As President Obama and his critics prepare for the climactic
battle over healthcare, they face a seeming paradox: Millions of Americans say
the system they depend on for everything from routine flu shots to life-saving
heart surgery is broken and needs fixing. Yet most Americans also say they’re
pretty satisfied with their healthcare. The explanation for the apparent
contradiction- and a big reason healthcare has turned into such an incendiary
fight—is that it’s not one crisis, it’s a bundle of crises. And, since most
people are fairly healthy most of the time, problems can go largely unnoticed
until calamity strikes. Medical costs are spiraling up much
faster than inflation or personal income, for instance, but the impact is
cushioned for a majority of Americans because they still have job-related
insurance. While employers are shifting more and more of the premiums’ cost onto
workers, the increases are gradual and lumped in with other payroll deductions.
For many, it’s only after a medical problem occurs that they discover the
coverage gaps and other limitations in their insurance can turn sickness into
financial calamity. There are problems with quality as well. Americans like to
think they have the best healthcare in the world, and at its best, American
medicine may still be a world leader. But overall, the evidence suggests that
almost every other developed nation delivers better healthcare at substantially
less cost. It is against this background that Ohama addresses Congress tonight
on healthcare overhaul. Costs are expected to rise 71% in the
next decade, according to the Centers for Medicare & Medicaid Services.
Insurance premiums are rising with them. Even with higher premiums, large
companies are narrowing the scope of what’s covered. And, among smaller
companies in some states, one major cancer case can push premiums so high that
the employer is forced to drop health benefits altogether. What’s driving up
costs Partly it’s the abundance of new technologies, which are both effective
and expensive. Inefficiencies "defensive medicine" designed to protect against
lawsuits, failure to use best practices, and a rise in for-profit healthcare
entities— also contribute. Some experts, such as Harvard University economist
David Cutler, argue that modernizing the healthcare system could save hundreds
of billions of dollars annually. Even a 1% drop in costs would make it possible
to cover the uninsured, he calculates. Costs for employer-based
insurance premiums have risen 119% over the last decade, more than three times
faster than wage increases. At that pace, the average family premium could reach
$ 23,842 by 2020, according to a study by the Commonwealth Fund, a nonpartisan
healthcare policy think tank. Rising costs have drained resources employers
might otherwise have devoted to wage increases; some companies have cut benefits
and shifted premium costs to employees. Medical costs are predicted to increase 71% in the next ten years partly due to______.