HS 107 Readings

March 18, 2007

The Health Care Crisis

by Alex Gerber

Modern medicine has probably done more to mitigate the misery and suffering that plague mankind than all the political ideologies, economic theories and religious persuasions combined.

The triumphs of modern medicine, however, are marred by the failure of health-care socioeconomics to keep pace with the brilliant advances of medical science and technology. The soaring costs of health care and the millions of medically uninsured Americans are stark testimonies of this truism.

Health-care costs are rising the fastest in history. Since 2000, private, employer-based insurance premiums have risen 4 times faster than wages. Total health-care spending has reached $1.9 trillion annually, 16 percent of the national gross domestic product (GDP), almost twice the ratio of the other industrialized nations and projected to climb to $4 trillion, 20 percent of the GDP, by 2015.

We can no longer ignore the dire consequences of the increasing health-care costs. Federal Reserve Board Chairman Ben Bernanke has warned us a fiscal crisis looms due to these unsustainable costs and "the U.S. economy could be seriously weakened, with future generations bearing the costs." This admonition was first raised by George Washington's 1796 Farewell Address when he impugned "ungenerously throwing upon posterity the burden which we ourselves ought to bear."

Also hovering like dark clouds over our health-care system are 47 million medically uninsured Americans -- having risen 5 million since President Bush assumed office. That the uninsured have poorer medical outcomes has been well documented. Indeed, there are wards in our nation's capital where health statistics are akin to those of Third World countries. The National Institute of Medicine has reported that 18,000 Americans die yearly for lack of health insurance, and our economy loses $60 billion to $ 130 billion per year due to poor health and early death.

The problem of runaway health costs and huge numbers of medically uninsured is related to the unanticipated nature of accidents and disease. The answer to preventing a medical calamity from becoming a financial catastrophe is budgeting in advance through insurance as we do for a possible house fire or auto accident.

But there are modifying factors with health insurance, revolving around society's decision that health care, unlike owning a home or an auto, is a fundamental right. Thus, health problems beyond an individual's control -- diabetes, congenital birth defects, being hit by a drunk driver -- should be insured by the community's pooling of resources (not unlike the collective responsibility civilized societies assume for allaying the costs of natural disasters like hurricanes or floods). Since Otto von Bismarck introduced this concept in Germany more than a century ago, all modern industrial nations, except the world's richest, have come to this conclusion.

The reason for this American anachronism is buried in history. During World War II, the War Labor Board froze wages and workers were in short supply. To lure them, employers picked up the tab for complete health insurance. National health-care costs in those days totaled only $40 billion yearly -- less than 5 percent of the Federal GDP. Due to the influence of its well-paid lobbyists in Washington, the private insurance industry has maintained its dominance of health insurance to this day.

Many health-care insurers are more interested in the bottom line than in the public's health. The obvious way to increase profits is to decrease benefits by excluding poor health risks from insurance programs. This adverse selection of "cherry picking" plus the 10 percent to 30 percent overhead of marketing, advertising, stockholder dividends and huge executive salaries -- none of which cures a single patient -- is largely responsible for health-care costs that have "broken" our health-care system.

The answer to our outmoded, multipayer, profit-oriented health-care industry is its replacement by a nonprofit, single-payer government agency. In short, universal health insurance (UHI) through Medicare for our entire population. President Clinton attempted to reform our health-care system along these lines but could not compete with the insurance industry's $19 million, Harry and Louise TV blitz that conned the public and Congress into believing UHI was "socialized medicine,"

In fact, our country already has UHI -- workman's compensation, which is the law in all 50 states. Society mandates health insurance for breadwinners who are injured on the job but not if they suffer the same injury while driving home from work. Why should a 5 o'clock whistle determine whether medical expenses are covered?.

In this regard, UHI will not be as costly as popularly assumed -- perhaps one-tenth the eventual $2 trillion cost of the Iraq war. The uninsured are not all dying on the streets. The majority are obviously receiving care, admittedly delayed, somewhere -- emergency rooms, public hospitals or uncompensated care at private hospitals and clinics -- with a "cost shift" to the insured. We thus already largely pay for the care of the uninsured.

The model for a UHI program could well be the Canadian UHI health care system, with modifications, which boasts a quality of care equal to ours at far lower cost. Indeed more personnel are needed to administer Blue Cross in Massachusetts than to administer the entire health care system in Canada.

It was not always so. In 1971, the ratio of total health care costs to GDP was 7.1 percent in Canada and 7.6 percent in the United States. With the adoption of its single-payer health care system 25 years ago, Canada's ratio rose to 9.6 percent in 2006 while ours has almost doubled to 16 percent.

Briefly, Canada's health-care system provides one standard of care for the entire population, rich and poor alike, under a tax-funded plan. There are no additional expenses (deductibles or co-payments) at the time of treatment.

The superiority of Canada's health-care system was perhaps best expressed by a recent Harris Interactive poll among the leading industrial societies that evaluated patient satisfaction with their health-care system. Canada ranked first and the United States last. An ABC News poll found that, by a 2-to-1 margin, Americans prefer a switch to Canada's health-care system.

We should heed the voice of the people.

Alex Gerber, M.D.,a clinical professor of surgery, emeritus, at the University of Southern California, is a former health-care consultant to the White House and the U.S. Department of Health and Human Services.