US Health Care Explained to Non-Americans


August 24, 2009



The core premise is this.  Should all citizens be entitled to life?  As in: Life, Liberty, and the Pursuit of Happiness?

Corollary: since health care is essential to the maintenance of life, should health care be a human right?

In the United States (sole among the industrialized countries), the answer currently is NO.  

Prior to World War II, health care in the US was a private-pay-as-you-go system.  "Charity hospitals" were sometimes available to fill the gap, and were largely privately funded.  Few remain.

After World War II, large businesses began using health care as a benefit in order to entice skilled workers.  This was called health insurance.  Opt in, you get coverage.  Opt out, you're on your own.

As time passed, Federal and State regulations began requiring companies over a certain size to provide these services, thus providing an indirect taxation on business and quietly abrogating the obligation that would normally be expected of the government to administer the programs (Most other countries chose to address the issue head-on).

This practice created a widespread *expectation* of employer-funded health insurance.

In 1965, Medicare and Medicaid were formed, which created health care services for the elderly and poor, respectively, under the aegis of the Social Security envelope. 

Medicare  is a "single-payer" system, in which the government taxes income from everybody at some 2.9% and then compensates private and public providers for services rendered to those who are sick.  It is, effectively, a co-op health care system with mandatory buy-in, but only certain people are eligible for services.  Medicare is a fairly successful program, administered at the Federal level.  However, with the expansion of the Boomer population, it will run out of money soon.

Medicaid quality varies widely, since it is partially funded and administered at the State level.  It is highly bureaucratic and inefficient, and, while envisioned to provide coverage for the poor, it only reaches about 40% of that population.  Like Medicare, it is at risk of collapsing due to budgetary issues at both the state and Federal level.

Between Medicare and Medicaid, It is important to understand that each program targets beneficiary groups based on superficial criteria: age, on the one hand; income AND qualifying illnesses, on the other.  The middle class is left to its own devices, which is private insurance of some kind or another.

The other major Federal government-funded health care option for civilians is the "socialized" Department of Veterans Affairs, which is wholly owned by the Feds: doctors and employees on the Federal payroll, and all buildings and facilities Federal-run.  The quality of care in this system can vary widely, depending on who you are (or were) in the military hierarchy and where you seek care.  This system applies to about 25 million people. 

Note that in the US, a "veteran" is not necessarily a "military retiree."  The definition of the term varies, but at the most generous level, you can enlist as a private, do your two years, and never hear from the government again.  Others insist that a true veteran has to have seen combat, or have been injured, or whatever.  The definitions can get very complicated and are often a function of services desired.

A retiree is a soldier who has typically served over 14 years and receives a pension AND benefits as a function of time spent in service.  The rationale behind the pension is that the 14 (or more) years represents significant risk and sacrifice for the participant: lost wages vs. the commercial sector, risk to life and limb (via industrial accidents or warfare), the huge stresses the military puts on families and mental health, etc. 

So, all retirees are veterans, but not all veterans are retirees.  And not all retirees are eligible for veteran services.  Got it?

A soldier who is injured while in service and requires ongoing medical care is the primary target of the VA system, and the system caters to people as far back as World War I.

Active military and military retirees and their eligible dependents have their own system, which ranges from on-base services to a variation of a single-payer system called Tricare (CHAMPUS).

Lastly, some states have “at risk” insurance for people who do not qualify for other insurance programs.  This is a service-of-last resort, strictly managed, high premiums, typically unadvertised, and with limited enrollment.

Is WHAT we have right now so wonderful?

What's the overall quality of care?  Apart from access, the cost of pharmaceuticals hits people the hardest.  

The quality of physicians is comparable to England.  We use the same French and German diagnostic and surgical equipment the Brits do.

There is a vibrant research community, at least on par with Russia, France, or England.  

There are also a myriad of technical, systemic challenges that go far beyond access issues: the lack of realistic recurrent training and certification for physicians,  lack of standardization of medical data (cited as a major issue in the Katrina aftermath: the records for half of New Orleans ended up under water), the residency system, doctors who have too many patients, regional doctor shortages, over-specialization resulting in ping-ponging patients, lack of patient "ownership."   Recently,  a bill (HR 6845) was introduced which allowed taxpayer-funded medical research results to continue to be published solely by for-profit journals, limiting the distribution of information in a way which is unique among all the research the US government funds.

