Why does U.S. health care cost so much and have so little to show for it?
The United States is known for having the best medical care anywhere—if you can afford it. The problem is each year more Americans can’t. They lack insurance coverage, in large part because fewer employers can afford to offer it. The average cost of family coverage has risen 78 percent—four times faster than general inflation and wages—in just the last six years.
As a result, the number of uninsured has ballooned from 38 million in 2000 to 47 million today. Alarm bells are sounding and politicians are taking notice. What some have discovered—if not yet fully addressed—is that Americans spend more per capita on health care than anyone (twice as much as the French and Germans, for example), but don’t have much to show for it. Our market-driven system allots oodles of cash for new technologies, private insurance overhead, overpriced drugs, and redundant tests, but patient satisfaction is lower here, as is life expectancy.
Because of these imbalances, the demand for cost containment has swelled in the U.S. business community. Its leaders see the issue in terms of global economic competitiveness. The growing lack of coverage has become a moral sore point as well. Wal-Mart was recently shamed into providing more accessible insurance for a larger percentage of its workforce. At the same time, advocacy groups like the American Cancer Society have gotten involved. The society recently ran TV spots calling for health-care reform because one of every ten cancer patients is uninsured. Patients who are uninsured are less likely to be diagnosed early on and receive successful treatment.
Last February, Democratic presidential hopeful John Edwards put health-care reform at the heart of his campaign. He offered an outline for near-universal health-care coverage, and his plan was later followed by similar proposals from Barack Obama and Hillary Clinton. The Democrats’ plans eschew single-payer, government-run programs. They rely on mandated insurance coverage, financed in large part by rolling back the Bush tax cuts for the rich.
The Democrats got badly burned in 1993 when they attempted to overhaul health care. Initially, 71 percent of Americans supported President Bill Clinton’s reform measure. That support plummeted to 43 percent when lobbyists for the insurance companies inveighed against the measure’s reputed complexity and “lack of choice.” This time out the Democrats are stressing an incremental approach.
Republicans are having none of it. When President George W. Bush threatened to veto a bill that would extend child health-care coverage, he claimed the measure would lead to “socialized medicine.” Republican presidential candidates are using the same vocabulary to caricature the Democrats’ plans. Their sole proposal is to use tax incentives to encourage people to buy their own medical insurance, a plan that favors the well-off and the healthy—those already more likely to be insured—and does not address cost containment.
In July, the president remarked infamously that the uninsured can always get medical care by going to an emergency room. True, and that is what a growing number of people do. But this is part of why the system is breaking. Each year the United States spends $40 billion on federal, state, and local coverage for the uninsured. Yet those who postpone treatment face greater risks and cost taxpayers more.
Emergency rooms offer stopgap care, not comprehensive health care. What we need is a system that guarantees basic health services and emphasizes prevention and patient responsibility. In a recent comparison of U.S. and European health-care systems, Daniel Callahan and Angela A. Wasunna (Medicine and the Market, Johns Hopkins University Press) found that all the European models they studied provide adequate choice and care while controling costs better and having higher patient-satisfaction rates.
It is unlikely that the United States will embrace a government-mandated, universal health-care system anytime soon, but there are already two homegrown models worth emulating and extending. One is an insurer (Medicare), the other a provider (the Veterans Administration). Not only does Medicare give enrollees a wide variety of service choices, but it does so with lower administrative costs than private insurance. And in recent years, according to Phillip Longman in the October Washington Monthly, the VA has started to develop a reputable care system that emphasizes continuity, preventive care, and verifiable results. Both Medicare and the VA show that there needn’t be anything un-American about comprehensive health-care coverage. Voters take note.
October 2, 2007