Healthcare Reform

Introduction Right now in the United States, about 46 million Americans are lacking health insurance coverage because they cannot afford it. The healthcare system is not working for the American people, it is bankrupting them. For years, legislators have attempted to reinvent the system and pass new bills but citizens are still being taken advantage of. Premiums are too high, and employees are forced to share more of the weight of health insurance costs then they used to. Small businesses are not able to provide adequate insurance to their employees. This problem needs to be addresses immediately. President Obama is working on presenting a new bill that should take effect this year. This paper seeks to discuss the ways in which the healthcare system in the United States is unfair, too expensive, and inadequate to fit the needs of our population. It will discuss the problems with the system, President Obama’s plan of action, and some alternative plans. People of the United States need to be educated on how the current system works and what we can do to improve it. Problems With Healthcare System “The US spends 17% of its gross domestic product on health care, far more than any other country” (Zabloski 2009). Those 46 million people that have no access to preventative healthcare because of cost are receiving expensive care in very overpopulated emergency rooms. According to Zabloski (2009), “Physicians and hospitals face confusing, intricate payment rules from insurers, while US manufacturers, burdened by substantial health-care costs, compete against manufacturers in other countries who don't pay for health care” (54). As a result, there is an immediate need for change. Families should not have to choose which comes first between feeding their families and paying for their health coverage. A man diagnosed with cancer should not eventually bankrupt his family. This is a vital problem right now in the United States (Zabloski, 2009). Health care is “is becoming ever harder to afford and hurting even those American families with coverage they otherwise like. It is crippling the economy because of its effect on competitiveness. And it threatens the solvency of the government itself because of its awful fiscal consequences” (Crook, 2009). Some Americans are unable to receive the most basic health care because they are unable to find a physician that accepts their individual health care plan, or they are refused because they are underinsured or discriminated against for certain conditions. Owen states, “As U.S. health care costs spiral upward, both consumers and employers have difficulty financing health services. Insurance premiums increase so rapidly that some families are unable to make monthly payments to purchase protection against future catastrophic health expenses” (2009). More and more small businesses conclude that they cannot afford to provide insurance to their employees while keeping their workforce at the current level. The rise of

2 premiums has increased more than the rise of inflation since the 1990s. For the 46 million individuals with no health insurance and the millions with inadequate or discontinuous health insurance, unpredictable costs of surgeries, hospitalizations, or rehabilitation services can erode the base of savings many have counted on for their retirement years. It is not uncommon for uninsured and underinsured people to be driven into personal bankruptcy. A recent study of 1,771 bankruptcy filers found that 50 percent cited medical causes for their financial plight (Owen, 2009). Large businesses are beginning to try to share some of the cost of health care with their employees in order to maintain their competition and status in the global marketplace. Yet some large companies have shut down some of their factories and taking back promises made to their employees about retirement benefits (Owen, 2009). The problems with the health care system are difficult for doctors and nurses as well, who have to face confusing rules from insurers about payments and costs of treatment, and having to refuse certain people care (Owen, 2009). “As major players in the provision of health care and as respected professionals in the community, physicians ought to be consulted and should participate in setting the priorities and determining the solutions” (Fleischman, 1994). We don't have a healthcare system; we have a set of fragmented interest groups looking out for their own interests," laments Chuck Kilo, MD, a Portland, Oregon, internist who wants a national health insurance system similar to Sweden's. "How can we tolerate having one-sixth of our population with no insurance? Doctors haven't spoken up and pounded our fists. We only do that when something threatens our own incomes (Meyer, 2009). A problem that has persisted from the past is that high premiums are a result of managed care companies needing to lower their costs and keep somewhat of a profit. Quality of healthcare is being compromised because the care is being too strictly managed, providers complain. Consumers can barely make their own decisions about their healthcare because managed care is causing restrictions and limiting their ability to participate. These consumers are complaining to their employers, who shoulder most of the cost of the premiums, and the result is that their employees are not as happy or productive (Clarke, 1999). Additionally, Employers will continue to transfer responsibility for health care to employees because cost-cutting has become essential to economic survival in a global economy. Employers that provided health benefits paid 73 percent of their employees' total health costs in 2002; the employer share is down to 65 percent in 2008. Further, the number of employers providing any coverage at all fell approximately 10 percent over the past decade (Bauer, 2008). Many other problems that are causing rising costs are the advancements in recent technology, medical

