The Paradox of US Healthcare

Published on
by
Al Jazeera English

The Paradox of US Healthcare

by
Andrew Kennis

Protesters stage a crime-scene-like "body pile-up" to show the poor state of US health care in Los Angeles, October 6. (AFP/File/Mark Ralston)

For nearly two decades, Wendell Potter led a very comfortable life as a public relations health insurance executive.

However, while flying on a corporate jet and being served lunch on
gold-rimmed china with gold-plated cutlery, Potter had an epiphany of
sorts.

He realised that the reason why millions of Americans were without
health insurance or under-insured was because: "Our Wall Street-driven
healthcare system has created one of the most inequitable healthcare
systems on the planet."

This June, Potter left his well-paid and secure job at CIGMA, one of
the US's largest health insurance companies, and has spoken out in
favour of healthcare reform.

'Killing thousands'

With almost 50 million people living without any health insurance
and another 25 million people under-insured during a recession, the
debate about how to reform the US healthcare system has been underway
for many months in Washington and is expected to continue through to
the end of the year.

Potter become a whistleblower and is now speaking out against industry abuses on national television news shows.

He does not mince words when telling Al Jazeera that if a strong
"public option" is not passed by Congress, healthcare executives would
be effectively allowed to continue policies that "literally kill
thousands of Americans every year, through denied coverage, as a result
of relentless pressure coming from Wall Street".

The public option, currently favoured by the White House, would
attempt to insure the uninsured, with the government providing a
non-profit, publicly-funded insurance plan.

The public option, however, has not been fully vetted and passed by
Congress and Republicans, coupled with a number of Democratic allies,
have vowed to prevent it from reaching the desk of Barack Obama, the US
president.

Paying more, getting less

In the meantime, the US continues to be the country with the highest
proportion of uninsured people in the developed world. It also has the
distinction of spending a greater portion of its total economic output
on healthcare than any other developed country - just over 17 per cent
of its gross domestic product (GDP) last year.

On average, the US spends twice as much as other developed countries on healthcare.

But even though US citizens pay more for healthcare, they get less
of it, resulting in a lowly 37th place ranking among healthcare systems
in the world, according to a study by the World Health Organization
based on quality and fairness.

In terms of the infant mortality rate, a common marker for the
overall state of healthcare systems, the US was outranked by all of the
following countries according to the CIA's World Factbook: Sweden
(3rd), Japan (4th), France (7th), Norway (10th), Germany (14th), Israel
(17th), Denmark (21st), United Kingdom (31st), Canada (35th), Taiwan
(39th), Italy (41st) and even a few underdeveloped countries, including
Cuba (43rd).

How can this paradox of the US spending the most and getting the
least for its healthcare occur in the country with the world's largest
economic output?

Claudia Schaufan, an Argentine physician and professor of
comparative health policies at the University of California in Santa
Cruz, explains that the common characteristics of healthcare systems in
the developed world have to do with the universality of coverage and
the lack of for-profit entities.

The key behind each of these systems is that they all outperform the
US in terms of their infant mortality rates, administrative costs, the
extent of population with coverage and the proportion of GDP spent on
healthcare.

Furthermore, there are no documented instances of citizens going
bankrupt because of medical care in these systems while, conversely,
some studies have shown as many as 700,000 Americans suffer that fate
annually.

'Making a buck'

One grouping of healthcare systems can be described as socially insured
and multi-payer (Germany, Switzerland, Japan, Israel, Belgium and
Austria), another as socially insured and single-payer (Taiwan and
Canada), and a third as nationally insured and delivered (United
Kingdom, Spain, all of Scandinavia, Italy and Iceland).

 

Socially insured and multi-payer systems feature health
insurance delivered by non-profit insurers. Those who are unemployed or
cannot afford to pay for the insurance, receive governmental assistance
so that universal coverage is achieved.

Certain multi-payer countries have a wide choice of insurance
programmes, as is the case in Germany. When you choose a private,
non-profit insurer - Germany has 240 of them - the government pays a
portion of the costs based on your income.

