Is Health Care Inflation Inevitable? What Are the Consequences?

Delivering the 2009 commencement address to the University of Chicago Medical School, Dr. Atul Gawande said:

Our country's health care is by far the most expensive in the world. It now consumes more than one of every six dollars we earn. The financial burden has damaged the global competitiveness of American businesses and bankrupted millions of families, even those with insurance. It's also devouring our government at every level -- squeezing out investments in education, our infrastructure, energy development, our future.

Lecturing the Stanford School of Medicine graduation in June of this year, Dr. Gawande said, "By the end of the decade, at the present rate of cost growth, the price of a family insurance plan will rise to $27,000. Health care will go from ten per cent to seventeen per cent of labor costs for business, and workers' wages will have to fall. State budgets will have to double to maintain current health programs."

Also in June of this year, the Commonwealth Fund, a foundation that focuses on health care, issued a report relating American health care to economically comparable countries:

Americans spend twice as much as residents of other developed countries on healthcare, but get lower quality, less efficiency and have the least equitable system. . . . The United States ranked last when compared to six other countries -- Britain, Canada, Germany, Netherlands, Australia and New Zealand, the Commonwealth Fund report found. "As an American it just bothers me that with all of our know-how, all of our wealth, that we are not assuring that people who need healthcare can get it," Commonwealth Fund president Karen Davis told reporters.

In September of this year, Hewitt Associates projected that 2011 will see the greatest rise in health care costs for businesses and employees in the last five years:

The average total health care premium per employee for large companies will be $9,800 in 2011, up from $9,000 in 2010... Average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, are expected to be $2,200 in 2011 -- a 12.5 percent increase from 2010 ($1,900). These projections mean that in a decade, total health care premiums will have more than doubled, from $4,100 in 2001 to $9,800 in 2011. Employees' share of medical costs -- including employee contributions and out-of-pocket costs -- will have more than tripled, from $1,200 in 2001 to $4,400 in 2011. [figures rounded to nearest hundred]

How's our health doing?

In October of this year, two researchers at the Columbia University School of Public Health published their finding that "fifteen-year survival rates for forty-five-year-old U.S. white women were lower than in twelve comparison countries with populations of at least seven million and per capita gross domestic product (GDP) of at least 60 percent of US per capita GDP." [White women have the highest life expectancy (81) among Americans compared with black women (77), white men (76) and black men (70).]

The American health care system is not equitable --- who you are determines your access to health care -- even how long you live. American health care is not effective -- even those in relatively privileged social groups fare poorly in international comparisons. American health care is not cost effective -- our expenditures are enormous to produce such poor outcomes. American health care costs are uncontrollable -- they are accelerating even as we claim to be taking steps to restrain them.

Americans and their representatives don't understand (a) how our health care costs and performance compare to the rest of the world - although they are certainly aware that their personal medical bills are rising, (b) how the growing proportion of our GDP that medical costs comprise drains the American economy and weighs us down competitively worldwide, (c) what causes our health care system to be so costly and ineffective. The consequences of this ignorance are that -- even with health care reform -- we haven't addressed these things, don't know we need to, don't know how to, don't foresee the disaster for our health and our economy that our albatross of a system is.

The most popular cable news commentators regularly announce confidently that the United States has, "by far," the best health care system in the world, while Republicans are working -- successfully (including via court challenges of its Constitutionality) -- to make sure that any halting efforts to modify the health care system represented by the Obama health legislation are immediately and permanently sabotaged.

Bon santé!