5 & 50 are two numbers that explain where half of all healthcare expenditures go in America today and represent a key area health reform must address.
We often here about the $3.5 trillion we invest annually for Healthcare in the United States. Breaking this down further, this means we spend an average of $10,739 per citizen.
This last number demonstrates how statistics can sometimes be misleading. As noted, we spend an average of $10,739 per citizen. But, understanding where the money is actually going provides a key insight as to why our investments are high but results are often lower than other countries spending less.
Look closely at where the money goes you see that five percent of people account for 50 percent of total health spending.
Think about these stats for a moment.
Health-care spending represents almost one-fifth of the United States’ economy.
In digging further into these numbers, the data from the National Institute for Health Care Management suggests that the health problems of about 15 million Americans consume almost one-tenth of the Gross Domestic Product (GDP) of the United States — around $1.7 trillion.
Those citizens in the “five percent” group are known as “super users” of the health system. They include the “sickest-of-the-sick” or have multiple chronic conditions requiring intense and continuous care regimens.
We are bombarded with stats that show, on average, the United States spends more on health per citizen than any other country on the planet. The reality is that most of these expenditures are concentrated on fewer people entering the health system once they are very ill (including being admitted to expensive, technology rich environments when nearing end-of-life).
Ethicists often ponder the issue of distributive justice…How do we use a finite amount of resources to do the most good for the most people?
To raise the question above is not to suggest we turn our backs on those women and men who are members of the medical “super-users” group whose lives (including quality of life) are dependent on utilizing the system in place today.
If we are serious about true reform, the deeper issue to consider is how we change the systems super-users are dependent on to better serve their needs while becoming more effective stewards of the resources required to meet the needs of this vulnerable population.
As we look ahead, these questions are worth considering
by anyone in, or touched by, the current healthcare system.
What is your view on whether half of all resource expenditures should go towards supporting the needs of a small group of people?
The rapid growth of the elderly population (a baby-boomer now turns 65 every 15 seconds and will for the next decade) will expand the size of the “super-user” group requiring intensive & costly services. What alternative or innovative ideas would support the needs of this population while making better use of our resources?
Do you know someone who is a “super user” of the health system? What services are they dependent on? What might you change to better serve his or her needs while make better use of resources?
If you want to go deeper in exploring this topic:
There is a great article in the Atlantic by writers Karen Weintraub and Rachel Zimmerman. Fixing the 5 Percent is a thoughtfully-written piece that explores both the problem as well as solutions others are pioneering to improve the effectiveness of services and costs.
Implementation of health reform poses formidable challenges for Democrats, Republicans, and the political process itself. What can the past teach us about what to do now?
“What is old is new again”
Today’s health reform debate is deeply rooted in the ideologies and legislative efforts of the past 75 years.
Should Social and Environmental Determinants of Health be part of reform efforts? In 1945, President Harry Truman proposed solutions to these issues as part of comprehensive health reform. Can we legislate “healthcare for all” while maintaining a private system that allows consumers to choose their own physicians? In 1962, President John F. Kennedy championed such an approach.
Sound like familiar issues relevant to today?
Understanding past struggles helps to shape our current efforts for positive change by providing useful perspectives on the similarities of issues as well as the politics of reform that have persisted for decades.
And so, here’s a short history on the “roots” of today’s issues and efforts to improve health systems in America.
This installment (Part 1) begins in the 1940’s and culminates in 1969 with the landmark passage of both Medicare and Medicaid.
In Part 2, we’ll look at reform efforts from the 1970’s leading up to the passage of the Affordable Care Act and what’s happening today.
1933-1945: Franklin D. Roosevelt Administration
While health reform as a movement in the United States goes back to the early 1900’s, a national effort supported by a significant political party emerged in the 1940’s. President Franklin Delano Roosevelt believed in the concept of “healthcare for all” as part of his broader view on the role of government to create and manage “social programs” to benefit all Americans.
His key push to provide Healthcare for All was part of what would become known as “America’s Second Bill of Rights.”
As World War II was coming to a close, it had been rumored that Universal Health Care was to be President Roosevelt’s next big political crusade. Unfortunately, he died just before the end of the war and so the world would never really know what might of come from President Roosevelt’s resolve to make healthcare accessible to all.
