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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

High care costs hit home


Denny Murphy Clinic head provider Paddy Carlson checks the range of motion of Shawn Smith, of Spokane, following his series of back operations. 
 (Brian Plonka / The Spokesman-Review)
Carla K. Johnson Staff writer

Judging by what we spend our money on, Americans love taking prescription drugs, going to doctors and spending time in hospitals.

We now spend more than $1.7 trillion a year on health care. If you were to count that out one dollar at a time, it would take more than 45,000 years.

For the past half-century, U.S. health-care spending per capita rose an average of 4 percent to 5 percent a year, adjusted for inflation. No effort to control the growth in spending has had a long-lasting effect.

Spending on health care is growing faster than the rest of the economy. In 2000, health spending accounted for 13.2 percent of the gross domestic product. Government analysts think that will climb to 17 percent by 2010.

If spending in another sector of the economy were soaring like that, we’d throw confetti.

But health-care increases price more people out of the market. That means more people without health insurance – 45 million Americans at last count.

And that means more people who delay their care until they reach a crisis and end up in the emergency room. That means more hospitals burdened with charity cases.

In Spokane, that means hundreds of hospital workers laid off and a possible ripple effect through the rest of the region’s economy. An Institute of Medicine report estimates that 18,000 people die prematurely each year because they didn’t have health insurance.

People who study the system say it’s vital to get more people covered, whether through expansion of government programs, encouraging employers to do more or through incentives like tax credits to individuals. Ideas for controlling costs include buying prescription drugs from Canada and reforming the medical malpractice system.

The employer-based nature of America’s system makes us unique. While other developed nations make sure all citizens have health-care coverage, the United States leaves private employers responsible for providing health insurance to workers and their families.

Fewer employers are able to handle the cost. U.S. health insurance premiums went up 11.2 percent from 2003 to 2004. The prior year, they had gone up 13.2 percent.

This year, there were 5 million fewer U.S. jobs that provided health insurance than there were three years ago.

During the past 10 years in the Inland Northwest, the average monthly insurance premium for an employee increased from $75 to $300; the average family premium increased from $225 to $850; and the average annual deductible increased from $100 to $400.

More lack insurance

Is there any good news here?

Some point to this: While the number of Americans without insurance has risen, the percentage of uninsured Americans has remained stable at about 15 percent over the past decade.

“The crisis is not as bad as we’re sometimes led to believe,” said Devon Herrick, a senior fellow with the National Center for Policy Analysis, a conservative think tank in Dallas. “That doesn’t mean we shouldn’t look for solutions.”

Herrick wrote an essay on the NCPA Web site ( www.ncpa.org) titled “Is There a Crisis of the Uninsured?”

He writes that some of the uninsured, about 15 million Americans, live in households making more than $50,000 a year. They can afford insurance, but choose not to buy it, according to Herrick.

“Oftentimes, policy-makers and the news media assume that every rational person would want to have insurance,” Herrick said. “A lot of people who don’t have insurance wouldn’t necessarily agree with that.”

Herrick acknowledged hospitals can get stuck with the bill when people are uninsured. He favors President Bush’s proposed tax credit of $1,000 per individual and $3,000 per family to make it easier to buy private health coverage.

When one looks in Spokane’s back yard, the percentage of uninsured, not just the number, is rising, too. In 1993 in Washington state, 12.6 percent of residents were uninsured. By 2003, the uninsured were 15.5 percent of the Washington population. In 1993 in Idaho, 14.8 percent of residents were uninsured. In 2003, that percentage had risen to 18.6 percent.

“It’s a big mistake to quibble over whether this is a crisis,” said Stuart Schear, spokesman for the nonpartisan Robert Wood Johnson Foundation, in response to Herrick’s arguments. “Let’s just talk real life. Forty-five million people, most in working families, do not have health insurance. I don’t know how you diminish that as a problem facing our country. President Bush doesn’t, and neither does John Kerry.”

Preventing disease

What are the answers?

The amount of discussion devoted to opening the border to cheaper Canadian drugs or to controlling runaway malpractice insurance rates obscures the tiny impact either solution would have on the gargantuan problem.

Opening cross-border trade eventually would increase drug prices in Canada, analysts say. Malpractice reform would lower health-care costs only 0.5 percent, according to the Congressional Budget Office.

But strategies most candidates aren’t discussing can be found in a recently published research paper. Kenneth Thorpe of Emory University in Atlanta found that heart disease and a small number of other health conditions account for most of the growth in health-care spending.

The top five conditions – heart disease, lung conditions like asthma, mental disorders, cancer and hypertension – accounted for 31 percent of the rise in health-care spending, according to the study published in the August issue in Health Affairs.

More specifically, the drivers of increased spending include new prescription drugs for high blood pressure and depression, the unexplained rise in asthma rates and the problem of obesity.

“We need to develop interventions to reduce the number of people getting these chronic illnesses,” said Thorpe, chair of the Rollins School of Public Health at Emory University in Atlanta and a former Clinton administration health official. “We need to find ways to get the growth in obesity down. We need to do a better job of finding out why there’s been an explosion in asthma and other pulmonary problems.”

The Institute of Medicine committee studying the uninsured found that the problem costs the United States between $65 billion and $130 billion a year in lost productivity and other costs. Covering the uninsured would cost between $34 billion and $69 billion annually, the IOM committee said.

The committee acknowledged that a single-payer system, in which the government pays everyone’s medical bills, is politically unpopular. A piecemeal approach that offered tax credits to moderate-income people and expanded current programs, such as lowering the Medicare age to 55, would be more politically palatable. Requiring people to have health insurance and subsidizing the insurance with tax credits might also work, but also would have an uphill battle politically.

“All of us are involved in driving health costs up, including patients who want treatments that aren’t best for them and are expensive, physicians, hospitals and insurers,” said Schear of the Robert Wood Johnson Foundation. “We need to figure out what to do together to get this under control.”