Without Reform, Health Care Costs Will Skyrocket

Rising health care costs will overwhelm the American economy and the American consumer, without an overhaul of the system. This is the conclusion of most health policy analysts, as well as a new study by the Commonwealth Fund, as reported in "The Cost of Doing Nothing" in the New York Times last Sunday.

"Health policy analysts and economists of nearly every ideological persuasion" agree that "the unrelenting rise in medical costs is likely to wreak havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly," says the Times.

Karen Davis of the Commonwealth Fund, a nonprofit health care research group, contends that things will hardly stay the same if we do nothing: "in fact, what we will have is a substantial deterioration of what we have."

The Fund analyzed the potential cost savings of past proposals on health care reform, and concluded that all of them would have resulted in a much lighter burden on the economy than we now pay. Health care now absorbs about 18% of GDP in the US--far higher than any other country in the world. (The figure is about half that in other industrialized countries). If the Clinton health care reform had been implemented, according the Fund's analysis, health care would absorb only 14% of GDP. If earlier plans by Carter and Nixon had been, the figure would be about 11%. (See the chart at the NYT site, and above).

The Fund study also estimated that the typical price of health insurance for a family is likely to double in the next decade, from about $13,000 a year, to $24,000. Health insurance premiums as a percentage of median family incomes grew from 11% in 1999 to 18% in 2007, and are expected to grow to 24% by 2020.

These kinds of costs will further erode economic growth in the United States; they will impede U.S. global competitiveness; and they will bankrupt American families and the U.S. government.

The perilous state of the American health care system is one of the key components of the decline of the U.S., both domestically and internationally, and urgently needs correction. One only wishes the members of Congress could put aside narrow self-interest and petty politics, and seriously confront the issue.

For more on the U.S. health care system, see my earlier post "U.S. Health Care Compares Badly to Others" or click on the "Health Care" label on the right side of the page.

Has the Supreme Court Legitimized Armed Insurrection?

The scary idea of insurrectionism may have been given a boost by the Supreme Court, according to a new and disturbing book by Joshua Horwitz and Casey Anderson, entitled Guns, Democracy and the Insurrectionist Idea, published by the University of Michigan Press. They argue that in the landmark Heller v. D.C. case of 2008, the majority ruling went far beyond the individual gun rights argument and opened the door to the (previously radical fringe) “insurrectionist” argument that citizens have a right to arm themselves to counter government tyranny. The authors make a strong case that this has potential to undermine Constitutional government, the rule of law, and democracy itself.

I raised similar concerns in chapter 3 of The End of the American Century, on the “Torn Social Fabric,” one important component of which was the huge number of violent crimes in the U.S., and the concomitant prevalence of some 200 million privately owned firearms. There, I raised particular concern about the minority of gun owners who believe that gun ownership provides an extra check on the government itself. As I wrote there ( p. 58):

“They see the Second Amendment to the Constitution as an implicit right of armed Americans to forcibly overthrow the federal government if they view it as tyrannical. It is hard to imagine any constitutional document, especially one with so many democratic checks and balances built into it, providing for its own violent overthrow. But many Americans seem to believe this—yet another reason why the United States is increasingly seen around the world as swimming against the tide of modern civilization.”

Horwitz and Anderson note that when they began writing their book several years ago, this insurrectionist idea was considered marginal, radical, and probably even treasonous. (Article III of the Constitution, in fact, considers levying war against the United States to be treason.) But the Supreme Court’s ruling in the D.C. case has given the insurrectionist idea more stature and respectability, and brought it into the mainstream. Horwitz and Anderson believe that this is a very dangerous precedent, potentially giving cover to those who would forcefully overthrow the U.S. government.

I share their concerns, and believe these concerns have become even more germane in the polarized and radicalized atmosphere of the last few years. Fox News stirs up hatred of the government, and calls into question its very legitimacy. The election of Barack Obama, ironically, has emboldened racists and bigots of all stripes, and led to a huge spike in the number of threats of violence against the President and the government itself.

