Some effects of globalization on U.S. employee health care benefits.
In the United States, employer-sponsored health insurance is in great danger of becoming less effective due to an escalation of health care costs and a rapid increase in international trade, not withstanding the Health Care Act of 2010. Most working Americans obtain their health insurance through their employers. Rapidly rising health costs are such that employers often attempt to reduce their impact by shifting as much of the costs as possible to employees. At the same time, many American employers compete with international businesses that have much lower wage levels or operate in countries characterized by an existing broad based national health system. These foreign companies are, therefore, far less affected by health care costs. The leaders of many major U.S. industries acknowledge that health care costs are putting their financial structures in jeopardy; nevertheless, many still stand firm against any major change in the U.S. health care payer system. The foreign company advantage affects U.S. exporting companies as well as those U.S. companies in competition with imports into the U.S. from other nations, which includes most American businesses. U.S. exports often cost more to produce than similar goods produced in the U.S.'s major trading nations. Imports into the United States are usually sold at prices lower than U.S. produced goods. While this is not all bad, it does put some businesses and most American workers at a disadvantage. Imports plus exports is now about 30% of Gross Domestic Product. This very large figure poses a tremendous handicap to American commerce and labor.
Much has been written about the tragedy of Americans without health insurance. There is a great deal of concern and focus on the growing number of Americans with no health insurance, as there should he. It will he some time before the new health care legislation begins to actually impact this problem. Two prominent organizations, The Commonwealth Fund and The Kaiser Commission on Medicaid and the Uninsured, provide thorough research on the uninsured. The Commonwealth Fund surveyed 300 opinion leaders concerning the uninsured problem and Kaiser has been addressing the same issue for many years (see The Commonwealth Fund: Health Care Opinion Leaders Survey 2004 and The Kaiser Commission on Medicaid and the Uninsured 2008). Kaiser has also provided invaluable research on employer-sponsored benefits, the source of most employed Americans' health insurance. Today 158 million Americans obtain their insurance as part of their wage and benefits compensation (The Kaiser Family Foundation 2008).
It is the intent of this brief essay to describe and discuss several significant factors affecting the ability of American businesses to continue to provide employer-based health insurance. It remains to be seen what effects the new health care law will have on the problems discussed here. In addition to the rising cost of health care, an important source of the increasing difficulty with continuing employer-based health insurance is related to the growing globalization of commerce. Much of American business, whether or not the particular firm is directly engaged in international trade, must contend with two major disadvantages compared to many international producers. First, in many cases, wages in the U.S. are still higher than in many economies around the world, usually constituting 60-70% of production costs. Second, America's most prominent international trading partners either make no provision for employee health care or they carry a significantly less burdensome health care responsibility. Both of these facts directly affect production costs in the U.S. In the short run there may be little that can be done to deal with the wage differential, but American businesses' health care costs might be successfully addressed by copying some aspects of European health care systems.
HEALTH CARE EXPENDITURE INCREASES
According to the Centers for Medicare and Medicaid Services (2008), spending on health care in the U.S. was more than $2.2 trillion in 2007. The Centers estimate that by 2018 national health expenditures will be just over $4-35 trillion. The year-to-year increase has been over 7% for many years and is expected to rise at that rate for the near future. Until the present recession, Gross Domestic Product (GDP) in the U.S. was growing at just under half the health care rate, averaging 2.75% per year in real terms since 2000. This is a satisfactory GDP increase by historical standards; however, health care is taking a larger percentage of GDP each year. Health care was 13.8% of GDP in 2000, 15.9% in 2005, and is expected to comprise 20.3% of GDP by 2018. Per capita spending on health care was $4,790 in 2000, $6,687 in 2005, and is now estimated to be $13,100 in 2018. Reciting these rapidly growing health care expenditures is not meant to be a criticism of the amount spent for health care. It is difficult to know what should be spent on health care. Table 1 presents a visual comparison of statistics for years 2000, 2007, and 2018.
