In Search of a Health Care Cost Solution

Last updated on May 13th, 2019 at 02:36 pm

POINT: Canada’s Model Would Work Here

By Jack Lohman

Employee health care is a major business expense that closes down some companies, causes others to outsource manufacturing and still others to relocate to Canada, where medical costs are just $800 per year per employee, compared with $6,500 in the United States.

GM is doing it. So is Ford. There are more Big Three autos being made in Ontario today than in Detroit. More than 60,000 U.S. jobs have been lost in this industry alone.

However, otherwise good businessmen still fall for the well-orchestrated rhetoric of the health care industry. Understand this very clearly: Of course the health care interests do not want to see a Canadian-style system that would eat into this profitable market. Why else the stories about how bad the Canadian system is, even when it is not bad at all? What does it tell you when over 90 percent of Canadians prefer their system to ours?

It is not our costs that have escalated at five times the rate of inflation. It’s the charges that the health industry has imposed. How else to offset the $3 million per year one Wisconsin hospital CEO draws, while another CEO of a popular HMO receives a $72 million salary? Doctors can become millionaires in the United States, but they can’t in Canada, so who in the industry would want to change that?

Picture this alternative: Your company is totally out of the health care business and your employees instead get their care through a Medicare-for-all system. Not socialized medicine. Just a system with one payer rather than the 400 insurers we now have in Wisconsin. See any doctor you like and go to the hospital of your choice. Perhaps even have a small co-pay to reduce frivolous visits. That’s the Medicare system of today. Your costs are next to zero. What’s not to like about that?

Why aren’t the politicians on board with this? Because you, Mr. Small Businessman, don’t have a lock on them. They get major campaign funds from the health care industry. Over $100 million per year is spent on lobbying and contributions at the federal level and $1.4 million annually at the state level.

Let me dispel a major myth: There is no such thing as "free-market competition" in the health care marketplace. "Market-driven" is corporate spin for "profit-making." It’s hogwash.

The Medicare drug program should be proof enough that we must avoid confusion and complexity, which drive up costs. This, incidentally, is a program that was bought and paid for by the insurance and pharmaceutical industry, and you can see what we got in return. We must keep the private interests out of it.

The greater the number of insurers that are involved in the system, the more of its resources that will be diverted from patient care to profit-taking.

I am not a fan of health savings accounts. They will encourage patients to avoid preventive medicine, which will be more costly in the long run. Healthy people will like them, until they age and/or become unhealthy. If you look at who is going to be the winner, in this case it’s not going to be the patient or the public. Though I’m a Republican, I don’t trust this GOP innovation, and the fact that the industry supports them worries me a lot. They aren’t dumb.

Health care should be a public service, and the taxes will be more than offset by the lower consumer prices for product. It is only by historic accident that it is now an employer burden. What to do about it? Ask your senator and representative to support SB388 and AB807, and then spend your health care dollars growing your companies.

COUNTERPOINT: Private Sector Must Find the Answers

By Jon C. Rauser

Wisconsin will soon join with 30 other states in the debate over who is best suited to manage health care costs going forward. It is a debate fostered by increasing costs, unreliable quality and the uninsured.

State Reps. Jon Richards (D-Milwaukee) and Curt Gielow (R-Mequon) have been working with the Wisconsin Health Project (David Riemer, and many others to design a Plan that you may research on your own at their Web site:

The Wisconsin Health Plan is now being crafted into a bill, which will work its way through the legislative process over the next many months. With a Senate and Assembly currently controlled by Republicans, the bill’s future is problematic. After fall elections, however, we could have a totally new ball game.

And nationally, I might add, the balance of power is even more likely to change than in Madison. It is easy to envision a new Congress in 2006, and we will have a new president in 2008. Thus, the private sector is "on the clock."

Single-payer proposals, no matter how cleverly disguised, would be financed through additional payroll taxes or some other mandatory funding vehicle. This has the allure of lowering administrative costs and eliminating the problem of the uninsured. Well, if you buy that argument, why not apply it to the housing industry? Isn’t it a scandal that millions of Americans are without affordable shelter?

Centralizing through government control of any segment of our economy is an anathema to the core beliefs of most Americans. Innovations (technology) and our aging population are the underlying factors for health cost inflation. These factors will not magically disappear should advocates of government-run health care "win" this debate, and frankly, I marvel at the gullibility of the many who don’t understand that fact. So, if out of frustration we turn over control of health care to government and costs continue to escalate, what then? There are only two answers: raise taxes and/or ration care.

I make no apologies for trusting our free enterprise system to find more equitable solutions to the funding and availability of care.

Consumers now ‘shopping’ for care vis-a-vis higher deductibles and health savings accounts are putting enormous pressure on the provider community to disclose pricing and quality measures.

The Wisconsin Collaborative for Health Care Quality is just one example of the many provider initiatives coming out of market pressures. Stay tuned for more.

Insurers have responded to these same pressures. Their members’ only Web sites have a glut of information on drug formularies, provider pricing, wellness and on and on. For those annoyed at insurers’ record profits and high administrative costs, there are smaller/local mutual companies or self-funded arrangements.

The issue of the uninsured is galling to those of us in the industry. As an insurance broker, I can find affordable insurance for most applicants. Those that won’t or can’t pay any premium cannot be denied access to care and there are literally dozens of free or low cost clinics in the Milwaukee area alone.

Business as usual is unacceptable. Providers know it. Insurers know it. Consumers know it. Even insurance agents!

As to my self interest, I’m guilty! You see, I’m one of those baby boomers who are driving the underlying demographic affecting health costs. Soon (not too soon, I hope) this body will start falling apart. When I go for care, along with my doctors, I want to decide when and how to receive care. Once health care financing is centralized in Madison or Washington, we will be on a path to ceding those decisions to someone else.

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