By Kennedy Maize
Companies that offer health insurance plans to their employees – and that covers most power companies – need to pay close attention to the Washington debate on national health insurance plans now current in Congress. So far, most of the sound and fury over the Obama (and congressional) plans are bogus, kicked up by folks who want to sink the administration, much as the Clinton ill-designed health care plan in 1993 nearly derailed that Democratic administration.
The opposition last summer ginned up by whack-job Republicans and devotees of Lyndon LaRouche, the screamers at the August town meetings, was entirely bogus.
President Obama’s speech in early September to a joint session of Congress should have dispelled the more apocalyptic August anger about Obamacare. “Death panels,” insuring illegal aliens (we won’t insure them, but we will treat them when they are sick or injured, and we will all pay for that), and “rationing” by government bureaucrats are all phony-baloney. In particular, the complaint of “rationing” is what private insurance companies do routinely. We ration by income.
The rant of “socialized medicine” doesn’t understand that about a third or more of all Americans already get their health insurance through the federal government in Medicare, Medicaid, the Veterans Administration, the Indian Health Service, the military system, the federal employee health benefit program (including members of Congress), and the children’s state health insurance plan (SCHIP). The complaint that federal bureaucrats will be making health care decisions ignores that profit-driven insurance bureaucrats are now making health care decisions on what the plan will cover and the doctor can do, based mostly on profit considerations, not health outcomes.
The overwrought complaints don’t hold up to scrutiny. I’m a Medicare recipient, so I benefit from “socialized medicine.” Republicans, in the form of a totally cynical Republican National Committee chairman Michael Steele, now say they want to protect me from any reforms (meaning cost increases or benefit reductions) of Medicare, because, in part, Medicare is irrational and inefficient. Huh? I heard Steele on a National Public Radio interview, and he was simply offering incoherent partisan bafflegab.
I suggest that every power company human resources manager with decisions about health care for employees consult the new book –The Healing of America, A Global Quest for Better, Cheaper, and Fairer Health Care – by former veteran Washington Post foreign correspondent T.R. Reid. He and his family lived for years in other developed countries and partook of their health care systems. Reid set off several years ago to examine the realities – not the Washington political sound bites – of how health care works in the major developed countries of the world: — the U.S., the U.K., France, Germany, Canada, Japan, etc. – as well as some up-and-comers such as Taiwan, Singapore, and South Korea.
Reid identifies three basic models of health care: Bismarckian (based on the model developed in Germany in the 19th Century by autocrat Otto von Bismarck), which uses the private-sector to distribute universal health care, but doesn’t allow for-profit insurance (that was the original U.S. Blue Cross/Blue Shield approach); the Beveridge model, best characterized by the United Kingdom’s National Health Service, where the government pays doctors and hospitals and citizens essentially shell out nothing for health care (that’s what most experts mean by “single payer”); and the “out-of-pocket” paradigm, typical of third-world countries, where health is a matter of who has money to pay for medical care.
The U.S. health care system, argues Reid, consists of all of the models, without a coherent vision. Medicare (which, thanks to longevity, is my health care plan) is Bismarkian, and remarkably similar to the Canadian health care system, as well as those in Germany and France. The U.S. even adopted the Canadian moniker of “Medicare”, although the Canadian system covers everyone, not just geezers 65 or older. The system for federal employees – including members of Congress – is similar to this system, which involves lots of choice, lots of payers, but no opportunity to deny coverage. Most folks get covered by employer-financed plans, through many private insurance companies
The U.S. health care system for American Indians and for military veterans is the British Beveridge plan: the government offers total coverage (in the case of the American Indian health system, cradle-to-the-grave coverage) at no cost to the patients. Most analyses of these systems gives them high marks, although, when I worked in the Public Health Service (the National Institutes of Health) in the early 1970s, there were gripes that doctors who worked for the Indian Health Service were second-raters who couldn’t make it in private practice. I never saw any evidence of that.
Then there is the system for those who can’t afford their own health insurance, don’t work for employers who offer it, and aren’t poor enough to qualify for Medicaid. That’s the third-world system, and our system for the uninsured (mostly folks who work but don’t have on-the-job insurance and can’t afford individual plans).
Also, the system for folks who are self-employed or own small businesses, is totally out of whack. Because these people are unable to take advantage of pools of insured, they end up with outrageously expensively insurance.
When I left a job not too long ago, I qualified for continuation of my existing, employer-sponsored insurace (COBRA) — at nearly $1,000/month. When I sought a private plan for my self and my wife six months later, I was able to find coverage for $600/month, but with a $5,000 deductible for each of us.
Also, the first plan that offered to cover me then rejected me for a pre-existing condition, high blood pressure, although I had never been diagnosed with high blood pressure and never been prescribed high blood pressure medicine. The rejection was based on a single BP reading in hospital as I was about to undergo major abdominal surgery. Damn right my blood pressure was high.
In the U.S. system, if you don’t have insurance, you pay what you can and depend on the kindness of strangers (charities, taxpayers, and those with private insurance) and expect sub-standard care. That leads to tens-of-thousands of deaths each year for folks in the U.S. who succumb to treatable illnesses because they lack means to pay for health care when it is needed. They eventually get treated, but that treatment often is too late. We, the insured, including the insured employees of power companies, or the taxpayers, eat the costs that are passed on to our health insurers and show up in our bills.
T.R. Reid makes a fundamental point. The U.S. health care system – the only one in the developed world that does not recognize health care as a basic right and a moral issue – has large economic incentives against preventive care and major drivers that push up costs and rates for the insured. Why should an insurance company trying to maximize profit pay for prevention, knowing that the insured customer is likely to change plans or lose covered within a short period of time? Preventive care may not pare costs in the short term, as recent studies have concluded. But it could cut costs in the long term.
The for-profit insurance scheme in the U.S. pushes insurance companies to refuse to insure “pre-existing” conditions and deny coverage when illness arrives, because that kind of coverage flows to the bottom line as losses. That makes economic sense for the insurers. But it’s perverse social policy, unlike anything anywhere else in the developed world.
Employers should be concerned that the current system takes workers off the job, rather than keeping them at work, where they produce value for the company.
For human resource managers attempting to get a grip on health care issues, T.R. Reid’s book is required reading, as the political debate over national health care reform proceeds in Congress. Reid lays out in clear prose just how other countries deal with health care (and, in his case, with a chronically-damaged shoulder), how they control costs (most don’t do a good job, and neither do we, in spades), and what makes sense for a rational, compassionate U.S. policy that will rest on the decision the rest of the developed world has embraced: universal health care is right for all citizens.
As a business proposition, universal health care along the lines of any of the models Reid has described, other than the U.S. system, make sense. The current U.S. hodge-podge system subjects employers to unpredictable and ungovernable costs. That’s bad management and bad business.
The book is T.R. Reid, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, The Penguin Press, New York, 2009, available in a Kindle edition from Amazon.com.