Developed countries with one national insurer that is funded
publicly - often described as single-payer - have a healthcare system
that is delivered by either private (as is the case in Canada) or
publicly-run institutions (as is the case in all of Scandinavia).

While these systems differ in their specific characteristics, the similarities are more important, according to Schaufan.

"Everyone has health insurance and there is no significant
for-profit aspect in any part of the medical sector ... nobody in these
systems 'makes a buck' at the expense of the health of patients," she
says.

Learning from others

Taiwan, which spends three times less than the US on healthcare,
developed its current healthcare system in the mid-1990s, when the
majority of citizens were uninsured and policymakers collectively
decided the health system needed to be radically overhauled. However,
the Taiwanese looked to other countries to forge their own system.

Asked what the proposed US reforms show in terms of learning from
other examples, Naoki Ikegami, a leading Japanese healthcare economics
professor, says simply: "Not much, because there has to be a
willingness to learn and if anything, US leaders have isolated
themselves from learning about other healthcare systems."

Professor Ikegami's co-author on numerous scholarly publications,
John Campbell, an American-born political science professor, says: "The
reforms being proposed in the US simply do not fix or get at the heart
of the problem, which is price containment and unsustainable healthcare
costs.

"The US would stand to gain a lot from going to a single-payer system, where costs could easily be contained and controlled."

Failing millions

In terms of for-profit and corporate
healthcare interests influencing policy in universally insured systems,
however, the situation is quite different.

Campbell says: "Insurance companies have a very small presence here
in Japan and simply do not influence policy at all. The exact opposite
is the case in the US where they basically dictate policy."

Potter explains that the situation in the US is a far-cry from that
in Japan, as a result "of the lobbying strength of the for-profit,
special interests in this country".

Consequently, Potter describes current reforms being considered by Congress as little more than "limited" in their scope.

Schaufan is also critical, adding that for most people, the measures
being debated in Washington will be little more than "mandates forcing
people to take on for-profit-based insurance companies, which already
depend upon the government to cleanse itself from having to cover the
elderly and the poor, through the popular Medicare and Medicaid
programmes".

She believes the US should adopt more fundamental reforms putting it
in line with the rest of the developed world that has opted for
universal coverage within the scope of non-profit-based and
administered systems.

Potter echoes Schaufan's sentiments: "The system has already failed
millions of Americans and will continue to fail millions more in the
years to come."

Other experts, however, disagree and point out that trying to rid the US of its profit-based system is unrealistic.

Timothy Jost, a healthcare policy expert and law professor at
Washington and Lee University, says: "I would like to have world peace,
but I just don't think we're going to get rid of a for-profit
healthcare system."

He says there are several significant steps Congress can take by
passing meaningful reforms, including "the expansion of Medicaid, as
all reform bills are currently proposing that Medicaid would be
expanded to 133 per cent of the poverty line".

Jost also points to "affordability subsidies, which would take care
of a sizable portion of the population and help put limits on
cost-sharing, which will cover most of the people who are
under-insured".

Cost-sharing transfers much of the burden of paying for healthcare
to insured consumers and is a significant reason why many people are
under-insured and many others have to declare medical bankruptcy,
despite having insurance.

What the public wants

Despite Jost's optimism about some of the reforms under
consideration, the public opinion polls suggest a possible disconnect
between politicians and the reforms they are proposing and what the
public really wants from their healthcare system.

Based on a recent New York Times/CBS News poll, the New York Times
reported that, "most Americans would be willing to pay higher taxes so
everyone could have health insurance and said the government could do a
better job of holding down healthcare costs than the private sector".

Another recent ABC News/Washington Post poll documented
public support for governmental insurance going even farther, as 56 per
cent supporting the idea even if it meant running corporate insurers
out of business.

What is even clearer than the apparent gulf that exists between
public opinion and the limited reforms being considered, however, is
that the US stands alone among other developed countries in terms of
its profit-driven and industry-dictated healthcare system.

Share This Article

More in: