Health Insurance

This excellent if alarming infographic created for Cascade Healthcare Solutions is being shared by Eric Sunga Jr., Outreach Coordinator, Spacecraft Digital:

Image courtesy of Cascade Healthcare Solutions

Now that government spending increases are trending down, it’s an opportune time to tackle healthcare costs

Where There’s a Will There’s A Way

Now that President Obama has bent the spending curve, reversing the spending increases of the former administration, the time has come to address healthcare spending, without making unnecessary cuts to Medicare and other social program beneficiaries. Serious economists have pointed out that there is actually no need for such benefit cuts, and the core  U.S. economic issue isn’t spending, at all, but income inequality.

Now, a study by the  nonpartisan Commonwealth Fund, titled Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System, finds that the $2.8 trillion U.S. healthcare system can be held to an annual spending target without spending cuts to Medicare, Medicaid, and other government programs by implementing measures to encourage providers to accelerate adoption of more cost-effective care.

The results would be that families, employers and government budgets would receive  relief from their growing financial healthcare burdens.

Commonwealth Fund President Dr. David Blumenthal believes the approach could win bipartisan support in upcoming deficit talks as a more politically acceptable alternative to cutting popular entitlement programs including Medicare.

There is an urgent need for such measures:

  • The United States has the world’s most expensive healthcare system.
  • Government forecasters say it will cost more than $9,200 this year person.
  • Costs continue to outpace inflation and restrain overall economic growth.
  • Americans die earlier and experience higher rates of disease than people in other countries.

Efficiency, Not Benefit Cuts

Although deficit hawks are attempting to turn the discussion to entitlement program cuts, the Commonwealth Fund study finds that benefit cuts are neither necessary nor inevitable. Instead, the study calls for the federal government to set gross domestic product per capita as a target for overall healthcare spending growth. According to the U.S. Centers for Medicare and Medicaid Services.In 2007, before the current slump in growth, healthcare spending rose 7.6% vs. GDP per capita growth of only 4.1 percent.

It’s Not Brain Surgery

‘The Commonwealth Fund study notes that changes that are already taking place could be accelerated, including financial rewards for physicians and hospitals that participate in coordinated team-based treatment strategies. The benefits for It Medicare’s 50 million beneficiaries would include:

  • Better protections against catastrophic illness.
  •  Incentives aimed at better outcomes for lower costs than under the current fee-for-service structure.
  • Freeing up resources for physicians and hospitals by reducing administrative costs.
  • Permanent elimination of a Medicare pay cut for physicians that Congress has repeatedly delayed.
  • And, of course, healthcare savings.

The report estimates that its recommendations could save $1 trillion on healthcare spending over 10 years. Savings would include:

  •  $242 billion savings for state and local governments.
  • $189 billion fom employers.
  • $537 billion for consumers.

Inevitable Change

In other words, not only isn’t it brain science, it’s a no-brainer. Of course, recommendations of this kind were originally included in the Affordable Care Act (ACA, or “Obamacare”) , but politicized as “death panels.”  There is certainly no doubt that cost reforms are needed, and now that the health care reform barrier has been breached and the ACA has created a platform for reform,  progress is inevitable.

Health care costs for a family of four have doubled in less than a decade from $9,235 in 2002 to over $19,000 in 2011

Health care costs for a family of four have doubled in less than a decade from $9,235 in 2002 to over $19,000 in 2011

How Expensive Is Healthcare?

CNN Money reports that in 2011, American families who are insured through their jobs average health care costs of $19,393 this year, up 7.3%, or $1,319 from last year, according to independent actuarial and health care consulting firm Milliman Inc.  of also highlights a new report from the Commonwealth Fund. It shows that:
  • Healthcare costs have risen by more than 60% between 2003 and 2011.
  • They will likely continue growing unless the health insurance market is completely overhauled.