In their conclusion, Horwitz and Anderson urge that “the Insurrectionist idea should be vigorously challenged by citizens in the court of public opinion and now, after Heller, in courts of law as well.” Among their recommendations for action is “occupying the common ground” with the majority of gun owners who are not Insurrectionists. In my mind, this solution is part of a broader need in the United States—for Americans to find the middle ground, and to isolate and marginalize those who preach hate, violence and intolerance.

U.S. Health Care Compares Badly to Others

In his address to Congress last week, President Obama decried the failures of the American health care system, and pointed out how poorly it fares in comparison to other wealthy countries. Millions of people in this country do not have health insurance and can’t afford necessary medical care. Tens of thousands die each year from lack of such access. We are “the only wealthy nation that allows such hardship for millions of its people,” observed the President.

The sorry and disgraceful state of the American system of health care is documented in The End of the American Century (pp. 48-53), and was also the subject of a post I made on this blog a year ago (US Ranks Low on Health Care). Since then, there is a mounting pile of evidence documenting how badly America fares in health care, on multiple dimensions. This is true both in terms of general overall statistics, like infant mortality, maternal mortality, and average lifespan (reported by organizations like the World Health Organization and the United Nations), but also in more specialized areas, like survival rates for disease, patient access to physicians, and public satisfaction with health care in different countries.

The highly regarded Commonwealth Fund, for example, conducts periodic studies of such issues, comparing the United States to other wealthy countries. One such study on patient access to primary-care physicians found that Americans wait longer to see their doctors than patients in Britain, Germany, Australia, or New Zealand, Holland or France—all countries with strong public-health systems. Almost a quarter of Americans reported waiting six days or more for an appointment, compared to just 14% in the UK and 18% in France, for example.

Another study on “preventable deaths” found the U.S. ranking dead last of the 19 countries in the study. These are deaths that could have been prevented with timely and effective health care--which of course is often unavailable to millions of American citizens. The U.S. ranking on this scale actually declined from 1997 to 2003, from 15th place to 19th place. Number one in the ranking? France.

Yet another study compared five-year survival rates for various diseases in the U.S. Canada, Australia, New Zealand, and England—all of whom spend far less on health care than the U.S. Of the five diseases, on only one of them (breast cancer) did the U.S. have the best five-year survival rates.

The veteran journalist T.R. Reid has just published a new book, The Healing of America, in which he compares health care systems around the world. In a summary of the book in Newsweek ("No Country for Sick Men"), Reid observes that in health care:

“The United States is the odd man out among the world’s advanced, free-market democracies. All the other industrialized democracies guarantee health care for everybody—young or old, sick or well, rich or poor, native or immigrant. The U.S.A., the world’s richest and most powerful nation, is the only advanced country that has never made a commitment to provide medical care to everyone who needs it.”

Consequently, according to Reid,

“about 22,000 of our fellow Americans die each year of treatable diseases because they lack insurance and can’t afford a doctor.”

Many Americans express concern about the “rationing” of health care in a government-supported system. But has Reid observes, the U.S. already rations health care. It is “rationing care by wealth.” While this may seem natural to Americans, he says, “to the rest of the developed world, it looks immoral.”

The immorality of this is particularly callous in its effects on children. A study from the National Center for Health Statistics reports that poor children are 3.6 times more likely to have poor health than children from affluent families. As I point out in my book, “The United States is the only developed country in the world where children suffer poor health and die simply because their parents are poor or unemployed.” (p. 52).

One also hears concern in the current debates about the potential costs of a system of universal health care—legitimate concerns in the face of unprecedented government deficits and debt. But the U.S. already has the most expensive health care system in the world, no matter how you measure it. As a share of GDP (2006), health care constituted over 15% in the U.S., compared to 11% in France, 10% in Canada and 8% in England—all of them with universal coverage for their citizens (OECD). On a per-capita basis, the U.S. also outspends every other country in the world, by a long shot.

