The terror of state health care
By Julian Delasantellis
It is now 402 years since Guy Fawkes' gunpowder plot to blow up the Houses of Parliament in London ushered in the modern phenomenon we call non-state terrorism. During that time we've heard speculation on the origins of the problem by everybody from popes and prelates to truckers and talk-show hosts, and most everybody in between who could put pen to paper or push wind through the larynx.
Still, at its most basic level, the causes and origins or world terrorism have continued to be a mystery. Until now. Fox News has the answer to what causes terrorism - it's, of course, government-run health care!
Had the news executives of the Wall Street Journal recently tuned into what passes for Fox News' daily business program, Your World with Neil Cavuto, to see how their possible new bosses at Rupert Murdoch's News Corp handle serious news issues, they probably would have ended the hour either making sure that their pensions were vested enough to retire comfortably, or, failing that, that their razor blades were sharp enough to slit their wrists comfortably.
The topic was the arrest of Muslim doctors in Britain for alleged participation in the recent spate of attempted car-bombings. Identified as a contributor to National Review Online (although he is not listed as such at the site, nor does the site's search utility turn up any hits on his name), one Jerry Boyer, under the headline "National healthcare: Breeding ground for terror" reports, "You've got shortages of doctors and nurses wherever you've got state-run health care.
"In the United States, we import a lot of physicians, about a quarter. But in the UK they import nearly half, nearly half of their physicians and nurses from abroad ... this is a real vulnerability, and Neil, it's not just a matter of them supplying, the Muslim world, supplying physicians ... you also have a situation where a state-run health-care enterprise is bureaucratic, and I think that the terrorists have shown over and over again, whether it's dealing with INS [the US Immigration and Naturalization Service] or whether it's dealing with airport security, they're very good at gaming the system of bureaucracies, they're very good at figuring out how to get around bureaucracies."
Cavuto: You also have the advantage in a bureaucracy, Jerry, I think you pointed this out, of becoming invisible, right? Whereas if you were to join a US medical practice, or even, as some internists do, just join an operation say, in Missouri, or Kansas ...
Boyer: Right.
Cavuto: ... You would stand out, for your religious views, or being an oddity, period. I'm not racist, but it just is. So that's what's distinctive about - in a national system, it's just more diluted, right?
Boyer: Right. Think about your doctor, I'll think about my doctor. Doctors in America tend to sort of cluster together in these practices, with three or five, or six or seven, maybe a dozen partners ... if one of your guys is a jihadi, if one of your doctors is spending all his time online, you know, reading Osama bin Laden fatwas, somebody's going to notice that.
But the National Health Service is more like the post office, you know, there's a lot of anonymity, it's easy to hide in a bureaucracy, and, more to the point, if you're a physician, and you're in partnership with another physician, and they turn out to be a terrorist, the practice is blown. I mean, there's severe economic consequences for you. But in a big bureaucracy, that's not the case.
(If you're too dense to have gotten the point so far, Cavuto flogs the Fox money shot.)
Cavuto: The fact that we might be looking to go this way in the United States, you're saying one of the potential consequences, without judging national health care one way or the other [heavens no, the concept of Fox News anchors interjecting their personal biases into news coverage is just too bizarre to contemplate], is that this could happen, that we have to be at least aware of the distinct possibility, in such a system, we would have to recruit outside doctors, and where we're getting the most of them these days seems to be from the Muslim world.
Core tautology
All during the interview, the split screen alternated between headshots of Cavuto and Boyer, along with standard US television-news health-story stock footage showing the backs of women getting X-rays with the front of their hospital gowns open, along with what, for Fox anyway, is the stock footage that lately illustrates most of their stories, the burning Jeep at Glasgow Airport. Like a starving man at an all-you-can-eat buffet, one hardly knows where to begin here.
Is Fox trying to proclaim the innate moral barbarity of Islam? Well, the culture of the West also produces murderous healers. In February 1994, Dr Baruch Goldstein, a US-born Israeli emergency-room physician, entered the Cave of the Patriarchs Mosque in the West Bank city of Hebron and, with his Israeli Army-issue Galil assault rifle, opened fire, killing 29 and wounding 150. Overwhelmed and beaten to death by survivors, he is still remembered and thought of by many in the ultra-orthodox settler community as a tzaddik - a righteous man.
The core tautology, that universal health coverage is an incubator of terrorism, becomes questionable when you consider the fact that most of the world's major industrial economies (in fact, just about all of them except the United States) have national health-care systems that guarantee universal coverage; among them, only the United Kingdom seems to have one that is a "breeding ground for terror". It's probably more accurate to say that universal health coverage breeds terrorism only if your government has been recently an ally of George W Bush's campaigns against the Muslim world.
