Healthcare's Downward Spiral
The mid-term elections play out in a few hours, and it looks highly likely that the Republicans will gain back substantial leverage in Congress -- most likely controlling the House, but not necessarily the Senate. The Republican leader in the House, John Boehner (R-Ohio), has repeatedly said that if his party gains control over the House, he will lead an effort to repeal the Obama health care reforms passed earlier this year by the Democratic Congress, although one has to question whether he actually has the will to follow through on that promise. Nevertheless, according to a recent poll, just over half of Americans likely to vote in the election want Congress to repeal "Obamacare" if Republicans gain power on Capitol Hill.
The reality, though, is that repeal is highly improbable given the likely outcome in the Senate. And even if by some chance a vote to repeal made its way through Congress, it would not survive a Presidential veto. Given that likelihood, it has been suggested that Republicans might be far more tempted to kill the bill by employing end-runs that nibble away at the law by refusing to fund its implementation or stopping the IRS's ability to impose the tax penalties mandated in the law or by having individual states, led by Republican governors, refuse to implement parts of the program, even to the extent of continually challenging pieces of the bill in court. All in all, it looks like an unholy mess in the making.
But make no mistake; whatever happens in these elections will make little difference in the downward spiral we are about to see in regard to healthcare -- not just in the United States, but throughout the entire world. And have no doubt, despite all the noise made by politicians of all persuasions, there is nothing in these elections that addresses anything remotely connected with the devastating issues inexorably moving towards us. When it comes to healthcare, it's as though the entire world is playing Nero, fiddling while the entire system burns to the ground.
First, let me explain that when it comes to health, I am not a political animal. Whoever supports alternative health has my support -- at least for those issues. My concern is whether or not legislation actually promotes good health and long life or the interests of the AMA and the pharmaceutical companies. Is it economically viable or does it continue to funnel vast amounts of our tax dollars into the hands of the insurance industry? With that in mind, where does healthcare stand today -- both in the United States and in the world at large?
The healthcare disaster
As I stated last January in my newsletter, The Healthcare Disaster, I believe that everyone (Republicans, Democrats, and Tea Partiers) is wrong and heading for a world of hurt. Unfortunately, their bad decisions affect us, which means we'll all be sharing in the hurt. And for those of you living overseas who are not directly affected by our elections, you are nevertheless screwed by the same trends that undermine things here in the U.S. -- probably even more so. I also stated last January that the healthcare bill as put together by the Democrats was an unmitigated disaster that would definitely cost money short term and did little to address the real problems we face today. Nevertheless, I thought that getting it passed was the least bad option, because if it went down in flames, we'd be stuck with the status quo, which ultimately would be far, far worse. And even more worryingly, if it went down in flames, it would be unlikely that anyone would look seriously at the issue again for years because of the political costs.
Surprisingly, the bill passed, but now the unimaginable appears to be happening. It looks highly possible that instead of being fixed and improved, the legislation will instead be neutered and rendered impotent, leaving a devastated Democratic party in its wake. With no viable alternative in play, and the dead bodies of Democratic legislators who voted for reform littering the political landscape, we will once again be faced with the status quo for at least another decade or two before Congress could possibly summon the will to seriously take on healthcare again. The bottom line is that we would be left with a tweaked version of the disastrous status quo for the foreseeable future, spiraling the United States ever down into increased debt and severely compromised health outcomes.
Let's look at why.
Healthcare demographics revisited
In my January newsletter, I explored the demographics of healthcare -- specifically the aging of our citizenry and the dramatic increase in self-inflicted illness that are virtually certain to overwhelm healthcare in the U.S. unless there are some profound changes in the way healthcare is delivered. But in some ways, Europe, China, South Korea, the Middle East, South America, and Japan are facing the exact same demographics we face in the United States -- but even more so. And these demographics will put intense pressure on the ability of governments throughout the world to continue to provide the kind of national healthcare their citizens have come to depend on. And things have not improved one iota since I last discussed them some ten months ago. In fact, the numbers just keep getting worse as government after government refuses to address them…for political reasons.
Spending on healthcare
According to the World Health Organization's The World Health Report 2008 -- Primary Care: Now More than Ever, the amount the world spends on healthcare is growing faster than the world's gross domestic product (GDP), having increased its share from 8% to 8.6% of the world's GDP in the five years between 2000 and 2005. Adjusted for inflation, this represents a 35% increase in what the world spends on health in just five years. But that's only the average. In fact, the U.S. blows these numbers away, leading the entire world in virtually every single category when it comes to health expenditure -- as a percent of GDP, per capita, and both public and private.
