----- Original Message ---- From: Michael Pollak <mpollak at panix.com>
> I've always thought -- and always been told -- that my coverage was the high end of standard, the kind of coverage people really miss when they lose their jobs. I think that's still probably true. So if I'm not covered, is anybody covered in this country?
I left out the keystone of my rant, namely: What on earth would be the point of making this kind of coverage universal? It's not only that most people can't budget 6 grand/yr for the standard plan. They couldn't afford to go to the doctor even if you gave them the plan for free!
[WS:] Basically what you describe is the hyperinflation of medical costs, rather than shifting the balance of payments from insurers to patients. Below is a comparison of revenue structure of the health industry (NAICS codes 621, 622, and 623) for 1998 and 2005 (which I recently compiled from the Service Annual Survey data for some other project):
1998 2005 Medicare 20% 21% Medicaid 8% 8% other gov 1% 2% pvt insur. 42% 43% patient 16% 14%
These data show no major shifts in the balance of payments between 1998 and 2005. If anything, the share of patient revenue is somewhat smaller (14 vs 16%) and the share of insurance payments (both public and private) somewhat larger.
What changed is the dollar amounts charged for medical services, which were growing at the average annual rate of 6.7% (in current dollars) - which is about three times of the official inflation rate. For ambulatory health services (NAICS 621) that growth rate was even higher - 7.3 per annum.
>From what I read, there are three, maybe four main factors cited to be responsible for that inflation:
- insufficient insurance by a growing segment of population, which causes providers to cover up the losses by charging higher fees - that may explain why your individual bill grows exponentially higher, but it does not explain the aggregate growth
- high administrative cost imposed mainly by the fragmentation of private insurance (which some claim to be a third of all medical cost) - it sounds plausible; I would add to it the cost of medical malpractice insurance, which is sky high;
- the kind of health care being delivered - especially emphasis on high-tech treatment instead of prevention - also sounds plausible, but difficult to control withour taking draconian measures (e.g. denying service if it costs too much.)
- changes in patient demographic and life style - older patients who require more care, or patients living unhealthy life styles (junk food, obseity, lack of physical activity, etc.) - again plausible but difficult to control.
To this, I may also add simple greed - like everyone else, providers want to make more money, and charge whatever the market can bear. This is Business 101.
A single payer insurance plan would save administrative costs but do little for other factors without extensive tort reform that would lower malpractice insurance costs, restructuring of health care delivery to focus on less expensive altrnatives to high-tech treatment (a controversial measure) and reforms aiming at behavioral changes of the population leading to healthier life styles (whose success I doubt, unless draconian measures are used.) And I see no effective ways of curbing greed that would fall short of draconian measures.
Wojtek