Our Healthcare System In Crisis: The Evidence

by Luna Flesher

It’s become clear to me based on the feedback from my previous posts on healthcare that many people in America don’t realize there are any problems with our existing system.

There is plenty of information available about these problems.  I always like to steer people towards personal research, but these links should get you started:

Plus:

And I’m not even talking about universal coverage to pay for those who can’t afford it.  I don’t have to even go there.  Because like it or not, we already pay for the poor’s healthcare through:

The US spends more for healthcare per capita than any other industrialized nation.  Yet in spite of this, it’s a myth that we have the highest quality care in the world.  According to the study linked there, “the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives.”

In my researching, I’ve run across story after story of hardworking middle class Americans being screwed over by our system. Recently, while emailing a friend of mine, I learned of not one, but two tragic stories:

My own problems are from a condition I now have also directly related to a doctor’s incompetence and refusal to look into a problem that I presented several times (each time worse) due to not wanting to run tests, as she was “out of budget” on tests that month and it would have cut into her income.

She complained of nausea over several visits,

I got to the place where nothing would stay down, even water. Got a bladder infection, showed up several times with an escalating temp, was told to go home and go to bed, it was “flu”. Ended up fainting a couple of times, very, very sick. Told to go home, go to bed, do not call her for three days, she was tired of seeing me and my imaginary problems. I felt like an idiot and hypochondriac, but the fever was there, the techs said it was going up every time I’d come in, and I felt horrible. I finally ended up in the ER, they said, hey, when is the last time you saw a doctor, you have really become ill. Well, I told them, they couldn’t believe what she did.

It turned out she had started with a simple-to-treat ovarian cyst, but due to lack of detection it had turned into a system-wide infection with high treatment costs and a long-term health impact.

I developed Ulcerative Colitis over it, which I still have to deal with now nine years later, and the host of health problems that it brings…. if they had just fixed the original problem I’d have probably still been healthy, now because they wanted to save a little $$ in the short run, I am one of the “chronically ill” who have a host of issues.

And one tidbit about pharmaceuticals:

My insurance paid for the $1,200 monthly for one of my drugs (which we found did not do any good at all, [because] after I became highly allergic to it I had to quit) but [they] will not pay $75 monthly for the other things I now do that do what the drug was supposed to do.

The second story happened to her husband:

He is having to have his back re-done because the surgeon who was supposed to be doing a fusion seven years ago screwed up royally. He put some hardware in [my husband’s] back, but nothing that would actually do any good. Three docs have looked at the x-rays and gone “huh?”. It has continued to deteriorate for seven years and he is now facing major surgery to not only remove the original mess up, but to correct the problems that were supposed to have been taken care of seven years ago. And we wondered why he never got any relief after going through all the hell of the first surgery.

Here we have two completely opposite problems: One doctor trying to avoid testing costs, and another appears to be performing an unnecessary and incorrectly done surgery potentially to line his pockets with more insurance money. Both resulted in long-term costs to insurance companies, and hence to all of our premiums.  Both resulted in long-term costs and suffering for these two people.

In effect, the industry itself made both of these people physically dependent on it, possibly for the rest of their lives.

Aren’t these the kinds of abuses supposedly caused by socialized medicine?

This is not an isolated incident.  These stories are all over YouTube, the news, the internet.  These are the people behind the statistics, the anecdotes to help us remember the numbers represent human beings.

HR3200 doesn’t represent socialized medicine as much as it represents reform. It may not be the best, but my reading of it tells me it at least tries to address most of these problems.  Obama is not pushing for nationalized health care like in the UK or Canada. He pushing to regulate and balance our out of control insurance industry, and the insurance lobby doesn’t like it. I should hope the reasons why are obvious.

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Published in: on August 15, 2009 at 4:52 am  Comments (7)  
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  1. Excellent post! keep up the good work, and get the word out to as many people as possible :)

    Don’t forget to write your reps too!

