The fundamental premise of the book is that most American decision makers are in a state of denial. Many of them consistently claim that the United States has the greatest health care system in the world. That claim is hard to support, when America spends over 16% of GNP on health care, while more than 46 million Americans have no health insurance and millions are under-insured.

Other wealthy nations like Japan, Australia, Canada , and rich European nations spend between 8 to 11% of GNP in health care and enjoy superior service and universal coverage. America is the only rich country that does not provide universal health care coverage to its population.

Surprisingly, Americans, the citizens of the wealthiest country in the history of the world have a lower life expectancy rate, higher rates of heart disease and cancer, and an infant mortality rate that is twice as high as other rich industrialized nations. Even Cuba has a lower infant mortality rate than the United States according to CIA Fact Book .

Per dollar America spends much more and gets much less in return than other affluent Western nations when it comes to health care spending. It is time for the American policymakers to stop bragging about their health care system and start acting on their hollow promises to find real solutions to health care crisis. It is expected that the United States health care spending would reach nearly 20% of GNP within next 10 years, which is unsustainable.

The above facts are well known amongst the policy makers but are not really known amongst the general population in the US.

The book compares and contrasts health care systems of other industrialized countries to the United States . Several critical issues facing American health care system are described. Finally, the feasibility of implementing a universal health care plans that are cost effective and are either financed publicly or by both public and private institutions are presented as possible solutions. These plans also take into consideration the best practices of health care systems of other affluent nations in the world. This includes the implementation of Information Technology that should have a major role to play in cutting costs and making any health care system more efficient and cost effective.

Nearly 50% of health care spending in the US is publicly funded by the federal, state and county level governments through various fragmented entitlement programs. The GNP of health care in America would be the fifth largest economy in the world – amounting to over 2 trillion dollars.

Major problems and issues relating to the American health Care system

According to Tommy Thomson, ex-secretary of Health and Human services (HHS), the number of un-insured will reach 54 million by year 2010, and health insurance coverage by small businesses will decline from 74% in 2005 to 60% in 2015.

 

The key issues that emerge from the rising cost of health care and its affordability and accessibility are:

 

• Americans have a lower life expectancy, higher rates of heart disease and cancer, and an infant mortality rate which is twice as high as other rich industrialized countries. Even Cuba has a lower infant mortality rate than the US according to CIA fact book.

 

• America has the most fragmented health care system amongst the rich industrialized countries, with diverse entitlement programs managed at federal and state levels .This contributes to a lot of form filling and bureaucracy. On average over 25% of the dollars disappear in administration compared to less than 10% of health costs in other rich countries.

 

• Over 46 million people are un-insured and millions are under-insured.

 

• The cost of health care is rising at least twice as fast as the rate of economic growth.

 

• Major companies and municipal governments are passing more of the cost of health care to their employees. Most of the companies and local governments will not be able to meet obligations of health care to retirees.

 

• Many of the small businesses especially in the service sector do not even provide health insurance to their employees.

 

• Most of the companies and city governments have not set aside enough money to meet health care obligations to retired employees.

 

• More and more companies will shift their manufacturing to other countries as they won’t be able to sustain health care costs for their employees.

 

• There is a steady rise in bankruptcies amongst individuals as well as companies due to the cost of health care. There were over a million bankruptcies filed by individuals in 2005 who could not afford to pay their health care costs.

 

• The cost of prescription drugs is rising even faster than the general rise in health care costs.

 

What has brought about this situation in health care and why is the cost rising so fast? The following are the major problems in the health care system in America.

 

Bureaucracy and paper work have made a quantum leap in the last 30 years to carry the daily tasks of health care. The increase is over 1500 percent, a mind boggling number, and these figures can be confirmed by charts presented by the bureau of labor statistics.

 

There is compartmentalization for the delivery of the health care system in the United States due to diverse entitlement programs, i.e., Medicare, Medicaid, Veterans and many others administered by federal, state and county governments. There is also a great deal of fragmentation of private health care insurance. Over 1500 health insurers handle the private insurance market, each with unique health policies with different amounts of deductibles. In California alone there are nearly 150 combinations of drug insurance policies with different deductibles.