Many Americans assume that the largely private medical care in the U.S. is more efficient, less bureaucratic and less costly than the government-run programs in other countries. In fact, administrative costs in the U.S. are higher in for-profit hospitals than in public ones, and overall administrative costs are higher in the U.S. than in countries with government-run programs. Compared to other countries, the U.S. also comes up high on administrative costs in health care. A 2003 study in the New England Journal of Medicine estimates that administrative costs absorbed 31 cents of every health care dollar in the U.S. compared to only 17 cents in Canada, which has a universal health insurance plan paid for by the government.

By all of these statistical measures, the U.S. health care system looks bad. But what it really comes down to is not statistical comparisons but fairness, compassion and justice. And the outcome of health care reform will depend as much on these American values more than anything else. President Obama himself recognized this in his address to Congress, where he appealed to the “large-heartedness” in the American character—“that concern and regard for the plight of others.”

“It, too, is part of the American character -- our ability to stand in other people's shoes; a recognition that we are all in this together, and when fortune turns against one of us, others are there to lend a helping hand; a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise.”

Much of the opposition to health care reform has come from people who are worried about how the changes will affect themselves and their families. Perhaps this self-interest is normal, and part of human nature. But our fate and health as a country is as much dependent on the health and safety of others as it is on our own. Re-establishing a sense of community and common purpose—and of the American tradition of large-heartedness—is an essential ingredient in the prescription for the ailing American health care system--and in restoring the United States as a great power.

Can We Cut Defense Spending to Pay for Health Care and Education?

I received the following email, from a retired medical school professor, raising the question of budget priorities, and whether we might be able to help pay for health care reform and/or education by reductions in the military budget. My response follows the letter:

Professor Mason:

I've been reading your book, "The End of the American Century," these past
several days and am finding it very readable and informative, albeit a bit
depressing. I'm a biomedical scientist by training and trade (and a fellow
academic and resident of Indianapolis; see below), and am much in need of an
uncomplicated, understandable discussion of economic principles. Your book
meets those criteria very well and I appreciate having it available.

Now to my question. Since retiring from the university, I've enjoyed engaging
in online "discussions" of issues political from time to time. Most
recently, during a discussion of how we might pay for health care reform, I
innocently -- and sincerely -- suggested that we might consider closing a
few of our military bases around the world. I've read Chalmers Johnson's
trilogy on the American empire and am quite sympathetic to the view that
we've way overspent on the military. In any case, my opponent dismissed my
suggestion as naïve and irrelevant by citing government figures
(http://www.truthandpolitics.org/military-relative-size.php)showing that military spending--as a percentage of GDP--is a mere 3.7% of GDP and has
actually declined in recent years. His point, of course, which was not
supported by any data, was that domestic social spending far outstrips
military spending. I find this notion preposterous but I'm puzzled by the
data he cited. Should I surmise that the percentage spent on, say,
education, is several times less than 3.7%? Or is this rendering of the data
simply misleading? Can you help me to sort this matter out?

Thanks. I'm sorry to trouble you with this question, but you DID manage to
get me to pick up and read your book...

Regards,

Lynn R. Willis

-----------------------------------
Dear Lynn,

Nice to "meet" you and thanks for reading my book, and for the compliment.

On the question of defense spending, it is true that it is a relatively small share of GDP. But in terms of spending priorities--the question you are addressing--I think the more appropriate comparison is defense spending as a proportion of the budget, not the GDP. In the TruthandPolitics page you mentioned, if you scroll down to Graph 2 (Defense Spending as a Percentage of Discretionary Spending), you will see that defense spending is about half of the entire "discretionary" budget of the U.S. government. So defense constitutes more than all other categories COMBINED, and is far more than that spent for education, welfare, etc. "Discretionary" spending refers to those categories that Congress has some authority over, as opposed to "Mandatory" programs (funds already committed) for Social Security, Medicare, Medicaid, Debt Interest, etc.


