Last night, watching a recorded episode of the Daily Show from last week, where Jon Stewart interviewed Elizabeth Edwards, Stewart took the conversation in the direction of health care. At one point, Edwards mentioned that “the President of UnitedHealth made so much money, that one of every $700 that was spent in this country on health care went to pay him.” I was totally floored by this statistic – could our for-profit health insurance industry be that twisted?
So here are some facts. In 2007, according to HHS, total health care expenditures in the US were $2.2 trillion, and expected to grow at a steady 6.1% to $2.33 trillion in 2008. Others, like the National Coalition for Health Care, estimate that in 2008 it was $2.4 trillion, fairly close. Now, 1/700 of that is $3.4 billion, which is actually a thousand times larger than Stephen Hemsley, the CEO of UnitedHealth Group, makes.
So was Elizabeth Edwards wrong? Turns out, she might have been referring to UnitedHealth’s former CEO, Willim McGuire, who was ousted in late 2006 after an options backdating scandal. McGuire made $125 million in 2005. That’s a mere 1 in every $20,000 spent on health care I guess. Taking into account the stock options he sat on, it might bring the ratio down…but I must conclude that there was some hyperbole on Edwards’ part.
I forgive her, mainly because this isn’t the point. What I find truly impossible to accept is that we have a for-profit healthcare insurance system at all. As I have pointed out in the past in CV, this seems to me to be one of the clearest conflicts of interest that you could devise: reward health insurance companies and their shareholders for giving as little actual health care as possible for every dollar received. What other way is there to maximize profits? Oh, right, I almost forgot: keep the costs of health care rising so that this industry grows out of control as a fraction of GDP.
The system where we rely on our employers to provide health care coverage is broken. The rising costs have driven some employers, like the big automakers (who spend more on healthcare than steel) to the brink of bankruptcy, and have driven others to continually pare back the level of coverage for their workers. Underinsurance is as serious a problem as the nearly 50 million not covered at all. Should the particular disease you get wipe you out financially just because it’s too rare a situation to be covered by your plan? Should companies and their shareholders be making profits while our loved ones are being denied treatment? Or even denied coverage at all due to a “pre-existing condition”?
The health care companies have realized that change is coming, quite possibly in the form of a government-run alternative plan with much smaller administrative costs and no profit motive. A report appeared recently in The Washington Post that Blue Cross Blue Shield is launching a large PR campaign against the possible government-sponsored public insurance option. In addition, the health cartel has put forth a plan a couple weeks ago promised to reduce the rate of growth of costs by 1.5%, to about 4.5% presumably. Whoopie.
The right wing is fearful of rationing, long waiting times, or being unable to choose a doctor. The problem is that they simply don’t seem to give a hoot about the 50 million un(der)insured, who wait until they are terribly ill and then show up in ER’s. Guess who pays for that.
Another huge factor in the exorbitant cost of health care in the US is a topic that seems to be very seldomly discussed in the media: the end of life. Something like 27% of Medicare costs go to the last year of a patient’s life. How much of this is simply due to the fact that the patient, and their family, wants to try anything possible to achieve a cure, when in fact the doctors and the nurses know full well that the patient is terminal? Greater emphasis on counseling patients and families, plus a change in our culture that would make us more accepting of death, and an increased focus on preventative and palliative care rather than heroic but clearly futile and expensive late-stage treatments could save our society hundreds of billions of dollars per year.
I am not saying that no one should make a profit performing or delivering health care. Doctors, nurses, hospitals, medical suppliers do what they do to make a living. (Let’s leave Big Pharma out of it for a moment – that deserves a whole post by itself.) What I *am* saying is that no one should turn a profit by adding an unnecessary and bloated layer of bureaucracy. As Donald Cohen pointed out in March at the Huffington Post, the for-profit players are crying foul at Obama’s plan, essentially for a government-run Medicare-like option, because they don’t want the competition. As Cohen points out:
Private insurance overhead and profits eat up 20% and more of health care premiums while Medicare overhead (and no profit) is closer to 3%. There is big money to be made in health insurance. The top 7 “for profit” health insurers made a combined $12.6 billion in 2007– an increase of 170.2% from 2003. The same year, the average CEO compensation package for these health insurance companies was $14.3 million. Pay packages ranged from $3.7 million to $25.8 million.
Government-sponsored single-payer healthcare, which succeeds admirably in many other countries around the world, is probably not a realistic possibility in the US. I think that the next best thing in the long run is that an array of private, not-for-profit companies like Kaiser Permanente could run the for-profits into the ground. The government can encourage the non-profits in any number of ways, with little cost to taxpayers. One way or another I hope that Congress and the Obama administration can create a viable option for the 50 million uninsured, soon.
Access to quality health care should be a basic human right in a civilized, technologically advanced society like the US. It has become our greatest shame in the world that we cannot provide that for one in six of our people.