TABLE 1. Summary of statistics for selected years; 2000 and 2007 are actual data (Centers for Medicare & Medicaid Services 2005, 2008); 2018 is forecast data (Centers for Medicare & Medicaid Services 2008) 2000 2007 2018 Total health expenditures $1.35T $2.2T $4.35T Percent of GDP 13.8% 16.2% 20.3% Per capita expenditures $4,790 $7,421 $13,100 Percent increase in expenditures over prior 7.0% 6.1% 6.3% year (nominal) Percent change in GDP from prior year 5.9% 4.8% 4.6% (nominal)
It appears that the U.S. is not achieving allocative or production efficiency in its production of health care. In addition, from a normative point of view, the socially correct amount of national health care production, or dollars that should be spent, is unknown. There is no properly functioning market mechanism to tell us how much health care should be produced or consumed, as is present in some other domestic industries or markets. Further, health care is not the same thing in 2008 as it was in 1950-not even as recently as 2000. The technology, the tools, the methods of providing care, and results are all changed as much as a 1950 automobile is a different mode of transportation than a 2008 vehicle. Therefore, it is very difficult to know how much of GDP should be allocated to health care. The U.S. economy has a market mechanism to indicate how many automobiles to produce, but there is no market mechanism to determine health care production. It is well known that at least 35 million Americans are uninsured. Many have insufficient funds or are without health insurance, which is required to cover the cost of obtaining care for serious health problems. When an economic system lacks any internal mechanism for indicating how much of a product or service society demands, society through its elected representatives should give some indication of the amount to be developed. The U.S. Congress has passed the new health care legislation which one hopes will, eventually, set some guidelines on the amount of health care provided (U.S. Health Care Reform Act 2010).
In the U.S., health care expenditures double in less than ten years. These changes are, of course, reflected in health insurance premiums. In fact, insurance premiums increase at a rate often much higher than the rise in national health expenditures. Premiums increased 13.9% in 2003, rising 9.2%, 7.7%, and 6.1% in 2005, 2006, and 2007, respectively. Workers' earnings rose 3% in 2003, 2.7% in 2005, 3.8% in 2006, and 3.7% in 2007. Real wage rate increases, however, have been 1.1 % or less in five of" the last six years, and less than inflation in two of those years (The Kaiser Family Foundation 2007).
Employer-sponsored health insurance is the foundation of American health care funding. In 2008, 60% of the U.S. population or about 159 million people were covered by employer-based health insurance (The Kaiser Family Foundation 2009). Employers maintain that they are finding it progressively more difficult to continue providing these benefits as part of employee compensation packages. From 2000 to 2007, the percentage of employers offering insurance to their employees dropped from 69% to 60% (Rubin 2006). While health care costs are, no doubt, the fundamental and surely the principal long run reason for the reduction of employer-sponsored health insurance, there are other reasons as well which include the business cycle and fluctuations in the number of employer-covered workers. As the level of economic activity increases, more workers are employed, thus more employer-based insurance coverage for workers. In addition, structural changes in the economy alter the number of covered employees. The shift of workers from high income, large firms to low income, small firms generally means a reduction in employer-sponsored insurance coverage (Reschovsky et al. 2006). Smaller firms have shown the largest decline in coverage. From 2000 to 2007, the percentage of small firms offering health care insurance to their employees fell from 68% to 59% while large firms stayed about the same at 99% (The Kaiser Family Foundation 2007). The new health care law is designed to help small firms, in particular, deal with these rising costs through tax rebates and health care exchanges. Since 2000, the percentage of total premiums paid by employees has not changed significantly. About 80% of single workers and 94% of workers with families pay some part of the premium, up about 5% in each category from the year before. Workers in small firms now pay about 16%; employees of large firms pay about 28% of their health insurance premium. The dollar amount, of course, has increased as the premium amount has increased. In 2008, under employer-based health insurance, the average premium for a single person was $4,704, and for a family the premium was $12,680. One can assume these premiums will double again in the next ten years. If present trends continue, however, real wages will hardly increase in the same period. Many employers are also responsible for retiree health care insurance, but among large firms (200 or more employees) that number has dropped significantly from 66% in 1988 to 33% in 2007 (The Kaiser Family Foundation 2006,2007).
