2005 April 27 Wednesday
Americans Are More Worried About Health Care Costs Than Losing Jobs
The Kaiser Family Foundation's latest survey on public attitudes about health care finds health care worries outrank many other financial worries.
Since April 2003, we have asked several questions to compare Americans' health care worries to their worries about other possible problems. We have consistently found that more Americans are personally worried about their health care costs than about losing their job, paying their rent or mortgage, losing money in the stock market, or being the victim of a terrorist attack.
Among health care worries, the public is most concerned about having to pay more for their health care or insurance, with almost half (49%) saying they are very worried. Somewhat fewer say they are very worried about not being able to afford health care services (42%), not being able to afford prescription drugs (35%), and declining quality of care (32%). Among those who currently have health insurance coverage, nearly four in ten (38%) report being very worried that their health plan will be more concerned about money than about what is best for them, and more than one-third (35%) say they are very worried about losing their health insurance coverage.
People in different demographic groups report different levels of worry about their own ability to access and pay for health care. For instance, non-whites, those with lower incomes, and those without health insurance coverage are more likely than their counterparts to report worrying about health care issues. In addition, more women than men are worried about their health care, perhaps due in part to the fact that women are often the primary health care decision-makers in the home, and they have more contact with the health care system than do men.
Losing a job or inability to pay the mortgage just do not rate next to medical care on the list of worries for most people.
Nearly half (49%) of adults say they are very worried about having to pay more for their health care or health insurance, somewhat more than the share who say they are very worried about their income not keeping up with rising prices (46%). Around four in ten adults say they are very worried about not being able to afford health care services (42%) and that their health plan cares more about saving money than about what is best for them (38% of those with health insurance). More than one-third of adults say they are very worried about not being able to afford prescription drugs (35%) and about losing their insurance coverage (35% of insured). Just over three in ten adults say they are very worried about the quality of their health care getting worse (32%).
Health care worries rank ahead of other non-health concerns, including not being able to pay their rent or mortgage (29%), losing a job (23% of those who are employed), losing money in the stock market (20%), and being a victim of a terrorist attack (19%).
With health care costs rising faster than inflation and companies cutting back and even dropping health care benefits these worries seem pretty rational to me.
My favorite proposal for the medical insurance problem: Tax-advantaged health savings accounts If you lose a job you lose your health care coverage and suddenly have to pay for health insurance at the very time you do not have a source of income. People need to be able to save money pre-tax while working at jobs with medical benefits so that they can continue to buy medical insurance between jobs. Also, the self-employed should be able to buy health care with pre-tax dollars just as those who work for companies can with employer-supplied medical benefits.
Also, medical insurance should be decoupled from any one job. COBRA coverage lasts for 18 months if you can afford it after you leave a job (and if your employer didn't go bankrupt or cancel medical coverage before laying you off). But even if you can afford to pay for COBRA coverage, should you develop a chronic condition while working at job you may find yourself uninsurable once COBRA coverage expires.
Health savings accounts would also reduce the number of parties involved in health care transactions. Employers would not be involved in choosing insurance and more medical care would be purchased directly rather than by an insurance company paying. This would make medical providers much more solicitous toward the wishes of patients.
Such accounts ought to require any insurance purchased from such accounts to have high deductibles and money from the accounts should be used to buy medical care up to the level of the deductibles. This would inject stronger market forces into medical care as more people directly spent their own dollars for medical care. This would tend to increase efficiency, decrease costs, and make service more customer-centric.
"With health care costs rising faster than inflation and companies cutting back and even dropping on health care benefits these worries seem pretty rational to me"
True,but the politicans have been demagogueing this issue for 20 yrs now,so the "paranoia" quotient is pretty high,anyway.
The medical system is like communism run by cost plus contractors. It is a free for all; and the overstaffing caused by affirmative action is rivalled only in the government itself. There is no means of rationing the product by ability to pay in the system as it exists. They need deductibles for the low income to have a reason to refuse treatment. The grip of the shysterocracy on this system has to be loosened; set limits on malpractice awards, and eliminate jury determinations in this category. It could be hundreds of billions down the rathole of the shysters' liability tax on medicine, directly, and indirectly through defensive medical practices. The medicare system needs to be means tested on assets, but have it accumulate charges and take them from the estate of the decedent. Then the old have an incentive to question the necessity of the treatment, and the provider can be confident of not being sued. The above changes, would elininate most of the cost difference between here and comparable countries; which spend half as much and gain much longer life expectancies. Medical facilities must be exempted from the affirmative action regime.
