Let's find a cure for what ails health care costs
Insurance is a benefit, not an entitlement
By Jean Edwards Holt, MD, FACS
San Antonio, TX
The much-publicized woes of the rising cost of health care is all too familiar to those of us in the industry. Although physicians and hospitals have at times borne the brunt of the blame for these hikes, I feel that at least part of what's ailing the health care industry can be attributed to how the average American consumer views health care benefits: Namely, as a right he or she is entitled to rather than a benefit that should be managed like any other household expense.
It has been determined by those parties footing the health care bill (primarily the U.S. and state governments and employers) that 15% of the gross national product is too much to pay for health care. The rise in health care costs in the United States is a well-documented ascent, reaching over $1.5 trillion presently. Reasons or theories proposed for this escalation include significant technological advances, increased patient and family demands, the aging population, cost of medical/legal interaction, the process of health crisis intervention as opposed to disease prevention, societal ills (alcoholism, smoking, SDS, AIDS, etc.), supply-induced demand (excess in providers promotes excess in care), and the evolution of the insurance industry. Let's focus briefly on this last issue.
The American health care insurance system had its real birth in the post-World War II era, as a result of the federal price and wage freeze. (There was limited Blue Cross-type indemnity coverage prior to this.) Employers, unable to increase wages, turned to creative mechanisms to attract workers.
The concept of "benefits" was born in the form of life, disability, and health insurance. The federal government subsequently deemed life and disability insurance to be taxable but allowed health care benefits to be tax-free for the employers. This has created a $100 billion a year tax subsidy that would be politically difficult to eliminate.
Perhaps more importantly, this benefit helped establish the belief of "health care as a right." This is a cultural concept that, while some in this country embrace as appropriate, has no political or legal foundation for its validity. Regardless of its lack of foundation, the general thinking of the American public has been permeated with this concept. All the discussion of "do whatever it takes no matter what it costs," is stated, realizing that the cost will not be directly borne by the patient requesting the services - a variable imposed on supposedly "market-driven health care" that places it in an unrealistic position.
Health insurance was originally designed to provide for an unlikely health event which would be financially ruinous for the individual, but has evolved into nearly a prepayment for services which are to be consumed. The more one consumes, the more one obtains from the system since the individual bears no significant direct consequence of the cost of the consumption.
Demand continues to increase while costs are given little heed by the consumer. The vehicle of insurance as a payer has allowed the person receiving the service to imagine it as "free" or as an entitlement. The same consumer who would go to the less costly afternoon matinee to save money on a movie ticket has little incentive to make it to the doctor's office during working hours rather than utilizing more expensive after-hours emergency department facilities when "it is convenient" - as both are covered insurance benefits.
After the sweeping federal attempt at health care reform failed in 1994, the industry's efforts have become focused on incremental steps to change our generally accepted high quality system to promote cost savings. This has been made more difficult by failing to take into account that individual responsibility for cost savings has not been a part of the thought process. Why will a lack of third party resources deter an "entitled" individual from demanding, expecting, and needing care - especially when individual responsibility for financial autonomy is not built into the process?
The present system of tax-subsidized health insurance providing top-dollar coverage creates a moral hazard (i.e., presence of insurance increases the amount of health care utilized) with poor incentives for the consumer to practice efficient personal consumption of health care. How can we pretend to have a market-driven health care system when the true essentials of such a system are not in place?
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