Health Care Meltdown: Confronting the Myths and Fixing Our Failing System
By Robert H. LeBow, MD
Revised and Updated by C. Rocky White, MD
Robert LeBow spent two years as a U.S. Peace Corp physician in Bolivia, and was headed toward a career in international health, when he realized that the economic forces in play in our own American health care system resulted in poor health outcomes here at home. He joined a health center for migrant farm workers in Idaho and became a life long health care activist. C. Rocky White arrived at the same conclusions, coming from a completely different background. His fundamentalist Christian boyhood on a Nebraska farm shaped his conservative views. His experience as a caring physician convinced him that while he was a strong believer in capitalism and the profit motive, he drew the line on issues relating to human health and questions of life and death. A few years after LeBow’s death in 2003, his widow asked White to revise and update her husband’s book, the very book that White himself would have written, had LeBow not done it first.
What exactly did these two men find wrong with the American health care system? Our medical technology is among the finest in the world and we have thousands of competent and compassionate health care providers. One problem is that our health outcomes are not very good in comparison to the rest of the world. A World Health Organization Study in the year 2000 ranked us at 27th in life expectancy, 29th in maternal mortality, 35th in infant mortality, and 36th in mortality before age five. In virtually all measures of health care, we rank in 20th place or worse, and we are the only industrialized democracy in the world which does not provide universal coverage to its entire population.
In light of these facts, it is surprising that in the United States, per capita spending on health care is roughly twice as much as in most other industrialized nations. We are also unique among our peers in being the only place where illness can lead to financial ruin. A full 50% of personal bankruptcies are medically related, and those affected are primarily middle-class people. 75% of those driven to bankruptcy due to health care costs had health insurance when they became ill.
What is contributing to such high costs? LeBow and White say that it is our fragmented, for-profit system for financing health care. A recent study of 2277 people in Washington state, for example, revealed that they were covered by 755 different health insurance policies and 189 different health plans. Such complexity results in increased administrative costs, as health care providers and hospitals submit claims to a variety of payers. In fact, up to 30% of health care costs involve administration, marketing of various insurance plans, inflated CEO salaries, commissions to insurance agents, and corporate profits. If these resources were instead devoted to patient care, all those currently insured could be covered.
How many people are currently uninsured? Out of a population of 300 million roughly 46 million have no health insurance. Adding those who are underinsured – in other words, those whose co-payments and deductibles are so high that their lack of a good plan presents a barrier to care – the figure is closer to 90 million.
When one is among the 90 million, he tends to delay health care, simply because it is too expensive. Or he sees a doctor, but forgoes the follow up visit. Or he doesn’t buy the prescribed medications, because he can’t afford them. Ultimately, the lack of preventative care or early intervention, results in many of the uninsured or underinsured developing serious problems that could have been avoided.
At the point where conditions become catastrophic, members of the uninsured or underinsured groups may gain entry to the system. Their aggravated conditions require immediate attention and the accompanying economic devastation makes them qualify for government programs for the very poor. However, the price is great – both in terms of human suffering and financial waste.
On the other side of the spectrum, there may be a tendency for overutilization. A person with back pain, for example, might come in and demand an MRI. A physician’s inclination might be to go with conservative approaches first, but he might be pressured into going along with the request, provided that the patient has a health plan that would cover it. In a similar vein, someone might see a particular medication advertised on TV and insist upon it, even though another medication might be less expensive and just as effective.
However, the middle class is vulnerable, as well. Our unique approach to health care which ties coverage to employment – a concept unheard of in other industrialized nations – means anyone is one layoff away from losing insurance. In addition, anyone who has been seriously ill (e.g. a cancer survivor) is someone labeled with a “pre-existing condition.” Insurance premiums for such a person become so high that many can no longer afford to buy it.
Physicians are suffering under the current system as well. They are devoting a significant amount of time to paperwork in figuring out who is covered by what and submitting and resubmitting claims. They also find themselves chasing favorable demographics, in order to survive. Rocky White tells of his own experience in the San Luis Valley, in South Central Colorado. In 1996, when he began working there, he was one of eleven internists in the Valley. The uninsured rate there is close to 24%. 23% of the population is on Medicaid and another 28% are on Medicare. With Medicaid patients, his practice lost 30 cents on the dollar, and with Medicare, he broke even. With such demographics, it is hard to sustain a practice, and White found that after nine years, he was the only internist left in the Valley. In this manner, many regions throughout the country are left with few or no internists.
LeBow and White argue that the only way to fix our health care system is to move to a single payer, one risk pool system. Health care delivery would continue to come from private providers but the financing mechanism needs to be done on a non-profit, public interest basis. With a single payer, health care administrative costs can be cut dramatically and resources could go back into patient care.
Who could object to health care as a human right and a simplified payment mechanism which would save billions of dollars? There have been four primary opponents: physicians, hospitals, pharmaceutical companies, and insurance companies. However, things are beginning to change. While the American Medical Association has long been an opponent of a single payer system, 57% of physicians overall now support it. These physicians are from varied backgrounds and political inclinations, but are aware of the inherent wastefulness in the current system and how it makes it increasingly difficult to practice medicine.
Hospitals, primarily those run as non-profits, should welcome a change that would streamline administration and cut down on paperwork. For-profit hospitals might consider converting to non-profit status.
A single payer opponent with more to lose is the pharmaceutical industry. Drug companies have one of the highest profit margins of all American companies, at 19% of sales. (In comparison, the median profit margin of Fortune 500 companies is 5%.) Drug companies spend three times as much money on marketing as they do on Research and Development, in order to maintain those high profits. A single payer system would have tremendous power to negotiate better pricing. Drug companies would still make a profit, but would not be able to “maximize profit.” The well being of our citizens would come first.
Finally, the player with the most to lose is the insurance industry. Their middleman role would be all but eliminated, except for some basic administrative functions within a non-profit context.
Perhaps the greatest obstacle to change, say the authors, is that the public knows so little about how the present system works or what alternatives might look like. The opponents of single payer have huge budgets to convince us that single payer is not a good idea. The opponents would like us to think that single payer would offer us less choice, when, in fact, the opposite is true. With today’s system, you can’t see a physician who is not approved by a particular health plan. Under single payer, there would be no such restrictions. A single payer, one risk pool system would continue to utilize health providers in the private sector. It is only the financing mechanism that would operate on a non-profit basis, in the public interest.
The authors emphasize that the “single risk pool” aspect of single payer is a critical element. Under the current system, health insurance companies are only too happy to delegate high risk patient responsibility to the government. The elderly are more likely to need medical services as are the truly poor, who have not had the same level of preventative care or early intervention. The profits are to be made among those in the healthy, employed middle-class. What could be more profitable than having a family of four pay well over $10,000 per year in health insurance, when the vast majority have little or no need to actually use health care services? Then, of course, should someone in this group become seriously ill, for example, develop cancer, the insurance industry looks for the first opportunity to deny coverage, or establish premiums that are well above the affordable level.
The one risk pool approach, advocated by the authors, requires us to think beyond our individualistic approach to health care and assume community responsibility. However, it is not simply a matter of altruism. We need to acknowledge that someone close to us may some day grow old or develop a serious illness. Just as we would want the members of the larger community to be there for us, we need to be there for them.