CONNECT
NationofChange / Op-Ed
Published: Friday 14 September 2012
“Republicans agree it’s good news but blame Obamacare for the fact that employer health-care costs continue to rise faster than inflation.”
The Wrong Way to Save Money on Health Care
Employer outlays for workers’ health insurance slowed from a 9 percent jump last year to less than half that — 4 percent — this year, according to a new survey from the Kaiser Foundation. Good news?
Our political class believes it is. The Obama administration attributes the drop to the new Affordable Care Act, which, among other things, gives states funding to review insurance rate increases.
Republicans agree it’s good news but blame Obamacare for the fact that employer health-care costs continue to rise faster than inflation. “The new mandates contained in the health care law are significantly increasing the cost of insurance” says Wyoming senator Mike Enzi, top Republican on the Senate health committee.
But both sides ignore one big reason for the drop: Employers are shifting healthcare costs to their workers. (The survey shows workers contributing an average of $4,316 toward the cost of family health plans this year, up from $4,129 last year. Many are receiving little or no employer-provided coverage at all.)
Score another win for American corporations — whose profits continue to be robust despite the anemic recovery — and another loss for American workers.
Those profits aren’t due to a surge in sales. Exports are down (Europeans, Japanese, and Chinese are all pulling in their belts) and American consumers don’t have the dough to buy more.
The profits are largely due to lower corporate costs, especially when it comes to their payrolls. Employer-provided health and pension contributions are shrinking, and the real median wage continues to drop.
High unemployment has given companies more bargaining leverage over their workers, who have to accept lower real pay and benefits or risk losing their jobs.
When it comes to health insurance, employees increasingly have to choose between health-insurance policies with sky-high premiums or with sky-high co-payments and deductibles. And since they can’t afford the former they’re opting for the big co-payments and deductibles – or no insurance at all.
The result is fewer visits to the doctor and less use of other medical services.
This is a new trend, and it comes despite the Affordable Care Act (which hasn’t been fully phased in). And it wouldn’t be worrisome if we were seeing too much of doctors before, and using up medical resources we didn’t need.
But it’s worrisome if it means less preventive care, or health problems going untreated until they become chronic illnesses or crises.
Healthcare costs do have to be better controlled. They now claim 18 percent of our entire economy. But the best way to control them isn’t by cutting back care. It’s by wringing inefficiencies out of the system.
Our healthcare system wastes 30 cents of every dollar spent on health care, according to new calculations by the well-respected Institute of Medicine. Much of it is wasted on repeated tests, and a huge portion wasted on paperwork – between doctors and hospitals and specialists and insurers, to justify expenditures by one group to be paid by another.
A single-payer system would be far more efficient.
So back to my original question. Is the dramatic slowdown in employer health-care costs good news? It all depends. If we and our families are in good health, or we’re high earners who can afford good health coverage without big co-payments and deductibles, or if we own lots of shares in companies showing higher profits because they’re trimming pay and benefits – or we’re in all three categories – it’s probably good.
But if we’re none of these, it might not be good news – especially if it means we’re getting less care than would otherwise keep ourselves and our families healthy.
At the least, if we’re concerned about the health and well-being of all Americans, we need to find out much more before we celebrate.
This article was originally posted on Robert Reich's blog.
Get Email Alerts from NationofChange
ABOUT Robert Reich
ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.
10 comments on "The Wrong Way to Save Money on Health Care"
September 18, 2012 8:42am
Notice the complete lack of evidence that increased co-pays reduce preventative care? That's the evidence is the other way (as reason would suggest it would be). Increasing the proportion people pay has been shown to have ZERO effect on health but to save money. As usual Reich is being a professional ignoramus here.
September 19, 2012 5:32pm
And your source? reference link to the literature please. As I thought you don't have one.
September 14, 2012 9:11pm
The system we have is inadequate and expensive for those of us who have it. It is inadequate for those without it, and expensive for those of us who pay their bills, because they enter the system in the most expensive manner and don't get completely healed.
Hopefully Obamacare will demonstrate that more care can be delivered to more people for less money. To be sure, a step in the right direction. So how do we get to a single payer system like Medicare and Medicade?
Two things: cut the BS and educate ourselves about the system and the solutions. and DEMAND steps be taken to get us there! Write or call your people in Congress and your State representatives. Do this frequently.