How do rising costs affect the average family? Kaiser Health News reports that the costs for an average family to obtain insurance coverage:

  • grew to $15,022 in less than 10 years.
  • They have grown five times faster than family incomes, which have risen only 11 percent.
  • Deductibles more than doubled for consumers with employer-based coverage, meaning employees are paying more to receive fewer benefits.
  • If costs keep increasing at this pace, the average family of four will pay about $25,000 a year for health insurance in 2020, according to NBC News.

What’s the Cause?

The problem, according to the report and an article on The Hill’s Healthwatchis wasteful and duplicative pricing throughout the private insurance market. The report states:

“Within the private insurance market, prices paid for care have been rising rapidly and vary widely for the same service across states, and often for the same providers, depending on the source of insurance.


According to CNN Money, of the $1,319 annual increase in 2011, workers’ out-of-pocket costs rose 9.2% – more than the 6.6% increase the prior year.

Payroll deductions for insurance coverage rose 9.3%, also more than the year before.

Of the $19,393 overall annual cost, employees’ share is inching closer to 50%, said Lorraine Mayne, principal and consulting actuary with Milliman:

“Employees are paying $8,000 of the $19,000. That’s a decent amount much larger than other areas of consumer spending.  What we’ve observed in the past few years is employers have increasingly been offering health plans with higher deductibles and co-insurance, co-payment limits,” she said.

Health reform so far has had very limited impact on curtailing these costs, said Mayne.

While reform’s new provisions such as eliminating lifetime benefit limits and removing copays on preventive care have changed rules for who pays for cost of care, they haven’t made any impact on the total costs of care, she said.

Most Expensive Parts of your Health Care

The report showed that physician costs represent 33% of a family’s overall health cost. Hospital inpatient costs account for 31%, outpatient costs, 17%, pharmacy, 15% and other expenses such as for medical equipment about 4%.

Divorce  Takes Away Many Women’s Private Health Insurance

study by the University of Michigan deprives thousands of women of their health insurance coverage. The study, which will appear in the December issue of the Journal of Health and Social Behavior, analyzed data from women between the ages of 26 and 64 between 1996 and 2007. It finds:

  • 115,000 U.S. women lose their private health insurance in divorce each year as they either: 1) no longer qualify as dependents under their partners’ policies; or 2) can’t afford private insurance.
  • Many women remain uninsured or under-insured for more than two years.
  • The Federal COBRA law allows people in most employers’ plans to maintain their health coverge after divorce, but  COBRA coverage only lasts only up to 36 months.

The Huffington Post draws attention to several of the financial problems around divorce that can be of grave concern to women:

The Takeaway: Hard economic times can create marital strains leading to divorce and separation, and when that happens, women and children often find themselves without health insurance coverage.

Why the ACA Is a Boon to Women and Families

The Affordable Care Act of 2010 (ACA) provides invaluable benefits to mitigate the health care risk that women and their children face in hard economic times and divorce.  It provides security to millions of working age people who are currently uninsured or underinsured or may lose job-based health insurance.  It is especially responsive to the needs of low- and moderate-income people. The Congressional Budget Office estimates that the ACA will cover some 32 million uninsured people over the next ten years, 94% of legal residents. Of the 23 million people who will still lack health insurance, one third are projected to be undocumented residents, who are ineligible for coverage under the law.

Here are some of the provisions that help low- and moderate-income individuals and families gain access to affordable, comprehensive health insurance.

Medicaid expansion: Beginning in 2014, the ACA expands eligibility for Medicaid for all legal residents to 133%  of the federal poverty level (about $14,404 for a single adult or $29,327 for a family of four.) Currently, while several states have expanded eligibility for parents of dependent children, eligibility thresholds are usually well below the federal poverty level, and and adults without children are not currently eligible for Medicaid regardless of income in most states.

State exchanges: The Affordable Care Act provides for the establishment of state or regional health insurance exchanges for individuals and small employers. New insurance market regulations governing health plans will prohibit:

  • Rating on the basis of health.
  • Limits on how much premiums can vary based on age.
  • Lifetime or annual limits on what a plan will pay.
  • Rescission of coverage when someone becomes ill.

