I read today about the rising poverty levels in the United States to the highest levels since the great depression and how another 800,000 people were added to the list that do not have health care. In addition a local hospital, in Seattle, is laying off employees because of more uninsured patients, bad debts as people are unable to pay their medical bills, cuts in Medicaid at the state level and more cuts at the Federal level in both Medicaid and Medicare. We live in very worrisome times and I sense a lot of nervousness out in society these days. When will this economic decline subside? If I don’t have health care and my children get seriously hurt how will I survive? Are we an insurance policy decision away from ruin? I have spoken with many people who have jobs who would take less or move elsewhere, take time off, retire etc..but one thing holds them all back and its the same answer every time…Health benefits.

Make no mistake first and foremost the issue of health care elicits fear in society today.  The biggest reason is once you are trapped in the system due to an unforeseen illness or tragic accident the bills begin to come in.  It’s like lava flowing from the volcano you can only hope it stops otherwise it will burn everything down in its path.  Except with healthcare it burns down ones life.  At a recent family event I heard of the firefighter who retired in perfect health.  Shortly after he suffered cardiac arrest and now is $200,000- in debt.  As I talk with other family members in that line of work the challenge with the early retirement policy of the profession is the worry of health care, some who still have children to support.  Unfortunately when it comes to health care horror stories are not hard to find.  There are a lot of players that make up the system we have in place today each with their own unique interests

Let’s start with a benefit we worry about, the cost of insurance. Without insurance we are at risk.  We choose not to go to the doctor for fear it may lead to additional costs that we are not prepared for nor can we afford.  In addition as the costs of care rise so do insurance premiums, having an effect on corporate America and having an effect on individual Americans.  What are ways to get costs down?  I am sure an insurance company would say get rid of or charge higher premiums for risky patients.  They would do it in a  heart beat but that goes down a very slippery slope.  An insurance company may then start dictating lifestyles.  As much as I treasure individual liberties, seeing how some people treat their bodies, this may be a good thing.  Don’t get me wrong having worked at Microsoft where we had the best insurance policies on the planet (until recently).  When I had a medical issue I provided my card and that was it.  Everything was covered.  Having left I now understand the debate much better(though unwillingly).  At the end of the day insurance is a business and for them many people are just plain bad risks.

A primary driver of increased cots is the medicines we take. The medications we have to take are run by a giant industrial complex: The pharmaceutical companies.  Back in the seventies a pharmaceutical exec was asked about how do you grow markets and the reply was “I don’t just want to treat the sick, I want to treat everyone”.  Why limit your market.  Fast forward to today and we seem to be well on our way to that vision.  But the bigger concern is what is that doing to our overall costs?  The way big pharma works today is when the release a new drug they need to seek approval from the FDA.  Once approved they have a fifteen year window to “recoup” their research costs.  A good example is Lipitor.  By some estimates Lipitor was taken by 12 million Americans to aid with high cholesterol.  The cost was around $2 per day.  The drug companies have a monopoly for 15 years to recoup costs.  My dad had high cholesterol, but in those days the cure was simple, change your diet.  To be clear that does not work for everyone.  But in that window they will attempt to maximize profits by charging a high price.  Now whether that price is warranted or not is the subject of debate.  Another question is should we reduce the window?  How much are we willing to pay to fight corporate lobbyists?

Advances in medicine have also had an impact both positive and negative.  One problem is many of the advances allow us to treat illnesses and prolong life but not cure major diseases.  Cancer costs continue to increase, because we have the ability to prolong life but the cure is as of yet still illusive. By delaying the inevitable are we succeeding?  I think that is on a case by case basis.  But if we could find a cure for cancer that would be the most optimal and hopefully the most financially viable for everyone involved.  If I have a fear it is that we are, to my earlier quote from the Merck executive, so driven by profits that we are more interested in the treatment than the cure.  I can only hope that is not the case, but it does weigh on my mind.  We cured polio but of late cures seem hard to come by.  We seem more driven by quarterly revenues than moral revenues.