Of course, it wouldn't be a real story from a Rupert Murdoch media satrap if it wasn't intended either to frighten or to titillate; this one is intended to frighten the less informed Americans (as a report from the Program on International Policy Attitudes at the University of Maryland has found that Fox News viewers are) into fearing both foreign-born medical personnel and universal health coverage.
Not counting those educated in Canada, about 25% of the United States' roughly 1 million doctors (the percentages are higher for nurses and other allied health personnel) were educated in places other than the US. The largest number of those come from India, at 25% of the total. The top Muslim-nation exporter of doctors is Pakistan, at 6%.
My personal physician is a lovely young woman from India; although I am sometimes apprehensive as to what test results of mine she will bring into the office, she has never given me any concern that she will come into the examination room about to detonate a suicide belt.
But according to Cavuto, if you live in such places as Missouri or Kansas, you don't have to worry about having a doctor with dark skin and an unpronounceable name come lunging at you with a lubricated rubber glove while screaming out his devotion to jihad. There, it seems that the doctors and other medical personnel all must still look like the late Robert Young in the 1970s American Broadcasting Co network medical drama Marcus Welby, MD - white, male, grandfatherly matured with gray hair flecked among the temples, an easy name to pronounce.
Then again, even then, white-middle-class America was not protected from the scourge of foreign-born medical personnel. Welby's office nurse was named Consuelo Lopez, played by Elena Verdugo.
But what Fox really wants you to oppose, more so than Muslim doctors, is a possible US national health-care plan, thus the caveat that national health-care systems are excessively bureaucratic - as well as being the breeding ground for terror.
It has been endlessly repeated that the United States is the world's only major industrial society without a government-financed system of ensuring health care to all its citizens. Actually, among the 20 largest economies in the world by per capita gross domestic product (GDP), the only nations where the government contribution is less than 50% of total national health-care spending are the US (with government contribution at 44.4% of total health-care spending), Singapore, and Cyprus.
The average government share of health-care spending in the Group of Seven industrialized nations minus the US (Canada, France, Germany, Italy, Japan and the UK) is 78.5%. This does not mean that the US is a land of cheapskates as regard to health-care spending. Quite the opposite: 15.4% of US GDP, more than US$5,700 per capita, goes to health care; the comparable G7-minus-US figures average out at 9.25% and just over $2,533 per capita.
About 15% of the population, about 47 million Americans, don't have health insurance; the number has increased by about 1.3 million people a year since 2000. For these people, US health care is represented by a leaky safety net of emergency-room visits, overburdened public-health clinics for the indigent, and utilization of questionably effective herbal, nutritional and homeopathic supplements.
As former senator Fred Thompson plays Hamlet in his latest role and decides whether to be or not to be the next president of the United States, he has recently said that poor Americans receive better care than do Britons from their National Health Service; this, of course, conclusively proves that neither has he ever accessed medical care from the NHS, nor is he a poor American.
Whatever the US gets with its Cadillac-priced health care, it is not better health. The United States is well down in the tables in almost all measurements of health status; in terms of infant mortality, according to the Central Intelligence Agency's World Factbook, this year the US ranks 41st, just ahead of Belarus and Lithuania, whose health-care delivery systems collapsed with the fall of the Soviet Union.
Historic failures, and successes
It's not as if there haven't been attempts to provide universal coverage. In 1945, president Harry Truman introduced a measure that would have instituted a system of national health insurance for every American; the doctors' lobby, the American Medical Association (AMA), would have none of that. Two years later, prime minister Clement Atlee and health minister Aneurin Bevan faced similar opposition from the British Medical Association to their plan to set up the NHS in the United Kingdom; Bevan later reported that the doctors' resistance only abated after he "stuffed their mouths with gold".
In the 1960s, US president Lyndon Johnson intended that his Medicare health program for senior citizens would soon be expanded to include citizens of all ages; this foundered on the government budget deficits generated by his trying to fund the Vietnam War and the Great Society without tax hikes. In 1993-94, Bill and Hillary Clinton's ideas for a fully inclusive health-care system failed in the face of opposition from health-insurance companies determined not to lose to the government a very profitable market, and Republicans in Congress determined not to hand the Democratic president an epoch-making domestic-policy legislative victory.
The 44% of US health-care spending funded through the government mostly represents Medicare, the government-run program for those over 65. Medicare is run very simply; in fact, to its recipients, it looks a lot like a national health-care system just by itself. A Medicare recipient sees a doctor, or has an X-ray or a surgery, and the federal government gets sent a bill.
Therefore, the administrative costs required to run this program, what is called the Administrative Cost Ratio (ACR), is very low, about 3% of total costs. (This is roughly in line with ACRs in national health-care systems.) It's still a very expensive program; at $374 billion, it's 14% of the federal budget, only surpassed by military spending, slated to be $740 billion in fiscal year 2008.
