Lately we are hearing in the news that our nation has a
health care crisis. Many say we need “Healthcare
Reform.” I disagree since our country
has some of the best healthcare in the world.
Refer to the January 2011 ranking of the top
1000 hospitals in the
world where the US holds all of the top 20 spots except for two Taiwanese
hospitals. In fact, the US holds 426 out
of the top 1000 spots for the best hospitals in the world. That’s pretty good numbers considering the US
comprises less than 4.5% of the world population according to the US Census Bureau. Even though some hospitals in the US may be
sub-optimal, we have quite a few great ones in comparison to the rest of the
world. With that said, I feel we have
pretty decent healthcare in this country (I’m sure some folks will disagree for
one reason or another, but I am entitled to my opinion).
Americans have access to healthcare since legally no one is
turned away from hospitals. The
Emergency Medical Treatment and Active Labor Act (EMTALA) was passed in 1986 by
the U.S. Congress which requires hospitals and ambulance services to provide
care to anyone needing emergency healthcare treatment regardless of citizenship,
legal status or ability to pay. This is
another example of an unfunded mandate put in place by our government that I’m sure
drives up health insurance costs. So even
though 43 million people (roughly 14%) in the US did not have health insurance
in 2008, these people still have access to healthcare, but perhaps not covered
under a policy. And a 2009 CBS News
poll
shows that 64% of Americans think health care should be a right. Healthcare is often confused as health insurance; or is it really healthcare?
So why do we hear so much about healthcare from the news and
from politicians? Why do we hear so many
fellow Americans complain about healthcare?
Why do so many companies complain about skyrocketing healthcare premiums? Many people seem to think the major cause is
because things are getting more and more expensive every year. However, according to the Bureau of Labor
Statistics, the average rate of inflation between 2000 and 2010 was 2.5% per annum.
So inflation doesn’t seem to be the cause since it has stayed rather steady. A few other factors could be compensation for
healthcare workers, profitability of hospitals, or profitability of health
insurance companies.
Forbes wrote an
article
about hospital profitability in August, 2010.
In this article they researched profitability of hospitals and found that
many hospitals were turning operating margins above 25%. The most profitable hospital had an
unbelievable operating margin of 53%! That
means they were charging patients double what they needed to survive. Even not for profit hospitals were turning
profits!
I discovered through research that insurance companies are
also doing quite well. United Healthcare
netted 3.8 billion in 2009 and 4.6 billion in 2010. The #2 Health insurer in the US, Wellpoint Inc.
made 5.6 billion in 2009 and 6.9 billion in 2010. Aetna netted 2.9 billion in
2009, and 3.75 billion in 2010. Blue
Cross and Blue shield
doubled
its profit in 2010 from the previous year, raking in 1.1 billion. There are so many insurers, I could go on and
on. If you want to get even more riled
up, then go online and check out how many millions of dollars of your insurance
premiums are paid out in executive pay to the leaders of these giant
businesses.
I have my theories of course, but I don’t think the government’s
solutions or regulations for health insurance will fix the problem. Politicians as of late seem to be very short
sighted and only seem to be interested in saying what people want to hear. In order to best describe my feelings, let me
give an example:
Let’s pretend for a minute that I was going to offer you a
grocery meal plan. I know you spend a
fair amount of money every month, so I am going to give you a really great policy
price which will take care of all of your grocery needs. I am going to get really low prices with the
grocery store since I have so much bargaining power (I'm going to get them a bunch of customers who can only shop at their store). Basically you take your meal plan card into
the grocery store whenever you want, and get whatever you want. It will only cost you $25 per trip as a
co-pay. Do you think you will buy the
same amount of groceries you did in the past?
Or perhaps might you get more and better ones? Do you think the store employees might throw
in a few extra items with your purchase you might need since they are “covered”
under your policy?
I bet if we tried this experiment, I would need to raise
your “policy premium” after year one to regain my profitability. Then the grocery store would soon realize
that they can charge whatever they want to you (since you aren’t paying
attention) because it doesn’t directly impact you. Soon after that, I would need to raise my
prices again since my profitability has been reduced. Not to mention the prices for groceries went
up because of inflation. This system
sounds ludicrous to me.
I don’t think the founders of the “free market” would think
very fondly of our current system. It is
basically a monopolistic price fixing scheme that doesn’t allow for
competition. So what is my
solution? Well, I probably don’t have a
perfect one, but I definitely wouldn’t vote for a politician just because they
claim they will solve our healthcare systems problems. Every solution I’ve heard from our
politicians is really no solution at all.
The proposed solutions seem to bind us tighter to insurance companies,
which I feel will only dig this hole deeper.
Do we want to head in this direction? I really want to hear solutions that will improve
the quality of life for me and my fellow Americans.
But just stop and think about the system as a whole for a
minute… why should your healthcare be tied to your job? You probably are not going to have your job
for the rest of your life. My personal
opinion is that insurance should be outlawed by the government unless the healthcare
companies and hospitals are non-profit organizations. This still would be imperfect since it could
leave openings for some people to take advantage of the system somehow (as
mentioned above). I would prefer if
people would go to a health care provider (doctor or hospital) and pay what
they can afford for the services they need.
In this model, people could pay for health services they require
directly and negotiate “fair prices”.