  2. If this reply is too long, please delete it. I don’t mind and am only interested in you reading it anyway.

    “Death Panels Already Exist”: Caveat emptor. Understand what you’re buying before you buy it. I only have a problem with service payment qualifications if the government forbids private payment for desired services or providers refuse to extend requested services. Then one could legitimately make the euthanasia argument.

    “We’ve already got long waits for care”: This is due to current government meddling with an industry. When you get between sellers and buyers, you corrupt the economics. There are artificial barriers to entry, constructed by government, that directly correspond to cost and availability of health care.

    “Most of us already can’t choose our doctors”: See “death panels” and “long waits” above.

    “Costs are already skyrocketing”: Again, see above.

    “The threat of increased taxes do[es]n’t matter much when we already subsidize healthcare through lower salaries and other hidden costs”: Yes, I hate these unfunded mandates by the government. Let’s be honest and have visibility of these costs rather than burying them as “other” or “administrative” costs.

    “We already have stifling paperwork and bureaucracy and high administrative overhead (wait, what, did that last link say 25%???)”: Administrative costs are, for the most part, non-productive. The higher the cost, the more secure a company is with its business. Competitive pressures force companies to trim non-productive costs. Also, private insurance company overhead is estimated to be 11.7%. The 25% you quote is for all forms of administration costs associated with health care spending and health care payment.

    “Many who want insurance and who can afford it are refused, even for “conditions” such as hay fever”: Yes, the purchase of health care is a privilege, not a right as some think it should be. Solutions to this problem include risk pools for high-cost insureds and the artificial barriers constructed by states that prevent competition within the insurance industry.

    “Many who have insurance and get seriously ill have coverage dropped”: This sort of corruption exists with any insurance, not just health care insurance. Such crooked business practices are despicable and should be prosecuted fully.

    “Medical bills are the leading cause of bankruptcy. Most of those going bankrupt were insured. (Can I point out this passes the cost to everyone through our credit system?)”: Yes, some procedures are dreadfully expensive and the cost doubles when you loose your health insurance. Buyers of insurance should factor this in when considering the type of insurance that’s affordable by them. Of course “should” is the key word. It would be nice if there existed more charities that address this issue. I wonder there’s not? Perhaps the incentives have been killed by insurance and government.

    “Many who should be able to afford insurance cannot”: “Should be able to” is a value judgment, and this issue is unrelated to health care, unless proposed to be solved by a new tax to buy insurance for those who “can’t” afford it.

    “The price of insurance keeps people from starting small businesses”: Yes, the inclusion of health insurance in compensation packages is ludicrous. If the cost of insurance goes up, should your wages go down? Try selling that to an employee, because the real cost of employment in the country (25-30% of wages for non-productivity related costs) is “hidden”.

    “The need to retain employer insurance increase[s] risks when making career choices”: Yep, attach arbitrary employment compensation requirements, and this is what you get. Imagine if you were not allowed to own a car because your employer provided you with one, and if you tried to get one privately you’d probably be turned down or forced to pay twice as much. It doesn’t make much sense, so why do we expect it? Government, taxes, unions, insurance industry, etc.

    The current health care “debate” is about proposed solutions, not the need for solutions. I don’t believe that the current ruling party proposals address the real issues, nor do I see many proposals from the opposition party.

    Here’s some interesting statistics (if true, but who knows):

    Health Care Spending (what we buy): In 2008, 31% to hospitals, 21% to doctors, 10% to medicine, 8% to long-term care, 7% to administrative costs, and 23% to other categories like diagnostic laboratory services, pharmacies, medical device manufacturers, etc. Profit margins are estimated as high as 25-30%. How are these businesses able to maintain such high profit margins? Artificial barriers to entry enforced by government contribute significantly. Demand exceeds supply which drives up profit for suppliers, as is only right. It’s not the fault of the suppliers, but rather those responsible for restricting the number of suppliers.

    Health Care Payment (how we pay for it): In 2004, 45% by government, 36% by insurance, 15% by individuals, and 4% by other funds. Solving insurance problems is only a partial solution, at best.

