Is it too dramatic to suggest that U.S.
health care is collapsing? That crisis is
around the corner? We read (and know firsthand) that costs are soaring,
that uninsurance and underinsurance
are rising. But a collapse?
For answers, Smart Business asked
Brian Klepper, president of the Center
for Practical Health Reform. He spear-heads a national health care reform
effort that has attracted the participation of business and health care leaders.
What is the state of U.S. health care?
To really understand it, a few facts are
key. First, health care costs are exploding. Between 1999 and 2004, health care
premium rose 5.5 times general inflation, 4.0 times workers earnings and 2.3
times the growth of business income.
Next, those cost increases are pricing
purchasers — individuals, corporations
and government — out of the coverage
market and eroding health plan enrollment. Last year, the Kaiser Family
Foundation reported that, over the previous five years the percentage of
employers offering coverage plummeted
by 2.6 percent per year. Employees who
still have coverage have narrower benefits and higher out-of-pocket costs.
Florida, where I live, has a large percentage of small businesses. So it’s a
good barometer of rising care costs that
affect employers everywhere. Between
1996 and 2004, while the state grew by 3
million people, 130,000 small Florida
businesses dropped coverage, a 53 percent drop, eliminating coverage for
760,000 enrollees, a 42 percent drop.
These are huge numbers.
Third, falling enrollment translates to fewer
health care dollars. As
purchasers stop buying, the money available to buy health care
products and services shrinks. The financing squeeze could destabilize the health care
marketplace if funding slows to a tipping point.
Finally, health care is the nation’s largest economic sector. At $2.2 trillion in 2006, America’s health care industry — the suppliers, care delivery system and insurers — is one-seventh of its economy and one-eleventh of its job market. Disruptions in the health care marketplace would likely cascade to all other
business sectors, threatening the
national economic security.
What can be done?
Despite a lot of ominous handwriting
on the wall, I’ve reluctantly concluded
that the health care industry is still too
profitable and conflicted to collaborate
on the changes essential to re-establish
market stability and sustainability. Only
the non-health-care business community
is strong enough to initiate meaningful
reforms. By coming together, they could
put pressure on the health care industry
and Congress to create more transparency and take other actions that are
required to effect real reforms.
I’ve been holding meetings with non-health-care business leaders around the
country, talking about the things they
can do in their communities and as part of a larger national effort. Employers are
upset over this issue, and so they’ve
been very responsive. I’m frankly more
optimistic than ever that business’s leadership is the best shot we have.
And I wouldn’t be surprised if actions
on health care clarify how business can
mobilize to help America grapple more
effectively with many other difficult
problems.
BRIAN KLEPPER is a national speaker and writer and is president of the Center for Practical Health Reform. Reach him at (904)
246-9643 or [email protected].