According to OECD Health Data 2010, "Health spending accounted for 16% of GDP in the United States in 2008, by far the highest share in the OECD [Organization for Economic Co-operation and Development], and seven percentage points higher than the average of 9% in OECD countries." Following the United States were France, Switzerland and Germany, which allocated respectively 11.2%, 10.7% and 10.5% of their GDP to health. The United States spent $7,538 USD on health per capita in 2008, two-and-a-half times greater than the OECD average of $3,060 USD (adjusted for purchasing power parity). Norway spent $5,000 USD per capita, and Switzerland $4,627 USD per capita. Americans spent more than twice as much as relatively rich European countries such as France, Germany and the United Kingdom. In fact, the level of health spending in the United States is so high that public (i.e. government) spending on health per capita is greater than in all other OECD countries, excepting only Norway and Luxembourg. But amazingly, despite the fact that the U.S. Government spends far more on healthcare per person than any other country in the world, it only manages to provide insurance coverage for the elderly and disabled people (through Medicare) and some of the poor (through Medicaid and the State Children's Health Insurance Program, SCHIP). In most other OECD countries, governments manage to provide universal primary health insurance for every single citizen for, on average, half the cost.
And our healthcare costs don't end with exorbitant government expenditures. In truth, even though our government pays more for healthcare than any other OECD country, it only covers around 70% of the costs. Private insurance accounted for 34.1% of total health spending in the United States in 2008, by far the largest share among OECD countries.
Okay, so the U.S. spends much more than any other country on health, but at least we have the best health care in the world according to a number of pundits, right? In truth, such claims are more political than factual. According to virtually all of the major measurable markers of health, the U.S. healthcare system is less than stellar.
- Despite the relatively high level of health expenditure in the United States, there are fewer physicians per capita than in most other OECD countries. In 2008, the United States had 2.4 practicing physicians per 1,000 people. The OECD average is 3.2, about 33% better.
- The number of curative-care hospital beds in the United States in 2007 was 2.7 per 1,000 people, again lower than the OECD average of 3.6 beds.
- Most OECD countries, including the U.S., have enjoyed large gains in life expectancy over the past fifty years. In the United States, life expectancy increased by eight years between 1960 and 2007. The average for OECD countries was 11 years over that same time period and 15 years in Japan.
- Likewise, we have similar drops in infant mortality in the United States. In 2006, it stood at 6.7 deaths per thousand births in the U.S., but in most OECD countries it was only 4.7. But that's just the average. Iceland, Sweden, Finland, and Japan have infant mortality rates of around 2.5 deaths per 1,000 live births -- less than half the rate in the U.S.!
- According to the World Health Organization's (WHO) 2000 report, the U.S. ranked 37th in the world in terms of the quality of its health care system. Now to be fair, the WHO rankings are in many ways close to worthless, so that number 37 spot for the U.S. may be highly arguable, but what cannot be argued is that by no meaningful measure is U.S. healthcare the best system in the world, despite the fact that we pay vastly more per person for our healthcare than any other country in the world. In terms of value received for dollars spent, U.S. healthcare ranks close to the bottom of the list.
Now keep in mind, all of the dollars and all of the deficiencies we've talked about relate to U.S. healthcare as it is today. This is the status quo. This is what we have now. This is what we will continue to have if the healthcare reform act is repealed. The real question we need to be asking ourselves is what can we look forward to down the road, assuming that Obamacare is repealed or starved to death -- essentially maintaining the status quo?
Costs will go up and up and up -- and health will decline
Quite simply, under the status quo, healthcare premiums are more than doubling every ten years. Now, it's true that nobody knows whether or not Obamacare will increase or decrease those costs over time. But what is known is that without changes to the system, that doubling every ten years will only accelerate. The status quo is a known disaster.
One of the few significant benefits of the healthcare bill that passed earlier this year is that it at least begins to point reimbursement away from "services provided" to "results achieved." Under the current system, which seems destined to be kept in place, doctors and hospitals are paid for the procedures they perform. The more procedures they perform, the more money they receive. The more expensive those procedures, the more money they receive. This creates little incentive to do anything but prescribe ever more expensive procedures, thus continually driving up the cost of healthcare. For example, how many doctors would still be prescribing hormone replacement therapy today to some 30 million women if they were docked income because their patients died, rather than rewarded because they put their patients on yet another drug?
Make no mistake; the current system is broken. Repealing the healthcare reform bill is not going to change that. In fact, it will just lock in steadily increasing costs and steadily decreasing levels of care for the next 10-20 years. At some point, it will have to be addressed -- most likely through drastic cuts in the level of service provided to the average citizen. The longer we wait, the more painful the adjustment will be. Obamacare did not resolve the problems inherent in the system by any means -- but it did open the door to changing them. If it's repealed, that door will slam shut for the foreseeable future. In other words, be careful what you wish for; you just might get it.