    The CBO estimates that at least half of the increase in health care spending over the last few decades was due to the cost of medical innovation — newer, cutting-edge technology is more expensive than older, established technology, because it’s in more demand. Also contributing to the rapid increase in cost is the increasing coverage of health care insurance (moral hazard). Why should I care if a procedure costs $2,000 when it only “costs” me $200 (plus, I’ve already paid all those damn premiums or taxes, I might as well get my money’s worth)?

    Before we consider creating a huge new bureaucracy for health care “reform”, we should try modifying the existing system. The following are solutions, listed in no particular order, which I think would work. Maybe they wouldn’t make it through the “sausage factory”, but they should, at a minimum, shine a bright light on the hypocrisy of the participants. Or maybe not. The cynic in me thinks that government is bought and paid for and acts accordingly; that too many voters are motivated by greed and not interested in true reform.

    * Eliminate punitive damage awards in medical liability suits. Elicit pledges from health care providers to refrain from defensive medical practice. Create heuristic claims evaluations for services by provider for finding potential defensive medical practice trends.

    * Maintain a national registry of the adjudication of complaints against doctors.

    * Require doctors to disclose adjudicated medical malpractice complaints to patients who request it.

    * Require disclosure for referrals to medical facilities owned in whole or in part by the referring physician.

    * Eliminate variable price schemes for health care costs. Medicare and other large insurance providers like Blue Cross Blue Shield use monopsonistic power to shift costs to other consumers of care, usually the uninsured. The pricing differences are truly astounding.

    * Eliminate state control over insurance policy content (ludicrous mandated coverage requirements) and any other government regulations that unnecessarily increase health care costs.

    * Eliminate state and federal excise tax on health insurance premiums.

    * Maintain a national registry of insurance policy information to include cost/benefit analysis for purposes of comparison. Automate comparison of user-selected plans to include deductible, co-payment, annual out-of-pocket expense, and a detailed list of effective coverage for the top 80% of treated diseases (in terms of occurrence during the prior five years).

    * Eliminate all tax of income spent on health insurance premiums, or conversely, eliminate the exclusion from income tax on all income health insurance premiums (regardless of the manner of payment, e.g. employer paid premiums).

    * Encourage responsible use of health care by promoting large deductible insurance plans coupled with HSA/MSA.

    * Reduce the barriers to entry for medical training and licensure.

    * Encourage medical careers and help establish and extend medical training facilities. Expand the functions performed by physician assistants (PA’s) and other non-physician care givers.

    * Establish a national medical license and registry of physicians, PA’s, and technologists.

    * Create a national risk pool for insurance coverage of citizens with high-cost medical conditions. All insurance companies that offer health care plans are required to participate based on the percentage of premium collections to the whole.

    * Outlaw mid-policy cancellations for anything other than non-payment of premiums. Require two month notice for policies that will not be renewable.

    * Phase out Medicare and Medicaid and associated bureaucracy. Offer insurance vouchers to income qualified citizens, regardless of age. Reclassify Medicare tax collections and trust funds accordingly.

    * Reform and streamline the FDA control over new medications. Eliminate prescription requirements for relatively safe medications where appropriate.

  3. You assume I have a choice about what health insurance I get, but I don’t. My employer does.

    Since I don’t have a choice, and since insurance company contracts are long and illegible, and since they are likely to bail from the contract due to an incomprehensible loophole or betting that I won’t sue, then caveat emptor can not apply. My choice is between accepting the insurance and trusting to luck, or not accepting the insurance, trusting to luck, and either dying, or charging my bills to the public via bankruptcy or an ER visit.

    “that too many voters are motivated by greed and not interested in true reform.” And insurance companies are somehow different? Remember, insurance companies have a lot more power than voters in the end, because they can fund who is even eligible to be on the ballot. (Because not just any of us can afford to campaign.) They can wine and dine not just elected officials, but worse– legislative staffers, the ones who do a lot of the actual work (like reading the bill).

