May 05

The Health Care Crisis: The Government’s Waterloo

Many organizations, including many governmental bodies, have an Achilles tendon, a looming Waterloo which will eventually bring them to their knees as sure as Summer follows Spring. This potential disaster for many governments, businesses and individuals is the health care crisis that has been growing exponentially for the past several years. While some efforts to contain cost have been attempted, HMO’s being the most obvious, the consensus seems to be that all of the attempts to rein in or even stabilize the increase in health care costs have failed. What are the signs of failure?


HMO’s and Health Care Insurance companies are going out of business or producing a lot of red ink.
Organizations are increasingly just walking away from their health care commitments opting for a cash stipend given to employees to help pay for any coverage they can find. (These stipends are either set at the amount equal to the employers share in the past year or tied to a cost of living increase, either one of which will be far less than the annual increase in health insurance premiums.)
Group and individual health insurance rates are going up each year at 2, 3 or even 4 times the rate of inflation.
Over 50% of all personal bankruptcies last year were caused, in large measure, by expenses related to health.
Cost saving measures such as shortened hospital stays are often having negative outcomes when patients experience complications after being released from the hospital. The additional costs often are 5 or 10 times the cost of what was saved by early release.
The percentage of our GNP and the percentage of after tax profits that must be allocated to health costs are increasing at consistently alarming rates with absolutely no relief in sight.
The congress is gridlocked on many issues, including health care, and can not even pass a Patients Bill of Rights.

To say that our nation has collectively failed to address this health care crisis would be gigantic understatement, and there is enough blame for everyone.

Individuals – We are less healthy as a population than we were 20 years ago because we exercise less, eat more (mostly unhealthy food), take too many prescription drugs and rely on a health care system to fix us when we become ill instead of trying to avoid illness.

Doctors – While many doctors are adopting more preventative approaches, including the use of alternative or complimentary health care approaches, there are still far too many doctors stuck in the past. Too many prescription drugs and surgeries are used when less invasive, less expensive and more effective treatments are possible. (Is it lack of knowledge, stubbornness, or threat of lost income that motivates them or rather doesn’t motivate them to change?)

Hospitals – Some hospitals are making a lot of money, maybe too much given the sizable reserves being accumulated, while others are having a difficult time making ends meet. The fascination with new technology and cost cutting may be side stepping the issue of quality care. Nurses are overworked and the number of medical errors is increasing at alarming rates. Perhaps there is still much to be learned about providing quality care with due consideration to both short and long term cost implications.

Employers – The fascination employers now have with the immediate bottomline seems to be driving some of the very shortsighted decisions they are making. Does cutting off health care coverage and shifting costs to employees create a dedicated, creative workforce with a high level of morale? Probably not. Since employee satisfaction, customer satisfaction and profitability are so closely connected could employers be cutting their own throats by treating their employees so poorly? Why are some companies able to avoid these problems by following guidelines for quality established by the Baldrige Quality Award? Why are some organizations able to adopt wellness programs that reduce their health care costs by as much as 30%? Why aren’t all employers jumping on this quality and wellness bandwagon? Could it be poor leadership?

Unions – Many unions have been pushing for safer and healthier workplaces for years with some great success. However, many unions have concentrated on getting employers and governments to do more while not taking a very hands-on approach to encouraging more employee ownership and responsibility for this problem. Will the unions jump in to establish insurance plans when the employers walk away from them? Maybe some will but most likely will not. Unions could have done more to push for the adoption of healthier lifestyles by their members.

Governments – Governments at all levels have failed as legislators, as well as employers, to take the lead in addressing this growing health care crisis. At the federal and state level pressure by special interest groups, (drug companies, doctors, dairy industry, meat industry, soft drink companies, etc.) have had a negative influence on everything from the food pyramid to school lunch programs and labeling requirements. Instead of helping people to become healthier governments seem to be moving in the opposite direction and are inclined to use their expert PR advisors to put the necessary spin on any issue to make it look like they are doing everything they possibly can to promote good health. An apathetic public and an inept media are the strongest allies that politicians and bureaucrats have in this health care war.

If nothing extraordinary is done to address this problem it is likely that some or all of the following scenarios or actions will occur.

1. The number of uninsured people will increase leaving adults, children, the elderly (everyone but the well to do) vulnerable, because they will not be able to get the treatments they need. This will place a tremendous burden on the health care system, which will be forced to deal with them when their conditions become serious and life threatening. This will become an even greater burden as baby boomers age and place extraordinary demands on the health care system.

2. As people begin to realize the connection between certain foods or certain drugs and their deteriorating health the number of law suits against fast food companies and drug companies will increase. Governments may even join forces in class action suits, as they did against the tobacco industry, hoping for massive settlements to defray some of the health care costs they and their constituents are being forced to absorb.