You can get a better sense of this if you look at a discretionary spending pie chart, or for a more authoritative and detailed source, look at the actual federal budget summary at:
http://www.whitehouse.gov/omb/assets/fy2010_new_era/Summary_Tables2.pdf

There, you will see (Table S-3) that for 2009, the Defense Department budget is $666 billion, and ALL other programs get only $613 billion. Education (Table S-7), gets a mere $41 billion.

Incidentally, US defense spending also makes up about half of all defense spending in the world, so the U.S. outspends virtually all other countries combined.

So I agree with your point that a small cut in the defense budget could make a huge difference in some of these other programs, including education and health care.

-----------

Other comments welcome!

Guns on Campus Would Add to the Mayhem

One of the themes of The End of the American Century is the exaggerated and destructive aspects of "American Exceptionalism"--the tendency for Americans to see themselves as exceptional, different and better than other peoples and countries. This takes extreme form in the combination of individualism and violence in this country, which is manifested in the peculiar (and exceptional!) obsession with individual gun ownership. The prevalence of firearms in the U.S.--almost as many as there are people--contributes to some 30,000 firearm deaths each year, and a homicide rate that is far higher than any other industrialized country.

For people in other countries, the levels of violence and the prevalence of guns in the U.S. invoke both amazement and horror. Global opinion surveys show that the two most common negative characterizations of Americans by foreigners are "greedy" and "violent." They contribute to the growing disillusionment with the U.S. (and with American citizens) in other countries, and to the view of the U.S. as being violent both in its foreign policy and inside its own borders.

In recent years, the National Rifle Association (NRA) has been pushing for the adoption of "conceal carry" laws in the states, and lately has been arguing for laws that would allow more guns on college campuses. They claim to see this as a way to avoid tragedies like those at Virginia Tech where a student killed 32 people in 2007. But few experts believe that arming students could prevent such a tragedy, and that it will simply lead to an increase in campus firearms injuries and deaths.

The NRA-sponsored bill in my state, Indiana, was introduced by a lifelong NRA member who wrote a letter to the Indianapolis Star arguing in support of the bill, Senate Bill 12. Below is my response to his letter, which appeared on the Star's website at the following link.

-----------------------
Nothing positive to gain from guns on college campuses

Posted: February 13, 2009

In his recent letter to the editor, state Sen. Johnny Nugent contends that "allowing guns will make our campuses safer." He is a sponsor of Senate Bill 12, which would "prohibit a state college or university from regulating in any manner the ownership, possession, carrying, or transportation of firearms or ammunition." Nugent believes that

"the only thing that can stop a bad guy with a gun is a good guy with a gun."

It would seem, though, that the best people to ask about security and safety on campus are the campus safety and police departments. Nugent would find that they overwhelmingly oppose this measure, as would almost all faculty and staff on campuses (as I am). Butler University Public Safety Director is Ben Hunter was formerly an officer with the Indianapolis Police Department. When I asked Hunter his views on this, he wrote "I am against the idea of carrying weapons on campus" and continued as follows:

"As a lifelong supporter of responsible gun ownership, I can attest that educational institutions and employers should be allowed to regulate their buildings and properties. Having students, faculty and staff possibly carrying guns on campus could result in accidental discharges, a false response to a threat and untrained persons that create an operational danger for (police). Proponents of such legislation will often talk about how well trained persons can assist with these threats; the only issue is that their training does not come close to what police officers are required to undertake."

College campuses are already much safer than the community in general, with far lower levels of both homicides and suicides. Surely, this is due, in part, to the prohibition of guns by most universities. Probably the biggest consequence of allowing guns on campus would be an increase in the incidence of suicide. Suicide is already the third leading cause of death for Hoosiers of college age, but suicides are much less common on college campuses than off. Since the most common means of death in suicides is a gun, increasing the number of guns on campus will only make suicides more likely.

