January 29, 2005

Health Care: The 800-lb Gorilla

[Cross posted to The Centrist Coalition blog.]

While the Democrats work overtime to shoot down a Social Security reform plan that hasn't even been proposed or detailed yet, there's another crisis waiting in the wings to explode. And for this one, there's no cushion of lead time.

Tax-Exempt Hospitals' Practices Challenged
46 Lawsuits Allege That Uninsured Pay the Most

As the cost of medical care continues to increase faster than economic growth, even the institutions that are supposed to help are taking a very hard line indeed on collecting bills from the uninsured--and charging them more to boot. While insurors negotiate steep price breaks on services, the uninsured are dunned for full "list" price, sometimes as much as six times what an insured patient's bill would be. In times past, the poor's charges would be written off as charity. Now even the non-profits are sending the bill collectors to dun minimum-wage workers for bills they can't possibly pay.

Malpractice suits, insurance companies, high drug costs, boutique clinics, corporate medicine--the list of things and people to blame is endless. But the bottom line is that the system is out of control, and rapidly becoming unaffordable to even those in the middle rungs of the ladder. Health insurance for a family of four has already passed the $10,000 a year mark, and that's NOT including deductibles and co-pays. By far the #1 cause of bankruptcy in America today is medical bills.

Social Security reform, while not cheap, is not complicated. The choices are fairly clear, the finances not all that ambiguous. If we act soon, it can be brought under control without the system imploding. But Medicare isn't running out of tax revenue in 2018. It's running out of revenue NOW, and the overall cost of the program in constant-dollar terms is expected to more than quadruple in the coming years. And that may be an optimistic estimate. One conclusion is inescapable--Medicare can not be reformed without reforming the overall health care system.

In the meantime, fewer and fewer employers are picking up the full tab for medical insurance. And even fewer pay anything at all for the employee's dependents--that's extra. The cost of insurance is severely retarding wage growth, and is the #1 factor cited in "outsourcing" decisions by employers.

Many defenders of the American health care system like to say that we have the finest health-care system in the world. And it's true that American health-care innovation is unrivaled, in drug and technology and treatment development. But outcomes are lagging, as large portions of the populace simply can't afford to access these innovations. We do indeed have the finest for-profit health care system in the world. It's the absolute finest at producing profits. But it's rapidly becoming second-rate at producing outcomes.

I have no easy answers. But I'd love to hear suggestions. How do we cage the 800-lb gorilla? And how can we afford to feed it?