Seize the day

April 1, 2009

President Barack Obama indicated in his inaugural
address that making quality healthcare more affordable to all Americans
would be one of his Administration's top priorities. Even without
current economic conditions, this is a Herculean task — in addition to
the estimated 47 million uninsured in this country, more than 25 million
Americans are under-insured — but it is crucial that we address the
crisis in healthcare and implement effective, transformational reforms
while public and political will exists. The deepening recession and the
growing number of Americans struggling to afford care for themselves and
their families only increases the urgency of reforming the nation's
broken healthcare system.

President Obama understands that lack of access to
preventative care and early treatment is a major contributor to
healthcare costs, and that healthcare costs are at the core of the
economic crisis that we now confront. Healthcare spending in the United
States is approaching 20% of GDP, and healthcare costs are responsible
for industry's inability to compete in the global market. For example,
the federal government has spent billions of dollars bailing out
American auto manufacturers, which spend more money on healthcare for
current and pensioned employees than they do on steel. They are no
longer car companies; they are healthcare companies that happen to make

There are a great number of stakeholders in the
current Byzantine healthcare system: health plans, employers and other
purchasers, labor unions, patients, patient advocacy organizations,
government, medical associations, hospitals, the pharmaceutical
industry, and the list goes on.

In fact, most Americans do not find much of a
healthcare “system,” but rather a frayed patchwork of unreliable and
inconsistent programs, providers, and facilities. As a result, they
routinely experience delays in getting care for a variety of medical
problems. They receive less preventative care and poorer treatment for
both minor and serious chronic and acute illnesses — which, in addition
to leading to poorer health outcomes, also increases the cost of care.

How do we fix such a badly broken system?

Reform must be transformational, not incremental.
Little changes will make little difference; they may shift who pays, but
changes will not meaningfully ease the burden without both reducing
costs and ensuring that those costs are shared fairly. There are four
fundamental pillars that will transform healthcare in the United States
and that must be the basis for any effective reform plan.

1. Affordability and sustainability: Healthcare
must be affordable, and the system must be sustainable. “Affordable”
healthcare means not only that anyone who has to buy into the system —
individuals, employers, and others — can meet the expense of doing so
but also that government can support its share of costs. “Sustainable”
means that the system is affordable over the long term. Medicaid worked
just fine at first but has proven unsustainable over periods of
double-digit health-cost growth with single-digit tax-revenue growth.

2. Portability and universality: Health insurance
must be portable. The problem with the employer-as-provider model is
that when a person loses his job, he loses his coverage. Why is it that
when we change or lose jobs, we do not lose our homeowner or auto
insurance, but we lose our health insurance? The growing tsunami of the
uninsured is a direct result of the growing tsunami of the unemployed.
Healthcare coverage must apply to everyone and must leave no one out.

3. A mandate: There must be a requirement that
every person has coverage. If there is no requirement, then we face the
death spiral of insurance: People get coverage only when they are sick,
and healthy people buy no coverage or minimal coverage, resulting in a
shrinking pool of people who make deposits into the system without
making major withdrawals. The only way to avoid this death spiral is to
require that everyone has coverage, and this individual mandate does not
have to be punitive. The President's suggestion that we require all
children to have health insurance is a good start; but, ultimately, we
must require coverage for all.

4. Quality coverage: “The juice has to be worth
the squeeze.” The healthcare coverage provided under any reform plan
must be comprehensive enough so that people do not feel ripped off by
whatever costs they are required to share. Under the current “system,”
many people who have insurance are still unable to afford the care they
need because out-of-pocket expenses are too high.

As the economy has worsened, national copayment
charities like the HealthWell Foundation have seen a surge in
applications for assistance from these under-insured. These people have
health insurance, yet still cannot afford treatment.

Effective healthcare reform requires coverage with low
enough copayments for people to afford, no exclusions for pre-existing
conditions, and coverage for chronic care and prevention. When everyone is
covered, the pool of healthy people will be large enough to offset the cost
of the sick.

In addition to the human toll, healthcare costs are crippling our
economy and threatening our international ability to compete. Reform
must be bold and transformational, and the stakeholders must be brought
to the table early — armed with audacious ideas but prepared to
compromise. The ultimate product is not likely to look exactly like
President Obama's current vision, nor exactly like any of the reform
proposals suggested so far, but compromise must be the fifth pillar of
health reform.

David L. Knowlton, BA, MA, is a member of the Board of Directors of the national non-profit HealthWell Foundation (www.healthwell
), which assists underinsured patients with serious and chronic conditions with their out-of-pocket costs for treatment. He is president of the New Jersey Health Care Quality Institute and a former deputy commissioner of the New Jersey Department of Health.