    My main point here is that government is not the only lying, cheating, frauding, bludgeoning entity in our society. YES, government has the biggest guns, but if they are prevented from using them when it’s appropriate, then we put ourselves at the mercy of just anyone else would walk in and take our rights.

    I’m not saying we have a right to healthcare. But we do have a right to do business with corporations and have our contracts honored. In my reading of this bill, it is a far cry from an “overhaul” of the system. It is reform. You may not like how it’s being done, but the tweaks to the system are relatively minor.

    I’m sure you have an objection to the Public Option. I myself can see both its advantages and disadvantages. But what about other more free-market parts? Like the health exchange? Like putting specific rules on insurance companies to explicitly explain to them the difference between fraud and fair business? What about the complaint appeal process for insurance companies? What about the various national registries it sets up? What about the studies and data gathering to report on what treatments and insurance plans work and which don’t? I think all of those items in this bill are really good ideas.

    On the tort reform thing, Roland actually had a much better idea the other day. See, you can’t just eliminate punitive damages, because in this country we don’t have a criminal trial process for corporations. We should. But we don’t, and we’re not getting one, and sometimes, corporations act in criminal ways. The other thing is, when someone gets $10m because through malpractice they became disabled or died, they or their families have lost something significant — the ability to bring in income. Huge medical settlements and rewards are to help compensate a family who now has no breadwinner, or a breadwinner who has to learn a new career.

    So Roland’s idea was simple: Limit the amount of money a lawyer can earn on any given tort case. Make it high enough that lawyers will still be motivated and fairly compensated, but low enough that they’re not motivated to file frivolous suits.

    In any case, the cost of malpractice is high, but it’s merely one factor that could be added to the long list I have here in my blog post. I don’t think all of your rebuttals to that list are valid in light of the data and other factors. (I don’t have time to address them all. The fallacy of reductio ad Saturdaymorningum. But I gave a lot of evidence in the supporting links, so I would hope you’d read them. Many of my rebuttals to your rebuttals are argued by the authors of those articles or self-evident in the reports.)

    Some of your other ideas are good ones, and some are fully or partially in HR3200 already. In fact, you mention a national registry of insurance policies, and a huge part of HR3200 is the health exchange, which is exactly that. It also funds and encourages training of providers, increases infrastructure, etc. It bars insurance companies from charging different premiums to people within the same risk pool. Bans insurance companies from canceling mid-policy for anything other than clear fraud or lack of payment. Gives credits (vouchers) to low income.

    Not all things in your list are in HR3200, but a lot of them.

    Other than the public plan, increases in Medicare/Medicaid, and taxes to pay for the vouchers/credits, I’m not sure what problems you have with it?

  4. I did follow your links, and the links within those links, and too often found myself amazed by conclusions drawn.

    I only expect adults to take responsibility for themselves, but I guess my thoughts are based on a fantasy, an unattainable philosophy, or are very out-of-date.

    Ciao Luna. It was a pleasure considering your thoughts.

  5. :) I didn’t say that your thoughts are based on fantasy, etc. That’s a strawman. ;) I just disagree with your conclusions, that’s all. I think it’s possible for adults with some power to be frauded and manipulated by groups of adults with more power.

    Thanks for reading the blog and commenting.

  6. Sorry this is long- but hey- It’s not 3000+ pages.

    We do have some of the best access to some of the best care in the world. The problem is that while some enjoy great access to care-others do not. A fair and productive solution to this problem is needed. Many fear that that solution may destroy some of the good things in our system, and we may be worse off in the end. In nearly 20 years as a physician I have filled the roles of employer, and employee, insurance purchaser, healthcare consumer, and healthcare provider. I have had to deal with both Insurance company and government red tape. I believe government red tape is worse. Government will have to be involved with a solution–so what do we do?

