Anyone who wants to understand the American health care system should study Daniel Lee’s excellent piece in the 7/27/08 Indianapolis Star (“Hospitals see growth as healthy”). All the problems of health care delivery and financing are laid bare by the words of the executives of the major hospital systems and the private insurance industry.

Pay careful attention to the article on page 14 (“Wishard says early action aids patients, bottom line”). The irony is striking.   On the one hand, the large “not-for-profits” build ever more lavish facilities in order to deliver the most expensive, high-tech, cost-ineffective inpatient care. On the other, the region’s major public hospital system adopts a strategy to deliver cost-effective, preventive, community-based outpatient care. Reams of health services research over many years have shown no evidence that the privately insured population has better outcomes.  

The reasons for these different strategies can be explained by the old adage, “ Follow the Money”. Everyone acknowledges that the Indianapolis suburbs have the best insured population.  While private insurance covers a population of upper-middle class working families with good jobs and benefits which can afford large premium outlays and substantial out-of-pocket expenses, it pays only marginally better than Medicare (indeed,  it follows Medicare reimbursement in lock-step fashion). As Matthew Gutwein, CEO of Health and Hospitals Corp. points out, the inner city population is more dependent on tax-funded public programs.

Kudos to those who spoke most candidly in the articles, two of whom are strong advocates of major structural health care reform: St. Francis President Robert Brody and Mr. Gutwein. Also speaking candidly, but I suspect with a good deal less anxiety is Dr. David Lee of Anthem Blue Cross and Blue Shield, subsidiary of the country’s largest shareholder owned insurance company, WellPoint, whose profits exceeded $3 billion in 2007. He laments the increased costs generated by increased competition. Of course, your costs are his profits, the tsunami of profit which washes over his industry. These profits are the result  of government health policies which pay for the poor, disabled and elderly patients, while allowing the monopolistic, poorly regulated insurance industry to take 25% of the premium dollar for paper-shuffling, cherry-picking and denying the claims of the healthiest segment of society.
The obvious solution to this dilemma is to expand the Medicare program to include all citizens( the “single payer” option). The expansion can be funded with a payroll tax, income tax, and appropriately calculated affordable premiums for all in a risk pool of 300 million. These taxes and premiums would replace all current private premiums ( those of both employer and employee) and most out-of-pocket costs. Employment-based insurance, experience rating, selective risk pools, and financial gamesmanship of all kinds would be eliminated. $350 billion in administrative cost would disappear as would the private insurers themselves, another obsolete industry like buggy whips and typewriters, which no longer adds value to our national economic well-being. Do not confuse such a program with  “socialized medicine”. It is no more socialistic or threatening to our free markets or your welfare  than your local fire or police department.

One last thought, another truth teller in the article is Mr. Tooley who said in the final paragraph, “It seems like a tremendous waste to me.“ He got that right.

Christopher Stack, M.D., member, Physicians for a National Health Program
4131 N. Meridian St.
Indianapolis, IN 46208
317-283-1895
8/01/08

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