The U.S. health care system: Sick and getting sicker

Socialist Worker
April 13, 2007

ELIZABETH LALASZ explains why the U.S. health care system is a nightmare for so many people--and how it could be different.

A RECENT CBS/New York Times opinion poll revealed the depth of dissatisfaction with the U.S. health care system.

Nine out of 10 people believe the health care system needs “to be completely rebuilt,” according to the poll. Even more telling, almost half of people--49 percent--said they would be willing to pay up to $500 more a year in taxes if this meant everyone in the U.S. would be covered by health insurance.

Next to the war on Iraq, health care--or the lack of it--has become the most important issue in U.S. politics.

And for good reason. Whether for the uninsured or the underinsured, for health care workers or families trying to protect against the worst--that is, for almost everyone except the executives and shareholders who run the industry--the health care system isn’t working.

Politicians from both parties have been forced to propose solutions to the crisis. But it will take tougher medicine than what most political leaders are offering to cure the sickness of the system.

THE LAST time health care took on this significance in the national debate was more than a decade ago, when Bill Clinton promised on the campaign trail in 1992 that he would fix the system if elected president. Clinton and his wife Hillary liked to point out the number of uninsured after 12 years of Republicans in the White House: 35.5 million.

Now, more than a dozen years after the Clintons’ health care “reform” collapsed in a mess of half-measures and concessions to business--and following the Bush administration’s meddling on behalf of health care corporations--the number of uninsured is one-third higher, at 46.6 million.

That’s more than the combined population of Oregon, Oklahoma, Connecticut, Iowa, Mississippi, Arkansas, Kansas, Utah, Nevada, New Mexico, West Virginia, Nebraska, Idaho, Maine, New Hampshire, Hawaii, Rhode Island, Montana, Delaware, South Dakota, Alaska, North Dakota, Vermont and Wyoming--with every single person facing financial destitution if they or a family member get sick or injured.

According to the U.S. Census Bureau, almost one-third of Latinos are uninsured, along with about one-fifth of African Americans. Fifteen percent of children aren’t covered, nor are 17.7 percent--or one in six--of full-time workers, nor even 11.2 percent of families classified as middle income, with household earnings between $50,000 and $75,000 a year.

These numbers will only get worse under the current system. Health Affairs, a policy journal, estimates that the number of uninsured Americans will grow to 56 million by 2013.

Even the most basic medical care can be out of reach for those at the bottom of the health care ladder. According to the Access Project, a Boston-based health care resource center, half of all personal bankruptcies and one-third of all credit card debt are caused by illness or medical bills.

In their book, Uninsured in America: Life and Death in the Land of Opportunity, authors Susan Starr Sered and Rushika Fernandopulle write:

Without consistent access to competent medical care, uninsured Americans are left to their own devices to manage their health problems. Thus, Mexican Americans and Anglo Americans in the Rio Grande Valley cross the border into Mexico, where drugs that are prescription-only in the United States are sold over the counter. College-educated uninsured residents in Massachusetts often know someone who knows someone who knows a doctor willing to write a prescription or give out free drug samples without seeing or examining the patient.

Across the country, many Americans take only half of a prescribed drug dose so that their medicine lasts longer. They share prescriptions with friends and relatives. When their medicine runs low, they skip doses until they can afford to refill. And they play a high-stakes guessing game when they choose which of the several prescriptions ordered by the doctor they can afford to purchase in any given month.

The consequences of such gambles can be deadly. According to the national Institute of Medicine, lack of health insurance causes 18,000 unnecessary deaths every year--the equivalent of six times the number of people who died in the September 11 attacks.

THE EXPLANATION for how this is possible in a country as wealthy as the United States lies in the one-sided class war waged by employers against workers. The era of the “American Dream”--when working people could aspire to decent wages and solid benefits--is over, and the chipping away at employer-provided health care coverage is one reason why.

According to a study on the uninsured by Families USA, a national advocacy group for health care consumers, in 2004, 63 percent of workers had employer-sponsored health insurance, representing a decline of as many as 4 million since 2000. Nearly half of all small employers don’t offer any health care.

Even among workers with insurance through their employer, the burden is increasingly being shifted onto them. Employee “co-payments” for health care--once unheard of, at least at union workplaces--are now the rule. Plus, the aim of the managed-care “revolution,” with its HMOs was to “ration” health care, with insurance bureaucracies often forcing patients to jump through hoops, even for emergency treatment.

All too often, health insurance policies fail people when they actually get sick or injured--and it turns out that needed treatment isn’t covered. Thus, it isn’t only the uninsured who end up with massive medical debts. According to Steffie Woolhandler, cofounder of Physicians for a National Health Program, three-quarters of people driven into bankruptcy by illness started out with insurance.

All these trends are the result of health care costs increasing at a rate that far surpasses inflation. From 2000 to 2006, according to government statistics, health insurance premiums rose by 87 percent--compared to an increase in workers’ income of just 15 percent.

The corporate giants of the health care industry are the big winners. The pharmaceutical giant Johnson and Johnson made profits of $10 billion in 2005, followed closely by Pfizer at $8 billion in earnings, according to Fortune magazine. The drug companies Proctor and Gamble, Merck, Amgen, Abbot and the insurer UnitedHealth Group are all among the 50 most profitable of U.S. Fortune 500 companies.

Naturally, that means a big paycheck for health care executives. Johnson and Johnson’s CEO received salary and bonuses worth $28 million last year. When former Pfizer CEO Henry McKinnell left the company, he got benefits worth $180 million, according to the AFL-CIO.

