The Observer, October 21, 2005
Volume XXXVIII, Issue 8
Government should take a role in healthcare reform
The American healthcare system has been ridiculed by other nations for being burdensome, overly complex, and inaccessible. Critics are correct in some cases: the American system is experiencing multiple problems, including rising costs, inequity in access, and quality issues. These problems, inherent in the structure of a market-based system, are mainly allowed to continue due to the political system's unwillingness to act, coupled with a flawed incentive structure. However, the extent to which the system itself is to blame, or the politicians, depends on the specific problem identified. Complexity and access problems, and to a lesser extent waste issues, could be controlled to a degree of certainty by the political system if political leaders would back it. Instead of having thousands of state and federal programs, and even more private insurance plans, the government could insure the citizens of this country at a basic level using one program, solving most of the problems facing the American healthcare system.
With the problem of rising costs, the private system is causing inflation that could easily be solved by the government if the current political powers became involved. One of the issues leading to inflated costs of healthcare in America is the large amount of administrative costs. Some studies have said that an estimated 31 cents on every dollar spent for healthcare in America goes towards administrative costs, including marketing, paperwork, and reviews as opposed to care. In fact, administrative costs in America have been more than 200 percent higher than Canada's proportionally, and have been increasing at a higher rate than overall inflation of healthcare costs in America. In addition to this, costs have been inflating independent of administrative costs. The percentage of gross domestic product that America spends on healthcare was 200 percent more in 2001 than it was in 1970, compared to Canada's 38 percent increase. Marketing expenses could be eliminated by switching to a system that does not rely on the markets to function, such as a more government-run healthcare plan than America currently has.
Inequality is another problem that the current systems, both political and healthcare, do nothing to solve. More than 40 million people do not have insurance coverage for healthcare. Part of the reason for this large number in recent years is due to the American healthcare system's reliance on employer healthcare benefits. People who do not have health insurance through their employer often cannot afford individual private insurance, qualify for federal programs, or pay out-of-pocket expenses for medical care. This problem with access has been around since the introduction of health insurance. However, from 1930 to 1970, while employer insurance was gaining in popularity and Medicare and Medicaid were created, the number of uninsured decreased. Since 1976, the number has been increasing due to employers dropping coverage, and the decrease in unionized, full-time jobs with benefits. If the system was not based on employment, and was instead based upon need, the number of uninsured Americans would not be as high as it is now.
Concerns about inequity relating to access also have an impact on quality issues. Adults with insurance get 90 percent more medical services in hospitals than uninsured adults. Uninsured people also report more delays in getting healthcare than those with insurance. Even though the current political leadership has attempted to cut Medicaid in the past, an expansion of it would be a logical solution to the problem of underinsured or uninsured people. Medicaid studies have shown that health outcomes of those with Medicaid are better than those without insurance, except in regard to breast cancer. Women who are diagnosed with breast cancer and are on Medicaid seem to have more advanced cancer when they get tested for it than those with insurance, and the rates are not that much different than those who are uninsured.
These problems involving exploding healthcare costs, inequality, and unfortunately for Americans, the market is not acting upon these problems. There is a necessary and obvious role for the government to play in the permanent revolution in healthcare. Problems such as inequality and rising costs can all be addressed by the government, at least in the short-term, given the amount of information and power available to the political parties that are in control of the country. The only problem that now stands in the way of a healthier, more compassionate America is building the willpower within the government to act on these problems. Only after addressing some of these problems can America hope to fix its ailing healthcare system once and for all.
All statistics were from Thomas S. Bodenheimer, MD and Kevin Grumbach's book, Understanding Health Policy, Fourth Edition.