US medicine is very technological, and its practitioners are very well paid (not that there is much evidence that these two preceding factors improve health-care outcomes), and the elderly use a lot of it, but at least in regards to the Medicare budget, a relatively small percentage goes for paperwork, bureaucracy and administration.
It's an entirely different situation for those under 65 who mostly rely on the private health-insurance industry. These are the businesses that receive the paycheck deductions and employer co-payments that represent how most employed Americans pay for their health care. The largest of these is the United Health Care Group, which for the first quarter of 2007 reported $1.58 billion in profit from $19.05 billion in revenues, for a rather healthy 8.3% profit margin.
Wall Street currently values the company at $71 billion; other leaders in the industry are WellPoint (valued at $50.3 billion), Aetna, (valued at $25.3 billion) and Cigna (valued at $15.5 billion). These four companies alone possess a market capitalization of $162 billion; to put that in perspective, America's three major automobile companies, General Motors, Ford and DaimlerChrysler (with most of that company's value originating in Germany) put together have a market capitalization of $135 billion.
Providing for a profit to be delivered to the stockholders is, of course, a factor that does not drive up costs in government-run systems. A greater inefficiency in US private-sector health care is the fact that this industry operates with very high ACRs. A 2003 study by the New England Journal of Medicine reported the US private health-care industry's ACR at just under 25%; add in a profit margin, and it turns out that almost one-third of America's $1 trillion annual private-health-care bill goes to costs and services that have no direct benefit to the patient.
Growth industries
One might think that US business, now so ruthlessly competent in slicing away whole office parks full of superfluous workers so as to improve the bottom line, might apply the same skills to health care.
They don't. In profit health care, the administrative side of the business is worth every penny it costs - and a whole lot more after that. Billing costs is easy in government-run health systems. Doctors, along with most other medical personnel, are government workers; they show up in the morning, go home at night. If the hospital needs more syringes, they go to the budget and get them. Patients get served, suppliers get paid, and paychecks get printed.
It's nowhere near that simple in private US medicine. Whether they be Shinto or socialist, Anabaptist or anarchist, all US medical personnel must daily prove their fealty to The Book, or, more accurately, The Books. These books are called ICD-9-CM (International Classification of Diseases) and CPT (Current Procedural Terminology) Standard Edition, both published by the AMA.
You go to the doctor with a sore throat. The doctor is worried that you might have a strep throat, so you get a throat culture. When that is concluded, you get a few minutes of advice on topical measures to alleviate the pain, maybe a prescription for a painkiller.
But it's far from that uncomplicated with the insurance companies. To get paid from the patient's insurance carrier, the doctor must find, classify and submit every one of his actions according to the tens of thousands of diagnosis and treatment codes found in The Books. Sore throat? That's a 784.1, unless it's chronic, then it's a 472.1. The immune assay code for Streptococcus, Group A, is 87430, but if it's for Streptococcus, Group B, it's an 87802.
If you're a new patient, the doctor's assistant will take your medical history and do a cursory examination. If this takes 10 minutes or less, that's a 99201; 10-20 minutes, 99202; up to 60 minutes, that code is 99205. When the doctor finally sees you, 15 minutes or less of face time is coded at 99241, 15-30 at 99242, 30-40 at 99243, all the way up to 80 minutes for 99245.
Of course, doctors face a lot more varied diagnostic challenges than just sore throats. Do you have a burn caused by a terrorist strike where some furniture and/or fittings have melted? That's on page 348 of ICD-9-CM; its accompanying code is E979.3.
If you get hurt parachuting, your injury code is E844, unless you had to jump out of the plane because it was crashing (James Bond's doctor is probably pretty familiar with this one) - that's E840. A cat bite is E906.3 (but a cat scratch is E906.
. A cobra bite, E905; a black-widow-spider bite, E905.1; if you've recently been a guest on The Jerry Springer Show and were deliberately bitten by another one of your interlocutors, you've got an E968.7, unless it was just an accident - that's E928.3.
You get the idea.
What you have here is the core of the high US health-care ACRs. Where once a doctor like Marcus Welby could get away with just Consuelo on the payroll to handle appointments and answer the phones, these days doctors and clinics, as well as the insurance industry, must hire legions of trained and skilled workers who can understand and navigate this ever changing system called medical billing and coding.
According to the US Department of Labor, "The expected growth rate for medical coding (including billing and medical-records management) and health-care information management for the period 2000 to 2010 is 49%. Medical coding is one of the 13 fastest-growing occupations in the country. Employment of medical-records and health-information technicians is expected to grow much faster than the average for all occupations through 2012, due to rapid growth in the number of medical tests, treatments, and procedures that will be increasingly scrutinized by third-party payers, regulators, courts, and consumers."
During the Cold War, the superpowers built intercontinental missiles to attack each other with. These days, the US medical industry hires its billing and coders to shoot claims off to the insurance companies, and the insurance companies hire their own billers and coders (anti-billing and coders?) to shoot them down, to deny payment.