Emergency rooms are also overburdened, since the desperate flock there for treatment of minor ailments, defeating their purpose as EMERGENCY rooms.  So people die as a result.  A medical lobbying organization, the AMA, is far too powerful and fights efforts at reform.  Habitual drug users and AIDS patients who choke up ICUs soak up community budgets.  The lack of a comprehensible public policy on drugs, contraception and substance treatment programs inhibits the ability to catch problems before they go catastrophic.  The inability of states to institutionalize the seriously mentally ill, so they end up on the streets.  And on and on. 

A Perfect Storm

In the 1980s and 1990s, a "perfect storm" started forming, all of which has its roots in bad government, at the hands of both Democrats and Republicans:

1.  Anti-labor laws were passed which started to allow companies to avoid health insurance and other benefit obligations by allowing them to use contract labor and part-time labor indefinitely.  Hence, a large number of people started to fall off the health care radar.  

2.  At the same time, the insurance industry started to clamp down on the costs of services by offering lower-cost "Health Management Organizations."  These were penny-pinching organizations that sought to control costs by strict rules on which drugs patients could take, which services they were eligible for, and which doctors they could use.  It resulted in a drop in the quality of medical care for many people since there was little continuity in treatment.  The rules forced many into receiving substandard treatment. It eventually forced doctors and providers, as an industry, to RAISE base rates in order to get paid (typically doctors get paid a fraction of what they charge the insurance companies).  

3.  Associated with the HMO "revolution", insurance companies started stepping outside of the actuarial process and dropped coverage for "money pits": people with expensive disorders.  They would systematically look at the paper trail to find technical errors in the application process such people would make, and discontinue coverage.  Sometime retroactively (At one Town Hall meeting, Obama mentioned a case in which a patient was dropped for not mentioning that she had received treatment for acne as a teenager). They also refused to insure many people with pre-existing conditions.  

4.  Since insurance companies are offered and regulated at the state level, it is not possible for customers to cross state lines and shop for the best program.

5.  The trial lawyers systematically blocked all attempts at tort reform, which sought to put caps on malpractice and product quality judgements.  This drove doctors' malpractice premiums up, along with the cost of services.

6.    The explosion of the pharmaceutical industry, improvements provided by the introduction and marketing of drugs designed to address chronic “lifestyle” ailments (hyperlipidemia via the statins, hypertension, minor psychiatric disorders, cancers, sexually transmitted diseases, AIDS), and the huge costs these drugs pose to the average consumer.  Thus, both critical care AND modern ongoing care (maintenance or preventive) became unavailable to increasing numbers of people.

7.  Analysts started realizing that Medicare and Medicaid were going to start running out of money as the Boomers aged.  Before 2020.

8.  A political media culture which hadn't been seen since the muckraking papers of the late nineteenth century, and which largely systematically blocked intelligent discussion of any issue.  Of particular concern is that the largest of these organizations is owned by a non-US citizen who has a track record of exploiting and generating controversy for ratings (income), whichever country he happens to operate in -- all of which have very generous press freedom protections.

9.  The Internet, which allowed rapid dissemination of authoritative nonsense.

The Current Situation

Bottom line: people who lost their jobs during which they may have had an ailment are increasingly unable to get or change insurance.  This is predominantly hitting the middle class.  The section of society which is uninsured is hit with a double whammy: both the inability to get insurance, AND the inability to afford the private-pay route.  An estimated 18,000 to 22,000 people currently die each year as a result of this system.  In some states, politically sexy groups have protection against specific practices (if you have AIDS, for instance, or are a woman).  There is great inequity and unfairness of who benefits from state and federal programs.

A more insidious effect is that if one IS covered by insurance, it becomes very risky to leave that protection.  Consider, for example, a worker who wishes to leave a company but is afraid to because of the uncertainty that future employers will have insurance plans that will cover him.  The situation is even more precarious for those who might go into business for themselves.

