By Donella Meadows
–January 28, 1993—-
The annual letter from my health insurance company came on the same day I was reading in Future Survey about the U.S. health care system.
If you are one of those Americans still privileged to pay through the nose for health insurance, you get annual letters too. For four years in a row mine has announced a 30 percent rate increase. This year it said my payments will only be going up 10 percent. My company has decided to cut benefits rather than raise rates further. When it comes to health insurance, paying 10 percent more for less service is considered good news.
Future Survey, published by the World Future Society in Washington, is a monthly abstract of publications on education, environment, economics, and, in the case of last November’s issue, health care. Just a few facts in that issue were enough to sketch out the big picture within which I find myself paying ever more for something that really should not be called a health care system, having lost sight of both health and care some time ago. Let’s call it the sickness system.
In 1992 the U.S. sickness system cost $817 billion — an average of $3200 for each man, woman, and child in America.
Fraud and abuse are estimated to account for $50-80 billion of that total. About 50 percent of the cost of the system comes from expenses that do not help patients — 20 percent from paperwork, 15 percent from malpractice insurance and litigation and overtesting, 10 percent from regulatory inefficiencies, and five percent from misdiagnosis and wrong treatment. Another 25 percent comes from repairing the consequences of smoking, drugs, alcohol, overweight, lack of exercise, and from end-of-life costs. Just one-fourth comes from treating actual, unavoidable illnesses.
Almost 40 million Americans have no health insurance, another 60 million are only periodically insured. Still another 60 million are continuously but inadequately insured.
One-third of the largest health insurance companies are expected to fail or merge in the coming decade. That will mean fewer firms, less competition, higher rates, and still fewer insured people.
In 1991 nearly 1 million hysterectomies were performed in America; over half of them were unnecessary.
One fourth of the people over age 85 in the U.S. are suffering from dementia (mostly Alzheimer’s disease). Care for an Alzheimer’s patient ranges from $25,000 to $65,000 a year. Total cost, about $40 billion per year.
About 55,000 Americans develop AIDS each year; about 45,000 die of it. The average cost of treating one AIDS patient is $38,300 per year. The cost of AIDS in the U.S. by the year 2000 will be between $81 and $107 billion, or about one percent of GDP. The number of teenagers with AIDS has risen by 70 percent in the past two years. Only half of all sexually active teenagers use condoms regularly.
The mortality rate from heart disease has fallen by 55 percent since 1950. The mortality rate from cancer has risen by 6 percent over the same period. Tobacco accounts for about one-third of U.S. cancer cases.
The incidence of tuberculosis in the U.S. declined steadily from 1882 to 1985, at which point it started going up again, because of the appearance of drug-resistant strains. In 1991 there were 26,000 new TB cases. Streptococcus pneumonia, staphylococcus, salmonella, and shigellosus are also showing multiple drug resistance.
The sickness system is vicious in its discrimination against the poor and in its wastefulness. It is also caught in vicious circles. The higher the price of insurance, the fewer are insured, the more the insured are charged to cover others, the higher the price of insurance. The more one hospital adds costly equipment to attract patients, the more competing hospitals do the same. The higher the doctors’ fees, the more resentful are juries in malpractice cases, the higher is malpractice insurance, the higher are doctors’ fees. The more antibiotics are used, the more resistant become the pathogens, so the more antibiotics are used.
Our new president caught on to one vicious cycle during his Economic Summit. “You get some sense of what an incredible downward spiral we’re in,” said Bill Clinton. “Because more costs keep being shifted to the private sector, more private sector people stop insuring their employees. We are … now up to 100,000 Americans a month losing their health insurance. An enormous percentage of them qualify for state Medicaid benefits….. That aggravates the federal deficit. And since states can’t run a deficit, they all go out and either underfund education, or underfund children’s investment programs, or raise taxes, and that takes money away from other kinds of investment.”
The sickness system is sick. Fortunately it’s so high on Bill’s agenda that he has assigned Hillary to figure out how to heal it. It will take someone very bright to untangle the complexities of the system and someone very tough to confront the lobbyists who are already working to protect the money streams of doctors, hospitals, and insurance companies. My guess is that Hillary is bright enough, but that the Clintons can only be tough enough if we, the public, assure them of our strong support for straight-cutting, no-compromise, fair-to-everyone, major surgery.
Copyright Sustainability Institute 1993