Sunday, July 19, 2009

Health Care Legislation

In the current debate about health care, facts are few and opinions are many. Here are some facts that may help you form your own opinion.

What We're Spending Now

The US Department of Health and Human Services' Center for Disease Control, using data from the Organisation for Economic Co-operation and Development , notes spending on health goods and services plus health-care infrastructure as a percentage of Gross Domestic Product as follows:
  1. United States - 15.3%
  2. Switzerland - 11.3%
  3. France - 11%
  4. Germany - 10.6%
  5. Belgium - 10.3%
  6. Portugal - 10.2%
  7. Austria - 10.1%
  8. Canada - 10%
  9. Netherlands & Denmark - 9.5%
  10. Sweden - 9.2%


US health care costs have more than tripled in inflation-adjusted terms over the last 20 years to their current level of 15.3%.

What We'll Be Spending If We Do Nothing

Further, if current policies remain unchanged, that percentage will increase to 25% of GDP in 2025, and 49% in 2082.

Long Live the Rich, and the Poor Die Young

Yet, according to the NY Times, government research shows “large and growing” differences between the lifespan of Americans, based on their wealth. Admitting researchers in disagreement for reasons for this growing disparity, they do agree that a part of the explanation lies in whether an individual has health insurance.


Expand Access and Curb Costs - One Out of Two

The Administration 's main objectives stated earlier this year were:

  1. Expand access to health insurance, and
  2. Curb runaway costs for the economy has a whole.

Current House legislation being considered, however, "significantly expands the federal responsibility for health-care costs," says Douglas Elmendorf, director of the Congressional Budget Office. The Senate Finance Committe has not yet released their verion of the bill. As both versions of health care legislation advance, expanding coverage has been embraced while few compromises have been made with pharmaceutical companies where savings were to have been made.

Allegations that the CBO has not "credited" such proposals as "preventative care measures" have been asserted. Those assertions are correct. It is apparent that preventative care will result in lower long term health costs. It is inappropriate, however, to assign a dollar amount to that cost savings, as that amount would be impossible to quantify.

One more quantifiable compromise would be to reduce the federal tax subsidy that encourages employers to offer large health-insurance policies, but that proposal has been opposed by labor unions (that have these tax-advantaged plans).

Where We Are Now

Current legislation has not yet achieved the goal of cutting costs in a way that will prevent unsustainable increases in health spending. Special interests on one side - particularly labor unions - are at odds with

  • AMA (that wants increases in Medicare payments to doctors)
  • Insurance companies (that want to prevent a government-run competitor in the marketplace)

Whatever your opinion, it is time to contact your Congressional representatives. Achieving both access and cost containment is critically important in solving this problem. The link below is provided for your convenience in doing so.


  1. Kitty,

    I am thankful for my health care coverage provided to me through my union contracts. They used to be much better, but now some of the cost-cutting has hurt especially in the area of "acceptable" drugs. I have friends who envy my plan because they need to get pre-approval on any other doctor they wish to see. My fear is that this provision will change. The patient should have a say who they want to see and when, and insurance companies should not determine the best cause of medical action--that should be between patient and doctor.

    But getting back to the unions...can you imagine how many more Americans would not be insured if it weren't for the unions?? And btw, not all unions have great plans to begin with. But something is better than nothing. Unions IMO built the middle class.

    I want health care for all Americans, but I want the plans to be fair. Many doctors don't accept my plan. But thanks to the savings over the years due to my co-pay which is now $15-$20, my plan allows me to see other doctors-like my orthopedic surgeon-who does not participate in my plan. My insurance coverage gives me $30 for that $200 visit. I think the rate some doctors are paid under these plans, like mine, are low, and I can see the AMA's point. But some doctors charges are way too high. But then again, they have a payroll to meet.

    If the gov't can find a way to bring down the costs of procedures, treatments and tests that now make it impossible for many Americans to get necessary treatment, that would be a fantastic start.

    But the whole medical industry, from the cost of drugs to manufacturers of medical equipment, IMO is holding us back.

    I cannot fault the unions at this time because any tax break the middle class can get helps make ends meet. Keep in mind that not all union jobs pay great. My building staff is part of a union, but are still low paid.
    My father's hotel union also had horrible health benefits, but thankfully doctors at that time didn't charge an arm and a leg, so they were still able to see the local family doctor. Medicare was a life saver when they were both diagnosed with cancer in their latter years. Without it, we could not have afforded any of the care they received.

    This is a messy situation. Personally I want universal health care, but my gut tells me the little guy will still get screwed.


  2. Thanks for your comment, Carol. The CBO's suggestion that tax subsidies that support large health care plans be lessened as a way to help pay the cost of expanded health care is being resisted by unions. The fact that unions are resisting this is understandable, just as the lobbyists who support doctors interest in increasing the formula for payment of medicare benefits, and drug companies who lobby to protect their profits as a way to pay the extraordinary costs of research and development of new drugs, and insurance companies who lobby to exclude a huge government provider that can price them out of the market. I take no sides here, but point out that all interests have some basis for their position. The fact is, however, that in its current state, health care legislation does not meet its stated goal of cost efficiency. Some compromise must be made, but thus far, no interest group has done so, and without such compromise, the legislation is likely to fail.
    Thanks for your opinion.

  3. I totally agree with you Kitty, but I would like to see the big companies make the first move.