3 errors, malpractice, inadequate laws and confusing regulations, no standardization, repeating services, and utilization of emergency rooms that is inaccurate or over utilized (Lefton, 2008). Americans are now very interested in seeing how a change is going to come about and put an end to this unfair treatment of employers and consumers. "Anyone who cares about the future of payment for health services needs to look beyond election-year politics to understand the trends that are really changing how dollars flow through provider enterprises" (Bauer, 2008). Citizens are hoping that politicians consider these trends and the consequences of the problems at hand to find a real solution (Bauer, 2008). President Obama’s Plan President Barack Obama has discussed, and is still discussing, his plan to improve the healthcare system. The new bill to be taking effect soon is a result of those company premiums rising. To introduce it, it is looking as if the younger, healthier employees could "defect from reasonably good corporate plans to cheaper 'public' plans" (Barlas, 2009). It is becoming likely that big businesses will be required to provide insurance, or that companies who do not provide it can buy it from a cooperative of the state. Then, private insurance companies will be found competing for the 46 million people that are now uninsured. President Obama is proposing that a mandate be set for employers. They would have to pay into a fund that the government establishes for Americans who lack insurance coverage. Companies that offer no health insurance coverage for a group (small businesses) will have to pay to a government fund or choose to provide coverage for that group (Holbrook, 2009). President Obama has said that healthcare is a top priority in his 2009 agenda. He states that he will "lower cost, promote choice, and provide coverage that every American can count on" (Dean, 2009).Under his plan, all Americans would be required to have insurance but there would be help for those who were less able to afford it. Although many Republicans are opposing this plan, Democrats believe that it is the only option as poor people's situations are getting worse by the day. Most employers do provide healthcare, but since the unemployment rate is so high right now, it is only further exacerbating the problem (Dean, 2009). The problem with passing the bill lies in exactly that there is opposition to plan. The battle has reached a critical point: Senate Democrats differ over the key question of whether to create a public insurance plan to compete with private options. Opponents have been storming Congressional town-hall meetings across the country, complaining about government intrusion in medical decisions and the cost to taxpayers. Public support for the Democrats' approach has been dipping in the polls (Perry, 2009). Obama has set some guiding principles for Congress, and is allowing them to create the right legislation. Some of these are to reduce long-term growth of health-care costs for businesses and government; protect families

4 from bankruptcy or debt because of health-care costs; guarantee choice of doctors and health plans; invest in prevention and wellness; improve patient safety and quality of care; assure affordable, quality health coverage for all Americans; maintain coverage when people change or lose their jobs; end barriers to coverage for people with pre-existing medical conditions (Zablocki, 2009). The most important aspect of Obama's plan is that he wants to ensure access to the right kind of care, and cutting costs at the same time. Obama has stated in the campaign that if we were to create a new healthcare system from scratch that he would support a single-payer option for healthcare but that since the current system is already in place and has been for so long, that “We may need a system that's not so disruptive that people feel like suddenly what they've known for most of their lives is thrown by the wayside" (Zablocki, 2009). Some feel as if Obama is being shrewd about his approach to not specify a detailed plan himself, but many Republicans and Democrats in Congress do not agree. George Watson, DO, a Wichita soloist who practices preventative medicine says about the plan, "This is a socialist, single-payer government healthcare program, and it will be no better than the best day in Canada or England" (Meyer, 2009). In Obama's budget plan for the 2010 bill, he proposed that over the next ten years he would spend $634 billion dollars that was set aside as a down payment for expanded health care. For funding, Obama would be limiting the tax cuts that American with higher incomes receive, as well as "reducing payments to private Medicare Advantage plans, changing Medicare payments to hospitals for care of patients after an admission, boosting prescription drug premiums for higher-income Medicare beneficiaries, and forcing drug companies to give bigger discounts to Medicaid programs" (Meyer, 2009). All of these options seem likely to change the current system, but is there a way for Congress to find a way to put those principles into action? Senate Finance Committee Chairman Max Baucus has been a leader in Congress, setting up a daft that is consistent to Obama's plan. Baucus would set up the opportunity for Americans to choose from a large menu private options and a public one similar to Medicare. This Health Insurance Exchange would allow people to that were older to buy into Medicare, and after the plan was established it would require all other adults to maintain insurance. However, breaks would be offered to those who have lower incomes and small businesses. Also, Medicaid would be available to persons under the level of poverty. In order to increase preventative care, doctors would receive more pay for coordinating this care and making sure more organizations existed for keeping people accountable in their health (Meyer, 2009). It seems as if most people are opposed to President Obama and Max Baucus' plans, although many argue that there is no other option. Baucus states, “Health reform is about striking the right balance between making sure health insurance is affordable for families and small businesses, and successfully slowing the