 Availability: The exchanges will provide a regulated marketplace in which people without access to employer-sponsored coverage who meet affordability and coverage standards can purchase insurance.

Choice: People purchasing coverage through the exchanges will have a choice of the essential benefit package with four different levels of cost sharing – Plans can cover:

  • 60% of an enrollee’s medical costs (bronze plan).
  • 70% of medical costs (silver plan).
  • 80% percent of medical costs (gold plan).
  • 90% percent of medical costs (platinum).
  • Out-of-pocket costs are limited to $5,950 for single policies and $11,900 for family policies.

Subsidized Premiums for Low to Middle Income Families and Individuals: Sliding-scale premium credits will be available to people with incomes up to 400% of poverty who purchase health plans through the exchanges. The credits will be tied to the silver plan and will cap premium contributions for individuals and families to:

  • 3% of income at just over 133% of poverty ($14,404 for a single adult or $29,327 for a family of four)
  • Gradually increasing to 9.5% at 300% to 400% of poverty ($43,320 for a single person and $88,200 for a family of four.)

Subsidized Coverage for Low to Middle Income Families and Individuals: Cost-sharing credits and lower annual out-of-pocket limits will limit cost-sharing for low- and middle-income individuals and families.  Credits will limit cost-sharing,  increasing the silver plan coverage (70 percent of costs covered) to:

  • 94% for those with incomes up to 150% of poverty.
  • 87% up to 200 percent of poverty.
  • 73% up to 250 percent of poverty

Out-of-pocket expenses will be capped for families earning between 100% and 400% of poverty on a sliding scale ranging:

  • From $1,983 for individuals and $3,967 for families,
  • Up to $3,967 for individuals and $7,933 for families.

Comprehensive Coverage: Qualified health plans sold through the exchange and in the individual and small group markets will be required to provide a federally-determined essential benefit package.  The essential benefit package, the new insurance market regulations, out-of-pocket limits, and cost-sharing subsidies will also help reduce the number of people who are underinsured, ensuring that people have comprehensive health plans that both encourage the use of timely, preventive services and protect against catastrophic costs in the event of a serious accident or injury.

The Individual Mandate: Beginning in 2014, all U.S. citizens and legal residents will be required to maintain minimum essential health insurance coverage through the individual insurance market or an insurance exchange, a public program, or their employer or face a penalty.  There are some exemptions:

  • Individuals who cannot find a health plan that is less than 8% of their income net of subsidies and employer contributions.
  • People who have incomes below the tax-filing threshold ($9,350 for an individual and $18,700 for a family).
  • People who have been without insurance for less than three months.
  • Other circumstances such as religious objections.

Individuals not exempt from the mandate, who cannot demonstrate on a tax form that they have health insurance, will be required to pay a penalty equal to the greater of

  • $95 or 1% of taxable income in 2014,
  • $325 or 2% of taxable income in 2015,
  • $695 or 2.5% of taxable income in 2016
  • Up to a cap of the national average bronze plan premium.

Families will pay a penalty of half the amount for children up to a cap of $2,085 per family.


Women who face losing the health insurance coverage provided through a spouse’s employer due to divorce or due to the loss of work and other economic hardships now have options for themselves and their children. The ACA will mitigate the barriers to coverage that people now face due to loss of employment, preexisting medical conditions and economic difficulty.

The benefits of President Obama’s health care reform program, the Affordable Care Act, include:

What Will It Cost?

But nothing is free, so many wonder what it will cost and who will pay for it. Those who oppose it say that it will add to the national deficit,  and create tax increases for the middle class and small businesses. These assertions are untrue. To better understand the costs, it is helpful to bear in mind that much of the assertions about the ACA has been less than honest partisan political rhetoric. Now that the campaign season is over, let’s take a closer look at how and by whom the ACA is paid for.

Taxes and Credits

The Kaiser Family Foundation and provide detailed lists of the tax credits and provisions of the Affordable Care Act. Most of the cost burden will be paid by:

  • The health care industry.
  • Employers that provide workers with insurance.
  • Wealthier individuals.