3. Many businesses will become less competitive due to either excessive health care costs and/or a demoralized workforce, which has been abandoned and left to fend for themselves in the quest to find health care coverage. This will put the U.S. at a distinct disadvantage to those countries that have some form of universal health care (which is most industrialized countries).

4. The general health of the population will continue to deteriorate which in turn will require people to spend a higher percentage of their income on health care. This will reduce the overall quality of their lives.

5. With less money to spend on other consumable items there is a serious likelihood that the economy will slip into a recession. The U.S. could suffer a serious set back in their economic growth as other countries like China or the countries of the European Union overtake the weakened U.S. economy.

These scenarios may seem far-fetched now but the country is already facing a crisis in keeping Medicare and Social Security viable. All of the theories for saving these two important safety nets are predicated on surpluses created by a booming economy for the next 20 years. What if the economy is not booming? What if it is actually in just a mild recession? It will not take very much extra cost in our health care system to tip the economic scales in the wrong direction.

There are at least two possibilities for avoiding this very negative future; one is very costly while the other is much more difficult to do but far less costly.

Universal Health Care – The costly proposal involves the adoption of a universal health care system similar to the ones, which exist in Canada and most Western European Countries. The political will to create such a system may not exist now, but after a few more years of failing piecemeal reforms, including HMO’s, it will be much easier to sell this solution. As more business opt out of providing health care and more people are uninsured or paying excessive premiums watch how quickly our politicians will jump on the universal care bandwagon. Consider the irony in the adoption of this approach.

1. The big insurance and drug companies which lobbied against Universal Health Care, with certain politicians, will probably be forced to make huge financial concessions in order to participate in a Universal Health Care system.

2. Doctors and other medical types who fought Universal Care will also likely be required to make serious financial concessions.

3. Employers who opted out of health care plans for their employees will probably be required to sign up and even pay higher rates if their employee’s health is not very good.

4. If people are still unhealthy and little is done to switch to a prevention based health care system then this will be a very expensive proposition. The percentage of the GNP going to health care will still be too large and other programs may need to be cut back such as military spending or Social Security benefits.

Wellness Health Care – The other approach would require quick, decisive and collective action by everyone involved in the health care industry. That is precisely why it will be so difficult to achieve. The forces of greed, both financial and political, are very strong. Look how hard it is to get campaign finance reform. It will be just as difficult to get the following types of reforms to make the Wellness Health Care approach a reality.

1. All medical schools should be required to change their curriculums to teach more about nutrition and alternative medicine. Models are available at Arizona University and Bastyr University.

2. All existing Doctors should be required to take a refresher course covering nutrition and alternative medicine.

3. All HMO’s should be required to adopt the strategies being used by HMO’s, such as Blue Cross and Blue Shield of California and Kaiser. These HMO’s support alternative medicine and preventative practices such as paying for vitamins for all insured persons.

4. All schools should be required to adopt the nutrition and school lunch programs outlined by the Physicians Committee for Responsible Medicine or Dr. Antonia Demas. These programs called Rite Bite and Food is Elementary have been adopted by several schools with outstanding results.

5. All employers should be required to have health care coverage for all of their employees as well as a wellness plan. The Wellness Councils of America and The Association for Workplace Health Promotion have developed outstanding programs for organizations of all sizes. Employees save up to $6.00 for every dollar they spend on wellness and some have managed to cut their health care costs by as much as 30%.

6. All health care plans should be required to be experiential based plans in order to reward those organizations that do an outstanding job of helping their employees to become healthy.

7. Foods should be taxed on the basis of how healthy they are. Several proposals have already been developed which would tax foods high in fat or sugar content. The money raised could be used to help provide prevention services and health care services for small employers or those people who may requires special care of some kind.

8. Truth in advertising legislation should be passed to ensure no food or drug company presents any product without a full disclosure of all possible negative reaction or consequences. (i.e. Food with a high fat content must warn about problems such as heart disease, cancer or arthritis. Food with high sugar content must warn about the potential for diabetes.)

9. Alternative treatments such as herbal remedies or vitamin therapy should be tried before more invasive treatments such as prescription drugs or surgery. This must become part of the Patients Bill of Rights that should be adopted as soon as possible.

10. All Doctors should be paid for keeping people healthy. The entire payment system now encourages very perverse behaviors and should be replaced with a system that rewards prevention.

Every one of these reforms is totally feasible and could be adopted with outstanding results. All that is required is some leadership and a desire by all concerned to do what is right for our Country and the people in it. Putting self interest aside will not be easy but is not only the right thing to do it may be the only way to avoid the health and financial crisis that is coming at us like a giant meteorite. Look up for a minute, look for it, it’s there.