5 growth of health care costs that weigh down the federal deficit and our economic competitiveness” (Serafini, 2009). One other plan that is somewhat consistent with President Obama's is the Healthy Americans Act, which was written up by Democrat Senator Ron Wyden of Oregon and Republican Senator Bob Bennett of Utah. They are suggesting not providing a public option for coverage, but also mandating a requirement for insurance. Employees would be able to purchase a different plan after they cash out their employer's benefits, as well as providing a tax deduction for individuals and families, not exclusively employers. These plans are all being considered in Congress as detailed legislation to carry out Obama's principles of cutting costs, expanding coverage, and providing better access to care. The question is when will this bill be enacted? President Obama states that it will be this year, and that This time, there is no debate about whether all Americans should have quality, affordable healthcare--the only question is how? He warned that there will be no sacred cows in this discussion ... and those who seek to block any reform at any cost will not prevail this time around (Meyer, 2009). Alternative Plans The United States is in the midst of a healthcare crisis, with many solutions being promoted but little consensus about which solutions will work. Much of the debate focuses on how to improve the system. However, it may help to first consider what we should be trying to influence and control to make the system work better (MacStravic, 2000). While so many people are opposed to Obama's plan for action on changing healthcare, there have been other options introduced. It has been noticed that if health care costs are brought down, it would increase the typical family of four's income by $2600 by 2020, and up to 10,000 by 2030. If health insurance were available to all of the uninsured, it would increase the economic status by $100 billion a year (Susman, 2009). J. Susman writes that these changes need to take place in our health care system: reorient the financial incentives of providers to value rather than volume. Conduct comparative effectiveness research, expand performance measurement and feedback, reduce fragmentation, particularly in administrative services, and target fraud and abuse aggressively. Engage patients in decision making. Expand coverage by establishing an insurance exchange, and increasing the availability and affordability of health insurance (2009). However, she states, that these changes would only improve our economy and healthcare system if we had a valued and sturdy primary care workforce (Susman, 2009). Many people have the opinion that focusing on preventative health care and living right to reduce the need for care of chronic diseases is the best way to improve our health care system. In an issue of the

6 journal Healthcare Financial Management, Senator David F. Durenberger's states in his article Inside-Out, Bottom-Up Healthcare Reform that We know that many consumers overuse the system, are uninformed about the costs of health care and make poor lifestyle choices that lead to costly illnesses that are costly to treat. But we also know that consumers will make good choices when they are motivated to do so. We need to create incentives that will encourage us to care about our health, to live healthier lives, and to use the healthcare system more judiciously” (Podgor, 2004). B. Podgor writes in another issue of Healthcare Financial Management his opinion that checks and balances should be applied to the healthcare system. He gives an example that since we are aware that two thirds of our population is overweight, we should hold those overweight people accountable to living a healthy lifestyle. If a person refused to take their health into their own hands and change the way they live, why shouldn’t they have to pay their own medical bill if they are diagnosed with a chronic disease? This solution would be a difficult and controversial one, but Podgor states that we should ask people to modify their lifestyles and reward them for healthy behavior. Certain encouragements and deductions to motivate people could be set in place. The payoff should be a healthier population (2009). Scott MacStravic, PhD, another author in Healthcare Financial Management writes that “environmental factors and behaviors lead to certain physical conditions that lead to disease and injury. Those, in turn, lead to use and overuse of health care, which leads to rapidly rising health costs and finally a heavy economic burden on individuals, businesses, and governments” (2009). He believes that if we work at reducing chronic diseases, it would improve the health care system by helping to improve consumer’s well-being and quality of life and reducing the consequences of labor costs on businesses. If we manage what occurs before a chronic injury or illness happens rather than after, we could bring into line the interests of payers and providers. “Predisease or nondisease conditions can be managed in ways that delay, minimize, or entirely avoid future disease-related demand for care” (MacStravic, 2009). Americans should focus their attention on preventing the behaviors that lead to chronic diseases such as smoking, poor diets, substance abuse, physical inactivity, poor stress management, and unsafe driving. These risky choices and behaviors can lead to poor productivity, poor work quality, problems at home, energy levels, and stress. MacStravic states that “interventions to promote higher levels of wellness and fitness promise the most general, widespread, and positive effects on individual and community health, as well as on later stages of the healthcare continuum, reducing risk of injury and disease, improving productivity and job performance, and reducing recovery time if an individual does become ill or injured (2009). It is important that the needs of consumers are being met first, rather than the needs of employers or businesses. It should not be difficult to make sure that those needs are being met when healthier employers can transfer their improved productivity into better financial performance for their company.

