Neither presidential health care proposal improves health or saves money
A debate rages regarding which presidential candidate’s health care” proposal will save the taxpayers money and do more to maintain or advance the population’s health status. The truth is that neither plan will do much to enhance health status and both plans will increase the burden upon taxpayers – until as a society we are willing to address issues, choices, changes and consequences we refuse to address.
The health status gains of the last 50 years were the result of the application of scientific discoveries within environmental sciences, microbiology, pharmacology, genetics, and immunology. As a society, we greatly reduced and eliminated harmful agents within our environment or protected individuals from exposure to them. We also were able to educate individuals to change their life styles to reduce the effect of certain factors (e.g., salt, tobacco, saturated fats), seek protection (e, g. immunizations), screening (e.g., Pap smear), or early care (e.g., antibiotics for streptococcus infections) to avoid serious consequences. Health insurance coverage had a marginal effect upon the tremendous health status gains of that era.
The same will be true for the next 50 years. To maintain or enhance health status there are several major issues we must address. The six I believe are most important are violence (homicide, suicide, and domestic), substance abuse (drugs, tobacco, and alcohol), high-risk pregnancies, dementia and mental illness, obesity and inactivity, and the provision of inappropriate, ineffective, and futile care. Especially as regards prevention, health insurance availability has a limited affect upon most of these conditions. It often contributes to provision of ineffective and futile care. Health status gains require society, especially communities, to address these issues through ethical, educational, social, economic, cultural, organizational, administrative, and related efforts far beyond existing “health care” interventions reimbursed through health insurance.
The cost and consequences of avoidable illness, injury, disability, and death associated with health system errors and the failure of individuals and communities to do a better job adopting healthy lifestyle practices and proven preventive measures (less than 50% for many interventions regardless of insurance coverage) are staggering. The cost of futile and ineffective care is enormous and varies greatly from community to community for the same “outcome” results. For Medicare alone, about 30% of expenditures ($130 billion) are for such care. A recent study revealed Iowa and Utah spent about $10,000 a year for care for individuals with certain conditions within the last few years of life while New Jersey and California spent $30,000 for the identical results. Neither plan will do much to address such issues.
The major role of health insurance should be to protect individuals and families from financial ruin when they suffer unexpected serious health related events. Obviously, the threshold for initiating such protection varies, starting at zero for the poorest individuals. Unfortunately, we have relied inappropriately, and too heavily, upon health insurance to try to address many of the other issues mentioned through “one size fits all” centrally administered categorical programs and insurance reimbursement policies. I believe we could do a much better job addressing these issue closer to home as I discuss in my book, De-Spamming Health Reforming the Health System from the Bottom Up.
Both plans employ “smoke and mirrors” to minimize the tax/fine and other negative consequences of their respective plans. Expanding benefits to more people translates into individuals, employers or the government directly – or through increased taxes, fines or more subtle “cost-shifting” – paying more. It is just a question of where the increased funds will come from and consequences of that action.
The current average cost of private insurance coverage, which covers about 63% of the population, is $12, 680, with the employee paying about $3, 350 of that amount. The percent of the population covered has continued to decline, largely because the percentage of small businesses offering coverage has declined from 67% in 1995 to 38% today. Senator Obama states he will not increase taxes or fines for small business, so it is doubtful either plan will do much to entice employers to increase coverage. Thus, the burden will fall to individuals or government (taxpayers). The Obama plan primarily will raise the resources directly through increased taxes/fines on businesses and individuals and the McCain plan through contributions by individuals not currently insured, and indirectly by increased taxes on individuals and businesses to make up for the shortfall by granting such uninsured individuals a tax credit. Each approach could increase or decrease the percentage of the population insured – or dropped from insurance coverage – depending upon the assumptions one makes about the direct and indirect impact, e.g., business closures, benefit restructuring, of the various tax maneuvers.
These discussions make most of us yawn and miss the major point. Most Americans are paying too much. Nearly eighty percent of privately insured Americans (1996-2002 data) receive less than $2,000 per year in health benefits; this translates to about $5,000 – $6,000 a year for average family of three. So where does the extra $6,000-$7,000 go?
Some goes to cover administrative costs and to provide perquisites to high paid executives through the provision of Cadillac health plans, e.g. cosmetic surgery, partially paid by the American taxpayer through tax breaks. (The McCain plan better addresses this issue.) However, the majority of the amount translates into a tax upon business and individuals to pay for the cost of care for the 10% -20% of high risk individuals who, on average, consume up to ten times ($20,000) as much each year in health service. Much of that amount pays for care for individuals with avoidable injury, illness, and disability, as well as ineffective and futile care, because of our failure to address the issues discussed above. If left unaddressed, McCain’s plan would fail to provide enough money for such care, since private health employer/ employee insurance plan premiums might no longer be available directly – or through cost shifting – to fund such care. Obama’s plan would continue to fund such amounts through private insurance premiums and an increase in government funding to cover the currently uninsured. Both will result in higher taxes on individuals and businesses because they do little to address the genesis of these staggering but avoidable excessive costs.
Copyright Notice – Copyright 2008 James D. Felsen, MD
