Another healthcare article

[Guest guest]

I am including another article written about the healthcare issues in the

states. Feel free to comment.

 

 

Mike W. Bowser, L Ac

 

 

OP-ED COLUMNIST

 

 

Passing the Buck

 

By PAUL KRUGMAN

 

The United States spends far more on health care than other advanced

countries. Yet we don't appear to receive more medical services. And we have

lower life-expectancy and higher infant-mortality rates than countries that

spend less than half as much per person. How do we do it?

 

An important part of the answer is that much of our health care spending is

devoted to passing the buck: trying to get someone else to pay the bills.

 

According to the World Health Organization, in the United States

administrative expenses eat up about 15 percent of the money paid in

premiums to private health insurance companies, but only 4 percent of the

budgets of public insurance programs, which consist mainly of Medicare and

Medicaid. The numbers for both public and private insurance are similar in

other countries - but because we rely much more heavily than anyone else on

private insurance, our total administrative costs are much higher.

 

According to the health organization, the higher costs of private insurers

are " mainly due to the extensive bureaucracy required to assess risk, rate

premiums, design benefit packages and review, pay or refuse claims. " Public

insurance plans have far less bureaucracy because they don't try to screen

out high-risk clients or charge them higher fees.

 

And the costs directly incurred by insurers are only half the story. Doctors

" must hire office personnel just to deal with the insurance companies, " Dr.

Atul Gawande, a practicing physician, wrote in The New Yorker. " A well-run

office can get the insurer's rejection rate down from 30 percent to, say, 15

percent. That's how a doctor makes money. ... It's a war with insurance,

every step of the way. "

 

Isn't competition supposed to make the private sector more efficient than

the public sector? Well, as the World Health Organization put it in a

discussion of Western Europe, private insurers generally don't compete by

delivering care at lower cost. Instead, they " compete on the basis of risk

selection " - that is, by turning away people who are likely to have high

medical bills and by refusing or delaying any payment they can.

 

Yet the cost of providing medical care to those denied private insurance

doesn't go away. If individuals are poor, or if medical expenses impoverish

them, they are covered by Medicaid. Otherwise, they pay out of pocket or

rely on the charity of public hospitals.

 

So we've created a vast and hugely expensive insurance bureaucracy that

accomplishes nothing. The resources spent by private insurers don't reduce

overall costs; they simply shift those costs to other people and

institutions. It's perverse but true that this system, which insures only 85

percent of the population, costs much more than we would pay for a system

that covered everyone.

 

And the costs go beyond wasted money.

 

First, in the U.S. system, medical costs act as a tax on employment. For

example, General Motors is losing money on every car it makes because of the

burden of health care costs. As a result, it may be forced to lay off

thousands of workers, or may even go out of business. Yet the insurance

premiums saved by firing workers are no saving at all to society as a whole:

somebody still ends up paying the bills.

 

Second, Americans without insurance eventually receive medical care - but

the operative word is " eventually. " According to Kaiser Family Foundation

data, the uninsured are about three times as likely as the insured to

postpone seeking care, fail to get needed care, leave prescriptions unfilled

or skip recommended treatment. And many end up disabled - or die - because

of these delays.

 

Think about how crazy all of this is. At a rough guess, between two million

and three million Americans are employed by insurers and health care

providers not to deliver health care, but to pass the buck for that care to

someone else. And the result of all their exertions is to make the nation

poorer and sicker.

 

Why do we put up with such an expensive, counterproductive health care

system? Vested interests play an important role. But we also suffer from

ideological blinders: decades of indoctrination in the virtues of market

competition and the evils of big government have left many Americans unable

to comprehend the idea that sometimes competition is the problem, not the

solution.

 

In the next column in this series, I'll talk about how ideology leads to

" reforms " that make things worse.

 

 

E-mail: krugman