EMPLOYER-SPONSORED HEALTH INSURANCE BACKGROUND
During the Second World War, in order to control inflation, employers were forbidden to raise wages. However, they were allowed to increase employee benefits and did so in order to draw workers to their firms. In 1950, Walter Reuther of the United Auto Workers and Charles E. Wilson of General Motors agreed on the provision of pensions and health care benefits for G.M. employees. Wilson also agreed to a cost of living increase for wages. This caused a surge in employer-sponsored health care insurance, with many companies and whole industries following over time (Loomis 2006).
It is interesting to note that a year before Reuther and Wilson came to their agreement, Richard Gosser and other Toledo, Ohio UAW union leaders, in their discussions with auto related manufacturers, argued for pensions to be regionalized (Gladwell 2006). They said that the responsibility should be spread over many companies involved in the production of related products. At that time, the union leaders suggested that each employer pay ten cents per hour worked into a central pension fund. The pensions could then follow the workers as they changed jobs, and if one company got into financial trouble, the pensions would not be affected. In other words, the union wanted the companies to engage in a "pay as you go" program, similar to defined contribution plans now being offered, not long-term promises or defined benefits plans, now being phased out. Corporate leaders were totally opposed to this regionalization plan. They reasoned that the broadly based plan was a threat to free enterprise and would result in the loss of control of their workers. Instead, at greater expense, they volunteered to set up a pension plan at each company. Had the union leaders plan become the model for America, employer-sponsored pensions and health care insurance might not now be in crisis (Gladwell 2006; Blumenthal 2006a). It should be remembered that the great oligopolies of the middle and late twentieth century had significant control over the price of their products. Having significant pricing power allows firms to control revenue and to award generous wages and benefits. In addition, per capita health care spending was only $148 by 1960. With the coming of globalization, these oligopolies no longer have such power, and per capita health care spending is now over $7,000.
IMPLICATIONS OF INTERNATIONAL TRADE
International trade has been growing steadily in the United States. From 2004 to 2008, the U.S. Census Bureau reported a 33% growth in total trade in goods and services. Comparing international trade, counting both exports and imports to GDP, (only net exports are counted as part of GDP), international trade was 25% of GDP in 2004, 26% in 2005, 28% in 2006, 29% in 2007, and 30% in 2008 (U.S. Census Bureau 2006, 2008a). By 2008, the six top trading partners of the U.S. in goods were Canada with 19.4% of the total, China with 12.0%, Mexico with 10.8%, Japan with 6.1%, Germany with 4.5%, and the United Kingdom with 3.3%. Together they constitute 56,1% of all U.S. trade in goods (U.S. Census Bureau 2007a, 2007b, 2007c, 2007d, 2008a, 2008b).
Both exports and imports are relevant here because American producers are affected (a) when they export to countries, having wage and health benefit advantages, and (b) when they must compete with firms from other countries that sell their goods and services in the U.S. The size of these trade figures and their growth rate are significant because these six major trading partners have either lower wages or a national health system that enjoys a much broader contribution base than their American counterparts. Both of these advantages lower labor costs to the firm. Of the six leading trading partners, Canada, Germany, and the U.K. have single payer national health systems, which remove much of the health insurance burden usually carried by U.S. firms. Germany's system is 90% single payer, and 10% highly regulated commercial insurance. Mexican and Chinese producers pay their workers lower wages and few benefits. Japan has a very highly regulated, mixed single payer, employer-sponsored hybrid system. Organization for Economic Co-Operation and Development 2003 data, however, estimate that the Japanese system has 81.5% public funding (OECD 2003). This is not to say that U.S. companies never take advantage of the much lower wages in China and Mexico, and some, perhaps a good deal, of the trade with these two countries is a result of the difference in wages. Nevertheless, these differences have very serious effects on American firms and particularly on American workers. While it is true that gains in productivity can, to a degree, make up for the burden of heavy outlays for health care and higher wages, productivity gains are usually short lived. Aggressive trading competitors are usually quick to adopt new tools and ideas, and in some cases, our European trading partners are more advanced technologically than their American counterparts. Further, most health care benefits in European countries are not less than those in the United States; however, they are provided in a manner having less impact on firms' operating costs.
