits the doctor, if at all, were relegated to emergencies, so in such a scenario, costs are curtailed. The simple fact is that there was little for doctors to offer and, therefore, virtually nothing to drive healthcare spending.
A second factor holding down costs was that medical treatments were paid for out-of-pocket, meaning by an individual’s resources. There was no such thing as health insurance, which was certainly not paid by an employer. Except for the very destitute who were lucky to find their way into a charity hospital, healthcare costs were the individual’s responsibility.
What does health care insurance have to do with health care costs? Its impact on health care costs has been and remains, to this day, absolutely enormous. When health insurance for individuals and families emerged as a means for corporations to escape wage freezes and to attract and retain employees after World War II, almost overnight, a great pool of money became available to pay for health care. As a result of the availability of billions of dollars from health insurance pools, money has encouraged an innovative America to increase medical research efforts.
More Americans became insured through private, employer-sponsored health insurance and increased government funding that created Medicare and Medicaid (1965). In addition, funding became available for expanded veterans health care benefits. Finding a cure for almost anything has consequently become very lucrative. This is also the primary reason for the vast array of treatments available today.
I do not wish to convey that medical innovations are bad. Think of the tens of millions of lives saved, extended, enhanced, and made more productive. However, with a funding source grown to its current magnitude (hundreds of billions of dollars annually), upward pressure on healthcare costs is inevitable. Doctors offer, and most of us demand and get access to the latest available healthcare technology in pharmaceuticals, medical devices, diagnostic tools, and surgical procedures.
The result is more health care to spend our money on. Until recently, most of us were insured, and the costs were largely covered by a third party (government, employers). Add an insatiable and unrealistic public demand for access and treatment, and we have the “perfect storm” for higher and higher healthcare costs. And by and large, the storm is only intensifying.
Now, let’s turn to the key questions that will lead us into a review and, hopefully, a better understanding of the healthcare reform proposals in the news today. Is the current trajectory of U.S. healthcare spending sustainable? Can America maintain its world competitiveness when 16%, heading for 20% of our gross national product, is spent on healthcare? What other industrialized countries spend on healthcare, and is it even close to these numbers?
When we add politics and an election year to the debate, information to help us answer these questions becomes critical. We must spend some effort understanding health care and sorting out how we think about it. Properly armed, we can more intelligently determine whether certain healthcare proposals might solve or worsen some of these problems. What can be done about the challenges? How can we, as individuals, contribute to the solutions?
The Obama healthcare plan is certainly complex – I have never seen a healthcare plan that isn’t. But through a variety of programs, his plan attempts to deal with a) increasing the number of Americans that are covered by adequate insurance (almost 50 million are not) and b) managing costs in such a manner that quality and our access to health care are not adversely affected. Republicans seek to achieve these same basic and broad goals, but their approach is proposed as being more market-driven than government-driven. Let’s examine what the Obama plan does to accomplish the abovementioned objectives. Remember, by the way, Congress passed this plan and began to kick in 2014 seriously. So, this is the direction we are currently taking as we attempt to reform health care.
The Obama plan dramatically expanded the number of Americans covered by health insurance through insurance exchanges and an expansion of Medicaid. To cover the cost of this expansion, the plan requires everyone to have health insurance, with a penalty to be paid if we don’t comply. It will purportedly send money to the states to cover those individuals added to state-based Medicaid programs.
To cover the added costs, several new taxes were introduced, one being a 2.5% tax on new medical technologies and another increasing taxes on interest and dividend income for wealthier Americans. The Obama plan also uses evidence-based medicine, accountable care organizations, comparative effectiveness research, and reduced reimbursement to health care providers (doctors and hospitals) to control costs.
The insurance mandate covered by points 1 and 2 above is a worthy goal. Most industrialized countries outside of the U.S. provide “free” (paid for by individual and corporate taxes) health care to most citizens. However, several restrictions may cause many Americans to be culturally unprepared. The primary controversial aspect of the Obama plan is the insurance mandate.
The U.S. Supreme Court recently decided to hear arguments about the constitutionality of the health insurance mandate due to a petition by 26 state attorneys general that Congress exceeded its authority under the commerce clause of the U.S. Constitution by passing this element of the plan. The problem is that if the Supreme Court should rule against the mandate, it is generally believed that the Obama plan as we know it is doomed. This is because its major goal of providing health insurance to all would be severely limited if not terminated altogether by such a decision.
As you would guess, the taxes covered by point 3 above are rather unpopular with those entities and individuals who must pay them. Medical device companies, pharmaceutical companies, hospitals, doctors, and insurance companies all had to “give up” something that would either create new revenue or reduce costs within their spheres of control. For example, Stryker Corporation, a large medical device company, recently announced at least 000 employee reductions to cover these new fees. Other medical device companies and pharmaceutical companies also experience this.
