Our Generation’s Health Care Future
by John Corker | Wright State University
The 2012 presidential election is just over a year away, and our health care system sits at a crossroads. Nearly one out of every five dollars produced by the US economy is spent on health care, and over half of US bankruptcies are attributed to medical expenses. This proportion continues to rise. We spend more money per person on health care than any other nation in the world; yet we do not even crack the top 25 in most major measures of health outcomes.
In order to feasibly access comprehensive health care services in this country, most of us need health insurance. Unfortunately, 1 out of every 7 Americans does not have health insurance; most of whom indicate that they simply cannot afford it. This 1 in 7 does not feel that they can afford insurance, because it is very expensive. And insurance is very expensive, because health care products and services cost a lot. None of this is new. None of this is rocket science. Yet, the nation has been arguing about how to effectively address this growing issue since Joey McIntyre, Jordan Knight, Jonathan Knight, Donnie Wahlberg and Danny Wood really were the New Kids on the Block.
A little over eighteen months ago, President Obama pushed major legislation through Congress that promised to reform the way we pay for health care services in America. Since that time, however, it seems as though the law has created more questions and debate than answers and consensus. Most notably, the legal battle over the Patient Protection and Affordable Care Act’s lynchpin individual mandate has made its way all the way to the Supreme Court. No one really knows when the case will actually be heard, but that may not matter. The major provisions of the PPACA aren’t scheduled to take effect until 2014, and the law is not expected to survive the 2012 elections if a Republican candidate emerges victorious. In other words, to date, the law that was once billed as President Obama’s signature political victory has not gotten us any closer to a more accessible, affordable health care system.
Their are many very complicated factors that contribute to this dilemma, but its foundation – the ugly, horrible, eye-averting problem that is harped upon ad nauseum by the media but never truly addressed by anyone in charge – lies in the complex costs associated with providing health care services in the United States. The reason health insurance is so necessary is that the average American’s health care needs are largely unpredictable, while health care products and services are largely unaffordable out of pocket for the “poorest” 99% among us.
The average cost of a physician’s office visit is approximately $155. A month’s supply of Accutane – a common acne medication – can cost between $500-1,500, depending on the supplier. An MRI can cost between $400-3,500, depending on the area of the body being imaged (MRI machines cost over $1 million on average). And a one-night stay in the hospital costs an average of $5,000. For reference, the median American household’s yearly income was $49,445 in 2010.
To be clear, the approximate costs outlined above reflect average figures across the country. Of course, the insured health care consumer pays barely a fraction of these actual costs out of pocket, with their monthly premiums serving as a longitudinal investment in their care. But for that 1 in 7, these costs often put health care services out of reach.
From where do the high prices of these services originate? The answer has three parts. First, medical technology and pharmaceutical companies charge very high prices for their products, and these companies justify charging so much for new technologies and drugs by pointing to the many years and millions (sometimes billions) of dollars that they invest in the research and development of their products; many of which are never even brought to market. However, despite these companies’ significant R&D costs, their profit margins remain some of the largest among American industries. But their CEO’s argue that this kind of profit margin is not only fair, but truly capitalistic for such a high risk industry.
Second, American physicians demand very high salaries (the average American hospital, by the way, barely breaks even). The lowest-paying medical specialty pays an average of almost $150,000 per year. This is three times the median American household income. Physicians and their supporters argue that the high prices they charge for their services are justified by the many years and dollars that they invest in their sophisticated training. At minimum, prospective physicians must commit eleven years of their life to training (including their undergraduate, pre-medical work). And by the end of this training, the average first-year physician has incurred almost $180,000 in educational debt (with the debt of many financially independent students reaching $250,000 or more). Even with their higher salaries, it takes the average US physician at least 20 years to pay off their educational debt with interest.
Third, a large portion of our health care dollars are spent on end-of-life care, and our elderly population continues to grow. While the average life expectancy for a US citizen currently stands at 78 years, it is estimated that a full 12% of our health care expenditures go toward just the final year of that span. In fact, in 2008 alone, Medicare spent $55 billion on just the last two months of patients’ lives; more than the budgets that year for the Departments of Homeland Security and Education. And it has been estimated that 20-30% of these expenditures may have had no meaningful impact.
While their relative merits are neither my responsibility to judge nor relevant to this article, the foundation of America’s very expensive health care clearly lies in the high prices charged by medical supply companies and physicians for their products and services, respectively, as well as the grossly disproportionate amount of money being spent on end-of-life care. To make matters worse, these prices and expenditures have caused health care costs to rise at an average rate 2.4% higher than GDP since 1970, and now threaten to cripple our national economy.
Compounding matters, we have a physician shortage in this country that is projected to reach 63,000 by 2015, with this shortage most heavily represented in critical primary care specialties. In other words, access to health care in the United States is increasingly limited not only by the price of products and services, but also by a severe shortage of the professionals needed to safely provide them. But this is not a problem solved by simply training more doctors. This issue too finds its origin in cost. US medical schools cannot admit more students without more residency training slots created in US teaching hospitals. US teaching hospitals cannot add more residency training slots without more federal funding. Did I mention that medical residency training slots are funded through Medicare? Yep, they are funded by the same Medicare coffers that legislators are threatening to slash in order to help solve a budget crisis that has become so severe in large part due to astronomical health care spending.
Clearly there are complex, myriad issues that contribute to the difficult crossroad at which our health care system currently lies. For the past two decades, the major debate seems to have been whether it is more important to decrease the costs of health care or increase access to it. For all of the reasons mentioned above, I argue that it will be impossible to increase access unless we first decrease costs. So how do we decrease costs?
Well, it’s going to take a team effort led by whomever emerges victorious from the 2012 elections. And make no mistake about it, any serious attempt at decreasing health care costs for the long term is going to hurt. It will take shared sacrifice. People making lots of money will need to take pay cuts. Corporations (and their dividend-hungry share-holders) are going to have to settle for smaller profit margins. Our elderly and their physicians are going to have to be more discerning about which products and services are really necessary toward the end of life. And my “next” generation needs to begin exercising positive life-choices now that will significantly decrease the amount of health care products and services that we’ll need to utilize in the future. How do we tangibly put these ideas into policy? I don’t have those answers; at least not right now. But I’m not running for the presidency in 2012.
Over the next year, the presidential candidates will debate a variety of important areas that need improving, and they will make many promises. But the person that occupies the Oval Office in January 2013 will not be able to keep those promises unless he or she reduces (or, at the very least, controls) health care costs. Unless the insidious growth of these costs as a percentage of our GDP is curbed, there simply will not be enough resources available to put people to work, better educate our children, or enforce effective immigration and foreign policies. This is the impact that health care will have on the 2012 elections, and on the future of our generation.John Corker is the NextGen Journal Health Care Correspondent and a third-year student at the Wright State University Boonshoft School of Medicine. He is a 2007 graduate of the University of Notre Dame and a host of the 'Radio Rounds' medical talk show (www.radiorounds.org).