Consider these three facts:
Five percent of the population incurs 50 percent of health care costs.
Twenty percent of the population incurs 80 percent of the costs.
One patient out of a hundred requires 20 percent of our health care dollars.
If you were a private insurance company concerned about your bottom line, you would go to great lengths to not insure sick people. Keenly aware of the above statistics, private insurers invest a healthy slice of our premiums to avoid exposure to people whose illnesses, or even risk of future illness, would jeopardize their profit margin. For-profit companies pay employees to limit claims on those they insure and to find ways to disqualify others for coverage in the first place.
It’s understandable from a business perspective for private insurers to exclude sick patients from their rolls. But if we believe that each one of us equally deserves health care, there is no reason to devise a public health care plan that embodies the same priorities as a for-profit insurance company.
Compare private systems to Medicare: Medicare insures everybody over 65 regardless of their state of health. Medicare spends its resources covering everybody instead of trying not to. It does not use our health care dollars for advertising, sales commissions, for adjusters who weed out costly patients, or for inflated executive salaries. As a result, its administrative costs are roughly six to 10 times lower than private insurers, depending on which source you consult. So why not simply extend Medicare to everybody, and have “Medicare for All” as our health care solution?
The reason is that Medicare for All is unaffordable. Anyone paying for health insurance knows their premiums are increasing at hefty double-digit rates every year. The Medicare budget parallels these increases. These unsustainable cost hikes are mostly due not to unnecessary emergency room visits or to insurance company greed. They primarily reflect the steeply rising costs of medical technology and medications.
For that reason, the answer to exploding medical costs is not fundamentally about weeding out waste and inefficiency. Nor is it about an electronic medical record, or even eliminating that 15 percent administrative surcharge added by private insurers, or by curtailing the more exorbitant profits of pharmaceutical companies. All of these would certainly help. But the amount of those cost savings is a grace note to the scope of the problem we face.
There’s an elephant in the health care living room that understandably has been avoided by all politicians, including our new president. That elephant is the “R” word. The unpleasant but unavoidable fact is that we need to ration health care in some way. Everyone can’t have everything. As a society we need to decide how to spend a finite budget to provide health care for each and for all of us. This means that some people’s benefits need be limited in order to make adequate care available to everybody.
Before we get too indignant at this prospect of denying care to someone who could be us, or our loved ones, we should recognize that health care is already rationed in our country. Health care rationing is done every day on the basis of income, or happenstance.
People lucky enough to have employer-based comprehensive health insurance, or wealthy enough to afford their own Cadillac of health plans, seldom need to worry about what’s covered. People who can afford only catastrophic health care plans run a medical gauntlet every year praying they don’t become non-catastrophically ill. People who can’t afford any of those plans often no longer bother to show up for medical care that will saddle them with bills and prescriptions they know they can’t pay for. These people, as is now well documented, get sicker and die sooner than the insured.
An equitably rationed health care program already exists. Like Medicare, this plan will cover you whether you’re healthy, acutely sick, or chronically ill. Unlike Medicare, it says “no” to some benefits that other plans, which are free to cherry-pick a healthier, less costly population, might allow. Plan members need to be on cheaper medicines unless their doctors state they need more expensive ones. The program won’t cover some procedures its administrators think are too expensive for the expected benefit. It knows that dollars not cost-effectively spent for one patient means dollars unavailable for the rest. This plan is Medicaid.
Because Medicaid carries the social stigma of a program for the economically disadvantaged, it may not be the first model most Americans might look to as our national health care solution. But what if we uniformly applied the same principles of cost and benefit that Medicaid applies to its low-income recipients across the board to all of us, sometimes painfully but at least equitably. Eliminate the discrimination based on income, and isn’t this the best option available to us?
Medicaid for All. If we don’t like the name, we can call it AmeriCare.
Dennis Chinoy is a physician assistant in Bangor.