The reduction in good-paying jobs in these and the hospital sectors may rise as former cost structures must be dealt with to accommodate the reduced hospital reimbursement rate. Over the next ten years, some estimates put the cost reductions to hospitals and physicians at half a trillion dollars., This will directly affect the companies that supply hospitals and doctors with the latest medical technologies. None of this is to say that these changes will not realize efficiencies that other jobs will, in turn, be created for, but this will represent a painful change for a while. It helps us understand that healthcare reform has positive and negative effects.
Finally, the Obama plan seeks to change the way medical decisions are made. While clinical and basic research underpins almost everything done in medicine today, doctors are creatures of habit like the rest of us, and their training and day-to-day experiences dictate, to a great extent, how they diagnose and treat our conditions. Enter the concept of evidence-based medicine and comparative effectiveness research. Both of these seek to develop and utilize databases from electronic health records and other sources to give physicians better and more timely information and feedback regarding the outcomes and costs of the treatments they provide.
Tuesday, there is great waste in health care, estimated at perhaps a third of over 2 trillion dollars in health care spending annually. Imagine the savings possible from reducing unnecessary tests and procedures that do not compare favorably with healthcare interventions that are better documented as effective. Now, the Republicans and others don’t generally like these ideas as they tend to characterize them as “big government control” of your and my health care. But to be fair, regardless of their political persuasions, most people who understand health care know that better data for the above purposes will be crucial to getting health care efficiencies, patient safety, and costs headed in the right direction.
A brief review of how Republicans and more conservative individuals think about health care reform. They would agree that costs must come under control and that more, not fewer, Americans should have access to healthcare regardless of their ability to pay. However, the main difference is that these folks see market forces and competition as ways to create the cost reductions and efficiencies we need. There are several ideas about driving more competition among health insurance companies and health care providers (doctors and hospitals) so that the consumer would begin to drive costs down by our choices.
This works in many sectors of our economy, but this formula has shown that improvements are elusive when applied to health care. Primarily, healthcare choices are difficult even for those who understand it and are connected. However, the general population is not so informed, and besides, we have all been brought up to “go to the doctor” when we feel it is necessary. We also have a cultural heritage that has engendered in most of us the feeling that health care is just there. There isn’t any reason not to access it. Worse, we all feel that we can do nothing to affect its costs to ensure its availability to those with serious problems.
OK, this article was not intended to be an exhaustive study as I needed to keep it short to hold my audience’s attention and leave some room for discussing what we can do to contribute mightily to solving some of the problems. First, we must understand that the dollars available for health care are not limitless. Any changes to provide better insurance coverage and access to care will cost more. And somehow we have to find the revenues to pay for these changes. At the same time, we have to pay less for medical treatments and procedures and do something to restrict the availability of unproven or poorly documented treatments as we are the highest cost health care system in the world and don’t necessarily have the best results in terms of longevity or avoiding chronic diseases much earlier than necessary.
We need a revolutionary change in how we think about health care, its availability, costs, and who pays for it. And if you think I am about to say we should arbitrarily and drastically reduce spending on health care, you would be wrong. Here it is, fellow citizens – healthcare spending must be preserved and protected for those who need it. To free up these dollars, those of us who don’t need it or can delay it or avoid it need to act. First, we must convince our politicians that this country needs to sustain public education about the value of preventive health strategies.
This should be a top priority, and it has worked to reduce the number of U.S. smokers, for example. If prevention were to take hold, assuming that those needing health care for the myriad lifestyles engendered by chronic diseases would decrease dramatically is reasonable. Millions of Americans are experiencing these diseases far earlier than in decades past, and much of this is due to poor lifestyle choices. This change alone would free up plenty of money to handle the health care costs of those needing treatment, whether due to an acute emergency or chronic condition.
Let’s go deeper into the first issue. Most of us refuse to do something about implementing basic wellness strategies into our daily lives. We don’t exercise, but we offer a lot of excuses. We don’t eat right, but we offer a lot of excuses. We smoke and drink alcohol to excess, and we offer a lot of excuses as to why we can’t do anything about managing these known to be destructive personal health habits. We don’t take advantage of preventive health check-ups that examine blood pressure, cholesterol readings, and body weight but offer many excuses.
In short, we neglect these things, and the result is that we succumb much earlier than necessary to chronic diseases like heart problems, diabetes, and high blood pressure. We wind up accessing doctors for these and more routine matters because “health care is there,” but somehow, we think we have no responsibility for reducing our demand for it.
It is difficult for us to listen to these truths, but it is easy to blame the sick. Maybe they should take better care of themselves! Well, that might be true, or perhaps they have a genetic condition and have become among the unfortunate through absolutely no fault of their own. But the point is that you and I can implement personalized preventive disease measures to improve healthcare access for others while reducing its costs dramatically. It is far better to be productive by doing something we can control than shifting the blame.
There are a huge number of free websites available that can steer us to a more healthful lifestyle. A soon as you can, “Google” “preventive health care strategies”, look up your local hospital’s website, and you will find more than enough help to get you started. Finally, there is a lot to think about here, and I have tried to outline the challenges and the very powerful effect we could have on preserving the best of America’s healthcare system now and in the future. I am anxious to hear from you. Until then, take charge and increase your chances for good health while ensuring that health care is there when we need it.