The funny thing it that worry about health care costs is a self-fulfilling prophecy.
1. People worry about healthcare costs.
2. People ask their politicians "To do something."
3. Politicians do something.
4. Healthcare costs go up.
5. Go back to 1.
For some reason, the majority of people haven't caught on to this little problem.
As Mr. Bolton mentioned, the tort system also has a lot of blame to accept for this condition. In a sense, the Malpractice Bar is a second regulatory comission for the whole industry, and one not subject to Congressional or State oversight. Congress' hands are largely tied by the Commerce Clause, and States are in bed with the Tort Lawyers for the campaign contributions and income taxes extracted from the insurance companies.
Also, the amount of resources wasted by "defensive medicine" (throwing every test & diagnostic the hospital has at a patient to avoid being sued for not giving it later) are a huge regulatory tax on the whole system.
Randall, your suggestions have merit, but shaving 20% off the top through better regulation is the better first step. (I just made that 20% number up, but I think it's actually conservative).
What do you think about the Swedish system to fix the malpractice suits?
"In Sweden, when a patient suffers avoidable injury, whether through gross negligence, such as a botched surgery, or through a more understandable but avoidable mistake, such as a misdiagnosis or medication error, the patient—usually with help from the doctor's office—fills out a form requesting compensation. That request, along with relevant doctor and hospital staff reports, gets reviewed by an adjuster who decides whether the injury might have been avoided had treatment differed. If the claim passes that hurdle, a panel of legal and medical experts considers it. If the panel decides the injury rose from avoidable error, the patient is compensated. The award varies according to the nature of injury, the degree and duration of the patient's disability, the expenses incurred, and other factors; it may also include compensation for pain and suffering. The entire process usually takes less than six months. Patients who feel unfairly denied or undercompensated can appeal, but they cannot sue. The system is funded by premiums charged to regional organizations of medical facilities and physicians. These premiums are substantially lower and more stable than malpractice premiums in a tort system."
"Such a system would generate more claims than does our present malpractice system—indeed, compensating more of the injured is part of the point. The system would save money, however, by eliminating punitive damages and legal costs. The legal and administrative costs of our present system (lawyers' fees, court costs, paid experts) account for 60 percent of the estimated $24 billion the malpractice system consumes each year. A no-fault system would cut that to 20 percent or 30 percent, roughly doubling the money available for the injured."
I think the Swedish system would be a good idea.
However, note that the malpractice system consumes only $24 billion per year. Sounds like a lot, right? Except, well, its not. The total medical industry is somewhere in the neighborhood of $1.6 and $1.7 trillion per year.
So arguments that medical costs can reduced greatly by reform of our method of handling malpractice hit up against the reality that the vast bulk of the costs are due to other reasons.
"Better regulation" is a rather broad term. I'm skeptical of your claim. What regulatory changes do you have in mind? Which of those regulatory changes do you expect to most lower medical costs?
I have heard many leftists respond to the economic devastation of the soviet union by concluding that with better planning central planning could have worked. Your "better regulation" strikes the same chord with me.
It sounds like nothing more than hubris to me.
But it would also have effects elsewhere. Brock mentioned "defensive medicine" in his post. I wonder how much money that consumes. A no-fault system would make "defensive medicine" unnecessary.
Also, have any insurance companies or hospitals made any moves to outsource administration-related costs? Technological change that pushes the elimination of most paperwork would be a welcome relief. There's no reason I should have to fill out my medical history every time I visit a different doctor. I read an article recently about genetic studies in Finland and apparently, they have everyone's information in a streamlined computer system.
"Access to clinical records is much easier in Finland than in the United States because the health care system is streamlined, centralized, and computerized."
I don't want a centralized state-run health care system, but it would save us a pile of cash to use whatever computer system they have to organize medical records.
Well, what portion of all medical costs arise from defensive medicine? Yes, it happens. But doctors already have plenty of reasons to order tests. One of those reasons is patient demand. Talk to people who are going thru major illnesses and listen for how they demand this or that test or this or that treatment. Old folks who know the government is going to foot the bill see no reason to hold back on their demands.
Also, doctors have one other big reason to add in treatments: They get a percentage of the treatment revenue unless they are working for an HMO or hospital. Speaking as a person who has someone close to him going thru a major illness I see far more signs of treatments being added in for profit-maximizing purposes than for defensive purposes.