What did that guy on Fox say about US medicine not being bureaucratic?
Doctors despise this system. The insurance companies love it. US medicine's golden rule is that "whoever has the gold makes the rules" and, these days, the gold goes to the night-school masters of business administration at the insurance companies, not the medical doctors from the Ivy League.
Rome controlled the world with its legions, Britain its navy; the insurance industry controls US medicine with the billing and coding system.
Has the insurance company had a bad day with the subprime mortgage bonds in its investment portfolio, and this quarter's earnings are at risk?
Well, that's easy enough to deal with. Guess what, doc: where we used to pay 80% for code 69405, Eustachian-tube catheterization, now we'll only pay 50%. The patient now has to pay the rest; if he can't, the doctor or clinic eats the remainder. If the company's balance sheet still looks grim, it may be decided that from now on, lots more 96921s - laser treatment of inflammatory skin disease between 250 and 500 square centimeters - are going to be classified as "not medically necessary", no matter what the patient's doctor thinks.
The insurance companies' philosophy here is similar to what Bud Fox's (Charlie Sheen) boss, Lynch (James Karen), said in the 1987 movie Wall Street: "Well, somebody's got to pay. Ain't gonna be me."
Seen in this light, America's 47 million uninsured are not a social crisis to be addressed by government intervention and remediation; they're perhaps the only real method of cost containment currently existent in US medicine. As administrative costs rise, health-insurance premiums rise in tandem. That means more and more employers can't afford to buy health insurance for their employees, and individuals can't afford to purchase it for themselves.
These people get thrown out of the system, so no one has to deal with their coded billing claims bouncing back and forth between doctors and insurance companies. Even if the United States wanted to (and that's a good question), it could not afford to cover the uninsured, not under this system.
The bottom line
In 1952, General Motors president and future secretary of defense "Engine" Charles Wilson told a congressional committee, "What's good for General Motors is good for the country." Even if that was true then, these days, it is questionable whether health-insurance-industry-centered US health care is good for the country; it's certainly not good for GM.
Since most health-care coverage in the US is based on a person's employment, the tremendous increases in health-care premiums charged by US insurers is a significant drag on company competitiveness, particularly when in competition with companies in countries that have national health systems.
GM now spends more on employee and retiree health benefits than it does on steel; it has been noted that, in the current round of North American auto-industry plant closings and workforce reductions, the angel of layoffs has mostly "passed over" the plants in Canada, where the companies have no financial responsibility for health care.
The ability to control costs at will is at the core of the four major US health-insurance companies' $60 billion in profits this year. As in most of US business these days, these benefits skew heavily to the top. After earning $500 million in compensation during his 14-year tenure as head of United Health, William McGuire, forced to leave office because of a backdating of a stock-options scandal, was offered a $1.1 billion "golden parachute" severance package to help him out the door.
It's a profitable industry, and it wants to stay that way. As the Republican Party has for decades found a reason to block just about every attempt to skim and redistribute some of the industry's gravy off the gravy boat, it is not surprising that the industry skews its political contributions heavily in that direction, by a reported 2:1 ratio in the 2006 congressional elections. McGuire, during his tenure at the top of United Health, made just under $149,000 in political contributions - $4,000 of that to Democrats.
After they finish buying Congress, they buy the American public. In 1993, to fight the Clinton health-care plan, the health-insurance industry created Harry and Louise. These were two actors hired by the industry to star in TV commercials playing the role of "average" Americans sitting at their kitchen table reading supposed details of the Clinton plan with greater and greater trepidation.
The skill and sophistication of the ads induced nationwide creative suspension of disbelief, as Americans never stopped to question just why this very profitable and canny industry was spending, by some estimates, $45 million just to publicize the views of these supposedly "average" Americans.
Then there's all the media stories about how bad medicine is in places like Canada or France, stories that, for the most part, the citizens of these nations find risible. Supposedly, in "Canuckstan" (what many opponents of US national health care call Canada) you basically have to be covered in lesions redolent of late-stage leprosy before you can see a dermatologist. The better health statistics in these nations belies these fables; besides, anyone who thinks that Americans have easy access to medical specialists has yet to have an encounter with a health-insurance company gatekeeper.
And if you don't believe that, how about that national health care breeds terrorism?
My doctor from India laughed when I told her about the Fox national-health-care-terrorism link. I asked her if she ever had any desire to ram her sport-utility vehicle into the departure terminal at the airport. "Does that time when I was late for my flight and the car park was full count?"
There it is, finally, the root cause of terrorism. They don't hate us for our freedom; it's our inadequate airport parking that's the problem.
Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington. He can be reached at juliandelasantellis@yahoo.com.
