It’s that time of year again when people go through open enrollment and supposedly make the wise benefit choices on health care that will protect them and their family for the coming year.
It is one of those processes those in human resources wish were a different type of event, or no event at all, so it seems fair game to draft some commentary that might be enlightening or, if nothing else, thought provoking.
As many folks know, the foundation of much health care coverage originated as a way to provide value to employees when wage controls associated with World War II prevented employers from giving pay increases.
The practice evolved through insurance products designed to spread risk and protect the employers and employees. Other groups got into the picture and coverage spread. Of course, as things evolved, various regulators stuck their fingers into the pie.
When it was recognized that many people were struggling with medical care costs, Congress enacted legislation in 1965 to create the Federal Medicare program and the Medicaid legislation to start coverage programs at the state level for people of low means or special conditions. This coverage was expanded in 2006 to add Medicare D to cover some drug charges.
Over 60 percent of the population is now covered under government programs of one sort or another.
Of course, we are all aware the Affordable Care Act was intended to address the needs of others — either to get them some coverage or to be an alternative for lower cost coverage. The program has, in fact, increased the number of people covered. Whether the program is good or bad is still up in the air for many people.
This brings me to the points I would like to discuss and make some proposals for consideration. The issue is about cost of health care. All the programs noted above and the various modifications to meet certain needs are all about helping cover all or a portion of the costs. The cost arguments are also about who pays, how much and who can afford what.
I’m sorry to use this analogy, but it is like putting a Band-Aid on a broken leg. We are wasting an extraordinary amount of time and energy on the wrong things.
First of all, let me start by pointing a finger at the Republican Party. What an incredible waste of the people’s money — forcing all the legislative votes to repeal the ACA. The effort to undermine the opposition has failed, but the bigger failure is the lack of attention to the needs of the people or what the country can afford. Let’s face it, ACA was a bill that was needed to get people coverage. If it is poorly written or funded inappropriately, fix it! Put in place a better idea — which gets me to two other points.
First, in this ramp-up to the presidential elections, I am amazed how little discussion, in both parties, there has been about dealing with health care matters. It must be a topic that is too sensitive to address.
Secondly, it seems to me there are a great number of matters in health care that are opportunities. If you want to deal with the cost management issue for the government, why not take on some program changes that would save millions of dollars?
Start with the consolidation of Medicare and Medicaid. One program would eliminate a tremendous amount of duplicated effort, both administratively inside the government offices and at most medical facilities. One set of decision makers, procedures, forms, communication documents, etc., has to be more efficient and less costly.
Next, the cost of drugs is clearly out of control. If we as a country believe in free market — and we do everywhere else, why can’t we have it apply in the Federal Medicare drug program? Other government programs go out for bids. Why not change the rules in this legislation?
I think the answer is pretty clear. The excess money going to Big Pharma puts them in a strong position to influence our weak legislators. Why don’t we want to have Medicare have the power to negotiate? How about making the government’s price equal to the average of the three lowest prices given by the pharmaceutical company to other customers, including when they sell to other countries?
The next question has to do with the role of insurance companies. Covering medical costs with insurance is an added level of expense. Yes, they provide a service, to spread risk and minimize the unexpected impact of health care costs when something happens, but is it an appropriate way to manage this area of our lives? Is health care any different than police and fire department protection? Or, perhaps having an army? The government provides all these services on an equal basis. Why is the support of health care any different?
I believe I just spoke heresy of an American system we all believe is the best in the world. However, the numbers of many well recognized organizations have statistics that show it isn’t the best. We are only number No. 1 in the world for highest cost of care. No one disputes that. Although every insurance company says it works hard at keeping costs down, the numbers don’t support that they make a difference. In fact, the price of care is going up another 7.5 percent this year, and people say this is good. No other service or product would publicize such numbers.
Now let’s put this in perspective. Look at the price of a medical policy (no vision, no dental, no long-term disability coverage or life). A small family premium can easily be over $1,000 per month — plus all the out-of-pocket costs that can be about the same or more. This is for a service that most people will use a limited number of times a year.
Contrast this cost to the cost of housing or a car you use every day. Those costs will generally be considerable less. I believe this is all out of balance. Yet we do almost nothing to address the underlying cost of health care services.
The first step in getting the program under control is to admit we have a problem. Then we just have to address the next 11 steps. Anyone care to suggest an 11-step plan that we can ask the next president and congress to endorse?
Ardon L. Schambers is principal and president of P3HR Consulting & Services.