    First for the ideas that won’t work–
    1)Taxing insurance premiums—STUPID!!!– My employees and I have insurance and we pay 100% of our way in the healtcare system, if you add to our cost by taxing our insurance as if it were income- to pay for insurance for the receptionists and nurses working at the doctor’s office down the street who have not paid for insurance– we are going to be very angry– and the increased cost could force us to stop buying insurance– and if the government is going to provide insurance for us if we don’t have insurance by taxing those who do? then why not be irresponsible if it pays better?
    2)Taxing charitable contributions–STUPID!!!
    This country has a long tradition of not taxing the money people give to charity. Because of a progressive (sometimes progressive oppressive) tax system, this gives people a false impression that it costs high wage earners nothing to make a donation. If someone in the 15% tax bracket makes a $1000 donation they will not have to pay $150 in taxes. While someone in the 40% tax bracket will not have to pay $400 in taxes after they donate. This applies also if you just don’t earn the extra $1000. You don’t pay taxes on money you didn’t earn, and you don’t pay taxes on money you donate. What I read in President Obama’s speech is that if you make a little less than $250k and you donate a $1000 computer to a college that you still won’t have to pay taxes on it, but if you make a little more than $250k he wants to charge you $400 for the privilege of donating. This is really just a hidden tax on charities. Donations will fall, many charities will fail, if this part of the presidents plan passes.
    3)Employer mandates will not work– Employer mandates will not cover everyone, and that is the main reason for this reform in the first place. Employer mandates will impact the job market negatively. The cost of insurance will prevent some employers from offering jobs. If all employees (Full and part time) must be covered then some employers will go to great lengths to see that all are full time. If only full time must be covered then some employers will move people to part time. If someone has two jobs do both employers have to buy them a policy or just one??? Employer mandates will mess up the job market.
    4)Expanding Medicaid–Medicaid already rewards some stupid choices. I know people who have turned down promotions because the $100 raise would have disqualified them from Medicaid, and they could not replace it for $500. Others have limited the hours they worked for the same reason. Many couples do not get married because if they do mom and the kids will no longer qualify for state funded Medicaid, and they will have to pay for insurance or the birth if both incomes are considered. The Government pays them more for doing less, but this locks them into a poverty level position– often for life. The Politicians were well intended but their solutions often do great harm.

    Now for a plan I think would work–
    First- Make Head of Household responsible for having insurance for them self and all dependents. Get it from your own or spouses employer, or from family, or community buying groups, but make HOH the responsible party.
    Second–If you have commercial insurance nothing changes, If you don’t then hold 10% out of income pretax. For the 10% HOH could select from the most popular commercial insurance plans in their county. The Taxpayers would pay the difference between 10% and the cost of the insurance policy. When a person was offered a promotion, raise, or extra shift they would still have an incentive to take it.
    somewhere between $60k and $100k a year people would be able to find insurance on their own for less than 10% of income and could then avoid the withholding.

    This plan covers everyone in the country, Everyone will be contributing to the system, but everyone who needs assistance will be given assistance proportional to their need.
    This plan will put a surprising amount of pressure on employers to have insurance if they can–Because if they don’t have insurance available, they will have to pay 10% more to be competitive with the employers who do have insurance available. We have had employees leave to work for other Doctor’s offices (that did not have insurance or retirement match) for 50 cents an hour. When we pointed out the cost of those benefits they demanded the higher pay our they would leave–We were already spending more to employ them than the other Dr was offering, but they did not see it– or maybe figured they could still qualify for medicaid–and they were young enough they weren’t worried about retirement yet.

    We need a plan that can work, and rewards smart choices. 10% is a lot to ask of a low income person– but if you look at insurance benefits as a proportion of some of my office staff’s compensation it is 15-20% or more. Medical Liability and its direct and indirect costs are also an issue that needs to be solved if we are to have any hope of controlling costs. Health Care is about 15% of GDP–Political talk that the top 5% of wage earners can pay for it all, with just some minor tax increases should be seen as the political pandering it is.
    This plan keeps the free market competition and innovation, that have created some of the best things in our system intact.

  7. […] I posted about how our healthcare system is in crisis.  Our free market system is supposed to be immune to these problems.  Yet I’m noticing a […]


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