Why do I suggest that there is problem with US healthcare. First, the availability of affordable healthcare insurance is becoming a major concern across the country and will undoubtedly be a significant issue in the upcoming Presidential election. I personally have learned firsthand of this through the misfortune of several friends of mine, who when recently downsized from their jobs found their severance packages inadequate for their COBRA payments and had to use their savings sooner than planned. Tens of millions of Americans don’t have healthcare insurance. Emergency rooms across the country are swamped with sick people without coverage who they cannot turn away because of local legislation. The problem is dealt with by closing hospitals and stopping certain services. Not a particularly effective approach for maintaining public health. Also, don’t think for a moment that this won’t be a big part of the impending national debate over illegal immigration.
OK, we’ve talked about the demand side and its increasing costs. Now, let’s talk about the supply side, let’s start with doctors. I can remember growing up in a major American city in the Sixites that doctors made good money, had the best house in the neighborhood, and drove the biggest car. I don’t find that with many young doctors today. My primary care physician recently told me that he’s earning about sixty percent of what he thought that he would be because the insurance companies haven’t kept up with inflation. He said that some of the providers hadn’t updated their reimbursement tables since the Eighties. Now, he’s a general practitioner who says that he’s very happy with his practice otherwise. He’s doing what he loves. I won’t pretend that this is a scientific survey but I don’t get the feeling that the ordinary doctors and dentists we meet everyday are the cause of the surge in healthcare costs. He doesn’t even complain about his malpractice insurance costs, although he does say that certain specialties are being priced out of his state.
Another component of the demand equation are the hospitals. But, again, the evidence doesn’t seem to support this. Hospitals are going under and are struggling to pay their bills. Also, several have begun to use some pretty heavy handed collection agencies to collect from their indigent patients. Now, a case can probably be made that hospitals haven’t been the most efficient organizations but this has been gradually changing.
Next up on the demand side are the pharmaceutical, medical device, and other suppliers whose products both the doctors and hospitals use. There’s probably a case that these have been making excessive profits by comparison to their customers, but, as has been written elsewhere in this blog, this will probably begin to change soon. While their prices and practices may have contributed to the run up in healthcare costs, I haven’t seen any evidence that lays the blame solely at their doors.
The last part of the demand equation I’ll write about are the health insurance providers. No one seems to like them. Patients, their doctors and hospitals, and the employers who provide their service to their employees do not like them. Politicians of all political stripes seem to feel that they are fair game as do late night talk show hosts. The last group of people that I can recall being this generally disliked were Saddam Hussein and his sons and look what that got them. But, let’s also not forget what we’ve had to live with once they were taken out. No simple solutions here.
So, something’s wrong here. No one seems to be very happy about the current situation especially those who depend on it either for their wellbeing or their livelihood. (I would be interested to know if Senator Bob Dole still thinks everything is fine but I don’t know how to contact him.) People talk about the Canadian system but their drug prices are only low because of their beggar thy neighbor policy that foists the costs of US drug research and development back onto their southern neighbors. France has been recently mentioned in the media for a successful system but haven’t French workers been striking lately about proposed cutbacks in their benefits? And, I won’t waste any more space over the failure of public healthcare under the Communist regimes in Russia and China.
I wish that I could propose a simple, easy and affordable solution that everyone would jump up and immediately agree with. I’m sorry, I can’t. I’m not that smart. Sometimes I wonder if anyone is. But, I do know this, if we don’t develop the national will and resolve to deal with this issue, whether or not it’s a full blown crisis now or only later, then somewhere down the road both for the public at large and the healthcare industry there will be very serious consequences.