Healthcare

The United States has the most expensive healthcare system in the industrialized world. Our healthcare system is projected to eat up 17.7 percent of our Gross Domestic Product (GDP) and cost our nation $3.1 trillion next year. And absent reform, this number could likely double in the next 20 years. Already, we spend more on healthcare than defense, Social Security or any other single spending area.

But even though we spend so much on healthcare, we really don’t get a whole lot for our money. A 2008 report found that the U.S. ranks last on preventing deaths and use of timely and effective medical care. The report also found that depending on where you live, the cost and quality of care you receive will vary drastically. Additionally, a 2010 study found that the U.S. ranked last in overall quality of care compared to six other industrialized nations. And a 2007 report published in the January/February issue of the Journal for Health Affairs showed that had the United States performed as well as the top three industrialized countries[in healthcare], there would have been 101,000 fewer deaths per year. Of course, some argue the validity of these studies and they do have some valid points, but the fact is our healthcare system costs a whole lot without any concrete justification of the outrageous costs.

Currently, federal, state and local governments finance nearly half–47 percent–of our nation’s health costs. The other 53 percent is paid through private funds–12 percent is paid out-of-pocket (entirely paid for by the individual), 34 percent by private health insurance (through an employer) and 7 percent from other funds. In other words, our nation has a mixed healthcare system of part government funded and part private. Government funded health insurance is primarily through Medicare or Medicaid. Medicare pays for the elderly and the disabled, while Medicaid pays for the poor. There is also the Veterans Administration and the State Children’s Health Insurance Plan (S-CHIP), which is similar to Medicaid but strictly for children. All health insurance–even those through the government–require the individual to pay copays and deductibles, which are out-of-pocket costs. And there are also approximately 51 million Americans (which is nearly 17 percent of the population) who are without health insurance of any kind. However, under the Affordable Care Act, this number is expected to drop to about 6 million.

One of the biggest issues with our healthcare system–and the main reason for the reforms under the Affordable Care Act–is the large number of Americans living without any health insurance and the negative effects this has on their health and their wallets. Compared to those with insurance, the uninsured are less likely to fill needed prescriptions, as well as more likely to pay out-of-pocket for prescriptions; they are more likely to have problems getting needed healthcare (even for serious conditions) and are less likely to have a regular place to go when they need medical attention; they are less likely to get needed preventative care like pap smears, mammograms, blood pressure checks and prostate exams, and are more likely to delay medical care, which can affect the diagnosis and prognosis of a disease; and finally, they are more likely to receive poor care for chronic diseases. An estimated 18,000 excess deaths occur per year in this country as the result of lack of health insurance for adults between the ages of 25 and 64. This number is comparable to the number of adults in this same age group who die from diabetes, HIV/AIDS, stroke and homicide. Also, there is a significant amount of emotional stress caused by lack of insurance such as anxiety, depression, fear and family problems. In addition, the financial strain of medical costs can be significant, even leading to bankruptcy–families who lack health insurance pay, on average, 40 percent of their medical care costs and 88 percent of their prescription costs out-of-pocket.

Unfortunately, even many of those who are insured lack adequate coverage. Most who have insurance get it through their employer, but due to rising costs more and more employers are dropping healthcare coverage. Between 2000 and 2005, the percentage of employers offering health insurance coverage dropped from 69 percent to 60 percent. And even if employers are still able to provide health insurance benefits, they are moving toward offering high-deductible insurance that covers a smaller percentage of healthcare costs. As a result, more Americans are finding themselves with lower-quality health insurance that doesn’t cover many of the medical costs. Furthermore, in a 2005 study that surveyed people who filed for personal bankruptcy, 46.2 percent of them cited a medical cause, and 7 out of 10 of them were insured at the time. This is primarily because many Americans lack adequate insurance that covers more costs, and the high medical bills plus the loss of income due to illness can lead to bankruptcy.

Americans are struggling to afford their healthcare plans just as our nation is struggling to afford our healthcare system. And there are several hidden costs in our healthcare system. This information compiled by the Institute of Medicine exposes the several ways in which uninsured Americans can be a drain on the economy. One of the main reasons is “fewer years of participation in the workforce.” An estimated $65-$130 billion is lost to the economy because of diminished health and shorter life spans of uninsured Americans. If these Americans had coverage, they could contribute more and for a longer period of time to the economy. Also, a similar cost is the “developmental losses for children.” Studies show that children without health insurance or inadequate health insurance have a higher risk of suffering development delays because of poor health, affecting their future earning potential. Furthermore, programs such as Medicare and Medicaid, Social Security Disability Insurance and the criminal justice system have higher costs than they would under universal coverage. This is because the people who are uninsured have poorer health, resulting in higher expenses once they become enrolled in Medicare and SSDI, or if they start using the healthcare of the criminal justice system. And finally, the unnecessary use of the ER by the uninsured costs billions of dollars every year, and the lack of preventive and adequate care for chronic diseases (which many times are at the advanced stages before being treated) leads to insurmountable costs.