Make yourself heard!
September 14, 2012 6:29pm
There's so much that's wrong with the American system of medicine (I wouldn't call it a "healthcare system") that one hardly knows where to start. Much has been said in the comments here, and I agree with many of them.
I still remember when I was 30 years of age and had to go to the hospital with appendicitis. I was pale as a ghost and doubled-over in pain and yet had to sit in a hospital office telling someone about my health insurance. I had an appendectomy, but that option, which saved my life, was almost beyond me because of hospital admission standards (and I had good insurance from my employer).
Now there's a shortage of primary care physicians, so I don't have too much choice in this small city I live in. I go to my doctor's office at an appointed time, sit in the waiting room for 50-60 minutes, with nothing for reading material except old Good Housekeeping magazines. Then I get called in the back, where I am weighed and have my BP read by some assistant, who transfers me to another room, where the assistant tells me the doctor will be with me "shortly. " 15-20 minutes later, the doctor peeks in, and I kid you not, I usually get no more than 2-3 minutes time with her. Then she usually gives me a referral to some specialist, or writes a prescription, then tells me to come back in 3 months. (I can hardly wait, can I?)
Wow. American "healthcare" in a small southwestern city. And yet when discussions in America come around to comparing our "symptom-treatment" system with the health care in other Western democracies, oh, then you start hearing all these messages about long waiting periods between appointments "over there," and how the surgery was found wanting, blah-blah-blah.
I don't believe a word of it. It's the same old song-and-dance from the defenders of Big Pharma and the insurance companies.
Just read Dr. Andrew Weil's book "Why Our Health Matters" and the author, with that shiny dome and outsized white whiskers, makes some good suggestions for improving what we fondly call a healthcare system. I'd recommend it to anyone. But will we ever get such reforms?
If getting what other countries have is "socialized medicine," then I'm all in favor of it, no matter what you call it. Our doctors are little more than pill-pushers in the employ of Big Pharma. You hardly ever get lifestyle recommendations (diet, exercise, supplements, stress mgmt.,etc.), just out comes the old prescription pad, and they scribble something with a flourish, and act like you should be impressed; you have to hope the pharmacy can read the unreadable. Yet shills or ill-informed yahoos crow about "the best healthcare system in the world." Unbelievable.
September 14, 2012 2:59pm
What good is any kind of Health Care, when Doctors don't heal, they just give you drugs. If you want real health Care, start with what's holding the doctors back.
September 14, 2012 2:11pm
My bank sends me a monthly statement. My utilities each send me (or let me view on line) a monthly statement. My home and auto insurance send me semi-annual bills.
Not my employer-semi-paid 'health' insurance. It's as if I don't have a continuing account with them. Rather, each new visit to a doctor - and each single lab test which that doctor may order - generates a new incident which generates separate paperwork and a separate weeks-later not-quite-a-bill-not-quite-not-a-bill statement from the 'health' insurance company.
My late wife's terrible fatal cancer lasted just five months. Rather than generating five monthly statements, her treatment and care generated an inscrutable score after score of bills and statements. For all I could tell, I would be liable for five figures of costs. Fortunately, despite the incompetent approach in paperwork, my actual liability was under four figures. That was never made clear by any statement, but rather by a face-to-face conversation with the hospital cashier.
To fix this aspect of the paperwork craziness in the American 'health' system it will be neither necessary nor sufficient to have single payer. It will require something more profound. Common sense.
September 14, 2012 12:31pm
Dear Robert: Corporate profits prevail and he who has the gold rules!