NO WONDER the CBS/New York Times poll showed so many people believe the health care system has to be “completely rebuilt.” But what would it be replaced with?

Right now, leaders of both parties are coming up with proposals that they claim would provide “affordable health care for all.” In reality, they will do nothing of the sort.

George Bush’s plan, unveiled during his State of the Union address in January, would use tax incentives to encourage movement from an employer-based health insurance system to one in which individuals buy health insurance on their own. Workers who purchase health insurance would get a fixed deduction from their taxable income--$7,500 for an individual plan and $15,000 for a family plan.

The stated intent of the proposal is to equalize individual and employer-based health insurance markets--but on the basis of the least comprehensive coverage. The tax incentives are designed to get people to buy cheaper plans--and so spend their health care dollars “more wisely.”

According to the Economic Policy Institute, the Bush plan:

will significantly erode the employer market...A flat subsidy that encourages the purchase of the “leanest” (least comprehensive) insurance plan possible potentially siphons off the younger, healthier people into the individual market and destabilizes employer risk pools. The flat exclusion will likely affect few people in the beginning, but as health costs rise faster than the exclusion amount, it will cause further employer erosion in years to come.

In short, the Bush plan is designed to accelerate the shift of workers out of so-called “Cadillac” health insurance policies and into bare-bones plans. That will mean more out-of-pocket deductibles on the “basic” plan, leading people to use fewer health care services--and for anyone who doesn’t comply by getting insurance, income tax penalties.

Most health care reform packages under serious consideration, including Bush’s, are modeled on Massachusetts legislation enacted in April 2006 by then-Gov. Mitt Romney, a Republican presidential hopeful who wants to build support as a conservative who nevertheless accomplished something on health care.

What he accomplished is another matter. Massachusetts law now requires residents over age 18 to obtain and maintain health insurance coverage, starting on July 1, 2007. According to the Kaiser Family Foundation, tax penalties for residents who don’t comply could run between $2,000 and $5,500 a year.

In California, Gov. Arnold Schwarzenegger vetoed a bill passed overwhelmingly by both houses of the legislature that would have brought the state one step closer to truly universal health care under a single-payer system modeled on Canada’s. In his veto remarks, Schwarzenegger stated, “Socialized medicine is not the solution to our state’s health care problems.”

Instead, Schwarzenegger pushed through a plan very similar to Massachusetts’, which would require all residents to purchase health insurance. Unsurprisingly, the insurance industry is thrilled. “The California proposal could expand the industry’s market to 4 million to 5 million currently uninsured Californians,” the Wall Street Journal noted hopefully.

These plans have been accompanied by rhetoric about “universal coverage.” In reality, they are designed to further push health care costs onto working people.

THERE IS an alternative proposal backed by growing sections of the labor movement and even a small number of Washington politicians: a single-payer health care system.

The single-payer system is so named because all people would belong to a single publicly administered pool that pays all medical bills--in effect, an expanded and improved Medicare system covering every person.

Such a system would eliminate the vast administrative waste perpetrated by the insurance companies. According to SinglePayer.com--a Web site launched by the California Nurses Association/National Nurses Organizing Committee (CNA/NNOC), the driving force for the single-payer legislation that Schwarzenegger vetoed in California--under private insurance, more than 30 percent of every health care dollar goes to administrative costs, compared to just 3.2 percent in the Medicare system.

Under most single-payer proposals, health care providers would remain as they are now, mostly private--in other words, nothing like the image painted by apologists for the current system who claim that a single-payer system would force patients to get in line and take whichever doctor or medical facility is available next. In reality, the restrictions on care currently imposed by insurance companies and health care executives are much harsher.

Hospitals would receive a global budget to cover their annual costs, and providers would be paid according to a fee schedule--they would not bill patients. Employers and employees would pay a payroll fee--like the one already taken from paychecks for Medicare.

Because government expenditures cover 60 percent of U.S. health care costs, U.S. taxpayers are already paying more than half the cost of national health insurance--and aren’t receiving it.

According to advocates, 95 percent of people would pay substantially less for health care than they currently do. Coverage would be “portable”--eliminating the fear of losing insurance that keeps many people in jobs they would like to leave. Workers who go on strike or suffer on-the-job injuries would never have to worry about losing benefits.

The single-payer system is in use throughout the world, including Canada, virtually all of Europe, Argentina, Brazil, Japan, South Korea, Russia and Australia. Mexico and South Africa are attempting to implement such a system.

While the health care systems of these countries are certainly not without problems, their advantages are obvious. In 2004, the U.S. spent $6,100 per capita on health care compared to $2,250 per capita on average in countries of the Organization for Economic Cooperation and Development that had national health insurance programs.

When Taiwan shifted from a U.S. health care model to adopt a single-payer system in 1995, it boosted coverage from 57 percent to 97 percent, with little if any increase in overall health care spending.

For the first time in more than a decade, there is momentum for change on health care. On the federal level, a proposal for a single payer system sponsored by Reps. Dennis Kucinich (D-Ohio) and John Conyers (D-Mich.) has been endorsed by 239 union organizations in 40 states. In California, the CNA/NNOC is continuing to push for statewide single-payer legislation.

It will take a powerful effort to overcome the resistance of the insurance and health care industry to any genuine reform. But a single-payer system is the only way to bring the U.S. closer to making health care a human right.

As Marilyn Clement, national coordinator for Healthcare-NOW, a coalition that supports single-payer, said, “Overwhelmingly, people are trying to find incremental responses instead of a national response. They are still putting forward the same proposals as last summer, such as ‘the first step is to get national health care for children.’ Well, that’s good, but we won the election. It’s time to escalate our hopes.”