America: The land of too much (and too little) health care
By Bill Settlemyer
President and CEO, Setcom Media
As the calendar rolled over to 2007, a trio of articles in The New York Times about health care caught my attention.
They recited some of the many disturbing facts about America’s health care “system,” most of which are no longer in dispute:
• We are the only Western industrialized nation that does not provide some form of universal health coverage for its citizens. About 15% of the population is uninsured.
• Health care costs now consume around 16% of GDP, double the rate in Western nations with universal coverage.
• In return for doubling our spending compared to other nations, we get poorer outcomes, with shorter life spans, more illnesses and higher infant mortality.
• As much as 20% to 30% of every health care dollar goes to paper shuffling and claims management across a fragmented system of providers, a huge source of financial waste when compared to the single-payer systems found in most other countries, where administrative costs are more likely to be in the 5% to 10% range.
• The amazing developments in pharmaceuticals, medical science and technology work miracles in individual cases but fail on balance to produce a healthier population or an affordable health care system. This is due in part to our failure as a nation to focus on wellness, disease prevention and universal access to primary medical care.
Political landscape changing
The most obvious political change in 2007 is the shift to Democratic control of Congress. There’s no doubt that this will heighten the attention given to possible changes in health care at the national level. But the reality is that change has already been underway in states like Maine, Massachusetts and perhaps soon in California, a bellwether state on issues of national importance.
We should not expect a wholesale and sudden shift to a single-payer universal health care system like those found in Canada or Great Britain. Why? As Anna Bernasek recently wrote in The New York Times, the main barrier may be ideological: Americans just don’t believe it can work here, despite the success of such systems elsewhere.
Of course, there are plenty of stories out there about long wait times and frustration with single-payer systems like those in Canada, but the reality is that most people get most of the care they need as measured by the overall health of people in those countries.
One answer to the concerns about single-payer systems recently emerged in Canada, where a provincial court ruled that people have a right to seek and pay for additional coverage and care outside the system if they so desire.
The handwriting on the wall
I know from personal conversations that many people inside the health care insurance business think the days of the current “system” are numbered. They see it cracking under the strain of double-digit price increases, mind-numbing inefficiencies and the increasing number of employers dropping or reducing the funding of group health coverage for their employees.
Those in the business of health insurance are on the front lines, as are the physicians, hospital administrators and employers trying to “keep it in the road” as the system careens toward a cliff. And they know they’re losing the fight.
In the past, most famously against Hillary Clinton’s ill-fated health care proposal back in 1993, the insurance industry has waged brilliant PR campaigns, invoking the specter of rigid government control and consumers losing the right to choose their health care providers. These campaigns have always succeeded in preventing change, but now even many top insurance executives acknowledge that something’s got to give.
The professors weigh in
Harvard Business School professor Clayton Christensen, highly respected author of “The Innovator’s Dilemma” and “The Innovator’s Solution,” noted in a recent Times interview that:
“The current health care system is divided into buckets. You have the insurers, the employers who put up the money, the providers such as doctors and nurses, and the hospitals. Because they exist as independent companies, they can each improve themselves, but they can’t re-architect the system in the way that it needs to be changed.
“There are two health care systems in the West, Intermountain Health Care in Utah and Kaiser Permanente in California, that are in fact integrated across each of those pieces of the system. They are far ahead of the rest of the world in bringing rules-based diagnosis and therapy in cost-effective business models to their patients.”
Another well-known Harvard Business School professor, Michael Porter, has written that competitive forces could help improve the system, but that currently the competition is in all the wrong places for all the wrong reasons. Whether through government regulation or private compacts between the various participants in the system, or a combination of both, competitive forces must be realigned to incentivize both efficiency and high quality care throughout the system.
South Carolina needs to be “in the game”
As a member of the board of MUSC’s Foundation for Research Development, I am an enthusiastic supporter of the pursuit of advances in medical science and technology. But at the same time I believe very strongly that unless we tackle the fundamental dysfunctions of our health care system, we will be hamstrung in our ability to provide the benefits of innovations in medical science to most of South Carolina’s citizens.
Far too many dollars and too many lives are being wasted by our failure to provide basic universal care to all South Carolinians. We pay a heavy cost both in worker productivity and quality of life, and our failure to help keep people healthier “on the front end” of the process runs up huge acute care costs later on, for which we all must ultimately help pay.
We can do better, and we must.
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