By Marshall Snipes, Chair, New Horizon Health Care Council
What is the Problem with Health Care? When that question is posited to the political class, the answers are predictably based on one’s political persuasion. Those on the left, who are liberals and tend to be Democrats, believe the problem is that the Affordable Care Act did not extend far enough. They believe we should have, and will ultimately get to, a single payer system similar to the rest of the Free World. That means more government. Those on the right, who are conservatives and tend to be Republicans, believe the Affordable Care Act itself defines the problem. They believe in less government involvement, but have offered very little in terms of comprehensive health care reform that addresses the real problem.
So what is the problem? In 1960, as a percent of GDP, health care was 5%. By 2014, health care had grown to 17.5% of GDP. (1) Health care since 1960 has grown significantly faster than GDP and the GDP Price Index. Medicare actuaries predict that, at the current pace, health care will increase to 19.6% of GDP by 2024. (2) Not only is health care the largest part of our economy, it’s also the fastest growing segment.
If quality health care was evenly distributed across all citizen classes and was somehow affordable to all Americans, then the American public might be willing to accept this trend. But health care is not evenly distributed and is certainly not affordable to all Americans. Current political solutions are reduced to sound bites without addressing the real issues – cost that in turn means affordability that in turn means access.
“If I had an hour to solve a problem and my life depended on a solution, I would spend the first fifty-five minutes determining the proper question to ask, for, once I knew the proper question, I could solve the problem in less than five minutes.” Attributed to Albert Einstein. (3) So what are the proper questions that should be asked?
First, we have to agree as a society whether health care is a right or a privilege. Historically, health care has been a “privilege.” With the passage of the Affordable Care Act, health care at least for some became a “right.”
Health care will never be affordable for the poor. As a society, we need to recognize our responsibility to help the poor. This is significantly different than simply declaring that every citizen has the “right” to health care. To solve the health care dilemma – providing affordable health care to all – this very important question must be answered. In 1964 when Medicare and Medicaid laws were enacted, the poverty rate was 14%. And today the poverty rate remains at 14%, after trillions of dollars have been spent on the poor. (4) I think it’s safe to say “the poor will be with us always.”
If you don’t believe every citizen has the “right” to health care, then you have to have a strategy to take care of the poor out of our “national conscience”. President Ronald Reagan in 1981 said:
“We will continue to fulfill the obligations that spring from our national conscience. Those who through no fault of their own must depend on the rest of us, the poverty-stricken, the disabled, the elderly, all those with true need, can rest assured that the social safety net of programs they depend on are exempt from any cuts.” (5)
Second, we have to agree as a society whether we want a single payer system, a free market system or the current hybrid system that exists today. Much has been written about single payer and free market systems. Single payer advocates point to coverage for all and lower costs. Free market advocates point to lower costs and a better allocation of our health care resources. Both are right, either system will lower cost. The questions become – (1) Do the negatives of a single payer, government controlled, less efficient system that would seem to stifle innovation and technological advances, outweigh the negatives of a free market system that in health care has not been achieved to date? (2) How would a free market system function in the current environment of insurance company and employer involvement? One issue is clear – if we don’t make the choice between the two alternatives, then by default we chose to limp along with our current hybrid system. Tinkering around the edges of “reform” will cause costs to continue to rise.
Third, what are the trends that are driving health care costs today? And do we have the political will to address those trends? There are many studies that have varying results determining those trends. But most of the studies believe that only 10-15% of one’s health status is determined by the health care they receive. (6) The balance of one’s health status varies from genetics, to personal choices, to environment and education. The single biggest factor in one’s health status is the choices one makes. We know that 37.7% of the population was obese in 2014, up from 34.9% in 2012, a trend that is increasing. (7) We know that the population is living longer. We know the “end of life decisions” being made are costly with no real medical benefit (the patient still dies and too often suffers along the way). We know the fee-for-service model inflates utilization. And most importantly, we know that when you have a system where the person making the decision to consume health care resources is not the person who pays for that decision, costs will continue to rise.
Until we are willing to determine if health care is a “right,” until we determine who is better to allocate our health care resources – the government or the free market, and until we have the political courage to address the sensitive issues impacting the trends that increase costs, health care will continue to consume more and more of our economy. In Stan Hupfeld’s book, Political Malpractice, he closes with these words. “We have always been a country as much concerned about the next generation as our own. The question is, are we willing to continue that tradition?” (8) Until society is willing to change, society will pay the price of a dysfunctional system that will be passed on to future generations.