The Quandary of Health Care Reform

Posted by Gregory Hill 
on Mar 18, 2011
 
 There is no question that the health care reform package passed last year is both complicated and controversial.  Nevertheless, Kansas is working diligently to develop programs to meet the 2014 deadline.

Matt All, General Counsel for Blue Cross and Blue Shield of Kansas, spoke to the Topeka Rotary Club and helped explain both the requirements of the law along with what he expects to happen once the act is fully implemented. 

 

 “I call this a health care quandary.  What we are seeing in Japan right now is a crisis,” said All.  “This is a big problem, but it is not a crisis.  The word quandary connotes a puzzlement of how to get out of a problem.  It’s more of a puzzling problem than our political dialogue would suggest.  There are no simple answers to the core problems with health care.”

All defined these core issue as the rise in health care costs at an unsustainable rate year after year, which has created the most important domestic issue of our time.  

“The costs of health care are rising faster than the costs of other things in our economy and it is consuming more and more of our economy,” All said.  “We spend twice as much on health care as any other country in the world and our health outcomes aren’t any better.”

As a budget item for both businesses and families, All said that the rising costs of health care are crowding out other goods and services they might otherwise consume with those dollars.  He said that families were not taking home any more money in 2008 than they were taking home in 2000, which is unusual in modern American history.   

“For each employer it also cost twenty-five percent more to hire a person in 2008 than it did in 2000 as well,” All said.  “That difference went to health care.  This is crowding out other things like research and development for businesses.”

According to the Kaiser Family Foundation, the costs of health insurance premiums more than doubled from 1999 to 2009, both to the costs to employers and to the employees contribution.  In 1960, the United States spent 5.2 percent of its economy on health care and in 2009 it spent 17.6 percent.

“The bottom fifty-percent of health care consumers spend only 3.1% of our national health care expenditure.  The top one-percent of health care consumers spend one-fifth of our national health care expenditure,” said All.  “This is a heavily concentrated expenditure on very expensive types of healthcare.”

All said the fee-for-service system has contributed to the rising costs of health care.  Providers, he suggests, are buying very expensive equipment and then passing those costs along as they are competing for patients. 

“The problem is that once you do that, you have to pay for that eqipment and you pay for it while driving the volume of patients through,” he said.  “But our own health care decisions are driving this as well.  We think we benefit from more and more expensive care.  But the data doesn’t really bear this out.”


 You can watch the video of our meeting by viewing this story on our website.