 

There are a great deal of problems related to eligibility for various entitlement programs and insurance plans as well. All of these have contributed to a great deal of bureaucracy and paper work.

 

The prescription drug program is far too complex and it only adds to the federal budget deficit. This program has several major flaws:

1. The federal government is prohibited from negotiating cheaper drug prices for patients with pharmaceutical companies, yet the Veterans Administration directly negotiates with the pharmaceutical industry about the price of each drug.
2. A ban has been imposed on importing prescription drugs from Canada unless allowed by the Department of Health and Human Services.
3. The coverage gap or ‘doughnut hole’ is a major flaw in the prescription drug bill.

 

Advertisement and drug companies

 

The advertising budgets of pharmaceutical companies for prescription drugs, in particular those of the American drug companies, have increased at a phenomenal rate in comparison to research and development budgets. They have increased from $5 billion in 1995 to nearly $20 billion in 2005.

 

Another problem is that many drug companies hype advertisement campaigns for prescription drugs as the advertisements either pitch misleading information or are simply open to ridicule. Basically, drug companies have become Pill Pushers – they are creating demand for pills where there is not even a disease. Many of the drug companies provide extensive research grants and gifts to doctors in various universities and institutions so that researchers can vouch for the credibility of their drugs.

 

Most of the media gives an easy ride to major drug companies for their absurd advertisements, because ads bring in money for television and media companies; hence it is difficult for them to criticize companies that bring them substantial revenues.

 

Ted Koppel of News Night, soon after leaving the show, indicated that many of the advertisers wanted to influence the content of reporting.

 

Lobbyists and their influence on officials and legislators

 

There are at least two lobbyists for each elected official in Washington in the health related field. Health care is one of the biggest lobbying issues, and over $300 million was spent by lobbyists in 2005. Money talks! The amount of money spent by lobbyists in influencing Congress and the Executive branch is not helpful in drafting legislation related to health care in America.

 

Health insurance and insurance policies

 

Employees of county, state and federal governments, companies, and small businesses have seen premium rates for health insurance rise by double digits since the year 2000. This rate has slowed down in the last few years but will still remain at least twice the rate of inflation in the foreseeable future. Top executives of health insurance companies received exorbitant salaries and remunerations from their companies according to The Economist report in the June 12, 2004 edition.

 

Over 1500 health insurers handle the health insurance market. The diversity of private health insurance is amazing, and in this respect there is no other rich country in the world that can provide so many choices of health insurance policies with variable amounts of deductibles. Insurance companies can also deny health insurance to sick people, and many of the bureaucrats in this industry determine what kind of treatment and drugs a patient should receive, instead of a doctor.

 

The policies of insurance companies are written by corporate lawyers, and are not easily understandable by normal people.

 

Doctors, lawyers, and malpractice law suits

 

The fear of being sued is leading doctors to practice “defensive medicine,” i.e., ordering excessive tests, avoiding risky procedures, referring patients to see other expert doctors. This kind of “defensive medicine” is becoming routine, leading to higher costs in health care and a waste of resources in the health care system in America.

 

There are too many groundless lawsuits as over 60% of the attorneys of the world reside in the United States. Litigations have not only increased the cost of malpractice insurance, but have induced many doctors to leave their medical practice altogether.

 

There are also problems and issues relating to long term care, emergency rooms, and mistakes made in delivery of health care.

 

Although America has some of the finest hospitals in the world, contributes to high quality research, and has competent and highly skilled doctors and nurses – nearly 100,000 patients die each year, because of mistakes made by staff working at hospitals. America also lies at the bottom of the league in long term care amongst the rich industrialized countries in the world.

 

The role and use of information technology is essential in every aspect of health care in order to trim costs.

 

The United States is unique amongst the rich nations, in that it has a fragmented, inefficient and bureaucratically wasteful system that excludes over 46 million uninsured people from health care. There are many myths and perceptions amongst the American population – some of these are:

 

America has the best health care system in the world.

Socialized medicine is bad.

Anyone in America has access to health care by going to emergency room.

Many people come to the United States for health care.

America will not accept health care rationing like they have got in other countries.

