Amy Miller
Professor Schelle
English 112
7 April 2010
Health Care Horror
Before the first hospital the Colonial American male’s average life expectancy was 25 years; today the average life expectancy is 79.36 years (Oliver). America’s health care quality has grown tremendously; unfortunately hand in hand is the expense of the care. The costs of health care are rising twice as fast at the rate of inflation, causing a huge individual and federal debt (“The Price of Health”). The federal government tries to compensate the cost of health care with programs such as Social Security, which was created in 1935, Medicare in 1965, and the Children’s Health Insurance Program in 1997 (Kovner, Jonas). However these programs have a reverse effect for national spending. In fact in 1964 only 5.8% of the Nation’s GDP went to fund health care; however now roughly 16% of the GDP, or $1228.5 billon is spent on health care yearly (Kovner, Jonas). The United States is the leading spender in health care worldwide; and the trend doesn‘t seem to be changing (“The Price of Health”).
The United States’ health care system is seriously flawed; this seems to be the one and only issue Republicans and Democrats agree on. Prescription drug costs, surgeries, national debt, and even annual physical rates are skyrocketing. The price for medical care has never been so high. Nurses and Doctors seem to worry more about malpractice lawsuits and insurance procedures than the patient sitting in front of them. Insurance companies are preying off the patients, and everyone has to fight for their personal well being (“Policies . . .”).
Although everyone knows what the problems with health care are, very few people know why these problems exist. Each country has its own issues with health care, and no one can seem to figure out the problem. I believe that in order for Americans to figure out how to find the solution they must first understand the history of the problem. Every problem encountered today has a history; some start as early as when hospitals were first created, and some have very recent creations (“Universal Health Care . . .”).
The biggest problem in health care is cost. From 1970-1991 health care spending grew roughly 12.4% each year; and has grown every year since. The national expenditures of health care come from 20% out of individual pockets, another 33% is paid through insurance companies and the government decides how to pay the rest. The problem is that the rate of health care spending is growing twice as fast as inflation, so Americans can’t keep up. Although new technologies are excellent for diagnostic and treatment purposes, they also increase national spending by large amounts. Dr. Kovner states that there are “astonishing increases in spending with commensurate gains in health status”. Much of this spending goes towards experimentations. Experimenting is necessary to find new cures and ways to fight disease but there is also a hidden problem with it. Other countries wait until America finds cures and invents new medicines, and then use America’s new products for their own. This means that most countries worldwide receive the same advanced treatments that Americans do, without having the pay the experimentation fees, which creates the high price of pharmaceuticals and treatment. However, if we don’t do these experiments the quality of our health care will not improve because there will be no advancements. They will never find a cure for cancer, or AIDS or paralysis; if there is no money spent on these things there will not be a gain in the health care field (Kovner, Jonas).
Prescription drug costs compensate for a total of 10% of the health care expenditures. Fiscal Policy states that “Three factors are contributing to the rapid increase in prescription drug expenditures: growing numbers of prescriptions per person; the entry of newer, more expensive drugs into the market that replace older, less expensive drugs; and price increases of existing drugs.” While health care in general is only rising twice as fast at the rate of inflation, prescription drug costs are tripling the rate of inflation, causing excessive spending. Even worse are the costs of “brand name” prescriptions. Fiscal Policy Institute facts show that “Brand name drugs became 10.5 times more expensive between 1998 and 2000, while the CPI (Consumer Price Index) for all items only rose by 2.8% during this time period. This problem can be solved quite simply. States have the opportunity to choose generic prescriptions over brand name drugs, unless otherwise stated by the Federal Food and Drug Administration (Fiscal Policy Institute).
The most expensive type of health care treatment is hospital care. A statistic by the Commonwealth Fund shows “Forty-five percent of the adults in the survey reported that they had a hard time paying their bills, even with health insurance, and had been contacted by a collection agency or had to change their way of life in an effort to pay their medical bills.” People often have to choose between going bankrupt or going without treatment they need. Eighteen percent of the people in the United States have high hospital costs compared to their annual income and 27% of Americans have debt related to medical care. The high costs create a rift between patients and their caregivers. Patients often feel they must keep their guard up at all times, and shouldn’t trust the decision making of their doctors (Cunningham).