1945-1953: The Truman Administration
In November of 1945 President Harry Truman called on Congress with a special message recommending passage of a Comprehensive Health Program.
While the full speech is worth reading, there are two areas that are especially relevant to the challenges of today.
The first area of importance is where the Truman administration puts forward the tenent of healthcare as a “right”:
“In my message to the Congress of September 6, 1945, there were enumerated in a proposed Economic Bill of Rights certain rights which ought to be assured to every American citizen. One of them was: “The right to adequate medical care and the opportunity to achieve and enjoy good health.” Another was the “right to adequate protection from the economic fears of sickness.”
Millions of our citizens do not now have a full measure of opportunity to achieve and enjoy good health. Millions do not now have protection or security against the economic effects of sickness. The time has arrived for action to help them attain that opportunity and that protection.”
Harry S. Truman in a speech to Congress advocating healthcare as a right.
The second area that is especially noteworthy to today’s challenges and struggle for comprehensive reform is this: Long before contemporary experts began championing the notion of Social and Environmental Determinants of Health, Harry Truman nailed the correlation of these factors to the health of a nation. His proposal tied social and environmental issues to the macro view of what “systems of health” should include:
” If we agree that the national health must be improved, our cities, towns and farming communities must be made healthful places in which to live through provision of safe water systems, sewage disposal plants and sanitary facilities. Our streams and rivers must be safeguarded against pollution. In addition to building a sanitary environment for ourselves and for our children, we must provide those services which prevent disease and promote health.”
Harry S. Truman advocating that Social and Environmental Determinants of health be part of a national health plan.
The issue that ultimately became the lightning rod for Turman’s proposal was a provision that called for universal health insurance coverage to be administered and paid for by a National Health Insurance Board. The American Medical Association, quickly decried this to be “socialized medicine,” with a Congressional subcommittee labeling the approach “communistic.” The bill died, but Truman continued pushing for expanded access to health services right up to the outbreak of the Korean War which then took priority.
1953-1961: The Eisenhower Administration
President Dwight Eisenhower was known from his military career as a brillant strategist who then became an effective and savy politician.
In reviewing the impact of Truman’s push for health reform, Eisenhower came forward with a more modest approach and a very clear message for Congress, voters and special interest groups to hear:
“I am flatly opposed to the socialization of medicine. The great need for hospital and medical services can best be met by the initiative of private plans. But it is unfortunately a fact that medical costs are rising and already impose severe hardships on many families. The Federal Government can do many helpful things and still carefully avoid the socialization of medicine.”
President Dwight Eisenhower
President Eisenhower proposed a four-part plan to increase access to affordable care for more Americans that included:
Federal funding to increase number of hospitals in the United States.
Legislation and funding increase services to those with “disabilities.”
Greater flexibility in allowing states to utilize federal funds for public health services.
Private health insurance reform to encourage new types of plans to cover more Americans.
To pitch this plan to the American public, and make very clear the differences compared to the proposals made by the Truman Administration, President Eisenhower made use of the new political tool of television (social media of the 1950’s) to make his case for health reform.
Sidenote: While the clip above is worth watching for the sake of understanding what was being proposed, it is most noteworthy in that the majority of the broadcast features one of America’s first female cabinet members Oveta Culp Hobby.
Like so many woman leaders whose contributions are lost in history, Hobby was first female secretary, of the new Department of Health, Education, and Welfare. In this role, she made the (then controversial) decision to approve Jonas Salk‘s polio vaccine. She was also the first women to receive the Army’s Distinguished Service Medal for her leadership efforts during WWII, including serving as the head of the Women’s Army Corps which was created to fill the gaps left by a shortage of men. The brilliance and contributions of Oveta Culp Hobby comes through in this short clip.
1961-1963: The Kennedy Administration
Under President John F. Kennedy, a proposal for expanding access to health services included health insurance coverage for those 65 years and older as part of a Social Security benefits package.
While this work began laying a foundation for what would ultimately become Medicare, it was met with strong opposition by special interest groups. Frustrated by the efforts of special interests to kill a bill making its way through Congress, President Kennedy went on the road to make the case for his proposal directly to the public in a series of public rallies. This effort culminated in the spring of 1962 with a rally in New York City.
