As the Bush Administration continues its relentless push to starve the agencies of government, its tax cuts are choking off federal payments to states and cities for federally-mandated programs like Medicaid, special education, the President’s "No Child Left Behind" law, and hundreds of others. While there is plenty of pain to go around, the haphazard mess that is the current American health care system may suffer most.
Remember the old song about the human body, the one that described how “the hip bone’s connected to the thigh bone…”? Well, the political “body” is also connected—more than we sometimes like to acknowledge.
As the Bush Administration continues its relentless push to starve the agencies of government, its tax cuts are choking off federal payments to states and cities for federally-mandated programs like Medicaid, special education, the President’s “No Child Left Behind” law, and hundreds of others. While there is plenty of pain to go around, the haphazard mess that is the current American health care system may suffer most.
In Indianapolis, Wishard Hospital faces severe financial problems caused largely by shrinking federal Medicaid reimbursements. Senator Bayh has proposed legislation aimed at helping Wishard, but that legislation will be about as effective in the long term as a band-aid on an amputation. Wishard’s crisis may be postponed for a while, but it will return and is likely to be replicated all across the country. Meanwhile, the ideologues in Washington simply shrug. In their view, government has no obligation to provide medical care to people who can’t afford it. (Indeed, when Congress recently passed a convoluted prescription benefit, Mike Pence intoned that it was a step on the road to the evil of “socialized medicine.” The Congressman evidently hasn’t noticed that we already have a socialized system; it’s just run by insurance companies rather than by government.)
What happens in the real world when payments under federal medical programs are reduced? Since people still get sick, those without health insurance—of whom there are over 45 million, up a million and a half since Bush took office—do not visit the doctor to get cost-effective primary care. They wait until they get really sick, until they can’t ignore the problem any more, and then they go to places like Wishard. When they can’t pay the bill, local taxpayers do. Costs “saved” at the federal level get charged to city and county governments, and paid for through local property taxes.
Of course, we could do as the ideologues suggest, and refuse to support institutions like Wishard. People without insurance could go to—and fail to pay—other hospitals, in which case health care costs and insurance premiums would skyrocket. Or they could just be turned away. But I don’t think Americans are going to let that happen. Over any three-year period, about 30% of the workforce, or 81 million people, will experience a gap in health coverage; 44% of workers who lose their jobs will be without insurance for at least one month, and usually longer. It could happen to any of us.
Furthermore, fewer and fewer businesses can afford to offer health coverage. In 1990, employers’ costs for health insurance equaled 100% of their net after-tax profits. It’s higher today. Increasingly, the small businesses that are the engine of job creation find they cannot compete with the big guys for good employees, because they cannot afford to offer health insurance. Workers whose family members have “pre-existing” health problems find themselves trapped in jobs they hate in order to keep coverage. The current system distorts the market in innumerable ways: it provides no incentives for effective public health measures, it rewards the establishment of “boutique” hospitals that siphon off income from full-service establishments, and it encourages drug companies and providers to divert million of dollars from health care to promotion and advertising. (“Have you asked your doctor for the purple pill?”)
Then there are the people who simply can’t get insurance. Since ten percent of the population incurs 72% of all medical costs, risk avoidance by insurers is the simplest and easiest path to profitability.
In 1998, Americans spent $4,270 per person for health care, compared with a median of $2,000 in twenty-three other industrialized countries. Yet the World Health Organization ranks us just 37th in overall quality of service.
Refusing to reimburse providers for services rendered to the uninsured is no answer to these problems. Neither is shifting the problem to local government. Our system is connected, and when one part is broken, it all is.