There are many reasons that hospital care is so expensive. For one, poor patients often cost more money than wealthy patients, although this seems absurd there are actually good reasons behind it. The poverty patients are often malnourished which means recovery time and hospital time is often much longer, because their body was not healthy even before the disease or injury and their system is weak. Also lower income patients often wait until the problem is extremely serious due to the fact they don’t want to go to the hospital because of high costs. Therefore, they wait until the problem is actually more expensive because they are scared of costs. Also, the problem of after care is higher in poverty patients. Patients who do not have the finances they need for nursing homes or in home nursing care usually stay in the hospital longer until a deal can be worked out or until they decide they have to take care of themselves with no extra help due to their financial situation (Thorpe).
Another issue America faces is health insurance; the United States is the only developed nation that does not provide healthcare for all its citizens. The problem with health insurance today is lack of competition. Unlike auto insurance there are very few insurers compared to the population. In fact, “There are nine states where a single insurer covers 70 percent or more of the people. In Hawaii, one insurer covers 78 percent. In Alabama, it’s 83 percent, and in at least 17 other states one insurer covers at least half the population” (Underwood). With no competition these companies can increase insurance premiums and lower the percent covered by their company. This causes many Americans to simply go without insurance. According to the American College of Physicians there are roughly 35 million Americans without insurance. For these unfortunate people their average annual health care bill is about $4,340 per person, and for those who do have insurance the amount of insurance they have seems to be based more off of what they can afford rather than what they need (Kovner, Jonas). During the past eight years, insurance premiums have nearly doubled. According to the Robert Wood Johnson Foundation the amount Americans have to pay for health insurance has risen by 30% however the income has only increased by 3% from 2001-2005. The math just doesn’t add up. The Employee Benefit Research Institute states “Retirees will need an estimated $635,000 (per couple over age 65) to cover healthcare costs in retirement”. This amount is estimated to give a retired couple a 90% chance of having enough money to pay for their health expenses beyond what Medicare covers (“A Collection of Problems . . .”).
Malpractice and distrust of doctors is a huge issue associated with medical care. The sad truth is that less than half of all medical care in the United States is supported by good evidence that it works, according to estimates cited by the Congressional Budget Office. They claim that the cost of medical malpractice litigation in the United States has steadily increased at almost 12% annually since 1975. Jury Verdict Research, a database of plaintiff and defense verdicts, says awards in medical liability cases increased “43 percent in 1999, from $700,000 to $1,000,000”. A group called Health Grades found that 195,000 hospital deaths in 2000, 2001 and 2002 in the U.S. were due to possible preventable medical errors (“Medical Malpractice”).
Another issue affecting malpractice is the population of an area. Patients in highly populated areas often have more cases of this because doctors know the patients can afford to pay for the unnecessary tests. However, doctors in low-income areas only run needed tests because their patients cannot pay for the excessive tests and screening. So now doctors have to be more worried about lawsuits than if the patient in front of them dies (“The High Cost . . .”).
The new health care bill is supposed to provide quality health care at a lower cost. This bill would also help control growth in health care costs in the future years. The bill is said to include the following benefits: coverage and choice, affordability, shared responsibility, controlling costs, prevention and wellness, and workforce investments (“Policies . . .”).
This bill would have to cover the 36 million citizens who don’t have insurance now, unless they choose the other option, which is to pay a fee, which will vary from year to year. There would be new rules and regulations restricting insurance companies from withholding coverage for pre-existing conditions. A “public option” would also be available. This “option” would be a “Government-run insurer [that would] compete with private insurers, with the dual aim of driving down costs and providing care for people who can find it nowhere else”. This means insurance companies couldn’t make the prices sky high if they wanted to stay in business, because they would have a more “fair” competitor (“Passing the Baton”).