COMPARISON OF HEALTH CARE COSTS WITH OUR TRADING PARTNERS
The per capita health care costs of our European trading partners are approximately half of those in the U.S. Their percentage of GDP allocated to health care is about two thirds of that in the U.S., and at the same time, common health markers are considerably better than the U.S. Their infant mortality rates are less than those in the U.S. Finally, European trading partners are living longer than American citizens. Japanese data are the best in the world and Canada shows better statistics than the U.S. according to the OECD. The United States does have better numbers than Mexico. There is little information for China.
BUSINESS REACTION TO COMPETITIVE THREATS AND RISING COSTS
The reaction to both lower wages abroad and higher health costs at home is the same. American firms struggle to reduce labor costs-both wages and benefits. High increases in health care costs have been said to be a cause of slow job growth, slow wage increases, and even negative effects on pension funds (Mintz 2004). Real wages in the U.S. increased 2.6% from 2000 to 2006 while productivity rose 18.4% (U.S. Bureau of Labor Statistics 2006). It would appear that much of the increase in productivity went to executive bonuses and salaries, and stockholder dividends rather than worker wages and benefits. It is likely that the partial shift of increased health costs to workers is partly responsible for keeping real wage increases low. The American labor force does seem to understand that international forces must be dealt with; labor has been willing to reduce wage and benefit demands in the past. While the unemployment rate is now high (approaching 10% in the spring of 2010), there is a great deal of unrest among American labor, and not just because of the current recession. Many American workers do not feel economically secure. They continue to sense that American jobs are moving overseas, and they see their health benefits eroding while corporate leaders' compensation reaches previously unknown heights.
Health care benefits are presently in a state of change reflective of more than just new health legislation. In the last several years, employers have, as noted above, begun shifting more health costs from employers to employees. Some specific changes include the increasing use of co-payments and deductibles. Among covered workers, most plans have co-payments that are rising. One method of dealing with health care costs is to stop offering health care insurance altogether, or to move part or all of the firm's operation to more conducive locations. As a rule, firms paying lower wages, those with a higher number of part time workers, and those where unions do not represent workers are less likely to offer workers health care insurance (The Kaiser Family Foundation 2006).
In recent years, there has been a growing effort on the part of the employers to employ so called market-based solutions to health system problems. Many business executives, despite their growing competitive weaknesses, agree with the free enterprise point of view. At the same time, a growing number of citizen groups, business executives, and political figures are coming to the conclusion held by most economists that some variation of a single payer system is the only hope of avoiding very serious consequences. Among major American auto companies, perhaps because of its German connection or because of basic self-interest, when Chrysler was DaimlerChrysler, the company supported a national single payer system.
If a market system is to perform acceptably it is absolutely critical that demand exercise its usual economic role. The consumer must deal with the constraints of limited income, prices that individuals must face that are controlled by market forces, plus a well-considered set of preferences. These demand factors are essential if suppliers are to be price competitive and cost conscious. This set of conditions does not exist on the demand side of the fragmented U.S. health care system, and therefore we generally find no meaningful competition on the supply side of the equation. Those who insist that the market can cure the problems in the American health care system, particularly the escalating cost problem, are deluding themselves. Nevertheless, attempts have been made, particularly in the last few years, to correct for this failing. Most attempts have come under the banner of consumer-directed health care.