Before pushing this law onto colleges and universities, our legislators should consult with those who are most familiar with the situation: the public safety departments, mental health professionals, and the deans of student life. I can't imagine that any of them would want to see more guns on campus.

The Measure of America

The Social Science Research Council and Columbia University Press have published a remarkable and eye-opening book, called The Measure of America: American Human Development Report 2008-2009, which could function as a companion and statistical supplement to The End of the American Century. In analyzing the domestic situation of the U.S., The Measure of America has many of the same themes, and similar (and supporting) evidence as my book. Like my book, it shows that on most measures of societal development, the U.S. has declined over recent decades, and lost ground compared to other countries.

The Measure of America is modeled on the annual Human Development Report published since 1990 by the United Nations Development Programme. That series attempted to get away from the raw economic indicator of Gross Domestic Product, and to determine the level of human development in each country. The “human development index” used by UNDP, an alternative to GDP, was “a composite index measuring average achievement in the three basic dimensions of human development—a long and healthy life, knowledge, and a decent standard of living.” (From the Human Development Report 2006).

The Nobel Prize winning economist Amartya Sen was instrumental in developing the Human Development Report, and wrote the Foreword to The Measure of America. There, he writes that

“we have to judge the success of a society, including its economy, not just in terms of national wealth or the ubiquitous GNP, but in terms of the freedoms and capabilities that people enjoy to live as they would value living” (p. xi).

Sen observes that this approach has been “remarkably neglected in the United States in particular” and notes in this country “a major discrepancy between opulence and achievement.” The U.S. may be on some measures the world’s wealthiest nation, but “its accomplishments in longevity, secure health, fine education and other such basic features of good living are considerably below those of many other—often much poorer—countries.” He also notes, as I do in my book, that the position of the U.S. relative to other countries has been “steadily falling” over the years (p. xii).

The book itself assembles data in clearly presented tables on the three main “building blocks” of the human development index: a long and healthy life; access to knowledge; and a decent standard of living. In all three areas, the U.S. fares poorly in comparison to other countries. Compared to other wealthy countries, for example, the U.S. ranks #24 in life expectancy; #18 in high school graduation rates; and #2 in poverty rates (you don’t want to rank high on that one!).

The data shows the downward trend for the U.S. over time in most of these measures as well. And for the overall index, the U.S. world rank dropped from #2 in 1980 (behind only Switzerland) to #12 in 2005. Countries ahead of us include much of western Europe, Canada, Australia and Japan.

(The American Human Development Project also maintains a useful website at this link.)

These are all trends and themes presented in The End of the American Century, where I also use authoritative data (including many of the same measures used in The Measure of America). They point out how far the U.S. has fallen, and how much work we have to do. The problems of the U.S., both economic and social, predate the disastrous Bush presidency, which simply exacerbated them all. It took more than eight years to dig us into this hole, and will take at least that long to recover. But we have to recognize these problems and understand them before we can begin to solve them.

The Measure of America: American Human Development Report, 2008-2009 (A Columbia / SSRC Book)

U.S. Ranks Low on Health Care

Chapter 3 of The End of the American Century, titled "Torn Social Fabric," focuses especially on the relatively poor levels of health care in the U.S., and how badly it fares in comparison to other wealthy countries. As I point out there, this is surprising in many ways "because the United States indeed does have available the best medical care in the world and spends more on health care than any other country." But "because there are so many poor people in the United States and so many people without access to health care, the average level of health and medical care in the United States is among the worst in the developed world" (bold added). In the late 1990s, the World Health Organization ranked the U.S. at 37th in the world in the overall performance of the health system. This was the lowest ranking of any country in the OECD.

New data reported in the New York Times confirms these disturbing trends. The United States now ranks 29th in the world on infant mortality rates which, as the Times points out, is "one of the most important indicators of the health of a nation and the quality of its medical system." The U.S. ranking has declined sharply since 1960, when its ranking was 12th in the world.