Mandi Woodruff of Business Insider provides a summary of some of the key taxes and credits:The Tan TaxTanning bed users have paid a 10% tax hike since 2o1o. It doesn’t apply to doctor-prescribed phototherapy services, some gym tanning services, or spray tans, but tanning salons, according to the Indoor Tanning Services Tax Center.Medicare surtaxesStarting Jan. 1, 2013, a 3.8 percent surtax will be payable against surplus investments reported by the following wealthier individuals:

  • Single filers reporting $200,000;
  • Married couples reporting $250,000;
  • Married couples filing separately reporting $125,000.

Also starting Jan. 1, 2013, the Medicare tax burden of wealthier individuals will increase by 0.9% on their earned income, according to the Kaiser Family Foundation.  This tax that will apply to:

  • Individuals earning more than $200,000;
  • Married couples filing jointly who make more than $250,000.

Consumer Penalties

As the law mandates coverage for all Americans, those who choose not to participate will be charged tiered penalties that will begin in 2014 and rise over a three-year period, according to the  National Center for Policy Analysis. The penalties (which have been called a “tax” by the Supreme Court) are as follows:

  • 2014: Families––$285 or 1% of total household income, whichever is greater. Individual adults––$95.
  • 2015: Families––$975 or 2% of income, whichever is greater. Individual adults––$325.
  • 2016: Families––$2,085 or 2.5% of income, whichever is greater. Individual adults––$695.

If you’re not covered by your employer, you’ll be able to choose from a list of government-mandated health insurance packages called “exchanges”at the state level. Exceptions apply to some, including low-income families who can prove financial hardship.

Flex Spending Account Limits

Flexible spending accounts will be capped at $2,500 in 2013, and new rules will limit what you can buy with flex accounts. They apply to non prescription medications, except insulin, or expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles, according to the IRS.

Employee Health Coverage

The Affordable Care Act’s aims to ensure that businesses choose low-cost plans, funded by an excise tax on “Cadillac plans” that cost more than $10,200 per individual or $27,500 per family, starting Jan. 1, 2018. However, these threshold amounts may be raised if health care costs rise more than expected before this provision is implemented in 2018, and for firms that may have higher health care costs because of the age or gender of their workers.The Pharmaceutical industryPharmaceutical manufacturers pay higher fees, phasing in on a tiered schedule beginning in 2012:

  • $2.8 billion in 2012-2013;
  • $3.0 billion in 2014-2016;
  • $4.0 billion in 2017;
  • $4.1 billion in 2018; and
  • $2.8 billion in 2019 and later.

Health Care Insurers

Insurers will also pay higher fees, to be phased in as follows:

  • $8 billion in 2014;
  • $11.3 billion in 2015-2016;
  • $13.9 billion in 2017;
  • $14.3 billion in 2018

Subsidies for Small Business Owners

Businesses will receive a tax credit to help subsidize the cost of health plan enrollment. The credit will be:

  • 35% of the employer’s insurance costs through 2013 for companies with fewer than 25 workers and an annual payroll of less than $50,000.
  • Full credit to employers with less than 10 employers with annual wages of less than $25,000.
  • Beyond 2014, the tax credit will extend to 50% if the businesses choose a plan under the health care exchanges.

Is It Affordable?

The political claim has been “We must rein in the skyrocketing cost of health care by repealing and replacing Obamacare.” However, according to Bloomberg,
Connecting current inflation in health care to the new law, which doesn’t take full effect until 2014, is a stretch. Health-care costs have been rising faster than prices in general for many years, though the pace has been slowing recently, in part because of the recession. Health costs rose 3.4% in 2010 from 2009, according to the Bureau of Labor Statistics, while the U.S. inflation rate was 1.6%.
Obama’s health-care law cuts future Medicare costs by more than $700 billion over 10 years, in part by reducing payments to hospitals and insurance companies, including [subsidies to them for] costlier Medicare Advantage plans. Romney says he would restore that money. The Congressional Budget Office has estimated that repeal of the law would increase the federal deficit by $100 billion over 10 years.