CONSUMER-DIRECTED HEALTH PLANS
In an effort to make the health care consumer perform the demand function, incentives have been set to encourage patients to become more cost conscious. The vast majority of employer-sponsored plans have co-payments. Co-payments and deductibles not only relieve employers of some of the burden of the insurance premium, but make the health care consumer more cost conscious which in time could perhaps then curtail the use of expensive health care resources. To some degree, these techniques do make the consumer more aware of out-of-pocket costs. However, a small segment of health care users consume the largest percentage of health resources, and are not deterred by co-payments or deductibles. High use insured consumers assume that they will exceed the deductible; therefore, they perform as if the health care were free. Further, when price conscious consumers constrain their use of health products, they may not be able to judge whether their choices are the appropriate ones in terms of their long-term health (Fuchs and Emanuel 2005). It would be guesswork to speculate how the new reform law will affect the present trends.
Health savings accounts (HSAs), which started in 2003, are another method of reducing employer health care costs. These plans attempt to encourage consumers to focus on the cost of health care consumed and help pay co-payments and deductibles. HSAs are tax-exempt; both employees and employers may contribute to these funds, but if the employer contributes to the HSA it must often be accompanied by a qualified high-deductible health insurance plan that will have a deductible ranging from $1,000 to $5,000 (Blumenthal 2006b; The Kaiser Family Foundation 2006).
Initiated in 1996, medical savings accounts (MSAs) are similar to HSAs and are tax exempt. The rules are similar except that MSAs may be used by self-employed persons and are limited to employees of firms with less than 50 workers. Again, MSAs may be used only with high-deductible health plans. Employers may contribute to MSAs, but not in the same year as the employee (Blumenthal 2006b; The Kaiser Family Foundation 2006).
Health reimbursement accounts (HRAs) are offered by some employers as credits meant to reimburse employees for health care expenses that are qualified. HRAs can be carried over into future years if the employer agrees. Reimbursement for employee health care expenses is not taxed as income. HRAs are often linked with High Deductible Health Plans (HDHPs).
Consumer-directed plans are meant to encourage the consumer to become more involved in the health care decision-making process; that is, to assume more of the demand function in a market based system. Unfortunately, so far little information on which to base decisions is provided consumers in these plans. In addition, it is not clear whether consumers would use information concerning the quality of physicians and hospitals, if they had it. Only 10% of firms with health care plans for employees offer some combination of HDHPs, HSAs, MSAs, and HRAs; 11% of covered workers have chosen coverage under some combination of these plans (Blumenthal 2006b; The Kaiser Family Foundation 2007). Many business leaders believe that, if consumer-directed plans fail, the only remaining solution to deal with the continuing escalation in costs is for employer-sponsored health care to disappear altogether.
While in power the Bush Administration continued to insist that the over 1,000 private insurance companies be included in any proposal for correcting the troubled U.S. health care system. The result of the Obama health care effort is not yet known. Research comparing U.S. to Canadian administrative costs found that 31% of U.S. expenditures are allocated for administration while in Canada, with its single payer system, the figure is 16.7%. This research makes the point that the money saved with an administrative cost similar to Canada's could provide for the uninsured in the U.S. (Woolhandler et al. 2003). Woolhandler and Himmelstein (2007) put the annual cost of medical bureaucracy at $350 billion each year. Medicare in the U.S. has shown very low and declining administrative costs. As of 2001, Medicare's administrative expenses as a percent of benefit payments were less than 4% (Centers for Medicare and Medicaid Services 2002).
