I've been involved in the evolution & debate over health policy and payment thereof for over 30 years, and fourteen countries, mostly with universal coverage, have sent official delegations to talk with me about how they can adopt some of our practices to save their systems. My views are non-partisan and non-political...just practical. Statistics are notoriously mangled relating to health care and dollars, so I use them as guidance, not gospel.
(1). The biggest challenge to cost & quality of healthcare is what I call "we the people". About 50% of total health costs are attributable to lifestyle choices, and so we could cut health costs 50% if we took care of ourselves. We won't. Obesity and expensive related problems are reportedly approaching 50% of the population. Smoking & unsafe sex are rising. "We the people" want to live our lifestyles and risk our health....and then cry that someone should pay the cost. So, unless government imposes some lifestyle police or tough-love penalties for people whose actions waste the country's money & health services, any proposal is simply rearranging deck chairs on the sinking Titanic.
(2). We the people will also not stand for any kind of rationing (which is the mainstay of all other governments' universal care systems). We expect all the care WE think we want, right away, from OUR choice of provider; period. We would have revolution, and the media would have a field day playing up sad stories of any restriction or delay (which are considered normal in the countries whose health plans we claim we want to mimic). Americans do not want ANYONE controlling or perceived to be limiting their health care & payment. For example HMOs & Managed Care, which were designed to bring some management and coordination to health care, and were the darlings of government & policy works, ended up being demonized in the media and in Congress for "withholding" care.
(3). HHS Secretary-designate Daschle suggests a Federal Health Board to define evidence-based health treatments and lower costs by deciding what is "most effective" and what "do not justify their high price tags". It sounds logical in theory, but re-read the previous paragraph to see why Americans refuse to be told or limited. Meanwhile, medicine is discovering that approaching treatment customized individual by individual is more effective than one-size-fits-all...but the Federal Health Board will become the defacto dictator of one-size-fits-all. It will be nearly impossible for the Federal Health Board to not become the health rationing dictate...or conversely, to waffle & whimp-out and become another useless bureaucracy. For example, read the next paragraph.
(4). As needs increase (such as the expected explosion of diabetes cases) and the population ages, health care dollars will be stretched to the limit (or taxes go sky high), we will need to gulp and consider some life and death questions. Many of the rationing techniques of other countries directly or indirectly acknowledge that, just as an old car reaches a stage where is not worth undergoing expensive repairs, the government applies the same logic to expenditures it will make on a person getting older (age 74 is reportedly the secret cut-off in one major country). In the US, the statistic is often given that, on average, we spend as much in the last six months of life (often hooked up to tubes or as a vegetable or in great pain) as we spent on health care for the entire rest of our lives. Would the Federal Health Board say that is wise, or even a compassionate use of assets? Is that an expensive way to play God? As health care assets and medical personnel become more stretched, should the nation be using its dollars providing ding a lifetime of healthcare for a child...or paying for 6 months of non-quality of life for a dying person? This sounds revolutionary and harsh.....but true health reform can not shy away from tough factors. Will a Federal Health Board ,with political roots, have the guts needed?
I can hear both sides screaming, but these kinds of societal issues which are so expensive to our healthcare system need to be faced in context. For example, a woman has "choice" about her body to have an abortion for any reason to terminate an entity in her womb. However, that same woman (or man) does not have that same "choice" to terminate her/his own life when she feels it is prudent. I think this hypocrisy is because we are squeamish about our mortality. Again, human psychology is the most powerful factor in health policy & customs.
(5). It is almost universally realized among health policy thinkers and political leaders in this field that at much as 20% of health costs (and many deaths and health problems) could be eliminated if maximum use was made of accessible digital medical records and other technology were maximized. It is a "no duh" as a safety & cost factor. However, the majority of public opinion seems to be against it. "We the people" assume that it is a tool for "them" (?) to spy on our medical condition. Of course, the same suspicious American then uses his highly-centralized credit cared and ATM card, but heck, my whole point is that common sense does not apply to medical care & payment.
(6). Health coverage is a big-talk, but low-budget priority for a huge number of Americans. Many Americans don't want or bother to get even free or heavily-subsidized health coverage. For example, reportedly 2/3 of poor children for which the government SCHIP program offers health coverage have not been enrolled, despite extensive advertising and recruitment. Many adults also don't procure or even accept employer-subsidized health coverage. Why? Going to the thousands of free clinics and hospital emergency rooms (for uncompensated care) is free and easy. Why bother with insurance & paperwork?!?
Americans also have a uniquely-goofy perception about buying health coverage. They want the absolute cheapest policy...but then they want the most expensive range of services. It would be like a person going to a car dealer. He buys the cheapest clunker on the lot, and then screams when he is not delivered a luxury car with all the options. It's crazy, but that's the unrealistic logic people use when getting health coverage.