Eighteen thousand citizens packed Madison Square Garden with Kennedy’s speech being televised nationally. Despite public opinion being in favor of Kennedy’s proposal the bill was defeated in Committee. President Kennedy vowed to press forward but did not live to see his plan come to fruition.
1963-1969: The Johnson Administration
Following the death of President Kennedy, Lyndon B. Johnson (LBJ) was sworn in as the President of the United States. He then won a landslide victory to be elected to a full term as President in November, 1964.
President Johnson was purposeful in visibly picking up the social programs that President Kennedy had proposed in order to “keep a promise made to the American Public.” With a Democratic majority in both houses of Congress, President Johnson had a receptive body for extensive social reforms that came to be known as the Great Society.
Even with control of Congress, there was strong opposition from the American Medical Association, conservative Republicans and congressional leaders within his own party.
With President Johnson working behind the scenes to build a coalition to support both Medicare and Medicaid programs, the Social Security Amendment was introduced in the House Ways and Means Committee in March of 1965, gained final approval by the Senate on July 28, 1965 and was signed into law by President Johnson on July 30, 1965. It is noteworthy that such landmark legislation was passed within the first six months of President Johnson taking office.
“No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime.
President Johnson on the signing of Medicare into law
As originally enacted, healthcare coverage would now be provided to those 65 years of age and older, and to the poor, blind and disabled. It covered healthcare services provided by hospitals, physicians, nursing facilities and home care providers.
Medicare was milestone legislation that guaranteed healthcare as a right for seniors. It showed that major reform is possible with the support of the public, and the alignment of the powers in Washington.
It should also be noted that such progress was made because elected leaders made healthcare access a legislative and executive priority. Even then, reform was a hard-fought battle.
The clip above from CBS’ Washington Unplugged is an exceptionally candid behind-the-scenes look at what President Johnson went through to make Medicare a reality. It demonstrates the kind of resolve and types of action needed today to enact meaningful reform going forward.
In Part 2, we will look at health reform events in the 1970’s leading up to the passage of the Affordable Care Act in 2010.
All videos used in this story provided via links to original content on YouTube. Full attribution and copyrights property of the original content owner who post to YouTube.
Regardless of your political leanings your approach to any reform proposal will be anchored to this single question.
Regardless of your political views or social priorities, your approach to any health reform proposal or debate should be anchored to a single question. Directly or indirectly, how you answer this question is central to evaluating any proposal for creating sustainable reform.
The question that is foundational to all others in the health
reform debate comes down to this:
Is healthcare a right or a privilege?
For the record, while most other developed countries have constitutionally
declared or legislated healthcare as a right for all citizens, America has not.
This is not an editorial comment but a statement of fact.
When the framers of the Constitution and Bill of Rights were
defining fundamental human rights, average life expectancy was 35 years of age. [i] The concept of “healthcare” as we know it
today simply did not exist.
Healthcare as a right means that all citizens are guaranteed
access to some level of care or services. While the type or level of service
might change, the commitment of equal access to “something” does not.
For example, Canada decreed healthcare as a right in 1984. Their system is known for guaranteeing all citizens access to certain services but often then keep patients waiting in line to access services based on budgetary targets. The United Kingdom guarantees all citizens the right to care with a founding principle of “free at the point of service” but often have some people waiting in line for service while others buy supplemental insurance policies that allow them to “jump the que” and gain better access to services.
Regardless of how the system is
organized, or how well it actually works, healthcare as a right means that there is a safety net that
catches all citizens.
The debate about healthcare as a right in America began with the
advent of two events in history.
The first was the beginning of the Industrial Revolution. A
massive shift of people going from working on farms to factories gave rise to a
new set of health issues and began the debate on the role of private companies
and the government in providing for the health of workers and citizens.
Around the same time medicine moved out of the shadows of quackery
and into the realm of being a repeatable, scientific discipline.
Ever since, America has wrestled with whether healthcare is a
right or privilege.
In the 1940’s President Roosevelt attempted to address the issue of whether healthcare is a right as part of a broader social initiative known as America’s “Second Bill of Rights.”