From a legal standpoint the values and virtues that created the United States also hurts us, in particular in health care. The US has always been great about protecting the rights of individuals.  It is why this country was settled in the first place, to escape the perceived tyranny of the monarchy in Great Britain.  When Jefferson wrote The Declaration of Independence and Madison wrote the Constitution they very much had the rights if individuals in mind.  In health care this, however seems to hurt more than it helps.  Every time a malpractice suit is filed it sets off series of cascading events which ultimately lead to higher costs.  The difference between healthcare and other industries, is that unlike a product where I have a choice whether I want to pay a higher price, my health ultimately determines if I have to buy or not.  We may protect the individual but in the end everyone pays individually.

Is there a fall back to help save you?  When you are 65 you qualify for Medicare, which is another issue.  Unlike Social Security, which I belive mathematically is a solvable problem.  Medicare is like an uncapped Gulf oil spill, except you just cannot pour concrete over the leak and fix it. There is no cap.  It’s a great deal, make no mistake.  Most health care costs come towards the end of life, which my own mother is at the that crossroads now.  Her monthly bill is $128.  If I could cover my whole family for $500 a month I would quit my job today and take time off.  But as we all know $128 would not cover the cots if my mom was hospitalized.  A couple of nights in the hospital, it would likely take a decade of her payments to cover those costs.  In the end Medicare covers those expenses, which means tax payers. Or we just print more money.  Still on the backs of working Americans.

The other area with age is as we get older we are forced into retirement homes.  They are a big piece of the end of life equation.  They are not cheap. I looked into this for my Mom.  Many have entrance fees ranging from $60,00 to $100,000, more now since I am quoting 5 years ago.  They do provide services for additional costs such as providing the daily medicines that many seniors need to take.  The monthly charges I can say since my Mom went into a home have risen from $2600 per month to $3500 per month.  Now if you do not have the money saved up what do you do?  This is where Medicaid comes in, a joint Federal and State program to help cover these costs.  But like Medicare this program has no cap it just keeps costing and costing.  When you look for a retirement home and have no money you have to find one that accepts Medicaid and has available space.  Once in though you are covered.  Crisis averted…for now.

When it comes to Medicare and Medicaid there are those who want to politicize these government services as entitlements and want to be true business professionals and say we cannot pay for these services and therefore we should just do away with them all together.  This was highlighted in one of the recent Republican debates in front of Tea Party supporters who booed anyone supported a government program and cheered when someone suggests they get rid of the programs all together.  I guess my question to them would be what would our country look like if we did get rid of Medicare and Medicaid and what new problems would we face?  The biggest concern here would be senior citizens who are the primary beneficiaries of these government sponsored programs.   If all of a sudden you could not afford for Mom or Dad to be in a retirement home would you be willing and able to take care of them?  What would happen when Mom and Dad’s money ran out and all of sudden the kids have to take in and support?  Would this put stress on your family when all of a sudden your government cannot help out and,your on your own? Some would have private industry supply these services and though I can understand the desire, how are they going to contain costs?  Private industry is there to make money not act as a charity.  Tea Party supporters have thought this through, obviously and have the answer.  They just seem unable to articulate it.

As  I look toward the future it seems apparent that we will be faced with some hard choices.  As we go back to where I started with so many people not having health care they can either hope ObamaCare takes care of them or they may simply just have to drop out of the heath care debate and accept their fate by not participating.  As a  country we have to make some choices as to what we can treat and what we can’t.  I will add in those countries that have socialized medicine they make these choices today as they do not have the doctors to cover certain forms of treatment (Denmark is a good example of this).  That may mean if you are at a certain stage of cancer unless you have the dough, you may just have to accept your fate.  A cruel answer but one I believe may play out to be very true.  I have seen the benefits of Medicare, but understand we cannot move this program forward without some better checks and balances.  It is just not sustainable. However what we don’t want to see happen is a system where some live because they can pay and others die because they are of low means.  It’s beneath us as a country, as a people, to accept such a future.

Good Night and Good Luck

Hans Henrik Hoffmann September 28, 2011