Many Americans are questioning whether this bill will pay for abortion fees. According to the official White House website, Dan Pfeiffer writes that the bill will have “Strict Compliance with Prohibitions on Abortion Funding in Health Insurance Exchanges. The Act specifically prohibits the use of tax credits and cost-sharing reduction payments to pay for abortion services (except in cases of rape or incest, or when the life of the woman would be endangered) in the health insurance exchanges that will be operational in 2014”; meaning this bill will not pay for any abortions unless they fall under the guidelines above. This is one of the main reasons this bill was able to pass.
There is a timeline set up for the structure of the new health care reform. Starting in 2010 all health insurance plans will be required to cover dependent children until age 26. There will be a high-risk health insurance pool set up in order to have an affordable coverage plan for uninsured Americans with medical problems. Insurers will be prohibited to write a policy that restricts payment for children with a particular condition. Insurance companies will no longer be allowed to put lifetime dollar restraints on coverage or cancel policies (with the exception of fraud). New tax credits will be provided to assist small businesses with fewer than 25 employees to help obtain and keep insurance coverage. The Medicare prescription coverage gap will be decreased by a $250 rebate that will be given to seniors stuck in the “doughnut hole”, and projected Medicare payments to hospitals, home health agencies, hospices, and nursing homes will be reduced (Zalvidar).
Finally, in 2010 the 10% sales tax on indoor tanning will come into affect. The next year will include more phases into the change of health care. In 2011, a voluntary long-term care insurance program will be provided to create a small cash benefit to help disabled people stay in their homes, or assist in nursing home coverage costs; the individual will need to begin paying a coverage fee five years before the benefits can begin. Medicare recipients will receive a 50% discount on brand name prescription drugs and will start filtering in more drug discounts. Primary care doctors and general surgeons working in conditions that are not ideal will be given a 10% Medicare bonus to improve preventive coverage. Medicare Advantage plans will be stopped in order to reduce payments to private insurers; this reduction will be filtered in over a period of 3 to 7 years. More money will be spent for community health centers providing more services for low-income and uninsured people. Employers will be required by law to provide written reports of the quality of care and benefits on the employees’ W-2 tax statements. There will also be a $2.3 billion annual fee for drug makers starting in 2011 (Zalvidar).
Starting in 2012, a program that will create nonprofit insurance co-ops will be set up in order to compete with insurers; and hospitals will be penalized for high rates of preventable re-admissions because of reduced Medicare costs. Coming into affect in 2013 there will be “standardized insurance company paperwork, first in the series of steps to reduce administrative costs.” Medical expense contributions will be limited in tax-sheltered FSA’s (Flexible Spending Accounts) to $2,500 a year to coincide with inflation. Thresholds for claiming itemized medical tax deductions will increase from 7.5% to 10% of income; however, seniors’ percentage minimum will still remain 7.5% until 2016. There will also be a 2.3% sales tax on medical devices excluding everyday products that can be bought at drug stores (Zalvidar).
The year 2014 will be when most of the regulations for the health care reform come into place. Insurers will be restricted from denying coverage or refusing to renew a policy to anyone with medical problems. The only differences of payment will be because of age, place of residence, family size, and tobacco use. Coverage expansion will increase due to new health insurance exchanges that will be for individuals and small businesses to buy. Low-income adults with no children will begin to be covered by Medicaid, which will also be covering people up to 133% of the federal poverty line. Citizens and legal residents will be required to have health insurance or pay a fine to the IRS; the fee will start at $96 per person in 2014 and rise to $695 in 2016. A penalty of $2000 per employee will be given if a company has more than 50 employees and have workers who get coverage through exchange and receive a tax credit (Zalvidar).
There are only two more steps on the timeline. In 2018, a tax on employer-sponsored health insurance will be imposed that will be more than $10,200 for individual coverage. Finally in 2020, the doughnut hole gap will be excluded from Medicare; seniors will still pay the 25% of their drug costs until the threshold for catastrophic coverage is reached when their co-payments drop to 5% (Zalvidar).