(Copyright 2007 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
By Julian Delasantellis
It is now 402 years since Guy Fawkes' gunpowder plot to blow up the Houses of Parliament in London ushered in the modern phenomenon we call non-state terrorism. During that time we've heard speculation on the origins of the problem by everybody from popes and prelates to truckers and talk-show hosts, and most everybody in between who could put pen to paper or push wind through the larynx.
Still, at its most basic level, the causes and origins or world terrorism have continued to be a mystery. Until now. Fox News has the answer to what causes terrorism - it's, of course, government-run health care!
Had the news executives of the Wall Street Journal recently tuned into what passes for Fox News' daily business program, Your World with Neil Cavuto, to see how their possible new bosses at Rupert Murdoch's News Corp handle serious news issues, they probably would have ended the hour either making sure that their pensions were vested enough to retire comfortably, or, failing that, that their razor blades were sharp enough to slit their wrists comfortably.
The topic was the arrest of Muslim doctors in Britain for alleged participation in the recent spate of attempted car-bombings. Identified as a contributor to National Review Online (although he is not listed as such at the site, nor does the site's search utility turn up any hits on his name), one Jerry Boyer, under the headline "National healthcare: Breeding ground for terror" reports, "You've got shortages of doctors and nurses wherever you've got state-run health care.
"In the United States, we import a lot of physicians, about a quarter. But in the UK they import nearly half, nearly half of their physicians and nurses from abroad ... this is a real vulnerability, and Neil, it's not just a matter of them supplying, the Muslim world, supplying physicians ... you also have a situation where a state-run health-care enterprise is bureaucratic, and I think that the terrorists have shown over and over again, whether it's dealing with INS [the US Immigration and Naturalization Service] or whether it's dealing with airport security, they're very good at gaming the system of bureaucracies, they're very good at figuring out how to get around bureaucracies."
Cavuto: You also have the advantage in a bureaucracy, Jerry, I think you pointed this out, of becoming invisible, right? Whereas if you were to join a US medical practice, or even, as some internists do, just join an operation say, in Missouri, or Kansas ...
Boyer: Right.
Cavuto: ... You would stand out, for your religious views, or being an oddity, period. I'm not racist, but it just is. So that's what's distinctive about - in a national system, it's just more diluted, right?
Boyer: Right. Think about your doctor, I'll think about my doctor. Doctors in America tend to sort of cluster together in these practices, with three or five, or six or seven, maybe a dozen partners ... if one of your guys is a jihadi, if one of your doctors is spending all his time online, you know, reading Osama bin Laden fatwas, somebody's going to notice that.
But the National Health Service is more like the post office, you know, there's a lot of anonymity, it's easy to hide in a bureaucracy, and, more to the point, if you're a physician, and you're in partnership with another physician, and they turn out to be a terrorist, the practice is blown. I mean, there's severe economic consequences for you. But in a big bureaucracy, that's not the case.
(If you're too dense to have gotten the point so far, Cavuto flogs the Fox money shot.)
Cavuto: The fact that we might be looking to go this way in the United States, you're saying one of the potential consequences, without judging national health care one way or the other [heavens no, the concept of Fox News anchors interjecting their personal biases into news coverage is just too bizarre to contemplate], is that this could happen, that we have to be at least aware of the distinct possibility, in such a system, we would have to recruit outside doctors, and where we're getting the most of them these days seems to be from the Muslim world.
Core tautology
All during the interview, the split screen alternated between headshots of Cavuto and Boyer, along with standard US television-news health-story stock footage showing the backs of women getting X-rays with the front of their hospital gowns open, along with what, for Fox anyway, is the stock footage that lately illustrates most of their stories, the burning Jeep at Glasgow Airport. Like a starving man at an all-you-can-eat buffet, one hardly knows where to begin here.
Is Fox trying to proclaim the innate moral barbarity of Islam? Well, the culture of the West also produces murderous healers. In February 1994, Dr Baruch Goldstein, a US-born Israeli emergency-room physician, entered the Cave of the Patriarchs Mosque in the West Bank city of Hebron and, with his Israeli Army-issue Galil assault rifle, opened fire, killing 29 and wounding 150. Overwhelmed and beaten to death by survivors, he is still remembered and thought of by many in the ultra-orthodox settler community as a tzaddik - a righteous man.
The core tautology, that universal health coverage is an incubator of terrorism, becomes questionable when you consider the fact that most of the world's major industrial economies (in fact, just about all of them except the United States) have national health-care systems that guarantee universal coverage; among them, only the United Kingdom seems to have one that is a "breeding ground for terror". It's probably more accurate to say that universal health coverage breeds terrorism only if your government has been recently an ally of George W Bush's campaigns against the Muslim world.
