Odds Are Against Major Healthcare Coverage Overhaul
By GMDC
It isn’t streamlined, it isn’t logical, but America’s cobbled-together system of paying for medical care does cover 85 percent of the population.
And despite the chorus of pleas for a sweeping redesign of America’s medical insurance system as the 2008 presidential race heats up, a top-to-bottom makeover seems less likely than a series of reforms that aims to fill in gaps in coverage
The calls for a far-reaching redesign of the health care system are as loud as they were in 1993, when a newly elected Bill Clinton tried to persuade Congress to enact a form of national insurance – the last time a president took on the issue.
Whether the new president is a Republican or a Democrat, a redesign will be difficult to pull off. Insurance companies, pharmaceutical firms and medical device makers, all of whom have a vested interest in averting radical change, are big campaign contributors and are strongly represented by lobbyists in Washington. That helps explain Congress’ reluctance to do more than tinker with a system that left an estimated 44 million Americans without health insurance last year.
Many of them did not require medical care, but a survey by the National Center for Health Statistics found that six percent of the population, or about 18 million people, reported that they were unable to get needed care due to cost at some time during the previous year.
The current patchwork system of paying for medical care results in disparities, with some low-income people going uncovered and affluent retirees having more coverage than they need. Most of these individuals turn to over-the-counter (OTC) treatments for treatment. For individuals with access to flexible savings accounts or health spending accounts, many of the OTC health expenses can also be reimbursed.
Most at risk are those who don’t have adequate medical insurance because they are not poor enough to be eligible for the “safety net” Medicaid program and yet can’t afford to pay insurance premiums. Often the only jobs they can get are ones with scanty or no health insurance benefits.
Discussion Questions: Does the impact of insured/non-insured consumers affect the sales of typical self-care categories such as OTC health care products, durable medical products, diabetes products, etc.? How has the impact of Flexible Spending Accounts and Health Spending Accounts affected these product categories? Do you see further government support and reimbursement for these product categories?
When a prescription drug is approved for over-the-counter sales, such as Prilosec and Plan B, volume soars. The increase comes from people who have no health insurance or drug plan AND from people who are well covered, but don’t want the delay, extra cost, and inconvenience of getting prescriptions. A huge proportion of prescriptions are written at the specific demand of the patients who already know what works for them as well as the right dosage. The extra cycle time and expense to get a prescription, particularly renewal prescriptions, is often just more overhead waste in the health care system.
There are two separate and distinct issues. One is coverage for the 15% of the people you mention that have no insurance coverage. The second is the out of control costs of the existing patchwork of systems that in time will force that 15% number higher as employers cut back even further. Bring control to the second issue and I think funding of the first will be easier.
There is momentum among Americans, shown in the latest WSJ/Harris poll on health reform, to ensure that government provides access to some basic benefit plan for those “uncovered.” See my blog from yesterday at www.healthpopuli.com. As we muddle through our fragmented health ‘system,’ we Americans project-manage our health through cobbling together individual approaches through a variety of products and services–some that fall under the strict definition of medicine and health care, and others that blur into health-enhancement. The latter can include food, exercise, tourism (medical and otherwise) and other categories that aren’t included in the 16% of our GDP allocated to health care. While those without health insurance coverage do spend more on OTC, we’re all spending more on lots of product categories that aren’t, per se, “health care,” but positively impact our health. Traditional health stakeholders–hospitals, physicians, and insurance companies–are starting to understand this, but they’ve still a long way to go to get more consumer-centric.
Truly a sad state of affairs. The American Consumer is being damaged by a system that discourages risk reduction and and is becoming more rigid, instead of becoming more flexible. Why would our health insurance system prevent me from buying insurance anywhere I wanted? It’s because each state has the ability to license insurance companies and uses this “power” to limit consumer choice. While states regulate who practices, they do little to regulate the practices of the insurers. They do not require insurers to reimburse doctors and hospitals for services in a reasonable amount of time. I know of one physician who is regularly approached by a major insurance company and advised that they will cut him a check today if he will settle for $60,000 of the $100,000 they owe him. If he doesn’t settle, they withhold payment for months (to teach him a lesson). Insurance companies force up the cost of medical care by increasing overhead of the care providers. But insurance companies have lobbyist and your congressmen and senators are in love with lobbyist. If America wants to solve this problem they should educate themselves and the get in the face of elected officials and insist on changes. We don’t need to nationalize medicine, but we do need to reform the insurance industry. If you think the victims of Katrina got a raw deal then you aren’t looking at what the medical insurance providers are doing to us on a daily basis.
Clearly the U.S. health care system is broken. Beyond the 15% of the population who are uninsured yet ineligible for government safety nets, there are untold others inadequately insured.
For these people–working poor, children of working poor, and self-employed–our system is harsh, not compassionate. Some face draconian exclusions for “preexisting conditions,” others can insure themselves but not their families, and many cannot afford both their premiums and their prescription medications.
A nationalized health care system is not the answer, in my opinion. But a few fundamental changes might help re-engineer what we’ve got. Here’s my Utopian checklist:
1. Nobody can be excluded or canceled. Sick or well, young or old. Make it a Federal law that no individual willing to enroll may be turned down for health coverage and nobody can be discontinued from their plan if they get sick.
2. No individual may opt out. Make basic health coverage mandatory for all adults and children, just like we do for auto insurance.
3. Minimum benefits/maximum premium. Federal law must require all health insurers to provide at least a basic set of benefits and imposes a ceiling on the allowable charges for those benefits.
4. National risk pool. To protect insurers, set up a national mandatory reinsurance pool that all insurers must participate in. It will spread risk and permit item #1–the no exclusions rule.
5. Health care ombuds-network. Establish a new cadre of health care advocacy professionals who work like a cooperative extension service, helping insured citizens get the benefits they pay for.
6. Incentives for healthy health care choices. Folks who get regular checkups for self and kids, who take their meds on schedule, who maintain a healthy weight and exercise accrue credits that may be applied to future health care costs. These may result in reduced out-of-pocket costs, lower deductibles, even long-term-care credits usable later in life.
There’s more to consider, including the radical notion that employers should not be in the business of providing health benefits to anyone. What about just providing a flat, pre-tax allowance that employees may direct to their privately contracted plans? Market forces would take care of driving down premium rates, just like the auto insurance business today.
What about a mandatory live-well-insurance component of private medical plans that accrues principal over the years until the income pays all premiums for retirees and a cash benefit to their heirs? The investment of this capital would help stabilize the insurers and take pressure off our Medicare system.
Smarter people than I may shoot holes in these ideas, but I’ll take the risk of ridicule on the chance that we might shift the dialog away from the abundantly stupid place it’s in right now. If I hear one more diatribe about socialized medicine, prescription drug reimbursement, or SCHIP, I just may have an infarction of my own–turning me into a burden on the insurance system.