The CBO estimated that repealing health reform would:

  • Increase the federal deficit by $109 billion over the 2013-2022 period and
  • Cause 30 million people to lose health insurance coverage.

So the ACA is not only affordable, but an important reform that the economy probably can’t afford to do without.

While Republicans who oppose the ACA have not given full details of how they would replace the health-care law, they have discussed measures to limit compensation for patients injured by medical malpractice. According to a 2009 Congressional Budget Office report, a $250,000 cap on damages would reduce health costs by $54 billion over 10 years, but this is only 0.5% of annual health-care spending.

The ACA goes far beyond this in tackling health care spending, but not far enough. It’s only  a good first step. Independent conservative author Andrew Sullivan has recognized this, saying that he’d like to see conservatives make the ACA better instead of trying to turn back the clock on health care reform.

After all, the ACA began as a conservative proposal by the conservative Heritage Foundation, and it was only after President Obama and the Democrats adopted this Heritage Foundation model that it suddenly became problematic for Republicans pretending to be fiscal conservatives.

The good news is that this is much more likely to happen now that the contentious election is over. The 2012 election is widely assessed as a clear repudiation of partisan extremes, including the Tea Party and Senate Minority Leader Mitch McConnell, who have led an obstructionist and disruptive political agenda. President Obama’s decisive reelection, along with Speaker of the House John Boehner‘s more conciliatory posture bode well for nonpartisan cooperation and compromise on budgetary issues. The ACA will stand, and meaningful measures to discuss cost reduction will be more possible going forward.

The takeaway: Where there’s a will, there’s a way. There are ways to tackle the rising cost health care costs, which is the largest driver of the budget. The political will to get it done will follow, as the severity of the problem is increasingly understood.

Michelle Singletary, Columnist for the Washington Post, points out that it’s time to elect a health Care plan. At the end of the year, employees have the opportunity to make changes to their workplace benefits for the next year.

Costly Mistakes in Open Enrollment

During open-enrollment season, most people fail to make a choice but just go with what they already have. Even worse, many employees make costly mistakes. A survey of 2,500 consumers conducted for Aflac finds :
  • 56% of employees estimate they waste up to $750 annually because of their errors during open enrollment, such as electing the wrong level of insurance coverage or choosing benefit options they didn’t need.
  • 61% said they are only sometimes or not at all aware of changes to their insurance policies each year.
  • 89% simply default to the same options every year.
  • Only 16% say they contribute the right amount to flexible spending accounts.

The Fear Factor

A survey by Aetna also found that workers consider it extremely difficult to choose health-care benefits. Employees surveyed said:

  • Health enrollment is the second most difficult major life decision behind saving for retirement.
  • Choosing health-care benefits is more difficult than purchasing a car, making decisions about medical tests or treatments, parenting and selecting other forms of insurance.

What’s the Problem?

The employees surveyed by Aetna said that the reasons they found these benefits decisions so difficult is that:

  • The information they are given is confusing and complicated.
  • There is conflicting data.
  • It’s hard to determine which plan is the right for them.

What Can Health Insurers Do?

Considering how vitally important this decision is, it is truly unfortunate that health care insurance providers have not been able to crack the code in distilling highly complex product information into easy-to-grasp and compelling value propositions.

One of the reasons for this is that health care industry is far behind the curve in customer-centricity. Only now in the wake of health care reform is the health insurance industry beginning to understand that they need to move toward a more consumerist individual retail model. This is vitally important because:

  • “Consumer-driven plans”– Employers are shifting more responsibility onto the individual employee in the form of  in which the employee needs to be more actively engaged in his or her health care decisions.
  • Health care exchanges under healthcare reform require individuals to compare providers online to make decisions about their coverage options.
  • More Medicare coverage options today include traditional Medicare, and plans provided through private insurers including: Medicare supplement policies, Medicare Advantage Plans, and Medicare Part D Prescription Drug coverage.