7 This could allow better advantages in pay for workers and management, and increased share prices (MacStravic. 2009). Preventative measures that exist in the United States now are much less than they could be. Currently we practice immunizations, physicals, and some limited tests and scans, some of which are not covered by a majority of people’s insurance. Hospitals feel no need to push proactive measures for patients unless they are for tax exemption purposes or to benefit the community in some way. It is not currently profitable for them. Making proactive measures as profitable in hospitals as they are with strength training coaches and smoking cessation clinics is the key.

The hundreds of providers already engaged in proactive health management have the opportunity to demonstrate their cost-effectiveness with respect to payers. And payers, including the many commercial insurance plans that offer pay-for-performance bonuses based on proactive management effort and success, have the chance to demonstrate they will pay providers enough to make proactive practices and programs viable, as essential elements, versus charitable sidelines, for primary physicians and hospitals (MacStravic, 2009). Unfortunately, is does not seem as if these strategies to improve healthcare will take effect anytime soon. The House and Senate are still arguing over which way to go about improving the system, and it doesn’t seem as if a preventative wellness plan will be up for discussion. Republicans want the problem to be repaired, but believe that the best option is a free market place where consumers have a choice from a wide array of options. They also want to shift the tax deduction to the individuals rather than the employers. Democrats believe that the only option is to mandate that all people have insurance immediately, rather than eventually covering different groups, beginning with children. They are not opposed to private insurance, but believe that there should be a public government option available that will be inexpensive. By not renewing the tax breaks established by President Bush, they will pay for expanded care. The situation is not hopeless, because the costs of medical care are not estimated to rise substantially, nor are they declining. The only silver lining is that financial leaders in healthcare will recognize changes in payment that are not initiated from political leaders. Slowly but surely, insurers and employers will hopefully change the fundamentals of the healthcare system. Conclusion The United States healthcare system is in need of reform. The current system is not working. There are problems with the cost of health coverage, access to it, and quality of care. The motives of insurers are

8 displaced, and employers are being forced to require their employees to shoulder too much of the cost of coverage. Prices are rising rapidly, which results in individuals and small businesses having a hard time affording care. Families diagnosed with chronic diseases are going bankrupt. Americans have been waiting for the nation’s leaders to resuscitate the failing system, but as history suggests, people are not taking seriously the promises made by politicians. President Obama has limited time in which to propose a new plan, and many oppose his principles for change. But change will happen, whether it is of the kind that will positively affect our population or not. We can only hope that the right path will be taken to improve the dysfunction. The Senate and House are in disagreement on whether they should move in the direction of a public option that would compete with private options, or to move towards a free market in which consumers have many different options. Republicans are skeptical of whether Obama can provide coverage to all of those that are lacking without increasing the middle class’ taxes or compromising care. If our lawmakers could see alternative options of lowering costs, we could improve the system as well as reduce poor quality of life in our population. Preventative treatment of chronic disease would allow better productivity and increase profits for businesses. It would reduce the demand for long-term care and lessen hospital stays, alleviating some of the costs out of pocket for Americans. Minimizing risky behaviors and lifestyle choices could eliminate the demands for inappropriate and expensive care. The most power should lie within the consumer, who should have plenty of choices and options about how they want to live their life and what kind of insurance they want to pay for. If the power did lie within the consumers, they could change the behaviors of themselves, insurers, employers, and the government. Providers of health care would have to attract customers. Customers could pay for a better quality of life rather than go bankrupt paying for treatment that may or may not prolong their life or satisfy them. In the future we hope that quality and value of healthcare will be determined by the consumer, not the government, insurers, or employers.

How Should the Congress of the United States Reform Health Care in 2009?

Paige Hill

10/14/09

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