Although this seems picture perfect, there are a few flaws. For instance this reform would cost $1 trillion over the first ten years; which would mean an increase in taxes for households making over $500,000 a year. This also could mean a rationing of health care. Meaning that minor procedures and operations might not be available until the problem is more serious or perhaps even life threatening. However, the CBO has high hopes and feels if the bill is passed Americans would see a net reduction in national budget deficits of $109 billion just from the first year. The actual results of this bill will not be known for quite some time if it is passed, because not all changes will be put into place until 2020 (“Passing the Baton”).
This bill is somewhat contradictory and confusing. According to the white house the bill will be “providing the largest middle class tax cut for health care in history” but it is also said that it could cost the people $1 trillion. This act also provides, “$1 billion for prevention and wellness to improve America’s health and help to reduce health care costs; $1.1 billion for research to give doctors tools to make the best treatment decisions for their patients by providing objective information on the relative benefits of treatments; and $500 million for health workforce to help train the next generation of doctors and nurses”. It makes no sense that the middle class is getting tax cuts, but somehow the government is giving more money to the health care system (“Policies . . .”).
The health care reform that is being proposed now will more than likely be a tragic failure. Americans are going to revolt because they will have to be paying higher taxes and paying for other people’s health care. Some regulations seem socialistic such as the fact every American must either have insurance or pay a fee. Some aspects are useful though. There does need to be a government insurance company that can create a reasonable premium that other insurers will have to compete with in order to have customers; because if there isn’t a regulated insurance company then premiums will continue to rise and create more and more problems with uninsured patients.
The main problems with health care are the unnecessary spending and insurance costs. There needs to be more competition between health insurance companies, either by a government ran insurer or simply more private insurers. If the government doesn’t want to have their own insurance company then they need to offer more benefits for private companies to encourage more Americans to start new insurance businesses. Insurance companies also need to start covering more preventive care in order to reduce costs of after-care; such as covering Nicorette and other non-smoking aides instead of paying for lung cancer treatment, birth control instead of paying for hospital fees for pregnancy and labor or an abortion, and other minor procedures that can stop the spending of more expensive after care. Another regulation that could help insure more people at a lower cost would be to have insurance companies base the price of your insurance off of preventive medical care. There is no reason a baby who has done nothing wrong but was born with a birth defect should have to be denied coverage when there are individuals who can prevent their diseases. Americans who are not born with a thyroid gland problem and are overweight should have to pay more for their premium since because they are overweight there is a higher likelihood of preventable disease such as: heart attacks, strokes, and diabetes. Tobacco users’ premiums should also increase because of the effects of expensive lung cancer treatment and oxygen, along with possible jaw cancer treatments. This seems to be a more fair way to assess the costs. Also, individual states need to take prescription drug costs into their own hands. Instead of taking the easy way out and just sticking to brand name drugs, the states need to search deeper and find more prescriptions that have the same effects but without the high cost. I think the government also needs to hire one person per every 2 or 3 hospitals to regulate the amount of unnecessary tests and screenings. Even if this regulator didn’t catch every mishap it would encourage doctors to stop running unnecessary tests and scanners if they knew someone was going to be looking to find those unnecessary expenditures.
States are already getting lawsuits together to sue the national government because they feel the new health care bill is unconstitutional. The 14 states include: Florida, Colorado, Idaho, Louisiana, Alabama, Washington, Texas, Utah, South Carolina, Nebraska, Michigan, Pennsylvania, and South Dakota. The states are suing for two victims in the case; the states themselves and the individuals in the states. Florida’s attorneys’ filed complaint states that, “The new healthcare reform package exceeds Congress’s powers to regulate commerce, violates 10th Amendment protections of state sovereignty, and imposes an unconstitutional direct tax”. The lawsuits will first go through state courts and then eventually the cases will make their way to the Supreme Court, which will hold the ultimate decision. The first lawsuit was filed minutes at the president signed the bill; which means more problems are surely to follow after more time has passed. The United States’ health care system is seriously flawed, but the new bill doesn’t seem to be the answer Americans are looking for (Richey).
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