Sunday, September 28, 2008
No universal cure for health system
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Alice Louise Kassens
Kassens is an assistant professor of economics, specializing in health and labor economics, at Roanoke College.
Health care is one of the top five concerns of Americans. There are several suggestions for overhauling our health care system. One popular plan is a universal insurance program. The U.S. is the only major industrialized nation without universal health care insurance, but before such a drastic move is championed, the costs and consequences should be made clear, and we should be certain that such a change would solve the problems associated with our current system.
Two common complaints about the U.S. health care system concern access and quality. It is reported that 47 million Americans are uninsured, but what is not highlighted is that many are young, healthy males who choose to spend their extra monthly income on entertainment rather than purchase health insurance. Eighteen million individuals are considered truly uninsured in that they do not have insurance provided by their employer, are too poor to afford coverage on their own and are not eligible for government programs. Thus, there is an access issue, but it is not as great as the advertised number.
The U.S. spends more per capita on health care than any other nation, but we have lower life expectancies and greater infant mortality rates than other comparable countries. Critics use these statistics to bolster the claim that our current system is failing and not achieving the quality of care of other nations. These statistics are misleading.
It is true that the infant mortality rate, the number of deaths per 1,000 live births, is higher in the U.S. than in other developed countries, but there is little consistency in the statistic, making cross-country comparisons problematic. In the U.S., a live birth is an infant showing any sign of life. France and Belgium, for example, do not count babies born prior 26 weeks. Given premature babies are at greater risk of death, this will underestimate the infant mortality rate compared to that of the United States. Additionally, genetic, behavioral and cultural factors influence infant mortality. The U.S. has more single mothers than most other countries, a group that is less likely to receive prenatal care. Life expectancy is also influenced by factors that are outside the control of the health care system. Two-thirds of Americans are overweight or obese and are at an increased risk of premature death from heart attack and stroke. Behavioral changes contribute more to increased life expectancy than reformation of the health care system. The U.S. does have superior survival rates for health events such as heart attack and breast and prostate cancer, a tremendous success of the current system.
Would a universal health care insurance program improve access to care? Having health insurance does not guarantee health care. If the price of care is zero, prices can no longer ration the good. Shortages must be addressed via queuing (wait lists), cancellations and death. In Canada, the wait for first-time mammograms is so long that it cannot be used as a screening procedure. A considerable number of U.K. lung cancer patients become incurable while waiting for treatment; others die while waiting their turn. Additionally, universal coverage does not guarantee equal access. Studies have shown that rural residents face greater barriers under such programs compared to urban residents, and if the poor are more likely to live in rural areas, universal programs create income differentials with regard to access.
Universal health insurance will not solve the access problem associated with our current system, and it will create additional problems. If employers are required to provide health insurance for their employees they will attempt to offset the added cost, estimated to be $2.60 per employee hour. For example, the average hourly wage for an administrative assistant in Virginia is $13.50. If the employer fully passes the cost of insurance onto the employee, an assistant's wage falls to $10.90 per hour, a reduction of almost 20 percent. This is a heavy implicit tax on the earnings of working Americans. Further, if an employee is paid within $2.60 of the minimum wage, the employer cannot fully offset the cost of coverage and will be forced to reduce other benefits offered, reduce hours or lay off workers.
There is no such thing as a free lunch, or in this case, free care. There are problems with our current system, but before a change is made, let's find one that will solve our problems, rather than making them worse or creating bigger ones.