The current mandated “post-separation” system, COBRA, provides six months of coverage following separation at relatively high costs to the employee--often thousands of dollars a month (when I left my last employer in 2005, I was offered a generous deal at $460).  There are no guarantees of continued coverage thereafter.  Critics note that the high COBRA costs represent the company’s actual insurance costs, which are “hidden” from workers and which they indirectly pay for through decreased take-home salary.  The main purpose of COBRA is to provide a cushion during which time users can shop for alternative plans.

The Players: Follow the Money (Anger)

Bush the Elder recognized the Medicare crisis during his term, but was quickly shut down.  The Democrats recognized the emerging problems during the first Clinton Administration in the early 1990s, but attempts at reform were shouted down by the opposition.  Bush the Younger also had a stab at the Medicare situation, with varying results, depending on how much who you ask hates him.

Now the Democrats are having another go with a universal solution.  The key in this plan is to follow a "single-payer" model, such as Medicare, which is effectively NOT insurance (which is a self-betting model), but rather a co-op model.  EVERYONE is required to pay in, and those in need--based solely on medical need-- will get coverage as required.   The main issues involve whether to force universal buy-in, or whether to allow the private insurance system to continue to exist, and, if so, how to pay for the universal option.

The organized opposition to this issue boils down to:

1.  Insurance companies, who potentially have much to lose.  They are posting record profits, and several are clearly attempting to manipulate public opinion, generally by getting in bed with the political opposition.

2.  Professional political opponents, who methodically use this and a number of sophistries in order to attack the opposition, hopefully costing the other party votes in the next election.  This is "business as usual" in this country, and has absolutely nothing to do with the merits of the issue.  It is a strategy that is used by both parties.  Find a weakness, and push until the other side fails.

3.  A small number of idealogues who object to government power as a matter of course, regardless of the merits: the intellectual heirs of "the opposition" of the 1930s, 60s, and 90s.  This is  a complex group of interests ranging from intellectuals to nutters to the intellectual heirs of the losing side of the Civil War.  These people generally have a primitive level of political socialization, believing in absolute choice.  Health care, in this context, is no different than buying a plasma TV.  If you buy into an insurance program, you get benefits, if not, you die. Choice.  However, this simplistic approach to the problem ignores the very real factors that inhibit the ability of citizens to buy into insurance programs, much less their ability to go a private-pay route if they chose wrongly.  Chronic ailments or major surgeries can easily bankrupt many middle-class families.  Most people, in contrast, believe an illness should not wipe out a lifetime’s work.

4.  Professional pundits, who see this as an opportunity for muckraking.  They are often perceived as being in bed with the professional political opponents and the idealogues.  Even the pundits themselves, such as Joe Scarborough, have noted that their industry must get increasingly strident in order to maintain ratings, particularly in the TV, print, and radio markets, which have stiff competition from the Internet and diminishing numbers of “high-value” viewers.

5.  A very small minority which is trying to responsibly debate the merits of how to proceed.  This minority tends to recognize the "Perfect storm" issues, and focuses on "how do we pay for it" in the face of escalating federal debt loads resulting from the War on Terror and the economic collapse of 2008. 

The rhetoric the “contra” factions use boils down to:

1.  Anticommunist rhetoric which is deeply ingrained in the American culture, and has been for well over 100 years.  The arguments on this front are simplistic tautologies:

a.  Don't nationalize the service, since the lack of competition will result in poor services and lack of innovation.

b.  Don't nationalize the service, since the government can't be trusted to administer anything properly.

c.  This, along with the auto industry bailouts, sets a precedent for government control of industries.  If health care, what next?

The amusing thing about this approach is that the US IS a socialist country, is heavily influenced by socialist ideals (or, as some might argue, the Christian ideals that influenced socialist ideals), and has been for well over a century.  It is not remotely a question of "what", rather just "what degree."  Complaining about the problems with "socialized" medicine also ignores the significant innovations that come out of the "socialized" medical systems in other countries.