But misplaced incentives, medical doctors, insurance companies, and stupid government policies are not the only reasons that healthcare costs will keep doubling every ten years…or faster. In fact, we ourselves, the world's citizens, are the single biggest factor driving costs ever upward.
Not long ago, I wrote a blog titled "The Top Overweight Countries Speak English." Essentially, it was about the fact that the world, led by the American way of life, was getting fatter by leaps and bounds -- or more accurately by jiggles and wiggles. Make no mistake; obesity is on the rise, and it will cause healthcare costs around the world to skyrocket. (It already is.) Obesity is spreading globally. Between 1995 and 2000, the number of obese adults increased worldwide by an astounding 100 million people, reaching a total of 300 million, with 115 million of those living in developing countries.
But that was in 2000! The numbers have only accelerated since then. It is estimated that an additional 2.4 million people have become obese in the United States in just the last three years. In fact, it is now estimated that 30% of U.S. citizens and some 29% of Australians are currently obese. In China, the obesity rate is increasing by a mind-boggling 40% per year, each and every year. In fact, worldwide it is now estimated that over a billion people are overweight -- creating the perfect breeding ground for a global tsunami of heart disease and diabetes. Who will pay for their healthcare?
The world's birthrate is dropping precipitously. In fact, the rate of population growth is now about half of what it was in the 60's. Take that Paul Ehrlich! Even more staggering is the fact that the global population of children under five is expected to fall by 49 million over the next 40 years. Much of this is happening in Europe, where virtually every country other than France is looking at birthrates insufficient to even replace their populations as senior citizens die off. At first glance, that might seem like good news for healthcare -- fewer children means fewer people that governments need to provide healthcare for. So costs should go down over time, right? Unfortunately, there's a flip side to the decreasing birthrate.
At the same time that the number of children under five is expected to drop by 49 million, the number of people who will be over 60 will grow by 1.2 billion over the next 40 years.
This hurts in two ways. First, senior citizens require more medical services to treat "age related" diseases such as heart disease, diabetes, Alzheimer's, and cancer. Thus the cost of providing healthcare for countries will increase significantly on a per capita basis as the population ages. Incidentally, the incidence of cancer worldwide is projected to climb 50% in just the next ten years. Second, and maybe even more important, the burden for providing this more expensive coverage will fall on an ever shrinking younger working population as a result of the fewer babies being born thing we discussed a moment ago. And for those of you in the young, aggressive developing countries of Asia and South America who might be feeling a bit smug right about now: don't! The big surprise is that things may be even worse in your part of the world than in the developed world. South Korean and Taiwan have some of the lowest birthrates of any major country in the world. China, of course, is about to reap the fruits of its one-child-per-family policy. In fact, China is rapidly aging to the point where demographers refer to it as the 4:2:1 phenomenon -- in which one child becomes responsible for supporting two parents and four grandparents. Japan is already there…and beyond, with an incomprehensible birth rate of just 1.25, far, far below the 2.1 required for mere replacement. If it drops just a little further, to 1.00, something bizarrely interesting happens. Theoretically, in a population where everyone has only one child, no one would have a cousin or aunts or uncles. If you think about it, your parent would have no brothers or sisters; thus, you could have no aunts or uncles, let alone cousins.
Brazil and Iran have already seen plummeting birthrates. In fact, Iran's birthrate is down to 1.74. This is an astonishingly low number for a non-developed country. In the next 40 years, Iran's population of over 60's is expected to increase from 7.1 to 28.1 percent -- well above the dismal numbers seen in Western Europe. Cuba, another non-developed country, is beginning to look like Club Med for seniors, and Russia is losing population at an astonishing rate. The bottom line is that of the 192 countries surveyed by the WHO, 66 have fertility rates at or below replacement level.
Again, especially for those who think the world is overpopulated, that might seem like a good thing. It's not, though, because along with having fewer children, people are also living longer. This has less to do with healthcare, than with other factors, which we'll talk about in a moment. But first, let's take a closer look at the numbers, which get worse the more you look at them.
First, it is important to understand that the aging of the world has much less to do with improved medical care than you might have been led to believe. For example, in the United States since 1960, life expectancy at birth has increased by about seven (6.97) years. At first, that might look like a huge win for improved medical care, but in fact, about 90% of the gains in life expectancy are attributable to a reduction in rate of death from cardiovascular disease and lung cancer combined with a reduction in the rate of death in infancy. Those gains are not so much attributable to advances in medical care as they are to fewer people smoking and better water treatment and sanitation -- important things, but not "medical" things. So what does modern medicine accomplish?