GENERAL MOTORS: A CASE STUDY
It serves us well to examine the mindset of leaders of large companies, such as General Motors before bankruptcy. In his report before the Special Committee on Aging of the United States Senate, G. Richard Wagoner Jr., then Chairman of General Motors, discussed G.M.'s health care responsibilities (Wagoner 2006; French 2006). He explained that G.M. paid the health care costs for 1.1 million employees, retirees, and their dependents. In 2005, G.M. spent $5.3 billion for health care. Mr. Wagoner noted at least sixteen programs that G.M. participates in or sponsors, including a consumer-directed plan started in 2006. Many of the programs have consumer information components that would aid G.M. employees to become better health care shoppers. He remarked that health care costs were unsustainable for General Motors, yet nowhere in his presentation did he mention removing these costs from G.M. with support for a national single payer system.
While General Motors is presently working on details to shift health care responsibilities to the United Auto Workers, G.M. still finances its own health care program, and has been the single largest private buyer of health care in the world (French 2006). G.M.'s prescription drug costs rose 22% from 2000 to 2001, accounting for 25% of total health care spending (Mintz 2004). G.M.'s board of directors included three members from the pharmaceutical industry. Without comment, the often-mentioned fact is repeated here. In 2003, G.M.'s pension, and health care costs for employees, retirees, and dependents added $1,824 to each car produced while $186 was added to each Toyota (Peters 2005).
When this writer inquired further into the policies of G.M. concerning its position on the future direction of health care for the nation, he was referred to G.M.'s chief health care lobbyist in Washington D.C. He was then directed to several sources that would reflect G.M's health care policy: the U.S. Chamber of Commerce, The National Association of Manufactures, the American Benefits Council, ERIC, the Health Care Policy Roundtable, and the National Business Group on Health. The points made by all of these business organizations can be summed up by twelve very similar statements of the U.S. Chamber of Commerce and the National Association of Manufacturers:
* They support market-orientated strategies to reduce health care costs and expand coverage.
* They strongly support consumer-directed health coverage, HSAs, HRAs, etc.
* They oppose all benefit mandates.
* They acknowledge that rising health care costs harm business.
* They do wish government to provide aid for business in the areas of catastrophic and chronic health care situations.
* They support health insurance tax credits.
* They support mandate-free small business Association Health Insurance Coverage.
* They support information technology; value based purchasing incentives, higher quality care, greater transparency, increased efficiency, and more affordable health care.
* They support medical liability reform.
* They say a single payer system rations health care to consumers while consuming massive amounts of taxes, both corporate and personal.
* They oppose The Patients Bill of Rights.
* They oppose efforts to apply controls on prices of prescription drugs or other health services, and the importation of foreign drugs.
The Health Care Policy Roundtable does recognize a health care crisis, and that 42 million uninsured working Americans need health insurance. These points sum up the position of General Motors before bankruptcy. The company has been described as an insurance company overwhelmed by obligations it cannot meet. Yet the company still will not support a government supported health system that would take over what is an unfunded health care obligation of some $64 billion as of 2005 (Loomis 2006). It is yet unknown what the result from the changes of late 2009 will be.
CANADA: A TRADING PARTNER CASE STUDY
Canada, the U.S.'s most important trading partner with almost 20% of total U.S. trade, recognizes that its single payer system is a significant business advantage (U.S. Census Bureau 2005, 2007a). In an important article in The Nation, heavily quoted here, Michael Grimaldi-then president and general manager of G.M. Canada and a Vice President of G.M.-was quoted as saying that the single payer system in Canada is a vital asset in the company's successful operations in that country, and "a strategic advantage for Canada" (Mintz 2004). A. Charles Baillie, an executive at Toronto Dominion Bank, called Canada's single payer system, "an economic asset, not a burden." He said, "In an era of globalization, we need every competitive and comparative advantage we have. And the fundamentals of our health care system are one of those advantages." Ford's and DaimlerChrysler's Canadian presidents and CEO's agreed. Union leaders from the Canadian Auto Workers added their endorsement to the business heads' views. In a study the union carried out, it was determined that hourly labor costs of vehicle assembly were, in U.S. dollars, $29.90 per hour in Canada compared to $45.60 in the U.S. They found that health care costs accounted for at least 25% of the difference. In 2003, William Clay Ford, Chairman of Ford Motor Company, called health care his company's biggest unsolvable issue. He said health care was out of control, a broken system. When Jack Smith, onetime president of G.M. Canada, became president of G.M. worldwide he still favored a single payer system, but the company did not (Mintz 2004).