(7). A bad thing about traditional health coverage of any kind has been that it has made us all dummies about the true cost of healthcare. I confess. I had a hip replacement in 2007. I have preached about this problem for decades, but I have no idea what the operation cost. I'm told that it was probably about $40,000, but I just paid some fairly small bills. So, as soon as people get health coverage, we think medical services are cheap.
(8). The price of medical services has become a cancer of the system. If gas stations charged each customer wildly different prices, and acknowledged that some buyers' price were subsidizing other customers, Congress and the public would be in an uproar. However, that is precisely the situation in medical pricing. Sadly, the poorest and uninsured are charged the highest cost. The original villain is Uncle Sam. Medicare has a below-cost reimbursement rate, and that rate seems to be a budgetary football with across-the-board cuts occasionally proposed by Congress as a budget-balancing pawn. Medicare, and other programs in which government can set what they will pay, means that hospitals, doctors and other medical providers have to "make-up" (a.k.a. "cost shift") those lost profits by charging other patients more. I could write a long book on all the other pricing & discount manipulations that have been tried, but, in brief, the medical community has become very adept at finding ways to increase their income, and attempts by the private sector to achieve realistic payment levels via discounts or other arrangements give glimmers of hope, but then fade. So, medical pricing is a scandal. If it is not fixed, then the goal of "expanding access" is simply expanding the cost under the broken pricing system.
(9). Reformers have focused on "access to health coverage" and "cost". However, the big & scary crisis on the horizon is that the number of doctors (and some hospitals) that will accept patients in the government-discounted health plans is shrinking, and is forecast by some to shrink as much as 50% about the time the Baby Boom really gets into Medicare. This is not a new trend of government price-controlled patients having a hard time finding doctors who will see them. It is just accelerating. It looks like the Congressional reformers are going to come up with something like the Massachusetts plan. However, that state has seen an increase in health coverage....but also an increase in problems finding healthcare providers who will accept the low-paying coverage the patients have. That is not progress.
(10). The thought process of most governmental reforms is that one-size-fits-all is the solution. That is financially inefficient and impersonal. More than ever, we all need to get the most bang-for-the-buck from our health coverage dollars. One of the great achievements of the employee benefits system, is that it has encouraged customized health plans per-employer. Those created under the ERISA law have been especially good in this regard. What is covered can be custom-designed for the unique needs of that company or union's workers. One-size-fits-all and the ever-growing list of politically-popular mandated benefits decrease or kill the personalized approach and thus less bang-for-the-buck for patients. That hurts people, not employers.
So...in summary, the big-picture situation is:
(A). "We the people" are like spoiled children who want to have damaging lifestyle habits, and yet receive instant money-is-no-object medical care whenever and for whatever we want...and we definitely will not accept anyone telling us "no" for anything.
(B). "We the people" do not want any efficiencies, ranging from accessible digital medical records to end-of-life options because "we" don't want government or anyone else "in our business".
(C). "We the people" don't know or value the cost of health care or insurance. Why bother? So, many Americans are uninsured or don't accept free or subsidized health coverage because it is too much "hassle".
(D). Medical pricing, abuse, & waste is America's most expensive scandal, but government payers such as Medicare, SCHIP, etc. + medical providers such as doctors & hospitals + patients would all need to take responsibility and make some expensive changes. Talk will be cheap, but true action is doubtful.
(E). Having health "coverage" is not the same as having health "care". We are on the verge of a major shortage of doctors and other providers, and especially those willing to accept patients with low-payment government plans. This problem will be exacerbated as Medicare balloons with Baby Boomers and other government programs such as SHIP and reforms being discussed expand.
(F). The goal of all health care coverage should be the most bang-for-the-buck via customization of plans, such as employee benefit plans have achieved. However, most health reformers aim for one-size-fits-all and mandated solutions.
Is there any bright news? Yes, in two areas.
(I). Since the illogic and ignorance of "we the people" is the source of many of the problems, the rise of Consumer-Directed Health Plans (CDHP) brings people into the process and lets them exercise their shopping skills. Worries were expressed at the start about how responsible people would be, but the news from the real-world is that CDHP participants are now constructively involved and that eases many of the "we the people" problems.
(II). In the past, reformers had the simplistic view that if everyone had health coverage, then everything was solved. More of the clear-thinkers are now beginning to comprehend the tangled web of issues & factors described above. The old solution of universal "coverage" would simply be a set-up for bitter disappointment as total health costs would increase and/or the supply of medical providers accepting low-reimbursement (government-related plans) patients would shrink. Just as the medical community is realizing that they need to focus on "whole patient" cures, a growing number of health reformers are recognizing that we need "whole system" reforms that recognize idiosyncrasies of "we the people", and reforms that do not throw out the good things (like the success of the employee benefit system & CDHP) in over-zeal of reform.