Of course, it wouldn't be a real story from a Rupert Murdoch media satrap if it wasn't intended either to frighten or to titillate; this one is intended to frighten the less informed Americans (as a report from the Program on International Policy Attitudes at the University of Maryland has found that Fox News viewers are) into fearing both foreign-born medical personnel and universal health coverage.
Not counting those educated in Canada, about 25% of the United States' roughly 1 million doctors (the percentages are higher for nurses and other allied health personnel) were educated in places other than the US. The largest number of those come from India, at 25% of the total. The top Muslim-nation exporter of doctors is Pakistan, at 6%.
My personal physician is a lovely young woman from India; although I am sometimes apprehensive as to what test results of mine she will bring into the office, she has never given me any concern that she will come into the examination room about to detonate a suicide belt.
But according to Cavuto, if you live in such places as Missouri or Kansas, you don't have to worry about having a doctor with dark skin and an unpronounceable name come lunging at you with a lubricated rubber glove while screaming out his devotion to jihad. There, it seems that the doctors and other medical personnel all must still look like the late Robert Young in the 1970s American Broadcasting Co network medical drama Marcus Welby, MD - white, male, grandfatherly matured with gray hair flecked among the temples, an easy name to pronounce.
Then again, even then, white-middle-class America was not protected from the scourge of foreign-born medical personnel. Welby's office nurse was named Consuelo Lopez, played by Elena Verdugo.
But what Fox really wants you to oppose, more so than Muslim doctors, is a possible US national health-care plan, thus the caveat that national health-care systems are excessively bureaucratic - as well as being the breeding ground for terror.
It has been endlessly repeated that the United States is the world's only major industrial society without a government-financed system of ensuring health care to all its citizens. Actually, among the 20 largest economies in the world by per capita gross domestic product (GDP), the only nations where the government contribution is less than 50% of total national health-care spending are the US (with government contribution at 44.4% of total health-care spending), Singapore, and Cyprus.
The average government share of health-care spending in the Group of Seven industrialized nations minus the US (Canada, France, Germany, Italy, Japan and the UK) is 78.5%. This does not mean that the US is a land of cheapskates as regard to health-care spending. Quite the opposite: 15.4% of US GDP, more than US$5,700 per capita, goes to health care; the comparable G7-minus-US figures average out at 9.25% and just over $2,533 per capita.
About 15% of the population, about 47 million Americans, don't have health insurance; the number has increased by about 1.3 million people a year since 2000. For these people, US health care is represented by a leaky safety net of emergency-room visits, overburdened public-health clinics for the indigent, and utilization of questionably effective herbal, nutritional and homeopathic supplements.
As former senator Fred Thompson plays Hamlet in his latest role and decides whether to be or not to be the next president of the United States, he has recently said that poor Americans receive better care than do Britons from their National Health Service; this, of course, conclusively proves that neither has he ever accessed medical care from the NHS, nor is he a poor American.
Whatever the US gets with its Cadillac-priced health care, it is not better health. The United States is well down in the tables in almost all measurements of health status; in terms of infant mortality, according to the Central Intelligence Agency's World Factbook, this year the US ranks 41st, just ahead of Belarus and Lithuania, whose health-care delivery systems collapsed with the fall of the Soviet Union.
Historic failures, and successes
It's not as if there haven't been attempts to provide universal coverage. In 1945, president Harry Truman introduced a measure that would have instituted a system of national health insurance for every American; the doctors' lobby, the American Medical Association (AMA), would have none of that. Two years later, prime minister Clement Atlee and health minister Aneurin Bevan faced similar opposition from the British Medical Association to their plan to set up the NHS in the United Kingdom; Bevan later reported that the doctors' resistance only abated after he "stuffed their mouths with gold".
In the 1960s, US president Lyndon Johnson intended that his Medicare health program for senior citizens would soon be expanded to include citizens of all ages; this foundered on the government budget deficits generated by his trying to fund the Vietnam War and the Great Society without tax hikes. In 1993-94, Bill and Hillary Clinton's ideas for a fully inclusive health-care system failed in the face of opposition from health-insurance companies determined not to lose to the government a very profitable market, and Republicans in Congress determined not to hand the Democratic president an epoch-making domestic-policy legislative victory.
The 44% of US health-care spending funded through the government mostly represents Medicare, the government-run program for those over 65. Medicare is run very simply; in fact, to its recipients, it looks a lot like a national health-care system just by itself. A Medicare recipient sees a doctor, or has an X-ray or a surgery, and the federal government gets sent a bill.
Therefore, the administrative costs required to run this program, what is called the Administrative Cost Ratio (ACR), is very low, about 3% of total costs. (This is roughly in line with ACRs in national health-care systems.) It's still a very expensive program; at $374 billion, it's 14% of the federal budget, only surpassed by military spending, slated to be $740 billion in fiscal year 2008.