2.  Arguing that a state-run health care system will result in a denial or degradation of services.  The people using this approach typically use exceptions from other countries’ health care systems and represent these examples as the norm.  This approach is largely targeted at the elderly, so both sides are busily trying to court the largest senior advocacy association, the AARP.  In pursuing this argument, many raise the spectre of our experience with HMOs, without naming them by name.  Bureaucrats making arbitrary medical decisions, or restricting procedures, or establishing quotas exist NOW.  Except they're in large insurance companies, not the government, their medical decisions are largely unregulated, their practices happen without public oversight, and the public has no practical redress except via litigation. 

3.  Fear mongering of various types within the mainstream: arguing that nonexistent provisions actually exist in current bills, such as providing free health care to aliens; or that the government will encourage old people to commit suicide; or that government money will be spent on abortion or to encourage abortions among the poor.

4.  Making common cause with fringe groups and individuals who were agitated by contemptible tactics during the 2008 presidential campaign, and who still harbor irrational fears that the government is run by a Kenyan-Indonesian jihadist Muslim who is hell-bent on creating a socialized state -- right after he moves his pretorian guard out of Guantanamo and to DC.  These people are more than willing to believe the worst about the government, no matter how outlandish.

The Democrats have also made major missteps, and have their share of blame in this situation.  Shortly before Obama took office, an ultra-left member of the House, Charles B. Rangel, introduced HR 1, the Economic Stimulus Act, an 800-page bill that coincidentally resembled Obama's political platform, which itself was evolved and formalized long before any analyst had a glimmer of economic problems.  This was rushed through the Senate, and there were charges of unilateral changes (resembling, no doubt, how the Democrats were treated during the first years of the Bush Administration, when the Republicans controlled both chambers and the Presidency). 

The Economic Stimulus Act, along with the September 2008 banking bailout, in retrospect, was at the minimum a case of "Cart Before the Horse", at the worst a craven, cynical attempt to push through a political platform by exploiting public fear. 

Rangel also co-sponsored the House version of the current health bill, HR 3200, and it is even longer.  The Administration, House, and Senate leadership have been charged with using similar tactics as with HR 1, ranging from declaring health care reform an "emergency" to inexplicably coupling it to the economic recovery effort.  This amplifies the mistrust the various opposition factions have: fool me once, shame on you: fool me twice, shame on me.  Nobody wants to be a sucker twice.

The Democrats also suffer from the assistance of their bedfellows, fringe leftist groups such as MoveOn.org, which used extreme ad hominem techniques to attack a wartime president and the US image abroad and helped engineer the current Democratic “opportunity” (using precisely the same methods that the Right is using to undercut the current wartime president and engineer their own opportunity in 2010 – both sides will use what works, no matter how disgusting). While their braying is largely restricted to the converted, their presence in the debate helps rob the Democratic side of public credibility.

Culturally, Democrats have a long tradition of sponsoring expensive government programs, from the New Deal to the Great Society, which end up dabbling in de facto social engineering, and which somehow tend to become dogma and the subject of much emotion. 

To support Johnson’s Great Society, for instance, much legislation was passed that seemed a good idea at the time, but in retrospect was an awful idea, taking the wisdom, for instance, that racial discrimination is a bad idea, then trying to redress wrongs by discriminating against others or showing preferences to those who were wronged (at the expense of others).  Continuing a bad practice, even with good intentions, resolves nothing.  A generation later, many young people of all races have difficulty understanding what they were trying to achieve, yet debate of these issues with those mired in the past is very difficult.  Instead of using the benefit of hindsight to correct wrongs, the Democratic party tends to require unthinking ideological compliance of its members, in the form of Political Correctness. 

Overall, the deepest criticisms come from a gut skepticism: who wants to introduce yet another half-baked hallowed Federal institution?

Currently (perhaps too late), now that there's a bill in text, the overarching philosophy seems in agreement, and the issue is merely the approach to be used.  It is not clear whether four months of vicious rhetoric can be overcome, or whether a rubber-stamp will just be put on the current system and we go on with business as usual. 

Text and images Copyright © 2009 by Robert Dorsett. All Rights Reserved. Permission to reproduce this article for non-commercial purposes is granted, provided that this disclaimer is included. Commercial requests may be made by going to http://www.dorsett.us and using the feedback link.

Oy vey, What a mess!