In 1945 President Truman proposed a national health program to include all Americans declaring in a speech to Congress “We should resolve now that the health of this Nation is a national concern; that financial barriers in the way of attaining health shall be removed; that the health of all its citizens deserves the help of all the Nation.” It was denounced by the American Medical Association and called a communist plot by a House subcommittee.[ii]
The Clinton administration made healthcare their top platform
priority but failed to get a plan through Congress.
Finally, the Affordable Care Act was passed during the Obama administration (aka Obamacare) in 2010 that created vehicles for citizens to have access to health plans while mandating coverage and fines for those choosing not to participate. The Trump administration from the outset worked to disassemble the Affordable Care Act.
The brief history of Affordable Care Act noted above is a cautionary tale that shows us that until healthcare is deemed a right, the fate of lasting reform will rise and fall based on the whims and views of those who control Congress and the White House (This situation continues to play out as I write this article).
An interesting corollary to the right to healthcare is our view
and laws pertaining to the “right” to education. While the U.S. Constitution
does not explicitly enumerate a positive fundamental right to education, a
series of court decisions and legislation provide any citizen a right to a
certain level of education.
As daunting as it may seem, American voters, business and political leaders have shown that they can commit to healthcare as a right in certain circumstances.
Healthcare has been decreed as a right in certain situations and
for certain people. As part of the Great Society, congress enacted legislation in
1965 to guarantee seniors the right to healthcare via the Medicare program and
to assist states in the provision of health services to the indigent via
And, since 1986, all citizens have a right to assistance in an
emergency room…Unfortunately, the law only requires that a patient be
After that you are subject to the whims of the situation.
If you believe that healthcare is a right, then any proposal for reform must call out and explicitly address this issue.
Do you believe healthcare to be a right or a privilege?
If you believe healthcare to be a right, the question that follows is “a right to what?” Is there a set of services to which everyone has access?
How should any proposal for reform address these fundamental questions?
Only twenty percent of citizens have electricity, but everyone has universal access to this life-changing service.
Other countries have proven that health, government and business leaders can work together to decide on what all citizens should have access to and create programs to provide universal access even in the most challenging of circumstances.
Such is the case in Rwanda.
Five years ago, the government made a commitment to create a nationwide program
to provide universal eye care to all citizens.
Why vision care? More than 2.5 billion people around the world suffer from poor vision without access to even the most basic treatment. Poor vision affects the ability of a child to see a classroom chalkboard or learn to read. It affects an adult’s ability to work.
Making a singular commitment of providing universal access to vision care for all citizens was just right for a country like Rwanda. This choice addressed a health issue affecting all citizens, did not require an expensive, high tech solution and contributed to health improvement in ways that help break the cycle of poverty, especially for women.
To make universal access to eye care possible, a public-private partnership with Vision for a Nation was created to train nurses, build supply chains for glasses and eye medications, and visit all 15,000 of the country’s villages.
As of last
year, the government took over responsibility for the management and financing
of the services. To date, more than 2.4 million eye screenings have been
carried out with over 1.2 million treatments provided.
And so, what does the good work in Rwanda have to do with health reform in the United States? Let us recognize that the United States and Rwanda are worlds apart geographically, economically and socially. But let us also not lose sight of the fact that in a poor country where less than 20 percent of the population have access to electricity, all citizens have access to a health service that improves health and allows them to lead better lives. This life-changing service is available to all because the leaders of Rwanda made it a priority and built a coalition of like-minded people and organizations to make it a reality.
As we look ahead to the process of defining, debating and developing new approaches to the health delivery system in America, imagine if elected leaders would start by “crossing the aisle” to select one thing to which all citizens would have access. This focus would provide the dual benefit of measurably improving outcomes while empowering citizens to lead more healthy productive lives. At the same time it would demonstrate that those we’ve sent to Washington D.C. could actually work together to accomplish something meaningful.
If the United States could demonstrate change by providing its citizens universal access to one service or area, what would it be (and why)?
Do you believe all citizens should have equal access to a set of services? If yes, broadly what should be covered?
Consider asking your elected officials what one thing would they be most willing to champion to improve access to health services that benefit everyone.
