Reforming the American Health Care System: Build on What We Already Have

Unlike previous years, youth participation in this year’s presidential election is very strong. TIME magazine in its February 11, 2008 issue listed "fear factors" in the polls conducted among the under-30 voters. At the top of the list, 62% of the respondents were concerned about not being able to afford health care; which was an even bigger concern than not being able to find a stable, well-paying job (ranked third at 58%). Their concern can be understood against the background that 47 million Americans, or 11% of the population, were without health insurance in 2005 (see chart to the left). According to the Henry J Kaiser Family Foundation Employee Health Benefit 2006 Annual Survey, a third of firms in the United States did not offer health care coverage. Due to high insurance premiums, many small employers cannot afford to provide health benefits. Employment is no longer a guarantee of health care coverage. Reforming the U.S health care system involves both expanding the coverage and controlling the growth rate of expenditures, which will result in better affordability. This efficiency can be achieved by improving every aspect of the health care chain and requires collaboration among the stakeholders in the system.

Although many people presently expect Congress to establish a cost effective health care system for all workers and their families, regardless of existing health, income level, or employment status, like other developed nations (as shown in the map on the right), this idea is not new. In his State of the Union address on January 5, 1949, President Harry Truman called for a nation-wide “system of prepaid medical insurance which will enable every American to afford good medical care.” More than fifty years later, we have yet to see the proposal become a reality. It has a lot to do with our culture, which embraces consumerism and capitalism. Within such a culture, patients want choices, and care providers look for returns. We allow market forces to allocate resources. Therefore, it is not surprising if the U.S. has a higher per capital number of health care professionals and high tech equipments.

Any universal coverage does come with a heavy price tag. According to the February 7, 2008 report in the Wall Street Journal, Massachusetts’ mandatory health insurance is costing the government about $155 million a year, and is projected to reach $1.35 billion by 2011. On the other hand, Massachusetts is expected to incur a $1.2 billion budget deficit in 2008. To balance the budget in 2011, some other areas of government services, e.g. education, may have to face deep cuts, or raise taxes. Moreover, we must realize that the universal health care system has shortcomings. It does not guarantee the quality service and access to a needed health care specialist in a timely manner. The bureaucratic inefficiency does exist in a universal health care system as it is in a Health Maintenance Organization (HMO) set-up. The U.K and Canada started their Universal health care system in 1948 and 1984 respectively. In the Commonwealth Fund 1998 International Health Policy Survey, 10% of the public in Canada and the UK said they did not get needed care in the past year, comparing to 14% in U.S. respondents. In the same survey, 47% of the Canadian respondents said it was very difficult for themselves or family members to see a specialist or consultant, comparing to 40% of U.S. respondents. In addition, market feedback continues to show significant percentage of people in Europe pay out-of-pocket to see specialists, avoid long waiting rooms, get MRIs, or see a doctor who is said to have a better training or personality.

There is no lack of proposals as to how to improve our health system. Preventive policies can lower expenditures. A report published by Commonwealth Fund in December 2007 examined 15 federal policy options that have the potential to lower health spending relative to projected trends. They include policies that would use better information for health care decision-making (which I separately address in another post), promote health and enhance disease prevention, align financial incentives with quality and efficiency, and correct price signals in the market. According to the authors of the report, “combining [these] policies would capture the synergistic benefits of individual changes.” The savings could amount to $1.5 trillion in national health expenditures over 10 years, while also improving value in terms of access, quality, and health care outcome. In the U.S., substantial costs to the health system are related to care of chronic diseases, such as diabetes or heart disease. Reducing tobacco use and prevention of obesity would potentially save the system $191 billion and $283 billion respectively over 10 years. Individuals taking wellness programs and living a healthy lifestyle would help lower the rate of growth in treatment expenditure. However, resetting the price signals is a delicate task in light of the shortage in primary-care doctors and the potential shortage of general surgeons as the population grows, according to the recent AMA data. Complicating the challenge is another growing trend that the quality-of-life issues are changing younger doctors’ attitudes towards practice options (which I discussed in my post under Reform or Innovation: Common Sense Should Prevail). Under these conditions, any radical reforming approach may create more new problems than it intends to solve initially. There is no magic bullet to fully address rising costs and inefficiency in the system; every stakeholder has to play a part to improve through gradual innovation.

After the election year rhetoric settles down, the government can build on the existing health care system. The sooner we address these challenges, the earlier we will see the benefit. Funding our long-term health care needs, by raising taxes will not . Any reform will lead to consumers directly feeling the pinch in their wallets, each time they utilize the system. Hopefully, this may lead to individuals assuming a bigger responsibility in pursuing healthy lifestyles and making choices for preventive treatment or care. Government assistance should always be the last resort for those who fall through the cracks of the system.