Since the choices consumers face are complex, and personally significant, Marketers now face the awesome responsibility and challenge of simplifying the decision process for the consumer. Behavioral economics studies have shown that how the enrollment choices are presented make a huge difference to consumers in empowering them to better evaluate their plan choices.

Where’s the Support?

To elect the right coverage for their needs, it is vital that people take the time to calculate their yearly medical expenses. However, Aetna found:

  • 43% of employees rarely or never track how much they spend on out-of-pocket health-care costs.

Marketers clearly need to offer more clear and intuitive enrollment materials. They also need to provide a good marketing media mix. For example, while some people are more comfortable reviewing materials on their own, others prefer 0nline guidance or telephone support. The Aflac survey found that half of employees said they would feel more informed if they sat down with an insurance consultant during enrollment. This points to a great need to improve open enrollment meetings.

Best Practices: Some of the information that Aetna provides can be viewed at, including:

Aetna’s research has shown that members who use the Member Payment Estimator may save as much as $170 on out-of-pocket costs for more than 30 commonly selected health care services they can research with this tool.

To help consumers better understand how health care reform impacts them personally, Aetna created the Health Reform Connection website which provides information on the different elements of health care reform.

The Genius of Simplicity

While large health care insurers like Aetna are taking the initiative to create innovative tools to ease the enrollment decision and empower members to make more informed decisions, still the sheer volume of Aetna’s web-based materials can itself be overwhelming, and the danger of overwhelming consumers with too much information remains an issue.
The key is to provide tools and systems that are informational, consumer focused and, most importantly, effectively simplify the consumer decision process. Less is often more. Carmine Gallo in Forbes summed up how important simplicity is to Apple’s success:

Your customers demand simplicity and simplicity requires that you eliminate anything that clutters the user experience.

The key to marketing success is to simplify your customer’s buying process for your products or services, and to simplify your communication messages to one core promise for your key customers.

A Major Problem For U.S. Consumers

Carl Finamore in Znet writes that despite healthcare reform, getting sick in America is still very risky:
  • Commonwealth Fund estimates 25 million people with insurance still struggled to pay medical bills in 2010.
  • Nearly 66% of all personal bankruptcies are still linked to those debts.
  • 48 million had no health insurance in 2011.
  • At least 29 million people are estimated to remain completely uninsured even after the Affordable Care Act is fully implemented seven years from now, according to The Congressional Budget Office.

A Windfall for the Private Sector

However, health care remains a very good deal for wealthy investors. According to Bain & Company:
  • Private equity global investments in healthcare doubled in one year – from $15 billion in 2010 to $30 billion in 2011.
  • This represents 15% of all private equity deals in the world last year by companies like Bain.
  • This netted a profit of $500 billion. “The Problem Is Profit”

“The Problem Is Profit”

Carl recently attended a national conference of Physicians for a National Health Program (PNHP) in San Francisco and asked Andy Coates, MD, president-elect of PNHP, to identify the top problem with healthcare in the U.S. Dr. Coates replied:

I am very tempted to say ‘profit is the problem,’ end of story. But there’s more. “The American system has an enormous amount of unnecessary bureaucratic waste. A great burden of time-consuming administrative efforts, aimed at extracting profit from caregiving, weighs upon us.  So much of the cost of healthcare has nothing to do with what is happening at the bedside. The quest for corporate profits undermines the effort to provide medical care to human beings.

How Taxpayers Fund The Private Sector

According to Carl Finamore, America’s for-profit healthcare system  is mostly paid for with tax dollars:

  • Our taxes pay around 60% of our current health spending.
  • This includes, among other things:
    • Tax subsidies for private health insurance and public employee health benefits.
    • Direct government Medicare and Medicaid subsidies.

