By Jan and Greg Phillips
Regardless of political leaning, most Americans can agree that the US healthcare system is problematic. Per capita healthcare spending is nearly twice as high as other wealthy nations and the price of care continues to increase at a rate that far outpaces inflation.
Access to healthcare often varies based on income, race, age, sex, disability, gender identity, and residential location. Cost, inadequate or no insurance coverage, and lack of availability of services are all barriers to health services that contribute to poor health status. In fact, the US ranks alarmingly behind eleven other peer nations in terms of life expectancy, suicide rate, chronic disease, obesity, physician visits, hospitalizations from preventable causes and rate of avoidable deaths.
Healthcare administration is a nightmare for hospitals and private practices due to the complicated, variable mix of rules and regulations between private insurance companies, pharmacy benefits managers, employer groups, Medicare and Medicaid. A 2017 study found that over a third of healthcare spending (approximately $2500 per person) in the US was attributed primarily to the administrative overhead required for billing and claims management. Complexity is costly.
Clearly, healthcare reform is needed and there are a number of plans, proposals and bills currently being floated and discussed. These include:
- Enhance the Affordable Care Act (ACA).
- Create a government-administered “public option” plan that would compete with private health insurance and be available to all Americans.
- Broaden Medicare eligibility by lowering the age to 60.
- Implement a single-payer, Improved Medicare-For-All plan.
When evaluating these and other proposals for healthcare reform, it is important to remember that there are not likely to be any “perfect” solutions. Healthcare in this country is an enormous ship that is not going to be easy or quick to turn. Undoubtedly, sacrifices and compromises will be required, corrections and fixes may be ongoing, and there will be winners and losers in the healthcare industry.
In our opinion, what matters most is to consider, first and foremost, how any health reform recommendation addresses the problems with our current system. Specifically, when evaluating a policy proposal, ask these important questions:
- How will it significantly reduce and/or control healthcare costs?
- What will the average out-of-pocket annual expense for healthcare be (payroll taxes, premiums, co-pays, deductibles, etc.)?
- How will it improve access to physician and hospital care?
- How will it improve the quality and efficiency of care and, ultimately, health outcomes?
When evaluating a proposed solution, we think it is important to also look for whether it will provide:
- Coverage protection for patients with pre-existing conditions
- Lower prescription drug prices
- Price transparency so it is known what a procedure or test will cost in advance
- Protection from surprise billing from out-of-network providers
- Protection for people who lose employer-sponsored healthcare
- Protection against bankruptcy resulting from catastrophic illness/injury
Healthcare reform proposals typically include changes in the way and the amount we pay for healthcare. Comparing approaches requires an “apples-to-apples” perspective, keeping in mind that there are multiple ways we currently pay for healthcare. We need to consider the sum total of insurance premiums, deductibles, co-pays, prescription drug purchases, and other out-of-pocket expenses. And, we must factor in the federal and state tax dollars we currently pay that go toward health care services. Thirty percent of our federal taxes go towards financing government-sponsored health insurance – Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), Veteran’s Health Care – as well as ACA insurance marketplace subsidies.
Finally, we believe it prudent to consider the impact healthcare reform will have on the healthcare industry as a whole. Most hospitals, private practices, insurance companies, pharmaceutical companies and medical equipment manufacturers are for-profit businesses that, in the case of public companies, exist to increase shareholder value. To the extent that healthcare reform will impact their bottom lines, they can, understandably, be expected to fight tooth and nail against reform. Can and should the government restrict or regulate a business’ right to make a profit? Should reform include price controls, caps on profitability, conditional government contracts? Should it address the skyrocketing costs of medical education as well as malpractice insurance rates? What impacts will reform have on hospital closures, unemployment and the US economy?
Healthcare reform is coming and there will undoubtedly be much discussion and debate ahead. The challenge for citizens, stakeholders and elected officials will be to participate with non-partisan open minds, a willingness to consider different perspectives and, most importantly, a rational and thoughtful frame of reference for evaluating proposed solutions to the serious problems with our current healthcare system.
Jan and Greg Phillips are business owners and Durango, Colorado, residents for over 30 years. Both have backgrounds in health education/health promotion and are actively involved in advocating for healthcare reform.
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