THE HEALTH CARE BUBBLE IN THE U.S.: HOW TO STOP IT FROM HAPPENING

FROM TOR DAHL AND ASSOCIATES
Newsletter Volume 6, Issue 9:

For health care premiums for 2010 price increases are now estimated to be in the range of nine to eleven percent – about five times higher than inflation. Outcomes will be about the same – we’ll still be 41st in life expectancy, 33rd in infant mortality, and 37th in health system effectiveness.

And the productivity improvement in the health sector will be a negative two percent.
Americans apparently don’t want this to change. Why? Because about 70% of the US population get their health insurance from their employers or through self-paid plans, and they are more afraid of losing it than paying 10% more. The 15% who are uninsured have no voting power, and the remaining who are insured are mostly people on Medicare, Medicaid and other government-sponsored plans (military, VA, federal employer), so most people fear that proposed changes may put them in a worse position than they are now. And this fear has produced the most emotion-laded debates that we have ever witnessed.

Yet almost all Americans are just one step away from losing their health insurance. That insurance may disappear if the employer lays off people or goes broke. If may disappear if you have a pre-existing condition, or you have a ceiling on how much the insurer will pay, or you have co-payments that you cannot afford, or the insurance company drops you because you are considered a poor risk.

So the average American is only two steps away from bankruptcy. If you lose your health insurance, you enter a twilight zone where 62% of all personal bankruptcies are caused by staggering health care bills.

This is what people prefer over a change in our system of health care financing? A change that promises to remove the pre-existing condition problem, makes your insurance non-cancelable and insures everybody? The reason, they say, is that it will cost too much.

Give me a break!

Is the 62% of bankruptcies not costly enough? The shift from going to your own doctor to waiting six hours in an emergency room? A system that will consume the entire Gross National Product of the US in 2060 if cost increases continue on the same path as they have since 2000? This is, without a doubt, the largest and most dangerous economic bubble we have ever encountered.

Here is the solution, and I cannot imagine why no one has advocated it during the entire debate that now has raged over nearly 5 years. The solution is to raise the productivity level of the health sector to be comparable with that of the average American worker.

That’s it.

That’s the solution.

If we do that, we do not have to hire even one additional healthcare worker over the next ten years. Over that period, everyone in the health sector will be paid the same pay increases as they received in the past decade. All Americans will be treated, whether insured or not, and the cost will not increase in total -–it will be offset by higher productivity.

And ten years from now, health care costs will be 10% less than they are today, in real dollars.
This is what the productivity of the average American can do for the rest of the economy.
If the health sector does as well, we shall have solved the cost problem, and the problem of the uninsured, all while continuing to provide the newly effective health care workers with the same high annual pay increases they received in the past.

Now, tell me again: Why don’t we do this? And now?

WOMAN OF WISDOM

We are fortunate when we have the chance to listen and learn from someone who possesses the strength of wisdom. A recent conversation with a woman taught me that wisdom is a scarce commodity in our society today. The wisdom possessed by this woman was not developed through formal education but through first hand life experiences.

The woman of wisdom expressed her concern to me about what is happening in society today and specifically her observation that America is “imploding” – referring to internal self-destruction. The woman of wisdom talked about the depression and the “acceptance” of children not finishing their high school education because they were needed to work on the farm or find work to help support the families. “Families” referred to not only to the immediate and extended families, but neighbors and people and individuals in the small rural communities they supported. The woman of wisdom explained how people would butcher farm animals and share the meat with others in the community. The depression was a difficult time, but people did not blame each other or their neighbors or their leaders. The people came together and supported each other.

The woman of wisdom married and bore eight children. It was a new era but not without hardships. World War II produced anxiety, a call to duty, shortages, and rationing. Again, people came together, supported each other to the extent that ration books and tokens were issued to each American family, dictating how much gasoline, tires, sugar, meat, silk, shoes, nylon and other items any one person could buy. The point of the woman of wisdom was rationing (sugar is an example) provided equal shares of a single commodity to ALL CONSUMERS. If another family had an issue or emergency, commodities were shared or given to them by other families.

The woman of wisdom expressed gratitude that out of the depression and the experiences of WW II, she felt blessed that social security became available for her generation, especially since her husband died at an early age. The woman of wisdom also expressed gratitude that she had Medicare and Medicaid in her ‘twilight’ years. The woman of wisdom expressed disappointment that the lessons of her generation appears to be lost in current discussions of helping people, and especially children, have access to “medical” insurance. The woman of wisdom said she was confused why people verbally attack each other on difference of opinions regarding “medical” insurance, and wanted to know why “these people” cannot work together for the good of the people, and for the good of each other.

The woman of wisdom passed away at the age of 92. I love you Mom.

THE COST OF FAILURE TO ENACT HEALTH CARE REFORM

FROM THE ROBERT WOOD JOHNSON FOUNDATION

September 30, 2009

By: Garrett B, Holahan J, Doan L and Headen I

Researchers from the Urban Institute used their Health Insurance Policy Simulation Model to estimate how coverage and cost trends would change between now and 2019 if the health system is not reformed.

The report shows that under the worst-case scenario, within 10 years:

The number of people without insurance would increase by more than 30 percent in 29 states.

In every state, the number of uninsured would increase by at least 10 percent.

Businesses would see their premiums increase—more than doubling in 27 states. Even in the best case scenario, employers in 46 states would see premiums increase by more than 60 percent.

Every state would see a smaller share of its population getting health care through their job.Half of the states would see the number of people with ESI fall by more than 10 percent.

Every state would see spending for Medicaid/Children's Health Insurance Program (CHIP) rise by more than 75 percent.

The amount of uncompensated care in the health system would more than double in 45 states.

http://www.rwjf.org/files/research/49148.pdf