This international gap has widened even though the U.S. spends far more on health care than most other wealthy countries, on both a per capita basis and as a percentage of GDP. In 2006, according to the Times, "Americans spent $6714 per capita on health--more than twice the average of other industrialized countries."

Grace Marie Turner, president of the Galen Institute, a conservative research organization, told the Times "infant mortality and our comparison with the rest of the world continue to be an embarrassment to the United States."

The dismal state of health care in the U.S. reflects broader trends of social and economic decline in the U.S.--compared both to our own past and to other countries in the world. It is the major theme of The End of the American Century: that the U.S. has lost ground as other countries have gained; and that we can no longer claim special privilege as the richest, or the most successful, or the most powerful--on almost any dimension.

The poor state of health care, and education, and infrastructure in the U.S. result from inadequate attention and resources to these areas of our domestic health. They pose the second horn of the U.S. dilemma: our economy is collapsing at the very time when we most need resources to rebuild the country at home, and reestablish our reputation abroad.

(See also my 9/23/09 post "U.S. Health Care Compares Badly to Others")

U.S. Intelligence Predicts Reduced U.S. Dominance

A Washington Post article this week (9/10/08) reports on a forthcoming U.S. intelligence agencies report that “envisions a steady decline in U.S. dominance in the coming decades.” Thomas Finger, a top analyst for the U.S. intelligence community, delivered the preview in a speech in which he saw U.S. global leadership rapidly eroding in “political, economic and arguably, cultural arenas.” The one area of continued U.S. dominance—military power—was becoming increasingly irrelevant as an asset in global power and influence.

These are all themes of The End of the American Century, so should not be terribly surprising, except for the source—the U.S. government itself—and the sweep of the conclusions. It is not just U.S. diplomatic influence that is on the wane, but political, economic, cultural and military leadership as well. The multidimensional and interrelated aspects of U.S. decline are the central theme of my book, but it is startling to hear it expressed so bluntly from the top intelligence analysts of the federal government.

The intelligence report, however, misses a key element of the declining global influence of the U.S.: its domestic weakening. Fingar’s speech saw the decline in U.S. dominance coming from exclusively global trends: globalization, climate change, resource shortages. All of these are important, of course, but the root of America’s declining global influence is here at home. Just as at the global level, the domestic decay is multidimensional—it is political, social and (especially) economic; and affects education, health care, infrastructure, and competitiveness.

The United States has become the world’s largest debtor, and the governments of other countries are increasingly worried about the scope and scale of U.S. debt and fiscal weaknesses. Even the International Monetary Fund, normally concerned about debt and insolvency in Third World countries, has warned that the continuing large budget deficits of the U.S pose “a significant threat for the rest of the world.” Other countries are beginning to turn away from the United States, both for investments and for global economic leadership, and are increasingly abandoning the dollar as the favored international currency. This is one reason for the sharp and steady decline of the dollar compared to the euro and other international currencies.

In many other respects, as well, the United States is no longer seen as the standard for emulation by other countries. The U.S. has among the highest rates of both poverty and inequality in the developed world. This poverty and inequality contribute to highly uneven access to health care, so the U.S. ranks near the bottom of developed countries in most measures of health and medical care. Even our vaunted democracy, the “beacon on the hill” for centuries, is now so dominated by money and special interests that it is rarely cited by other countries as a model for political development. Global public opinion polls in the past showed foreign populations skeptical and wary of the U.S. government; increasingly now they reveal negativity toward the U.S. population, and even to U.S. ideals. All aspects of American “soft power” are withering away.

The Fingar report, like Fareed Zakaria’s new book The Post-American World, sees this global shift coming because of “the rise of the rest”—global powerhouses like China, India and Brazil that increasingly cut into the U.S. lead on the world stage. Zakaria asserts, indeed, that the shift is not about the decline of America, and writes about the many elements of this country’s continuing strength. Solidly within the U.S. establishment, both of these analyses ignore the sand shifting beneath their own feet. Only by confronting and addressing our own domestic weaknesses and problems can we begin to solve our international ones.