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The Health Care
Bubble in the U.S.:
How to
Stop It from Happening
For health care premiums for 2010 price increases are
now estimated to be in the range of nine to eleven
percent – about five times higher than inflation.
Outcomes will be about the same – we’ll still be 41st in
life expectancy, 33rd in infant mortality, and 37th in
health system effectiveness.
And the productivity improvement in the health sector
will be a negative two percent.
Americans apparently don’t want this to change.
Why? Because about 70% of the US population get
their health insurance from their employers or through
self-paid plans, and they are more afraid of losing it
than paying 10% more. The 15% who are uninsured
have no voting power, and the remaining who are insured
are mostly people on Medicare, Medicaid and other
government-sponsored plans (military, VA, federal
employer), so most people fear that proposed changes may
put them in a worse position than they are now. And
this fear has produced the most emotion-laded debates
that we have ever witnessed.
Yet almost all Americans are just one step away from
losing their health insurance. That insurance may
disappear if the employer lays off people or goes broke.
If may disappear if you have a pre-existing condition,
or you have a ceiling on how much the insurer will pay,
or you have co-payments that you cannot afford, or the
insurance company drops you because you are considered a
poor risk.
So the average American is only two steps away from
bankruptcy. If you lose your health insurance, you
enter a twilight zone where 62% of all personal
bankruptcies are caused by staggering health care
bills.
This is what people prefer over a change in our system
of health care financing? A change that promises
to remove the pre-existing condition problem, makes your
insurance non-cancelable and insures everybody?
The reason, they say, is that it will cost too much.
Give me a break!
Is the 62% of bankruptcies not costly enough? The
shift from going to your own doctor to waiting six hours
in an emergency room? A system that will consume
the entire Gross National Product of the US in 2060 if
cost increases continue on the same path as they have
since 2000? This is, without a doubt, the largest
and most dangerous economic bubble we have ever
encountered.
Here is the solution, and I cannot imagine why no one
has advocated it during the entire debate that now has
raged over nearly 5 years.
The solution is to raise the productivity level of the
health sector to be comparable with that of the average
American worker.
That’s it.
That’s the solution.
If we do that, we do not have to hire even one
additional healthcare worker over the next ten years.
Over that period, everyone in the health sector will be
paid the same pay increases as they received in the past
decade.
All Americans will be treated, whether insured or not,
and the cost will not increase in total -–it will be
offset by higher productivity.
And ten years from now, health care costs will be 10%
less than they are today, in real dollars.
This is what the productivity of the average American
can do for the rest of the economy.
If the health sector does as well, we shall have solved
the cost problem, and the problem of the uninsured, all
while continuing to provide the newly effective health
care workers with the same high annual pay increases
they received in the past.
Now, tell me again: Why don’t we do this?
And now?
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