The Price of Civilization_ Reawakening American Virtue and Prosperity - Jeffrey D. Sachs [84]
Real Health Care Reform
Low- and middle-income Americans have suffered from stagnant wages and been pressed down by international competition and rising health care costs. The relentless rise of health care costs in the past couple of decades occasioned the nearly sixteen-month saga of health care reform at the start of the Obama administration. Yet though the reform accomplished two important goals—expanding coverage to the poor and protecting coverage of those with preexisting health conditions—there is very little in the legislation that will slow the increase in health care costs for a given amount of real health care delivery. In fact, health care costs are likely to rise, not fall, in the coming years as the new measures are implemented. What happened is clear enough. The private health care insurance industry, the pharmaceutical industry, and the American Medical Association blocked the deeper reforms that could have brought cost inflation under control. As one leader in the industry has put it, “health care will not reform itself,” since the vested interests are too powerful.18
Several careful studies have shown how the private-sector interest groups in the health care sector hike up their costs and prices, knowing that they will be reimbursed by the government (in the case of Medicare and Medicaid) or by private purchasers of health care insurance, who have no real alternative. According to one study, the excess costs of U.S. health care in 2003 amounted to an estimated $1,645 per person, or roughly 4 percent of GDP.19 The study found that excessively high costs permeate the entire health care system, including hospital care, outpatient care, drugs, and health care administration. Doctors’ salaries in the United States are far higher than in other countries; so, too, are drug prices. Privately owned outpatient clinics have high costs and excess capacity. And the costs of health care administration and health insurance (such as the handling of claims) are estimated to be around six times as much as the median in the OECD (high-income) countries!20
The Scandinavian countries run their health care systems at roughly half the cost of the United States and with much better results in life expectancy and reduced child mortality. They do so by emphasizing a “systems approach” to health. Health care is publicly financed but privately provided. One systemic difference with the United States is Scandinavia’s much greater attention to primary care, which heads off expensive and chronic conditions that arise and intensify when they are ignored until too late. Primary care doctors are the “connectors” between patients and specialists. Management of the overall health care system is much more transparent. Billing and administration are not bureaucratic nightmares involving private insurance companies. And doctors work more seamlessly together on complex cases, avoiding a massive duplication of administration and of expensive medical tests.
As Obama himself noted during the health care reform debate, there are examples of such successes in the United States, including Kaiser Permanente and the Cleveland Clinic. He even visited the latter to make the point. Yet the reform legislation gave barely a nod in that direction. The lobbyists had won long before the visit by promising to support the legislation (or at least not fight against it) as long as the basic structures of the overpriced health care system were not touched.
A Pathway to Energy Security
The greatest infrastructure challenge of the coming decades is to wean America from its dependence