Learn more about the work of Vision for a Nation and its mission to unlock the potential of the world’s poorest communities by making eye care globally accessible.
Annual health deductibles for workers have increased eight times faster than wages in the past decade. How is this impacting families?
Every day in America the discussion of Health Costs goes from the news room to the living room of 152 million Americans whose benefits provided by an employer sponsored plan. They don’t need the news anchor to tell them things are going in the wrong direction.
The latest Health Benefits Survey by the Kaiser Family Foundation tells the story of how healthcare costs are increasingly eating up more of the earnings of workers particpating in plans that are becoming harder for companies to provide as costs escalate.
Annual family premiums for employer-sponsored health insurance rose 5 percent to average $19,616 in the past year, extending a seven-year run of moderate increases. On average, workers are now contributing $5,547 toward the cost of family coverage, with employers paying the rest.
Since 2008, annual deductibles have increased eight times faster than workers’ earnings and three times faster than general inflation.
A quarter (26%) of all covered workers are now in plans with a deductible of at least $2,000, up from 22 percent last year and 15 percent five years ago. Among covered workers at small firms (fewer than 200 workers), 42 percent face a deductible of at least $2,000.
While there is a great deal of focus on expanding access to health services for the uninsured, those who are insured by company plans face their own set of challenges in the ever-growing personal costs of being insured.
The burden of deductibles on workers will continue to impact them in two ways: a growing share of covered workers will face a general annual deductible, and the average deductible will continue to increase faster than increases in take-home pay.
When it comes to employers being proactive in finding ways to
help employees manage health (rather than merely paying bills when they are
not) there are several trends worth noting:
Among large firms that offer health benefits, one in five (21%) report they collect some information from workers’ mobile apps or wearable devices such as a FitBit or Apple Watch as part of their wellness or health promotion programs. That’s up from 14 percent last year.
Most large offering employers (70%) provide workers with opportunities to complete health risk assessments, which are questionnaires about enrollees’ medical history, health status, and lifestyle, or biometric screenings, which are health examinations conducted by a medical professional, or both. Thirty-eight percent of large offering firms provide incentives for workers to participate in these programs. The maximum financial incentives for these and other wellness programs often total $500 or more.
Telemedicine: About three quarters (74%) of large offering firms (at least 200 workers) cover services provided through telemedicine, such as video chat and remote monitoring, which allow a patient to get care from a provider at a remote location. That’s up from 63 percent last year and 27% in 2015.
Retail health clinics: Similarly, three quarters (76%) of large offering firms cover services received in retail clinics, such as those located in pharmacies, supermarkets and other retail stores. A small share also provide financial incentives for workers to use these clinics.
“Health costs don’t rise in a vacuum. As long as out-of-pocket costs for deductibles, drugs, surprise bills and more continue to outpace wage growth, people will be frustrated by their medical bills and see health costs as huge pocketbook and political issues,” KFF President and CEO Drew Altman said.
How is the trend of rising deductibles and other “out-of-pocket” expenses impacting you and your family? Is this a minor inconvenience or a major issue impacting other aspects of your life (e.g. daily living expenses, vacations, saving for retirement or college)?
How does this issue rank relative to issues you would like to have elected leaders review and address?
To lower costs how open are you to trying new activities such as actively particpating in workplace wellness programs or using lower cost care options such as telemedicine?
The complete Employer Health Benefits Survey report can be downloaded here which includes over 200 exhibits and in-depth review of key issues impacting both the worker and the employers who also continue to be impacted by rapidly increasing health costs.
Download the Summary of Findings which provides an overview of the 2018 survey results. This serves as a great handout for discussions or email attachment for those interested in learning more about this important issues impacting workers.
This related brief on the Peterson-Kaiser Health System Tracker examines employer claims data to measure the uptake of telemedicine services by employees and their family members.
Financial Burden of Medical Care: A Family Perspective: This downloadable data brief from the National Center for Health Statistics utilizes data from the National Health Interview Survey (NHIS) to provide key findings on the financial burden medical care has on American families. The brief reports that 1 in 5 persons was in a family having problems paying medical bills, and 1 in 10 persons was in a family with medical bills that they were unable to pay at all.