My life has changed because what happened after 9/11 forced me to come out of denial. Denial that I didn’t even know I had. It forced me to recognize the fact that during the Bush-Cheney administration our great United States of America willingly sacrificed American blood for Mid East countries’ oil. It forced me to recognize that we do not in practice have two governing parties in our U.S. Congress. Instead of the Republican Party and the Democratic Party in actual practice we only have one party. That one party is the U.S. Corporations Party. And that one party, especially since 9/11, has been in absolute control of our U.S. Congress. Government of the people by the Lobbyists for the rich and powerful U.S. Corporations made it easy for our great nation to sacrifice blood for oil. In addition to the controlling influence our U.S. Big Oil corporations have, we also have experienced the controlling influence of our Big U.S. banks and Investment firms. Specifically evidenced by the way many billions of dollars worth of fraudulent Mortgage Backed Securities (MBS’) were created by Wall Street and sold to “unsuspecting” and naïve pension fund managers and investors. The result of all of the above actions caused our financial crash in 2008. When adding the unpaid cost of the Iraq and Afghanistan wars to the fraudulent Wall Street MBS investment packages the sum equals the Multi Trillion Dollar Debt which we are now experiencing. We cannot permit our gridlocked Congress to continue in its present condition. There is only one way to heal our Congress and that is by taking the money out of politics. And the only way to do that is with a simple Amendment to our Constitution. To see how and why that is done click on, or copy and paste into your browser this link: http://signon.org/sign/take-money-out-of-politics
September 14, 2012 11:24am
PS: Robert, do you ever READ these comments?
September 14, 2012 11:37am
You hit on one truth, that a "single-payer system" or other form of recognition that Health Care is a Human Right and that the Community should find a way to pay for it is a FACT realized by EVERY other industrialized nation to the benefit of their People's health and well being (and at FAR less cost). But this fact is NOT recognized by the for-profit corporate sick care system or the public and politicians in USAmerica.
But that's only part of the story. Thanks to the deviant for-profit corporate motivations built into the system of "health care delivery" in the United States there are systemic problems with actual "care" as well.
First, if we had comprehensive health care available to all persons in the U.S. (as we should), we'd have to beg Cuba and others to provide enough primary care doctors to do the job since WE DON'T HAVE ENOUGH OF THEM. Between the high cost of education (usually involving student LOANS in the U.S.) and the vastly unequal compensation structure, the U.S. has produced a lot more surgeons and specialists than Primary Care doctors.
2nd, have you BEEN to a hospital or ER in the U.S. lately? Have you been to one in a Single-Payer country? Well, I have been to both lately.
In the U.S., "care" is skewed to provide "billing points". EVERY treatment, object, article and action carried on in a U.S. hospital must be tracked with a billing code to finally arrive as part of a bloated bill for services which the middlemen in the insurance corporations mindlessly pay a part of if you have insurance or, in many cases, serve as a trigger for personal bankruptcy.
As a result, most health care practitioners are expected to be a bookkeeper/accountant/clerk for a large proportion of their work day to the detriment of the provision of ACTUAL HEALTH CARE!
A side effect of this is that "costs" are constantly increasing way beyond any other cost of living to provide the extra profits that Wall Street demands of any corporate dominated enterprise.
Another side effect of "increasing efficiencies" to increase profits is that health care delivery is centralized around corporate medical complexes and is thereby NOT readily available to most people, especially those with difficulty accessing transportation even if they happen to HAVE inadequate, incomplete "health insurance".
In the Civilized nations who have determined that Health Care is a Right (along with Higher Education!), the provision of health care is not the doling out of a collection of commodities but rather a seamless whole whose objective is the restoration of People's Health. A patient's experience of Health Care Delivery in a single-payer country is like day after night compared to the U.S. mechanistic, corporate model of delivery.
So, a comprehensive and efficient system of financing health care is only the starting point. In addition to that, the entire U.S. system from medical and nursing schools through doctor's offices through hospitals, drug companies and health equipment providers must be converted from an enterprise designed to provide corporate profits above all into a, to them, entirely unfamiliar model of providing wide-spectrum Health Care to human beings.
September 14, 2012 12:14pm
Bravo! Well said! A single-payer system is the way we need to go, but I doubt it will happen as long as Americans keep their 'it's all about me" attitude. We also need to stop listening to the concocted horror stories fabricated by those who want to keep our corporate profit model. That single-payer systems are a nightmare is a myth. My brother-in-law lived in Germany, which has a government administered, single-payer plan. When he became terminally ill, his care was excellent - timely, cutting-edge, without the spectre of personal bankruptcy.
We need to start checking out the details of how other industrialized nations with government-run, single-payer plans run their systems. Or better yet, why don't we ask DOCTORS here for their input? And I'm not talking about the big-wigs in Washington or on the faculty at Harvard; I mean real, run-of-the-mill doctors. For a doctor's take on what's wrong with our system & how to fix it, read Maggie Kozel's The Color of Atmosphere: One Doctor's Journey In & Out of Medicine.