|
| Politicians need to take a fresh look at health care funding... |
|
In August, Dr. James C. Mitchiner of the Washtenaw County Medical Society wrote about the merits of single-payer coverage, noting it's been available in the United States for more than 40 years in the form of Medicare. The four decades of evidence shows an administrative burden of 3 percent compared with 18 percent or more for some for-profit insurers. Single payer compares favorably against the inefficient duplication of administrative costs inherent to the current system of 1,200 private health insurers, and the increased out-of-pocket cost to consumers from 1,200 risk pools.
Mitchiner also noted that "single-payer'' is not "socialized medicine,'' something the New England Journal of Medicine recognized in its Aug. 23 editorial supporting a single-payer funding system. Physicians are increasingly recognizing that on a net basis, single-payer doesn't mean less net revenue, and will provide more time for the practice of medicine instead of managing the paper flow of 1,200 different reimbursement forms. From a public policy economic perspective, however, the most relevant and critical point he touched on is this: Single payer would "nurture free enterprise by ending the struggle of American companies to keep up with escalating health care costs which makes them less competitive in a global market'' (italics mine). The Unites States is locked in a titanic global struggle with ascending economic powers (China, India and others) as we desire to maintain the standard of living that fueled this nation's growth and prosperity over the last 100 years. Economics is well known as "The Dismal Science,'' but you ignore economic forces at your peril. In short, the cost of health care is crucifying the American economy. Let's look at two anecdotal but relevant examples. The Big Three - General Motors, Ford and Chrysler - and other industrial giants provide an important source of well-paying manufacturing jobs, central to any developed economy. Increasingly, they are outsourcing production to other countries. True, there are a variety of reasons for the outsourcing - but at the margin, the cost of health care is making it un-economic for corporations (big and small) to create and to retain jobs in the United States. It is not uncommon for health care alone to add 15 percent to 25 percent to a company's payroll. The cynic might rightfully suggest that the United States is in the post-industrial age and aging industrial giants do not matter as much. Consider the actions of a growing industrial giant - Toyota - when deciding which country to locate a new auto plant. They went to Woodstock, Ontario, Canada - not Detroit, Michigan, America. The decision was announced in 2005, with opening day scheduled for 2008, making 100,000 cars and employing at least 1,300 skilled workers. When the announcement was made, Canadian Federal Industry Minister David Emerson noted that one factor in Toyota's decision was a $4 to $5 hourly cost advantage "thanks to the taxpayer-funded single-payer system in Canada.'' Health care is a huge part (15.9 percent of GNP) of the American economy. The system of private-sector doctors, hospitals and allied health care workers works well in the delivery of health care. It's the costly system of 1,200 risk pools (private insurers) funding coverage through the workplace that is broken. The estimated $200 billion-plus annual savings from a single-payer funding system that the Government Accountability Office estimates would be a huge economic boost to the U.S. economy. In the United States, the purchase of health services occurs in 1,200 duplicative ways. The country can ill-afford the annual waste of $200 billion in unnecessary administrative costs, as estimated by the GAO. Americans don't need political and special-interest rhetoric about the socialist evils of foreign systems of funding health care. We need pragmatic solutions to the health care funding crisis, and politicians willing to take a fresh look at Medicare and other funding models that work, both in the United States and elsewhere. In 1957 America marshaled its resources in the face of Sputnik to put a man on the moon within 12 years. At the time, the threat of Russian space dominance from without was considered an issue of national security. Today, the nation faces the issue from within of a threat to its tradition of (profitable) free enterprise - wasted resources in the billions of dollars spent on unneeded paperwork and insurance company bureaucracies. Can't we face this threat with the same national commitment that we devoted to the space race? No less is at stake. |
| Raymond A. J. Digby, an Ann Arbor, Mich., resident, is a member of the Association of Home Office Underwriters and was formerly in actuarial practice. |
| Print Mail Friend |
| HEADLINES |
| September 03, 2010: Canadian Life Insurers Continue To Acquire US Life Insurers...Industrial Alliance Acquires Golden State Mutual... |
| September 01, 2010: US and Canadian consumers and brokers tap into savings and better life insurance values with QuotesOnTap(R) on SmartPhones and SmartTablets... |
| August 30, 2010: LIMRA Study: Individual life insurance ownership in the US drops to a 50-year low... |
| Aug 16, 2010: QuotesOnTap, North America's first and only fully self-contained independent multiple company life insurance quotation and comparison tool for the new generation of SmartPhones rapidly gains popularity and is being further enhanced... |