Immigrants (legal and illegal) are crowding emergency rooms thus increasing the cost of health care for everyone in America.

 

Why is it not possible for the richest and most powerful country in the world with the finest brains and institutions, to devise a universal health care system that is simple and cost effective? Is an ideology more important than the physical security of an individual? Why can’t America learn from some of the best practices of health care systems in other rich countries and create an even better system? Is it the pride of a nation that has so far failed to look at systems which are not American? Why not start fresh and create a new system, instead of trying an incremental approach to a fragmented health care system? Why is there a lack of vision, when some policy makers and politicians are aware that the current health care system is unsustainable? Where is the will of these people? Why not use the best practices of Information Technology to cut down on the costs of health care? The main question is: is it the basic right of every person in the United States to have health care security rather than a health care system based on privilege? Why not apply a simple, logical, and wise approach to finding appropriate solutions? The answers to these questions are there! I am certain that within the next couple of Presidencies a new and more cost effective universal health care system in America will emerge.

 

In making the right choices and decisions we must know all the important facts about the health care system, and use the wisdom of many who care to provide universal health security to the people in America.   

 

Cost effective solutions to the American health care system

 

For a rich and large country like United States of America or its 50 states to provide a decent health care system with modern medicine for all its population, it must take into consideration all the points discussed in the previous pages.

 

There are only three possibilities on which a health care system can be based.

 

1. A system that is only privately funded.
2. A system that is a combination of private and public funds.
3. A system that is only publicly funded but can also include ‘top up insurance’ for those who can afford it, special procedures and exceptions like jumping the queue for a surgery.

 

Number 1 is not an option as the health care system will become money driven with ever escalating health care costs, and it will become unsustainable in a short period of time. Hence number 2 and 3 are the only options as long as the health care system is not fragmented and covers the whole population in America.

 

A cost effective American health care system can evolve if politicians and policy makers do not get cluttered with their ideologies in finding solutions, and if they are willing to swallow their pride after repeatedly misleading the population by saying ‘America has the best health care system in the world’. They have to transcend their egos and also look for the best practices in the health care systems of other nations. America has to start with a fresh approach in developing a health care system, which is superior and more cost effective than any of those that already exist in other rich countries of the world. America has the means to develop from scratch a newer and better health care system because it has the best brains, the finest health institutions and hospitals. It has brilliant minds and doctors that are wise and ethical and a bureaucracy for processing information in place. The current health care system has not only become antiquated but it has become too money driven.

 

As a starting point to develop a new, simple and cost effective health system, the President and Congress could set up a commission of perhaps 10 persons of integrity and character, with a clear mandate, which is inclusive of the problems and issues discussed in the previous pages.

 

The commissions work could take up to 2 years. They should look at the health care systems of other rich countries that are nearly 50% less expensive and have been in place for a much longer time than the American one. They should also ask questions such as  why the Singapore health care system has an infant mortality rate of only 2.3 per thousand,  and why the rich countries of Europe, as well as Japan and Australia have infant mortality rates that are half  that of the US – at nearly 7.0 per thousand.  There will be a learning process in developing  a cost effective health care system with under 2.3 ,  but perhaps they can even improve the new health care system to attain a value under that.

 

Each state can adapt a health care system, which is preferred by their residents and is independent from the federal government. Whatever the system adapted by an individual state is – it is most urgent to include and implement prevention measures to improve the health of the people.

 

Prevention and regular physical examination (especially for people over 40 year) reduces cost of health care.

 

Prevention of disease or illness is a necessary part of evolving a new and cost effective health care system. It is important and urgent that federal, state and city governments spend adequate money in educating people to the importance of a healthy diet and eating at regular times, essential daily exercise, and making an effort to reduce stress and conflicts in their lives.

 

In order to get a ‘prevention psyche’ in to peoples minds, a massive advertisement and media campaign far larger than the ‘anti-smoking’ and  ‘wearing of seat belts’ ones must be conducted by federal, state and county level authorities. At the same time all un-healthy drinks and food should be removed from school and college vending machines. This is one of the most important issues that can dramatically lead to better health and at the same time dramatically cut health care costs under any system.

