Matters Column

The picture of the United States health care crisis

March 17, 2017
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Human resource professionals are expected to deal with all health care matters from a variety perspectives. The general expectation is to make a silk purse out of a sow’s ear. However, in order to do that, they have to have a good understanding of objectives and available resources. They also have to have a good understanding of the elements that impact the situation, both currently and down the road.

A little history

It is interesting to reflect a little on the issue of providing health care for patients and paying for it. As we all know, it started as a direct relationship between patient and provider. Costs were lower and treatments simpler. People with means could get better treatments — no surprise there. Then companies started to pay for it when they couldn’t give pay increases. From that gentle intrusion of third party involvement, things changed on a fairly regular basis, with certain patterns developing that seemed to require regulations to minimize unseemly practices and various provisions to include or eliminate coverages with cost and special interests frequently in the picture.

A big step toward addressing the coverage issue was in 1965, when Medicare and Medicaid were signed into law. The intent was to get coverage for large segments of the population without coverage. Unfortunately, the financing mechanism and the related controls seem to open the door for future issues right from the beginning. A review of the two programs shows in the past 40-plus years, there was some adjustment nearly every year. 

Health care issues were such a mess, both public and private, the Clinton administration used it as a prime 1992 election campaign point. Consequently, it became Hillary Clinton’s roll to get a new system in place within 100 days. Due to the complexity, multiple special interests and associated advertising efforts, the goal was never reached.  But, that didn’t stop the tinkering and the intrusion of special interests or insurance companies. Yet, with all this involvement, we still failed to get people covered for care at reasonable costs.

Health care today

Now, along comes the Affordable Care Act, which does seem to get more people covered. Is it complex? Yes! No surprise when you consider the operating environment. Perhaps, there needed to be a 50-page executive summary so the staffs of our elected officials could get some kind of an understanding of it and know what they were voting for or against, instead of just partisan politics with limited specific discourse of the good and bad. That rhetoric still is flowing, yet we now have millions more people covered. It is also interesting people are blaming Obamacare for the skyrocketing costs of health care, yet the 11.3 million people who signed up under the provisions account for only 3.4 percent of the United States population. Is it realistic to say this program is responsible for driving up health care costs?

It seems the more you know, the more difficult it is to find your way to a solution.

Multiple people are trying to get their fingers on the pie. Of significant concern is the role of the insurance companies and the pharmaceutical companies. To me, this is working backward. The laws and the plans should be made first and then ask the insurance and pharmaceutical companies how they will operate within the new structure. They will figure out how to make money, or some new groups will emerge to do the job. Or maybe, it will be the role of the government to facilitate good health care services, as it is in many countries where health care costs less and outcomes are frequently better. The assessments show us as No. 11 in effectiveness.

A means to improve our situation

Instead of just being another critic in the crowd, I’d like to offer a strategy and a suggestion or two for dealing with our health care crisis. Perhaps, a starting place is to establish a philosophical framework to establish health care expectations for the people. If there is some foundation in the constitution, all the better. However, for this discussion, perhaps an example can serve as a starting point: The people of the United States, as a corollary to Life, Liberty and pursuit of Happiness, also should be provided a safe and healthy environment on a pre-established balance to the degree that our resources will allow.  This should set the stage of how much money we will spend for both military and health. The next phase of the process is to determine how much will we spend for care and how much for administration. Once the targets are set, then the work begins.

After setting the philosophical and budget framework for health care, it is necessary to determine what will be covered by public monies. This should be type of or amount of care, not who the care is for. Young, old, veteran, dependent, disabled and religious beliefs should not be the consideration. It is what we want to achieve as a society based on our resource priorities. Just like we want the best missile system to get the job done, health care should be about results. That means aligning programs with desired outcomes. This is a more complicated discussion, but each decision should be a practical application within the philosophical framework and consistent over time — not something Congress tampers with each year. The priority should be about spending our money on care, not administration.

The opportunity

We currently spend about 25 percent of health care expense on administration — 30 percent more than most developed nations. Nearly 25 percent of health care staff is involved in administration. No one seems to have a vested interested in controlling these costs, as they are just a pay through to the payers. This amounts to $200 billion per year. When we find instances where we can in fact cut out billions to get our costs in line, especially administrative costs, we should do it.  A perfect opportunity is to integrate Medicare and Medicaid into one program.  This separation has no value from a health care perspective, it is only about costs and who gets to make the decisions to not provide care. Let the states decide about extra care, if any, above the basic federal plans — just like people on Medicare who add an extra policy if Medicare isn’t good enough. If we got rid of most of the administrative costs and spent the money on care, extra policies or state plans might not be necessary.

After we set the plan and type of care we agree to fund, we should go after who can produce the best results for what we determine we will pay and don’t have provisions that say the government can’t negotiate, like we did with Medicare Part D. That was a legitimately bad deal for the American people, and the administration should revoke it.

Ardon Schambers is principal at P3HR Consulting & Services.

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