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Conservatives and "Free Trade" Liberals seek to import U.S. Private Healthcare Horrors by J. Thorton, American Healthcare Correspondent Stephen Harper's Conservative Party of Canada plan to import a U.S. style two-tier, private-healthcare driven system, threatens to bring the kind of horror stories into Canada, that Americans have become all too familiar with. Excessive charges to patients who must pay their own health care bill is presently one of the least-known, but most egregious cost-shifting offences of the American health care system. The fact that it most prominently affects the segment of the American population who can least afford it - the 41.2 million uninsured - is inexcusable, and intolerable. In many instances, they are charged three-to-seven times more than an insurance plan would pay.[1] In the United States, if these patients can't pay the entire amount, they are pursued by collection agencies, have their homes foreclosed, car and bank accounts seized, and wages garnished.[2] All to subsidize discounts for the largest and wealthiest HMO's in America[3], who frequently pay below cost [4] for the identical treatment. While the lack of a health plan weighs heavily against any family, it affects different income levels in drastically different ways. For the poor, it means access to health care through Medicaid, SCHIP, community health centers and outpatient clinics of participating hospitals, use of emergency rooms for both emergency and non-emergency treatments, and hospital services under indigent care programs at public and private institutions. Obtaining health care through these means is time-consuming, inefficient, and frequently results in a lack of timely or preventive care. But the poor at least have this limited care, and they have it free. Their tab is paid for by taxes, charity, and what's known as "cost-shifting." It means everyone else pays more to make up for the loss by hospitals and providers. For uninsured middle-class families, the effect can be hellish. Most either lost their job, work for an employer that doesn't offer a health plan, or are self-employed and have to fend for themselves. Many have lower middle class incomes and simply can't afford a standard premium. Others might have upper middle class incomes, but can't buy any health plan due to pre-existing conditions. But they work, have a car and some savings, pay a mortgage, taxes - and their bills. Here's what is happening to these families in the current market, at a hospital in California:
-- The hospital's average cost per day for inpatient care is $1411. (Source: California Office of Statewide Health Planning and Development, OSHPD, 2000 Hospital Annual Disclosure Reports[5].) This full-sticker price was once jokingly referred to as the "Sheik" price, as only billionaire oil Sheiks would fly into the U.S. and pay it, no questions asked. These excess bills not only affect the uninsured, they directly impact all Americans, through taxpayer-funded Disproportionate Share Funds, known as "DSH" funds. After charging these outlandish prices, the most aggressive hospitals seek court judgments against their former patients, after which the unpaid bill officially qualifies as bad debt. The larger the amount of bad debt a hospital claims, the greater the amount of DSH funds they receive.[6] Middle class uninsured America has now become the "DSH Sheik" of the new century. In stark contrast, a non-profit hospital in the same market has a very different, and infinitely fairer billing practice.
Their average cost per day is $1197. If the damage from this system were confined to just middle class uninsured Americans and taxpayers, it would be bad enough. But it now threatens the ability of all Americans to reclaim their health care freedom and fight skyrocketing insurance premiums by switching to higher deductible policies. Relatively few families exercise this option today, as most employers don't yet offer medical or flexible savings accounts, or the new IRS-approved health reimbursement accounts. Even fewer employers offer defined contribution plans that would allow an employee to take their health care allotment to the private market to access these new cost-saving plans, if they're unavailable through the company plan. But that small number, an estimated 7.1 million Americans as of November 2002, is growing rapidly, as more and more employers are moving to higher deductible policies of all types to avoid having to cut back on benefits due to spiralling health premiums. Today's trickle will be become a deluge as employees and employers alike began to realize the advantages in quality, cost, and consumer choice that the free market can provide.[7] Key to that realization is kicking the insurance industry out of everyday health care entirely. By using these new higher deductible policies, a family that currently pays $500 a month for a lousy HMO that dictates which doctors, hospitals, and treatments they can use, could instead purchase a major medical policy with a $5000 deductible for around $200 a month. That leaves $300 a month cold cash to spend on whatever health care they please. They keep whatever they don't spend, the perfect wellness incentive, and the perfect incentive for health care consumers to actually shop for affordable prices, for the first time in decades. That has been the key missing ingredient in curbing skyrocketing health costs. Less than 10% of American families spend more than $5000 a year on health care, which means 90% of the public would have no dealings with health insurance companies in an average year other than paying the minimal premium. Total freedom from the system unless they face a catastrophic health setback - then the insurance kicks in. These approaches offer the best and brightest opportunity for average Americans to restore their free-market liberties, and for the U.S.A. to once again lead the world in health care delivery, instead of succumbing to the dismal, deadly, and stagnant government-rationed care that has overtaken most industrialized nations. American excess private healthcare billing But now there's an Iron Curtain standing in the way of that revolution - excess billing. If our first health care pioneer families leave their old HMO behind, purchase a private market high-deductible plan, then have their entire annual out-of-pocket budget destroyed by a single $6000 night in the hospital because they dared to pay cash, the revolution is over. No one will follow a settler who's been eaten by cannibals. Some insurers are already encouraging health care providers to charge these excessive rates for as long as the family is paying the bill from their new spending account, and then revert to the usual discounted price only when the family's funds are exhausted, and the insurance company is required to pay.[8] Who are the totally insured Americans (not to mention the overwhelming majority of Americans who are inadequately insured)? . 45 Million Americans are uninsured, equal to the combined populations of 24 states: Connecticut, Oklahoma, Oregon, Nevada, Arkansas, Idaho, Vermont, Wyoming, Massachusetts, Arkansas, Mississippi, Rhode Island, North Dakota, South Dakota, Alaska, Iowa, Kansas, West Virginia, Montana, Maine, New Hampshire, Kentucky, Delaware and Nebraska. . -- 80% of the uninsured come from families with someone employed full-time. . -- 80% of the uninsured come from families making less than 300% of the federal poverty guidelines. . -- In Connecticut 28% of non-elderly residents making less than 200% of the federal poverty guidelines are uninsured. . -- The uninsured are disproportionately women, children and people of colour. The Problem Of The Uninsured Lack of Health Insurance Kills People. The uninsured are in poorer health than the insured. They die earlier and are sicker when they seek treatment. 18,000 die prematurely due to lack of insurance. There is a 43% higher adjusted mortality rate for uninsured people 55 to 64. It is estimated that health insurance would lower mortality for the uninsured by 10% to 15%. . A substantial aspect of the fall in US health care statistics from 1st in the world prior to WWII to 21st in infant mortality and 27th in terms of longevity is directly attributable to other industrialized nations providing health insurance to their populations while the US does not. . Lack of Health Insurance Is Inefficient and Increases Health Care Expenses. . There are hundreds of thousands of avoidable hospitalizations due to lack of insurance. . About one-third of medical expenses for the uninsured, 41 billion of 125 billion, are uncompensated thereby raising the cost of health care for all Americans and increasing state and federal expenditures. . The uninsured are a significant factor in why the US expenditures are on average around twice as much per capita as other industrialized countries.
Endnote References:
[1] U.S. Department of Energy, November 5, 2002 Latino Group Calls on US Attorney to Expand Probe  |
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