Newsletter Volume 6, Issue 9:

For health care premiums for 2010 price increases are now estimated to be in the range of nine to eleven percent – about five times higher than inflation. Outcomes will be about the same – we’ll still be 41st in life expectancy, 33rd in infant mortality, and 37th in health system effectiveness.

And the productivity improvement in the health sector will be a negative two percent.
Americans apparently don’t want this to change. Why? Because about 70% of the US population get their health insurance from their employers or through self-paid plans, and they are more afraid of losing it than paying 10% more. The 15% who are uninsured have no voting power, and the remaining who are insured are mostly people on Medicare, Medicaid and other government-sponsored plans (military, VA, federal employer), so most people fear that proposed changes may put them in a worse position than they are now. And this fear has produced the most emotion-laded debates that we have ever witnessed.

Yet almost all Americans are just one step away from losing their health insurance. That insurance may disappear if the employer lays off people or goes broke. If may disappear if you have a pre-existing condition, or you have a ceiling on how much the insurer will pay, or you have co-payments that you cannot afford, or the insurance company drops you because you are considered a poor risk.

So the average American is only two steps away from bankruptcy. If you lose your health insurance, you enter a twilight zone where 62% of all personal bankruptcies are caused by staggering health care bills.

This is what people prefer over a change in our system of health care financing? A change that promises to remove the pre-existing condition problem, makes your insurance non-cancelable and insures everybody? The reason, they say, is that it will cost too much.

Give me a break!

Is the 62% of bankruptcies not costly enough? The shift from going to your own doctor to waiting six hours in an emergency room? A system that will consume the entire Gross National Product of the US in 2060 if cost increases continue on the same path as they have since 2000? This is, without a doubt, the largest and most dangerous economic bubble we have ever encountered.

Here is the solution, and I cannot imagine why no one has advocated it during the entire debate that now has raged over nearly 5 years. The solution is to raise the productivity level of the health sector to be comparable with that of the average American worker.

That’s it.

That’s the solution.

If we do that, we do not have to hire even one additional healthcare worker over the next ten years. Over that period, everyone in the health sector will be paid the same pay increases as they received in the past decade. All Americans will be treated, whether insured or not, and the cost will not increase in total -–it will be offset by higher productivity.

And ten years from now, health care costs will be 10% less than they are today, in real dollars.
This is what the productivity of the average American can do for the rest of the economy.
If the health sector does as well, we shall have solved the cost problem, and the problem of the uninsured, all while continuing to provide the newly effective health care workers with the same high annual pay increases they received in the past.

Now, tell me again: Why don’t we do this? And now?