 

In the Scandinavian countries of Norway, Sweden, Finland, Denmark and Iceland, people over 40 are encouraged, sometimes by mandatory rules, to have regular physical check ups – most of the population complies.

 

Universal Health Care bills of Massachusetts and California

 

The Massachusetts Health Care reform Plan mandates everyone in the state to purchase health insurance by July 1, 2007. The plan requires the participation of both individuals and companies, and it includes a requirement that employers with more than 10 employees must either provide health insurance coverage for their employees or pay a “fair share” contribution of up to $295 annually per employee in to a special fund.  Massachusetts enjoys a strong foundation of employer sponsored insurance, and is also supported by expansive Medicare and Medicaid entitlement programs, which has made it easier for the state to achieve universal health care coverage. There will be a preservation  safety net for people who can not afford health insurance.

 

The Massachusetts universal health care plan is basically a combination of private and public funds but it will require a major overhaul of regulations on how insurance companies deal with health policies. This plan will be effective in law by July 1, 2007.

 

The Californian Universal Health Care bill SB 840 is basically a publicly funded health care system that includes all the residents of the state. This bill was passed by both the state senate and assembly while Governor Schwarzenegger returned the bill without signature in September 2006, hence this bill is not enacted into law.

 

This bill envisages that all federal, state and county monies will be reallocated to the state Health Care Fund. This will supply one-third of the needed funding. The remaining funds will come from state health care taxes that will replace health insurance premiums now paid to insurance companies and co-pays and deductibles being paid to health providers. Premiums will be based upon individuals and families incomes and would be in proportion to wages. Basically it is a single-payer health care system that is very similar to the health care systems of Scandinavian countries. This system can be cost effective as it would eliminate much of the paper work. The complete bill can be viewed at www.healthcareforall.org.

 

The California universal health care bill SB 840 and Massachusetts Health Care Reform Plan are two ways to create  universal health care. Another way would be to create a universal plan that has similar types of services as those mentioned in ‘Benefits section’ of SB 840 plus ‘top up’ insurance, which may include other benefits as required by the patient. This can cover emergencies like a waiting list (in case one develops for a particular operation or a procedure). Each state can follow one of the universal health care plans as mentioned.

 

Let me then take other issues, which are necessary in cutting the cost of health care and making it efficient. It would be necessary for federal and state governments to take either appropriate steps, or to regulate or even legislate some of the most important issues mentioned below though.

 

Fragmented federal and state entitlement programs all lead to a great deal of paperwork and the net effect is inefficient delivery of health care. All these programs should be eliminated and be replaced by a single program that takes into consideration the needs of elderly, poor, military, unemployed, and other vulnerable groups that are unable to contribute in taxation or otherwise to the general funding of the health care system. The health care systems of England and other European countries have special provisions for both the treatment of vulnerable groups and of how these patients are charged for prescription drugs. Lessons learned from the European systems can be further improved in the American health care system.

 

There is no need to have special veteran’s hospitals. There are more than 175 veteran’s hospitals, and separate programs for dependents of military personnel. The integration of VA hospitals under the same universal health care system will lessen bureaucracy and paperwork.  The over-burdened hospitals will be able to transfer their patients to hospitals that have excess capacity. In the current system, this interchangeability is not possible.

 

Politicians and lobbyists: The cost effective reform of health care will be much easier if lobbyists of health were severely restricted from contributing money to the legislators and their staff, and to federal and state government officials.

 

Health insurance industry and insurance policies: There is no chance for health insurers to regulate themselves as long as the current health care system exists in America. The decisions about patient’s care must be left in the hands of doctors and not with insurance company bureaucrats.

 

In a single tax payer universal health care system, there is no need for a health insurance industry hence the saving  of enormous cost to the system by eliminating the ‘middle person or a layer of bureaucracy’. The role of the health insurance industry should be regulated severely in either a universal health care system with ‘top up’ insurance or a system that accommodates both public and private financing like the Massachusetts Health Care Plan.