Although it's not very good at making people healthier in old age, modern medicine is good at using expensive therapies and drugs to keep people limping along into their 60's and early 70's. If one measures success in terms of the quantity of life as opposed to its quality, then there is much to recommend about modern medicine. But even here, there is less than first meets the eye.
In fact, there is now compelling evidence that genetics plays the major role in helping people live longer, not medicine. When it comes to living to 100, that's more likely to be determined by your genetics than your medical care.
In Lessons from the Miracle Doctors, I wrote, somewhat tongue-in-cheek, about the apocryphal old man:
We've all heard stories of the man who smoked and drank like a fiend for eighty years, was never sick a day in his life, but died at the hands of a jealous husband who shot the old letch when he discovered him in bed with his twenty-year-old wife. These things happen, or so I've been told. On the other hand, there's no question that your odds of having emphysema or lung cancer or of having parts of your mouth, lips, and tongue surgically removed increase dramatically if you smoke. It's all a question of odds.
Well, as it turns out, that paragraph may not be so tongue-in-cheek. Meet 108 year old Helen Reichert. She lives on rare hamburgers, chocolate, cocktails, has never touched a vitamin pill, and smokes like a fiend -- lots and lots of cigarettes, every day for over 80 years. Not only has she made it to 108, but she's still sharp as a tack, has a great memory, and is still active. As it turns out, for Helen, it's probably not just a question of odds. Her brother Irving is 104. Her other brother, Peter, is 100. And her sister, Lee, made it to 102 before dying in 2005. As it turns out, they all have a genetic marker that seems to be responsible for their resistance to the diseases of aging and that gifts them a long life. The rules of living a healthy lifestyle do not seem to apply to people with those markers…within limits. But certainly for the rest of us, we're looking at a maximum of 75 to 85 years. And for the rest of us (and I'm assuming I'm one since no one in my family tree has made it to 100, with almost no one on my mother's side of the family making it much past 70), lifestyle does indeed matter. It matters in two ways.
- It makes a difference as to whether or not you actually make it to your maximum 75-85 years, or die at 60 from a heart attack.
- And maybe even more importantly, it determines the quality of life you have over the last 20 years of it and whether or not you'll require expensive medical procedures and an endless supply of debilitating prescription drugs to merely hang on as a stoned-out zombie for those final years.
Incidentally, when I said that none of my ancestors made it to 100, the vast majority died from either heart disease or complications from diabetes. Not long after my 62nd birthday, a complete medical test revealed that my cardiovascular system was perfect, with zero evidence of blockage or hardening of the arteries, and a heart capable of operating flawlessly under extreme stress. In addition, my blood sugar numbers were spot on. So although genetics probably dictate that I don't make it to 100, I'm probably not going to be slowed down along the way by diabetes, heart problems, or emphysema. The bottom line is, that for the vast majority of us, lifestyle matters.
And it matters for the future of healthcare. With the world population rapidly aging and a diminishing number of young working-people forced to pay for the care of the elderly, the only thing that can save healthcare in the United States and elsewhere is for people to change their lifestyles enough so that they don't need to suck the system's teat dry in their final years. There simply will not be enough resources to provide the level of care that an out of shape, obese, improperly nourished world demands. And if we want to avoid (in the parlance of Sarah Palin) death panels telling us what health care we can and cannot have, the answer does not rely on repealing healthcare reform. But rather, we need to take care of ourselves enough so that we never put ourselves in the position of requiring someone to make that decision for us.
I do not know how the mid-term elections are going to play out, although it's not hard to at least make a prediction as to the general tone of the results. And given those likely results, I can only hope that the new Congress exercises wisdom as opposed to political expediency and eschews the populist choices of trying for repeal of the healthcare bill or opting to starve it to death in appropriations committees. There is no question, despite the President's protestations to the contrary, that Obamacare is a disastrous piece of legislation, but at least it represents a real attempt to get the system off its current downward spiral. Although repealing it might feel good for the moment; it would be a disaster.
The smart thing would be to acknowledge what the bill attempted to accomplish and then rip it apart and fix it from top to bottom. Notice, I said fix, not repeal or scuttle. And let's stop pretending America has the greatest healthcare system in the world. It doesn't, not even close. Yes, it's the most expensive by a wide margin, but that's not actually the same thing as best. Let's stop trying to score political points and let's work together to do the right thing!
Since that's not likely to happen, and since our healthcare system is likely to continue its downward spiral to disaster, it leaves it up to you and yours to start taking care of yourselves. So unless you've tested positive for the longevity genes, you better start cleaning up your act and living the Baseline of Health lifestyle ASAP.