American-based companies are finding it increasingly difficult to compete with foreign firms. Wages, benefits, and labor costs are higher in the U.S. than in many international competitors' countries. Those firms that must meet foreign competition directly are experiencing intense pressure now, but even firms not directly involved with foreign trade feel the effects, or they soon will. In several leading trading partners, e.g., China and Mexico, wages are significantly lower than in the U.S. In other important trading partners, e.g., Canada, Germany, and the United Kingdom, firms are not primarily responsible for employee health insurance.
The major way most working Americans obtain their health insurance is through their employer. Employer-sponsored health insurance is unsustainable. Health care costs are causing American firms to lose their competitiveness. The two main reasons employers are finding it increasingly difficult to continue providing health insurance for their employees are (a) the rapid escalation in health care costs in the U.S., and (b) the fact that globalization is leading to a rapid increase in international trade with nations where firms do not have the heavy burden of employer-based insurance.
Increasingly, American firms are shifting health care costs to their employees with continually higher premium contributions, co-payments, and deductibles. Many smaller firms find they must discontinue employer-sponsored insurance to remain viable. Larger firms will follow as health care costs destroy their competitiveness. This trend will almost certainly continue, and the ranks of the uninsured will swell. The very heavy reliance on employer-based health insurance makes this economy highly susceptible to calamity. Major changes must he made in the U.S. health system. Will the U.S. Health Care Reform Act of 2010 change these trends? This remains to be seen.
The Employment Act of 1946 was passed to clarify the responsibility of the federal government's role in the U.S. economy. The Act spelled out, in general terms, what was expected of the federal government concerning employment, price stability, and growth. It created the President's Council of Economic Advisors and the Joint Economic Committee of Congress. This was done to assign responsibility for fiscal policy, and to emphasize strongly that classical economics no longer set the guiding principles for the economy. America desperately needed the Health Care Act of 2010. It needs to be made clear whether health care is a right of all Americans, and if so, exactly what that right entails. When this is accomplished, the U.S. health care system can then proceed to address its many problems. The destination must be known before the journey can commence. Perhaps the new health care law makes some of the destinations now clear. What is not clear, at least to this writer, is how the provisions in the act can be paid for and, even more importantly, how escalating costs can be slowed.
There are those who think the health system in the U.S. will not change without some major catastrophe, a great natural disaster, a depression, or a war. Such events are not necessary. If significant change does not occur soon, a major calamity in the health system is on the way. What must be controlled are the escalating costs we are seeing every year. The doubling of health care costs every ten years must slow. Today, many millions of American are without health insurance. Many of these are uninsured because of the cancellation of their employer-sponsored benefits; millions will surely follow either because their employer stopped offering insurance or because there is no longer an employer. To head off such a serious event, the great corporate leaders of the U.S. must change their position and mindset for their own survival, if for no other reason. Further, they must support some form of a single payer system or other government sponsored insurance program. If they do not, the system will change anyway, but perhaps not until millions more Americans are without insurance, resulting in serious social unrest.
There are many variables determining life expectancy of the average citizen of a nation. Among the economic variables, the size of its GDP has always been significant. How GDP is distributed, however, is even more significant. Included in the list of technological determinants, the excellence of the best health care is an important variable. The efficiency of its delivery system to the whole population is no doubt even more important. Valuable economic resources must be purchased in a manner that exhibits both financial fairness to the payers and medically justified utilization constraints on the providers and consumers. Many of these longevity-determining factors are in disarray in the U.S. Unless reconstruction begins soon, the average U.S. citizen may well begin to experience a decline in length and quality of life.
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