March 5, 2008

Universal Healthcare?

For what its worth, in about 2-3 months the Presidential race is going to heat up and hopefully some real issues will cross the table. Healthcare will definitely be one of these issues and the big debate will be on whether to keep our current system or switch to a publicly managed insurance system.

I make no secret that Universal healthcare should be a pillar of modern society and public health. With the amount of travel and personal exposure due to rising population density it is important that we value the health of our neighbors and fellow citizens.

So my question is why is there such an upwelling of support against a universally accepted insurance program? Currently in the US we have 2 different publicly managed insurance programs. One is Medicare/Medicaid and the other is the for national children's health insurance. Currently most Americans are happy with this system and believe that it is right to help insure those with fixed incomes and those too young to care for themselves.

In 2001, the median income for Medicare receiving families was $20,000. The cost of Medicare is 15% of the cost for private coverage which means many of these families could never afford private insurance. It is estimated that 43 million individuals who are not on a fixed income receive Medicare benefits, that is over 10% of the nation (most in the working population) that would not be covered if not for the public system now in place.

Another concern is exactly how we're going to pay for this. And that is a good question that policy makers will have to address going forward. One fallacy of universal healthcare is that we will have to pay to insure those who aren't contributing to the healthcare fund. While this may be true and another roadblock to universal coverage, the truth is that many people today are receiving treatment at our public hospitals and not paying for it. Many of these people contribute very little to no tax revenue and are still receiving services at no charge. These services and time logged by physicians and nurses still have to be paid, they are not a pro-bono service, and will receive payments whether the patient can pay or not. This payment comes in the form of increased insurance premiums and elevated cost of service.

If a hospital can expect 60% of people receiving CT scans to be able to pay, the cost of each CT scan is going to rise as the cost of unpaid service has to be ameliorated through a concurrent price increase in each individual procedure. Now that a CT scan price has increased any insurance company with a client receiving a CT scan will now have to pay more for the procedure than previously. The rise in price is not absorbed by anyone other than the patient themselves as their premiums and most likely deductible will continue to rise as the insurance company is responsible for higher procedural payments. To compound the problem, the insurance company is not seeking good faith and word of mouth advertising, they are looking at their profits.

Here is another reason why healthcare here is so expensive. If a procedure costs $100 and the insurance company is responsible for $80 your copay is $20. That doesn't sound too bad, but why do you have to pay $300 a month to maintain your coverage? The answer is profits. In order for the insurance company to make money the consumer must pay above and beyond the cost of care received. Its really a simple equation, if the insurance company has to pay X you can be sure that you will be contributing X + Y to the insurance company in order to feed its profits. So you are paying both for your coverage and services received and the profit margin for the company. This is ridiculous, and add to it the cost of the doctor's profits and you are looking at a steep price with hidden profits behind every procedure you have done. If these companies are allowed to reap in huge profits it is not coming from the hospitals, physicians, or government, its coming from our pockets!

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