Other Countries Get More For Their Money

Dr. Steffie Woolhandler, professor of public health at City University of New York,  visiting professor of medicine at Harvard Medical School and spokesperson for PNHP compared this to what happens in other developed countries, pointing out that:

  • The majority of healthcare funding in other developed countries is also paid through taxes but in each case the costs are much lower and they get more.
  • U.S. health spending amounts to around $9,000 per capita.
  • Other developed countries spend about half as much.
    • the U.S. spends 16% of gross domestic product (GDP) on health care, compared with 8% to 10% in most major industrialized nations.
  • The private sector squanders around 31% of their budget on non-treatment related administrative costs.
  • Outcomes are not better: for instance, the U.S.  lags in life expectancy behind other developed countries.

Fact: Not-For-Profit Works Better

The difference is that most of them have some form of a not-for-profit national public healthcare system. Examples can be found right here in America. For instance, the government-paid and operated Veterans Health Administration (VA) has better outcomes, including:

  • Superior medical services.
  • Bulk purchases of prescription drugs at substantially reduced costs.
  • Fortune magazine calls the VA “the most wired and cost-effective health system in the land.”

But the trend toward privatizing Medicare and Medicaid to appease pharmaceutical giants creates the opposite effect: the government is prohibited by law from making these same bulk purchases on the open market for Medicare and Medicaid.

The Proof is in The Data

These statistics are clearly documented, and, for all the political rhetoric in Washington about Medicare and Medicaid, the problem is not public management but a for-profit system that increasingly directs Medicare and Medicaid tax funds to private providers and insurers through such costly privatized programs as Medicare Part D and Medicare Advantage programs.

Carl previews research that will shortly be published in the International Journal of Health Services by policy experts including Dr. Woolhandler showing the massive amount of tax dollars Medicare has overpaid private insurance companies under the Medicare Advantage program, and its predecessor programs over the past 27 years:

  • Total excess payments over the past 27 years is amount to $282.6 billion.
  • Most of this has been paid over the past eight years.

Our Money Can Be Better Spent

Imagine if all that waste were spent more wisely? For instance, this wasteful spending could be spent on:

  • Improving patient care.
  • Enhansing Medicare’s trust fund.
  • Reducing the federal deficit

The only way to do so is for government to stand up to the health care providers, but given their economic clout with the media and government, this has proven extremely very elusive.

Washington continues to debate around the edges of the issue, with no real will to take on this powerful sector.  While some threaten to repeal “Obamacare” in favor of a purely market-driven system – which we already know doesn’t work in healthcare, Obamacare is filled with giveaways to the private sector.  Such giveaways are not surprising given the American-style “sausage making” form of politics. The best possible option – single payor system – was taken off the table nearly from the start in order to assuage private suppliers of healthcare, including “insatiable Wall Street investors operating without any of the control or regulation taxpayers should expect.” Carl concludes:

Is there any wonder costs are going up? We as a society will pay the price as millions of uninsured avoid treatment, millions suffer economic hardship because of rising co-pay and deductible costs and millions discover too late their skimpy insurance coverage will not cover their medically recommended recovery plan…Certainly both research and activism are necessary components of the renewed and reinvigorated national healthcare debate that we so desperately need. But, for this debate to be productive, it cannot, unlike the Congressional discussions we’ve seen, tap dance around the greed and inefficiency of the profiteers who are engulfing and undermining our medical system.

As I have often written in this blog, the solution lies in education. And in today’s highly politicized media environment,  the conventional wisdom in Washington is obfuscation.

The ACA Is Just The Beginning

The Affordable Care Act is a good first step in that it does expand access to health care while providing mandated preventative benefits. But it is only a first, fledgling step on a long road of improvement. And one of the better outcomes of the ACA would be if it stimulates more constructive reform building on its foundation.

That some politicians would propose to turn back the clock on even this first step speaks volumes about the clout of this behemoth industry. That people are still so unknowledgeable about the drivers of health care costs that they continue buy into the fiction of the free market in healthcare despite all evidence to the contrary speaks volumes about the industry’s public relations machine – namely, media and politicians.

Health care is the most significant frontier of government reform because, unless these truths are squarely faced and dealt with, the U.S. public will continue to pay an unthinkable price to fund a grossly inefficient system that redistributes taxpayer money to the upstream corporate providers –  the large hospital groups and pharmaceutical companies.

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