Saturday, December 27, 2008

Paying for Health Care

Health-care costs in the U.S. have increased over the past couple of decades faster than the rate of inflation or growth of the gross domestic product (GDP)*. In other words, the U.S. is going bankrupt paying for health care. In 2007 health-care spending increased by 6.9%, twice the rate of inflation. The $2.3 trillion spent on health care in 2007 represented 16% of GDP; by 2016 this is expected to rise to $4.2 trillion which will be 20% of GDP. The U.S. spends a higher proportion of its wealth on health care than any other industrialized nation; Switzerland, Germany, Canada, and France, for example, spend between 9.5 and 10.9% of their GDPs on health care--and those countries have universal health-care insurance coverage; in the U.S. some 46 million citizens have no health-care insurance. Moreover there is no evidence that health-care services received in the U.S. are of better quality than in these other nations; by most measures (such as chronic disease rates and death rates) they are worse.

This lamentable situation has been attributed to inefficiencies, excessive administrative expenses, inflated prices, poor management, waste, and fraud. In other words, it is due to the federal government's misplaced passion, since Ronald Reagan, for deregulation. And as the medical resources of the country--the doctors, hospitals, pharmacies, pharmaceutical suppliers, health insurance companies, etc.--have been pretty much given their head trusting that free-market economics with a dash of ethics and common sense would inexorably set things aright, the same thing has happened that we witnessed so graphically in the financial sector--things have run enthusiastically and irresponsibly amok; costs are up and quality of services is down.

The cure is obvious though it is not easy. The U.S. government needs to develop transparent and robust regulatory controls. This would start with the development of a universal health-care insurance system for all citizens (just as other industrialized nations have). Tens of billions of dollars would be saved by fair and consistent pricing of medical goods and services. Tens of billion more by accepting generic drugs**--the Veterans Administration and many foreign governments already do; Medicare does not. And further tens of billions of dollars by developing and installing a uniform, computerized medical records system*** worthy of our information age.

The problem is severe. The cure is clear. The missing ingredient is the political will.

There are two problems with health care, however, that this does not address. One is the incongruity, discussed in prior essays, between the flawed reductionistic approach of usual, Western (allopathic) medicine and a more integrated, wholistic perspective. This can only be addressed by education, public awareness, and gradual cultural paradigm shifts. For now and the foreseeable future we are stuck with the fragmented, "body parts" viewpoint of allopathy--with a dash of acupuncture, homeopathy, chiropractics, and nutritional approaches gratuitously thrown in.

There does seem to be a growing emphasis on "wellness" rather than on "illness," on maintenance of high-level health (through health education, healthful nutrition, and lifestyle changes) and thus on "prevention" of health problems rather than on "cure." This may go a long way towards solving this first problem.

The other unsolved--perhaps unsolvable--problem is the "myth of infinite entitlement." In theory, every single individual is entitled to "the best" medical care that money can buy--be it organ transplants, genetic manipulations, or other expensive therapeutic interventions. In fact, our society cannot afford that kind of care for every citizen. We have to turn poor folks away from some doors that are open to rich folks. There is no philosophic rationale for this; it is simple pragmatism: whether we like it or not, "ordinary people" can get just a certain amount of medical care and no more while rich folks can take advantage of every modern medical miracle.

This second problem has been true for only the past 50 to 75 years. Prior to that the "best" medical care was not so sophisticated, technological, and specialized that ordinary folks could not afford it. But increasingly in recent years the "best" medical care is simply too expensive for anyone but the very wealthy.

Notes: * Gross domestic product, or GDP, is the broadest measure of a country's economy; it amounts to the total market value of all the goods and services produced in a country during a certain period.

** Generic drugs are the same chemicals as non-generic drugs, but they are marketed without the advertising, the gifts to doctors, and the corporate profits that inflate the prices of "named" drugs from "named" companies. Arguments have been made that buying generic rather than proprietary drugs interferes with private research and development of new drugs; but such R&D funding should be done with academic, philanthropic, or governmental resources rather than by entrepreneurs and drug companies in search of private profits.

*** Although developing a huge, integrated, computerized medical-records system would cost many millions of dollars, this cost would be graciously, philanthropically born--as Ross Perot pointed out--by any of a number of computer billionaires such as Ross, himself, or Bill Gates.