Reform Health Care Now: Syrocketing costs are choking American businesses
Since taking office in January, President Obama has made it clear that overhauling the nation's health care system is one of his top priorities. Naysayers argue that the new President is tackling too much too soon in light of the current global economic crisis. Others maintain the President's plan is too ambitious and that our health care system just needs a tune-up.
As a physican on the front lines of the nation's health care crisis, I don't think these critics are wrong. I know they are. That's why I've channeled my inner David Letterman and come up with a Top 10 list of reasons Congress would be foolish not to take the President up on his challenge and put health care reform at the very front of its agenda this spring.
Of course, if you're out of work and uninsured or you've suffered a major medical problem in the past decade, you already knew that. The problem is that too many other Americans are still in various stages of denial on this issue. They sense the urgency of the situation only little by little, each year paying higher deductibles and out-of-pocket expenses or being forced to switch doctors because the physician they've come to trust no longer accepts their insurance plan. Or discovering suddenly when they're pregnant, for example, that the nearest obstetrician to their house is two hours away because so many of my fellow ob-gyns have abandoned our field due to soaring malpractice costs.
U.S. health expenditures were expected to rise an estimated 6.9 percent in 2008 -- twice the rate of inflation -- according to the National Coalition on Healthcare. In 2007, total spending added up to $2.4 billion, representing 17 percent of the Gross Domestic Product (GDP). Within just the next eight years, that figure is projected to nearly double, to $4.3 billion.
Who do we think is going to pay for that? Can American families continue to afford annual 7 percent rises in co-payments and premiums, without seeing a serious eroding of their disposable income available to go toward buying new homes, frequenting malls, appliance stores, car dealerships or any number of other already-struggling businesses? And what about their employers? How will American companies, which shoulder the lion's share of coverage costs in our current system, continue setting aside larger and larger premium allowances and still be able to invest in new hires, new technology, new product lines, new growth that is the country's only real hope for sustained recovery?
One need only look at the nation's struggling automakers to understand the crippling effect that soaring health care costs have had on major corporations' ability to compete globally. And yet the impact has been even greater on small businesses, which don't have the negotiating power of large corporations to secure discounted group rates.
The average cost for a small-business owner to insure a worker's family is now $12,680. To put this in perspective, healthcarereform.gov points out that's almost the same as the annual income of a minimum-wage worker. In other words, if you own a restaurant or store and hire someone for minimum wage, you will spend about the same on their health insurance as on their salary. Is it any wonder so many low-wage workers in this country go uninsured?
At my ob-gyn practice in Connecticut, I cover three employees, including myself, and it costs me a total of $26,000 a year. Because costs have risen so much, I recently switched to a plan with a higher deductible -- a choice made by increasing numbers of small-business owners. The arrangement worked out pretty well (my employees don't pay towards premium -- a rarity for American workers), until my wife needed an MRI and my family got hit with a $5,000 bill, $3,000 of which we had to pay out of pocket before we met our new yearly deductible.
In subsequent Top 10 installments I'll go into more depth about what's causing costs to rise, but suffice it to say that in this country we do a lot of very expensive tests that are used sparingly in other countries whose outcomes are little different than ours. Some doctors also have incentives to do the tests -- they earn more for the additional "work" they perform, or have been conditioned to run the procedures to protect themselves from getting sued. And, frankly, patients have gotten spoiled by their access to the most sophisticated, state-of-the-art medical technology, even though it hasn't necessarily improved their health.
When patients receive a bill, they're often surprised at how much even routine office visits cost. But when you add up the cost of employees' health insurance, medical liability insurance and leasing expensive ultrasound or X-ray equipment, you realize that in many cases the doctor is simply passing those costs onto patients. Likewise, hospital charges have increased because institutions are trying to make up the money they lose on all the uninsured patients they see. It has become the classic self-perpetuating cycle: the more medical costs rise, the fewer patients and employers there are who can afford insurance, and the higher costs continue to spiral.
The upshot is that we must control spending -- now -- or American consumers and businesses soon quite literally will have little left to pay for anything else.