Our nation’s endless decades’ old fight about health care has prevented us from even examining what a health system is supposed to do. Lacking a clear vision, we have been unable to chart a viable much less sustainable course. From the beginning it has been a medical/surgical system based on fee for service payments. Doctors and hospitals charge for services and people pay based on those prices, or the discounts some groups are able to negotiate.
We have never agreed as a society whether health care is the responsibility of individuals and families or whether health care is a social good for the nation, or even a combination.
While I am hard on employers in this blog they are not the villain. The villain is our lack of vision of what a system should do.. Many groups at both the national and local level are fighting for transparency and quality. What is the villain is our lack of vision which has birthed this system with its conflicting and confusing rules. We have some key groups at the local and sometimes state levels that are working to build sustainable quality systems that support individuals, families, employers and the communities and states at large. The Washington Health Alliance, The Foundation for Health Care Quality in Washington State,as well as national groups of Employers, such as the Leapfrog Group. If we are going to make things work we need all parties involved–individuals, families, and employers, which includes unions. There are others. We can work together. This is an attempt to show why we need to do so.
Early insurance as we know it did not arise until the Depression when doctors and hospitals were last in line to be paid. Except for some Medicare, Medicaid, public health and specific programs for children, seniors, the poor, the mentally ill and disabled, and to even some extent, our veterans, health insurance was and remains a private enterprise.
As a consequence of our inability to decide as a nation what a health care system should do our system was defaulted to employers as the major provider of health care insurance. This has led to a health care insurance marketplace more overwhelming than a specialty grocery store. Not only are there numerous products, but there are specialties within products–an unending maelstrom few can fathom, much less make informed choices. Employers can dictate the choices for their employees, individuals in the private marketplace are lost at sea with myriad choices of cost and coverage.
The cost of an employer based system is the elephant in the room. What is not widely discussed when there is talk of retaining the private insurance marketplace is that public dollars–not just federal dollars–also pay for private insurance. Public employers include:
- 50 states and 5 inhabited territories—Puerto Rico, Guam, Northern Marianas, US Virgin Islands, and American Samoa
- 39,044 general purpose local governments (municipal governments, townships governments, and county governments)
- 50,432 special purpose local governments (special tax districts, independent school districts, and independent special school districts)
These public employers use city, county, local and state tax dollars to contract with private insurance companies for employee health care benefits. Some self-fund (act as their own insurance company by holding the money they would have paid to a private insurance company and pay their employee claims that an insurance company would have paid). Employers who self-fund often contract with insurance companies to manage and pay claims, and monitor eligibility, benefits, authorizations and referrals.
Each of these employer public and private programs has its own program with its own staff to verify coverage, provider, co-payments, deductible, employee and dependent coverage, and so forth. Some of these smaller groups, such as teachers, may become a subset of a larger group, such as state employees. Benefits, however, often differ. All these thousands of layers of bureaucracies add to costs. Nearly 20% of all health care costs can be attributed to the tsunami of regulation at both the private and public levels whether federal, state, county or city.
Any change to this private insurance system and its medical surgical model however, is plagued with the same battle about the nature of health care: personal vs. social responsibility. Even today, this fight remains couched in personal/marketplace/HSAs vs. Single Payer/Medicare for All/universal coverage. And the demand for the repeal of the Affordable Care Act called Obamacare.
Until the ACA there was no common set of benefits to provide a baseline for everyone. These new core benefits now come in four versions—silver, bronze, gold and platinum. All four have the same basic benefits everyone can count on. People can buy more if they wish. The exceptions are the employers who became the default providers of health insurance during WWII.
Until recently over 70% of all Americans had their insurance through their employer. Now it is about 55%. As costs increase more and more companies are passing along the cost of health care to their employees in the form of higher co-insurance, co-payments and deductibles.
The default to employers led to the cascade of different benefits and coverage depending on where you work. The costs determined by the insurance companies that contract with employers and are based in good part on the known risks of disease/injuries of that particular company or its profession. Farmers pay more than lawyers—mechanics pay more than accountants–simply because of the differing potential physical dangers of the professions. Businesses with predominantly young (and therefore in danger of becoming pregnant) women often pay more than a comparable group of young men.
The crazy quilt of coverage rules has created a maze of conflicting voices about health insurance coverage and its costs. Employers contract with insurers. Insurers calculate risk and put a price on it. To contain costs the insurers can choose/negotiate with a network of hospitals and doctors and other health professionals as well as other health services, such as pharmaceutical companies and laboratories. The insurer offers one or more options to the employer that has a team of human resource staff to manage employee health care benefits, cost sharing, deductibles, referrals and co-payments. In the 1990’s one multi-specialty medical clinic in California added 35 people full time just to manage the eligibility, authorizations and referrals of all the different insurance companies that contracted with that clinic.
Like Medieval monks debating how many angels can dance on the head of a pin, these varying rules have created incalculable choices that no one can fathom and that have nothing to do with the health of the nation. There has been no foundation or guarantee all families and individuals could count on no matter where they work, their income, age, sex, disability or whether or not they are employed by a company that offers insurance. This is one thing the Affordable Care Act brought with its Essential Benefit packages.
We are suffocating in private regulations that make public programs pale in comparison. Each private program has its own rules, cost sharing, networks, eligibility requirements, and premiums and even drug costs when all largely offer the same medication whose costs no one seems to be able to control, but all lament. The cost of these regulations and paper work is staggering. It is estimated that nearly 20% of all health care costs are for such activities.
Our health care emperor simply has no clothes. However, this emperor’s empire represents nearly 20% of the American economy, and it is not governable. The industry has legions of ‘dukes,’ ‘courtiers,’ –landlords, employers, bankers, doctors, hospitals, labs, and lobbyists that dictate the rules of the game, the coverage and prices. No one looks out for the general well being of the workers and families who actually fuel this economy. Even decision makers who could influence the rules in this kingdom cast a blind eye on those trapped in the system believing so-called safety net programs will actually take care of those who cannot afford insurance, are poor and even on public programs. Like the frog in a pot of water, we are blind to danger until the water becomes too hot and too late we realize the walls are too steep for us to escape this cauldron of cost and coverage.
While there is special coverage for many including Medicare and Medicaid, and other special programs. Even changes in benefits to these programs require federal action. Medicare initially did not cover preventive care or annual examinations, for example. It took an act of Congress to add mammogram coverage or prostate examinations.
It is up to us who are still on some semblance of a safer shore to act before the health empire is crushed by its weight of rules and money. Given the system’s sheer size, change cannot possibly happen overnight. The ACA, however, is an attempt to slowly change our course, but it is being tossed again into a storm of dead end rhetoric that serves no one except those who profit from the status quo. The winners are not families, and many businesses not to mention many, many small public groups, small non-profits and even those that offer health care services.
I know I am tilting at windmills, but we could solve this problem if we all had a common goal for the health of a nation and built a system that could support that goal. It does not have to be a choice of private vs. public. But we need to know what kind of a system we are building if we expect it to be sustainable. We need to have a goal we can agree up and work together to reach. I have no idea how to keep the politics out of this but it is up to us to try. Our course is not sustainable.
Maybe we can start at the local level! City by city, county by county to show some sustainable and viable models that actually work for all involved.
Kathleen O’Connor, May 3, 2016 (c)