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The system will make doctors the health insurers of last resort," said Dr. Reinhardt, who is a professor of political economy at Princeton University, and has served on commissions overseeing Medicare and Medicaid, the U.S. government insurance programs for the elderly and the very poor. Europe may follow U.S. lead Despite moves by some political parties in Germany and elsewhere to rein in health benefits for the elderly, Dr. Reinhardt said that he "would hope Europeans have better sense" than to abandon universal health insurance in favour of an American-style system. However, he thinks it's possible that at least some European nations could share America's health insurance fate. "Eastern European countries might be persuaded by American consulting firms and U.S. aid to convert to a U.S.-style 'market approach' in health care," Dr. Reinhardt told EuroTimes. "Among other things, it would open these countries to U.S. insurance companies as new markets. The elites in those countries might welcome that approach, as the American system caters superbly to the upper half of the income distribution. "After all, Russia was persuaded by Americans to turn over much of the wealth of the country to a handful of probably U.S.-financed oligarchs under the 'shock theory' for transition economies. Anyone who bought that from the U.S. might also buy our health insurance system as well." Unaffordable coverage A reliance on employer-sponsored coverage is at the root of the American health insurance crisis. Generally, only the very poor, the disabled and those over age 65 are eligible for government-sponsored health insurance in the U.S. Virtually everyone else is insured through groups sponsored by private employers. As a result, about 44 million persons living in the United States - more than one-sixth of the population - has no coverage.The problem is the cost of providing coverage is growing so fast that many employers have already dropped coverage for lower-wage workers. It's a trend Dr. Reinhardt believes will pick up speed. At the current 15% rate of increase, in ten years the 2003 premium of $9,000 will rise to $36,000 - $1,000 more than the take-home pay of the lower 1/3 of U.S. wage earners. Even if the inflation rate were cut to 10%, health insurance premiums would rise to 43% of total wages in ten years, Dr. Reinhardt said. System not sustainable "This is clearly not sustainable for employers," said Dr. Reinhardt. In addition to a huge jump in the ranks of the uninsured, he expects a resurgence of HMOs and other highly restrictive managed care arrangements for at least the lower half of wage earners. He also expects growth in defined contribution arrangements, in which employers give workers a fixed amount of money to buy coverage on their own, medical savings accounts and catastrophic-loss-only health insurance policies.All of these options will either put physicians under tighter management control, or require them to collect large balances from patients who really can't afford to pay, or both. The American Medical Association, Dr. Reinhardt noted, "thinks this is the greatest thing since sliced bread. I think it is the greatest thing for uncollectible debt." System enormously wasteful The American penchant for private insurance is also enormously wasteful, Dr. Reinhardt pointed out. While the government-run Medicare program spends 2% of revenues on administration, private insurers spend upward of 15% to cover administration, marketing and profits to shareholders. "No other system in the world burns as much on administration."Despite the growing dimensions of the problem, Dr. Reinhardt sees little hope of the U.S. adopting universal health insurance. Even when the American government projected budget surpluses exceeding $4 trillion over a decade, there was no move to spend the money for national health insurance, which Dr. Reinhardt estimates would cost about $100 billion per year. Since the terrorist attacks of Sept. 11, 2001, and several rounds of tax cuts under the Bush Administration, America now faces a $4.4 billion budget deficit over ten years. The situation is even worse at the state level, with 20 of 50 states cutting coverage for the Medicaid programmes that insure the poor.
Huge bankruptcy toll The cost of America's continuing failure to address its health insurance problem is high in terms of human suffering and damage to the economy, Dr. Reinhardt said. Many credible studies documented that lack of insurance coverage both limits access to services and results in poorer health status. It also drives about one-half million Americans a year into bankruptcy to escape medical bills they cannot afford to pay. "What's going to happen? We'll muddle through," Dr. Reinhardt predicted. "It spares us the hard choices and the system works for the upper two-thirds of the population." |