There are other costs that aren’t so hidden, such as administrative costs, which are much higher in the U.S. than other industrialized countries. Although there is disagreement over how administrative costs are measured, and therefore how much of the total healthcare costs they represent, the fact is that they are much higher here than in other industrialized countries (all of which have universal healthcare systems, btw). Plus, administrative costs tend to go toward things like billing and handling claims and less towards patient care. Another cost hiker is the absence of efficient cost control mechanisms. Our healthcare system is funded by the government and private insurance companies alike, and when a healthcare system has multiple payers all playing by a different set of rules it can be extremely difficult to create a system of cost controls. However, if you have just one payer using just one set of rules, cost controls are much easier to institute because they can apply to the entire system.

In addition, American businesses are suffering quite significantly due to the rising costs of insurance premiums that have cut away at profit margins. This, in turn, is inhibiting businesses from investing in expansion or is causing them to lay off employees. For example, in 2005, it was estimated that $43 billion was spent on uncompensated medical care for the uninsured, and two-thirds of this cost was paid by people with employer-based private insurance. This in turn drove up the costs of the insurance premiums prompting many employers to stop providing health insurance all together or to eliminate jobs to compensate for the lost money, which is why that same year General Motors had to lay-off 25,000 employees due to “runaway health care costs.” Also, because some employees don’t have health insurance or don’t have adequate health insurance, many of them miss work or aren’t as efficient when working, thus creating workplace productivity losses. And lastly, health insurance costs are built into the prices of American products, whereas companies in other countries aren’t responsible for the costs of healthcare. Therefore, American companies are at a disadvantage, leading to a loss of global competitiveness.

Probably the biggest reason why our healthcare system costs so much is because we have a system that rewards based on quantity rather than quality of care. We have a fee-for-service based system that pays providers for the number of treatments and procedures they provide and pays more for using expensive technology or surgical interventions. It is not designed to reward based on better quality of care or to support care coordination or prevention. In other words, there is an incentive for doctors and hospitals to run a bunch of tests and perform procedures, even if they aren’t necessary. We also need to bring our healthcare system into the 21st century. Our healthcare system uses outdated methods, which oftentimes encourage unnecessary care provided in a high-cost, low-quality environment. For example, most doctors and hospitals rely on paper to keep their patients medical records. Instead, we should adopt health information technology such as using electronic methods of keeping a patient’s medical history. This way no matter where an individual is or what doctor they see, their entire medical history can be pulled up on a computer.

Also, Americans can do our part to bring down healthcare costs as well. Obesity is (no pun intended) a huge problem in this country. Our diet of processed, fatty foods is literally killing us. Plus, we don’t exercise nearly enough, which only exacerbates this problem. If we lived healthy lives by eating better, exercising more and cutting out bad habits like smoking we would have less health problems, which in turn would cut back healthcare costs. This would not only save individuals and families money, but it would also save our country money.

Our government recently passed the Affordable Care Act, commonly referred to as “Obamacare.” This was a historic step in our nation’s bid to reform our healthcare system, but many are appalled by the notion of a “government takeover of healthcare.” The debate over healthcare was, and still is, nasty and divisive. It also encouraged the spreading of misinformation about healthcare reform (one of which is that universal healthcare and socialized medicine are the same thing–they are not) which made it difficult for Americans to really understand what was going on. And both sides have valid points–as with every major issue, there are pros and cons to be considered. Essentially, the debate will rage over how we should reform our healthcare system, but it is irresponsible not to acknowledge that our healthcare system is far too expensive, covers too few people and does not consistently deliver high-quality care. It is estimated that roughly 30 cents of every health care dollar is spent on poor quality care or administrative waste. We can do better than this, and we should do better than this.

This issue is complicated, and after three years of intense debate, has also become exhausting. But it won’t go away. If we ignore it, it will get far worse. We know that healthcare is too expensive in the United States. We know that most Americans aren’t getting the quality of care they deserve (especially for what they pay). We know that 51 million Americans don’t even have insurance of any kind, and tens of millions more are “underinsured.” We know the negative consequences of being uninsured or underinsured. We know that other industrialized nations all have universal healthcare systems and spend far less money and seemingly provide higher quality care than we do. (Note: it is frequently brought up by opponents of universal healthcare that the U.S. provides the best healthcare in the world, which they claim is why people from other countries sometimes come to the United States for procedures and treatment. They are right that we have the most advanced healthcare in the world, but what they fail to acknowledge is that this high quality of care is not available to everyone. It is available for those who can afford it–natives and foreigners alike. Basically our healthcare is advanced, but our insurance system sucks. And with bad insurance, you’re going to get bad healthcare.) So we know all of this, but what is it really telling us? Should we implement a universal healthcare system? Should we see how the new provisions in the Affordable Care Act work out before we jump to any conclusions? Should we repeal the Affordable Care Act and start all over again?

The bottom line is, we have to do something.  Maybe the Affordable Care Act isn’t the best answer, but not changing our healthcare system will lead to bankruptcy.  And the worse part is our healthcare system will bankrupt our country while providing crappy care to most Americans. Plus, there are obvious moral and financial questions attached to this issue. With more Americans becoming uninsured every year, and healthcare costs continually rising faster than inflation, reform is desperately needed.

For Millennials, if we can fix our nation’s healthcare problem, it will without a doubt be one of our generation’s greatest accomplishments. It is certainly doable, but again, it comes down to a choice. We either choose to change the system and change the way we live our lives, or we face the likely devastating consequences of stubborn complacency.

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