 *****

To cut down the cost of a universal health care system, insurance companies must provide policies that are written in simple English without ambiguities. Insurance companies should be severely regulated and should provide a limited number of different policies with deductibles. Only a few companies should be able to provide health insurance and this could be done by a bidding process in each state – meaning insurance companies would bid for the cost of health insurance against each other and only the top three companies would be selected to provide health insurance in each state. Insurance companies should not be allowed to pick and choose people for their health insurance policies. By following this process, competition could be preserved while satisfying the needs of patients. The same process could have been applied to Prescription drug Part D entitlement program for seniors and disabled that came into effect on January 1, 2006.

 

Cost of drugs and hyped advertisement of prescription drugs by companies: No residents or citizens of any other affluent country pay as high a cost for prescription drugs as the residents of the United States. The cost of prescription drugs can be as much as 30 to 70 percent higher in general in America than other rich countries. The main reason for this is the hyping of drugs in advertising which creates demand, and the fact that companies spend a fortune in advertisement and aggressive marketing of prescription drugs. It was a mistake when congress deregulated the advertisement of prescription drugs.

 

Cost of malpractice law suits and insurance: It would cut down the cost of health care if the following suggestions can be co-opted into any new system.

 

Law partners or lawyers should pay for the cost of bringing frivolous law suits if their cases are dismissed. There should be a cap on damages rewarded in any particular case. Non-economic compensation should be according to a fixed schedule, instead of judges or jurors picking a figure from the air. The cases should be heard by specialized courts where judges are experts in complex health care problems and patients’ conditions – thus excluding juries from hearing complex health care cases. Patients must be guaranteed at least 50% of the awards in any particular case.

 

Malpractice cases against doctors, health care employees, and hospitals should be first dealt with by ethical committees (say 5 people of high ethical and intellectual standing that may also include doctors and lawyers) at a local and state level before cases are allowed to proceed.

 

Role of Information technology (IT) and Outsourcing: In the United States, the health care system is riddled with paper-work, inefficient communications, and bureaucracy. In some estimates, it costs as much as 25% to 30% of the total health care expenditure of over 2 trillion dollars, while these costs are less than 10% of the total expenditure in the health care systems of other rich countries.

 

There is a need to incorporate in the health care system a confidential electronic network of health information for each patient, thus eliminating inefficient paperwork and cutting down on medical errors. In an efficient IT health care system, records of the patient would simultaneously be available to only health care providers.

 

All office work including billing can be much more efficiently organized by effectively using IT technologies.

 

Extensive use of medical technology is essential in testing, treatment, procedures and operations on a patient. The costs of these treatments are becoming almost prohibitive in the American health care system. Many of the economically developing countries like Mexico, India and Thailand offer these treatments at costs, which are less than 1/10 of those in the United States.

 

Summation and Action

 

It is time for the United States to incorporate certain other forms of alternative medicine and therapies like - Allopathic, homeopathy, acupuncture, and herbal medicine - into the health care system. Proven alternative medicine can be useful for patients with less side-effects, and can only be cost effective.

 

Martin Luther King, Jr. stated in one of his speeches and I quote, “Of all the forms of inequality, injustice in health care is the most shocking and in humane.”  The inequality of health care has steadily increased as more and more people are uninsured and underinsured. The steady rise in bankruptcies – nearly half of the bankruptcies filed in America are because people are unable to pay their medical bills - is a shocking state of affairs for a rich country like America.

 

The United States of America is number 1 in obesity, 37th in infant mortality rate, and tied 54 with Fiji for fairness in health care, yet is spending over 16% of the GNP on health care – the highest per person by far in the world. What has gone wrong? Certain politicians and policy makers need to wake up, and not bury their heads in the sand by creating a health care system that is money driven. Incremental changes to the current health care system will only lead to higher costs and less care for the entire population of America.

 

It is time to act. A newer health care system must be implemented; one that is inclusive and fair, and provides basic security for each and every one in the nation. Knowledge, facts and data, and, lessons learned from the experiences of people in America and other nations are out there. It is time to act on the most important domestic issue of all, and create a universal health care system. Let there be no fear factor for people in America to go and visit their doctor.

 

Copyright © 2007 Umang Malhotra. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of the author is strictly prohibited.

Book website: www.eyeuniversal.com/solutionstohealthcare

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