US medicine is very technological, and its practitioners are very well paid (not that there is much evidence that these two preceding factors improve health-care outcomes), and the elderly use a lot of it, but at least in regards to the Medicare budget, a relatively small percentage goes for paperwork, bureaucracy and administration.
It's an entirely different situation for those under 65 who mostly rely on the private health-insurance industry. These are the businesses that receive the paycheck deductions and employer co-payments that represent how most employed Americans pay for their health care. The largest of these is the United Health Care Group, which for the first quarter of 2007 reported $1.58 billion in profit from $19.05 billion in revenues, for a rather healthy 8.3% profit margin.
Wall Street currently values the company at $71 billion; other leaders in the industry are WellPoint (valued at $50.3 billion), Aetna, (valued at $25.3 billion) and Cigna (valued at $15.5 billion). These four companies alone possess a market capitalization of $162 billion; to put that in perspective, America's three major automobile companies, General Motors, Ford and DaimlerChrysler (with most of that company's value originating in Germany) put together have a market capitalization of $135 billion.
Providing for a profit to be delivered to the stockholders is, of course, a factor that does not drive up costs in government-run systems. A greater inefficiency in US private-sector health care is the fact that this industry operates with very high ACRs. A 2003 study by the New England Journal of Medicine reported the US private health-care industry's ACR at just under 25%; add in a profit margin, and it turns out that almost one-third of America's $1 trillion annual private-health-care bill goes to costs and services that have no direct benefit to the patient.
Growth industries
One might think that US business, now so ruthlessly competent in slicing away whole office parks full of superfluous workers so as to improve the bottom line, might apply the same skills to health care.
They don't. In profit health care, the administrative side of the business is worth every penny it costs - and a whole lot more after that. Billing costs is easy in government-run health systems. Doctors, along with most other medical personnel, are government workers; they show up in the morning, go home at night. If the hospital needs more syringes, they go to the budget and get them. Patients get served, suppliers get paid, and paychecks get printed.
It's nowhere near that simple in private US medicine. Whether they be Shinto or socialist, Anabaptist or anarchist, all US medical personnel must daily prove their fealty to The Book, or, more accurately, The Books. These books are called ICD-9-CM (International Classification of Diseases) and CPT (Current Procedural Terminology) Standard Edition, both published by the AMA.
You go to the doctor with a sore throat. The doctor is worried that you might have a strep throat, so you get a throat culture. When that is concluded, you get a few minutes of advice on topical measures to alleviate the pain, maybe a prescription for a painkiller.
But it's far from that uncomplicated with the insurance companies. To get paid from the patient's insurance carrier, the doctor must find, classify and submit every one of his actions according to the tens of thousands of diagnosis and treatment codes found in The Books. Sore throat? That's a 784.1, unless it's chronic, then it's a 472.1. The immune assay code for Streptococcus, Group A, is 87430, but if it's for Streptococcus, Group B, it's an 87802.
If you're a new patient, the doctor's assistant will take your medical history and do a cursory examination. If this takes 10 minutes or less, that's a 99201; 10-20 minutes, 99202; up to 60 minutes, that code is 99205. When the doctor finally sees you, 15 minutes or less of face time is coded at 99241, 15-30 at 99242, 30-40 at 99243, all the way up to 80 minutes for 99245.
Of course, doctors face a lot more varied diagnostic challenges than just sore throats. Do you have a burn caused by a terrorist strike where some furniture and/or fittings have melted? That's on page 348 of ICD-9-CM; its accompanying code is E979.3.
If you get hurt parachuting, your injury code is E844, unless you had to jump out of the plane because it was crashing (James Bond's doctor is probably pretty familiar with this one) - that's E840. A cat bite is E906.3 (but a cat scratch is E906.
. A cobra bite, E905; a black-widow-spider bite, E905.1; if you've recently been a guest on The Jerry Springer Show and were deliberately bitten by another one of your interlocutors, you've got an E968.7, unless it was just an accident - that's E928.3. You get the idea.
What you have here is the core of the high US health-care ACRs. Where once a doctor like Marcus Welby could get away with just Consuelo on the payroll to handle appointments and answer the phones, these days doctors and clinics, as well as the insurance industry, must hire legions of trained and skilled workers who can understand and navigate this ever changing system called medical billing and coding.
According to the US Department of Labor, "The expected growth rate for medical coding (including billing and medical-records management) and health-care information management for the period 2000 to 2010 is 49%. Medical coding is one of the 13 fastest-growing occupations in the country. Employment of medical-records and health-information technicians is expected to grow much faster than the average for all occupations through 2012, due to rapid growth in the number of medical tests, treatments, and procedures that will be increasingly scrutinized by third-party payers, regulators, courts, and consumers."
During the Cold War, the superpowers built intercontinental missiles to attack each other with. These days, the US medical industry hires its billing and coders to shoot claims off to the insurance companies, and the insurance companies hire their own billers and coders (anti-billing and coders?) to shoot them down, to deny payment.
