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Fix This Mess

Fix This Mess

Fix this Mess (continued)

By Mary Beth Regan


The Problem: Among the world's 30 most industrialized countries, only the United States, Mexico and Turkey do not have nearly universal health coverage. According to recent data, 47 million Americans are without health insurance. The fallout: The uninsured avoid care because it is too costly. Or they seek care but are saddled with the highest costs because they are not represented by federal programs or private insurers. The problem is growing, says Gerard Anderson, an HPM professor, and Hugh Waters, an HPM associate professor. The number of uninsured in the United States has been increasing an average of one million people per year since the 1970s.

How We Got Where We Are Today ...1930s
As the Depression worsened, people had difficulty paying hospital bills. As a result, medical insurance programs, modeled after the Texas plan, proliferated. Hospital charges were based on the cost of care, plus a small 10 percent markup for reserves.

The Fix: In July, Anderson, PhD, and Waters, PhD '99, MS, unveiled a proposal for universal coverage at the Brookings Institution in Washington, D.C. Unlike others who have proposed comprehensive reforms, such as giving vouchers to people to buy their own coverage, the team wants to expand the federal Medicare program for the elderly to the uninsured. They call their plan Medicare Part E(veryone).

Private health plans or companies could offer the plan and those without employment-sponsored health insurance could enroll directly. The premiums would be the same for everyone—and the federal government would subsidize poorer citizens who cannot afford coverage. By covering younger, healthier individuals, the plan would actually lower the government's cost per person. "This is one way to quickly achieve universal, continuous, and affordable care for everyone," says Anderson. The projected total cost to the U.S. government: $94.4 billion.


The Problem: While the United States continues to outspend other nations, these dollars are not as efficiently spent as possible, says HPM's Jonathan Weiner. The U.S., for example, spends about 15 percent of GDP (gross domestic product) on health care, nearly double that of the United Kingdom. Yet the U.K. consistently outranks the U.S. on measures of efficiency—administrative costs, use of information technology, deployment of interdisciplinary teams. Bringing greater efficiency to the U.S. system does not mean scrapping private insurers, managed care or federal programs, Weiner says, but it may require radical change.

How We Got Where We Are Today ...1960s
After greatly expanding their services, hospitals saw costs begin to increase at 2 to 3 times the rate of inflation. Most hospitals had a list of prices for roughly 5,000 items. There were no discounts. Nearly everyone paid the same rate. The Medicare program was established in 1965.

The Fix: One idea Weiner has advocated is the creation of a quasi-governmental body, such as the U.S. Federal Reserve Board, which oversees monetary policy, to coordinate and evaluate the efficiency of health care. For example, the board might grade major medical technologies, procedure and services to essentially weed out costly, inefficient treatments. Then, using a cost-benefit analysis, the board would place a value on each option. The most "efficient," or cost-effective treatments, would be covered by insurance plans. Other riskier or more expensive treatments would be permitted—but patients might have to buy supplemental coverage or cover these costs themselves.

In addition, Weiner says, the U.S. must improve its use of technology through the burgeoning field of health informatics. Consider that all the nearly 7 million residents of Hong Kong have electronic medical records. "We really are the laggards," Weiner says, noting that the U.S. has no consistent program to convert patient records to electronic versions.

He advocates the creation of electronic health records (EHRs) or, even better, Internet-based personal health records (PHRs) that patients can take with them from doctor to doctor. "Within a generation, we'll see the positive side of health information technology," he predicts. "Health care will get more humane ... because the technical side of what doctors do will be handled by the electronic box."

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