Chapter OneSpending More, Getting Less
The American health-care system is collapsing around us.
FORMER SENATOR JOHN B. BREAUX
The health-care crisis that is engulfing workers is by far the most important and difficult domestic issue facing the United States today. According to a 2005 poll by the Kaiser Family Foundation, a nonprofit health-policy research group based in Menlo Park, California, Americans ranked health care behind only war and foreign policyand just ahead of the economyas the most important issue for the government to address. No wonder. Our system is in shambles, and the near-term prognosis for fixing it is not good. Workers whose insurance is provided by their employers face constant cuts in coverage and increases in costs that threaten their savings. The 76 million baby boomers are beginning to retire and are likely to stretch Medicares budget to the breaking point; Medicaid, the government health-care program for the poor, is in critical condition in many states. Still more dire, the ranks of the uninsuredbetween 45.8 million and 81.8 million, depending on whether those with sporadic coverage are countedcontinue to swell. Given the nature of the American political system, things are certain to get much worse over the next decade or so before they get better.
Understanding how we got into this mess is important to getting out of it, so this chapter looks at the broad systemic problems of Americans health-care system. The central aim of this book, however, is to help you deal with the system as it isnot as it was or might beso if youd like to go directly to practical matters, skip ahead. You can always return to this chapter later.
How Bad Is the Crisis?
If you have a job and your employer provides comprehensive health insurance, you probably have access to pretty good care. You have some choice in selecting your doctor, you can usually get an appointment in a matter of days, and if you are hospitalized you can be reasonably confident your care will meet certain minimal standards. You also have some peace of mind in knowing that most of your medical bills will be paid. Yet that care is likely not as good as you have been led to believe. If you have a serious illness or accident, your pretty good health insurance may leave you responsible for some pretty big bills. America is facing a health-care crisis not simply because so many lack insurance; we have cobbled together an irrational and inefficient system that is filled with loopholes, obstacles, and unmarked hazards even for those with insurance.
Many Americans think our health-care system is the best in the world. Unfortunately, this is no longer true. For certain expensive, high-technology surgical procedures, medical care in the United States is unrivaled. But this is only a small portion of the overall medical picture. Much of the rest is an increasingly dysfunctional system the benefits of which dont come close to matching its outrageous expense. Its failure is not just hurting the health of our citizens but is a drag on our economy.
Because most people get health insurance through their employers, the spiraling costs of health care have been cited in layoffs, bankruptcies, and announcements of low profits or losses. The chief executive of General Motorswhere annual health-care costs approach $6 billion or an estimated $1,500 per vehicle, more than the cost of steelwarns that “the health-care crisis is putting our future at stake.” The chairman of Starbucks, whose company spends more on employee health insurance than it spends on the raw materials needed to brew its coffee, calls the situation “completely non-sustainable.” The costs are squeezing American companies that compete with companies from countries whose citizens have guaranteed national health care that is less expensive andbetter for the bottom linenot provided directly by employers. Toyota recently decided to locate a new plant in Canada instead of Alabama, partly because of savings the automaker will enjoy under that countrys national health insurance. GM, which operates several plants in Canada, has lobbied the Canadian government not to change its national health-care system. As Dr. Arnold S. Relman, a Harvard Medical School professor emeritus and former editor of the New England Journal of Medicine, wrote in the March 7, 2005, issue of the New Republic, rising health costs “are threatening the financial stability and competitiveness of many American businesses and are discouraging the hiring of new full-time workers.”
Employer-based insurance also has unpleasant consequences for workers. Those who would like to change jobs, retire early, or start their own business are often unable to do so because they fear losing health coverage or being unable to afford it on their own. (Well look at the problem of so-called job lock and its consequences in chapter 3.)
To get a handle on how little we are getting for our health-care dollars, first consider infant mortality ratesone of several common, universally accepted measures for ranking nations on the quality and availability of their health services. According to the CIA World Factbookyes, the Central Intelligence Agency, not some dewy-eyed liberal groupthe United States estimated 2005 rate of infant deaths per thousand live births stands at 6.5, giving 41 countries out of 224 a ranking higher than America. Even impoverished Cuba stands two notches above the United States, with an infant mortality rate of 6.33. Most industrialized nations have better infant mortality rates than America. Singapore tops the list at 2.29. As a whole, the European Unions rate is 5.1. Nicholas D. Kristof, an op-ed columnist for the New York Times, noted in a January 12, 2005, column that if the United States had an infant mortality rate only as good as Cubas, we could save an additional 2,212 babies a year; with a rate as good as Singapores, we could save 18,900 babies a year.
The more data you look at, the worse it gets. Life expectancy at birth in the United States stands at 77.71 years, ranking 47 out of 224 countries. Tiny Andorra tops the list at 83.51 years, with Singapore, Hong Kong, and Japan all hitting over 81 years, and the European Union, overall, standing at 78.3 years.
The World Health Organization ranks the United States thirty-seventh in terms of overall health performance; in fairness of health care, it ranks fifty-fourth.
A study published several years ago in the Journal of the American Medical Association by Dr. Barbara Starfield, a physician and distinguished professor at the Johns Hopkins Bloomberg School of Public Health, compared health conditions in the United States with those of twelve other leading industrialized countries. The United States ranked an average of twelfth for the sixteen health indicators examined. It was in last place for low birth weights, neonatal and infant mortality overall, and years of life lost. It edged up for life expectancy at the age of one for females (ranking eleventh) and for males (ranking twelfth) and for life expectancy at the age of fifteen for females (ranking tenth) and for males (again, ranking twelfth). At the time of the study, Japan ranked highest among developed countries in terms of health; France has since moved into that spot. Starfield points out that the United States tends to rank worse each year.
Starfield cited two causes behind Americas poor showing: the huge numbers of people without insurance and a weak primary-care system. She said that while Americans without insurance, as well as many covered by Medic