What did that guy on Fox say about US medicine not being bureaucratic?
Doctors despise this system. The insurance companies love it. US medicine's golden rule is that "whoever has the gold makes the rules" and, these days, the gold goes to the night-school masters of business administration at the insurance companies, not the medical doctors from the Ivy League.
Rome controlled the world with its legions, Britain its navy; the insurance industry controls US medicine with the billing and coding system.
Has the insurance company had a bad day with the subprime mortgage bonds in its investment portfolio, and this quarter's earnings are at risk?
Well, that's easy enough to deal with. Guess what, doc: where we used to pay 80% for code 69405, Eustachian-tube catheterization, now we'll only pay 50%. The patient now has to pay the rest; if he can't, the doctor or clinic eats the remainder. If the company's balance sheet still looks grim, it may be decided that from now on, lots more 96921s - laser treatment of inflammatory skin disease between 250 and 500 square centimeters - are going to be classified as "not medically necessary", no matter what the patient's doctor thinks.
The insurance companies' philosophy here is similar to what Bud Fox's (Charlie Sheen) boss, Lynch (James Karen), said in the 1987 movie Wall Street: "Well, somebody's got to pay. Ain't gonna be me."
Seen in this light, America's 47 million uninsured are not a social crisis to be addressed by government intervention and remediation; they're perhaps the only real method of cost containment currently existent in US medicine. As administrative costs rise, health-insurance premiums rise in tandem. That means more and more employers can't afford to buy health insurance for their employees, and individuals can't afford to purchase it for themselves.
These people get thrown out of the system, so no one has to deal with their coded billing claims bouncing back and forth between doctors and insurance companies. Even if the United States wanted to (and that's a good question), it could not afford to cover the uninsured, not under this system.
The bottom line
In 1952, General Motors president and future secretary of defense "Engine" Charles Wilson told a congressional committee, "What's good for General Motors is good for the country." Even if that was true then, these days, it is questionable whether health-insurance-industry-centered US health care is good for the country; it's certainly not good for GM.
Since most health-care coverage in the US is based on a person's employment, the tremendous increases in health-care premiums charged by US insurers is a significant drag on company competitiveness, particularly when in competition with companies in countries that have national health systems.
GM now spends more on employee and retiree health benefits than it does on steel; it has been noted that, in the current round of North American auto-industry plant closings and workforce reductions, the angel of layoffs has mostly "passed over" the plants in Canada, where the companies have no financial responsibility for health care.
The ability to control costs at will is at the core of the four major US health-insurance companies' $60 billion in profits this year. As in most of US business these days, these benefits skew heavily to the top. After earning $500 million in compensation during his 14-year tenure as head of United Health, William McGuire, forced to leave office because of a backdating of a stock-options scandal, was offered a $1.1 billion "golden parachute" severance package to help him out the door.
It's a profitable industry, and it wants to stay that way. As the Republican Party has for decades found a reason to block just about every attempt to skim and redistribute some of the industry's gravy off the gravy boat, it is not surprising that the industry skews its political contributions heavily in that direction, by a reported 2:1 ratio in the 2006 congressional elections. McGuire, during his tenure at the top of United Health, made just under $149,000 in political contributions - $4,000 of that to Democrats.
After they finish buying Congress, they buy the American public. In 1993, to fight the Clinton health-care plan, the health-insurance industry created Harry and Louise. These were two actors hired by the industry to star in TV commercials playing the role of "average" Americans sitting at their kitchen table reading supposed details of the Clinton plan with greater and greater trepidation.
The skill and sophistication of the ads induced nationwide creative suspension of disbelief, as Americans never stopped to question just why this very profitable and canny industry was spending, by some estimates, $45 million just to publicize the views of these supposedly "average" Americans.
Then there's all the media stories about how bad medicine is in places like Canada or France, stories that, for the most part, the citizens of these nations find risible. Supposedly, in "Canuckstan" (what many opponents of US national health care call Canada) you basically have to be covered in lesions redolent of late-stage leprosy before you can see a dermatologist. The better health statistics in these nations belies these fables; besides, anyone who thinks that Americans have easy access to medical specialists has yet to have an encounter with a health-insurance company gatekeeper.
And if you don't believe that, how about that national health care breeds terrorism?
My doctor from India laughed when I told her about the Fox national-health-care-terrorism link. I asked her if she ever had any desire to ram her sport-utility vehicle into the departure terminal at the airport. "Does that time when I was late for my flight and the car park was full count?"
There it is, finally, the root cause of terrorism. They don't hate us for our freedom; it's our inadequate airport parking that's the problem.
Julian Delasantellis is a management consultant, private investor and educator in international business in the US state of Washington. He can be reached at juliandelasantellis@yahoo.com.
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