Few Public Services Despite the Highest Health Care Taxes

·         The United States health system is a hybrid, with 60% of health care publicly-financed, but most care delivered privately.[1]  While the U.S. system is often thought of as being privately financed through employers, this is not the case.  Private employers cover fewer than half of all Americans¾43%¾and pay less than one-fifth of total health care spending.[2]  In contrast, about 60% of the U.S. health system is publicly (taxpayer) financed.  Taxes fund coverage for more than 20 million government employees, and for more than 70 million persons including the elderly (Medicare), the permanently disabled, the very poor (Medicaid), people with end-stage renal disease, and veterans.  In all, 34% of Americans have government-paid insurance. The rest buy their own coverage (7%) or are uninsured (16%).  Despite having the smallest percentage of the population with government assured coverage of any developed nation (34% versus 100% in most developed countries), Americans pay the highest health care taxes in the world.[3]

·         Among Organisation for Economic Cooperation and Development (OECD) countries, there are three main types of health care programs.[4]

<         A National Health Service, where medical services are delivered via government-salaried physicians, in hospitals and clinics that are publicly owned and operated.  The U.K. and Spain are examples of such a system.

<         A National Health Insurance System, or single-payer system, is a health care system in which a single entity, such as a government-run organization, acts as the administrator to collect all health care fees, and pay out all health care costs.  Medical services are publicly financed but not publicly provided.  Examples include Canada, Denmark, Norway, and Sweden.

<         A universal Multi-payer Health Insurance System, or all-payer system, as in Germany and France.  These systems provide universal health insurance via sickness funds, which are used to pay physicians and hospitals at uniform rates.  These rates are negotiated annually.

High Prices, High Private Administrative Costs

·         The U.S. spends considerably more on health care than any other OECD country, averaging $4,887 per person in 2001, and climbing to $5,440 in 2002.[5]  Canada spends just 57% that of the U.S., Sweden spends just 46%, and the U.K. spends only 41% as much as the U.S. on health care.[6]

·         In 2004, private insurance accounted for 37% of all U.S. health care spending.[7]

·         The U.S. also spends the highest proportion of Gross Domestic Product (GDP) on health care:  15.4% in 2004, compared to a 6.4% average of 193 World Health Organization member nations.[8]  This is an increase from 14.6% in 2002,[9] indicating an increase of $937 billion.

·         The U.S. spends more per capita:  U.S. health care spending per capita was 2.5 times greater than the OECD median in 2004.[10]

·         Economic cost:  The Institute of Medicine estimated the lost economic value due to the lack of insurance between $65 and $130 billion per year.[11]

·         Americans pay higher prices for health care-related services than citizens of other countries.  For instance, the average cost of a one-day hospital stay in the U.S. was $2,434 in 2002, compared with $870 in Canada and even less in other OECD countries.[12]  Prices for pharmaceuticals and physician visits are higher, as well.  Even adjusting for per capita GDP, the supply of health care resources, and the added cost of malpractice litigation, a study in Health Affairs finds that Americans pay more for the same- or lower-quality care.[13]

Administrative Costs in the U.S.

·         In 2003, 24% of total health expenditure went to administrative costs.[14]  By comparison, Medicare and Medicaid have administrative costs of 2–5%.[15]  If total administrative costs were reduced to 5% it would represent a savings of $316 billion in 2003:  over $7,000 per uninsured person.

·         In 2005, Health Affairs released a study of health insurance costs in California.  It found that $230 billion of health spending was devoted to insurance administration and only 66% of health spending went to medical care.  Twenty-one percent of private health spending went to billing-related tasks, and an additional 13% of spending went to non-billing administrative functions.[16]

·         Private insurers spent eight percent of their premiums on billing, marketing and other financial activities, physician offices spent 14% of revenues, and hospitals spent seven to 11% of revenues on these activities.[17]

·         Recent studies show that if California were to implement single-payer health care, total spending on health care could be reduced by about $8 billion.[18]

High Costs Drive Americans into Debt

·         In 2003, nearly 29 million adults (14%) reported medical debt.  Seventy-seven million had medical bill problems or medical debt and 12.4 million reported having both.[19]

·         Uninsured debtors and dependents represent 32.6% of people who filed for medical bankruptcies and 33.1% of those who filed for other bankruptcies.  39.9% of medical bankruptcies came from people who experienced a gap in their coverage over the past two years.[20]

·         People aged 19 to 64 who lacked coverage (35%) had significantly higher rates of medical bill problems and debt than did those with regular health insurance coverage (60%).  In order to cope with medical debt, 28% had to significantly change their way of life.[21]

Health Insurance:  Rising Premiums, Falling Coverage

·         In 2006, 47 million Americans, 15.8%, were uninsured, up from 44.8 million (15.3%) in 2005.  This is the sixth straight annual increase in the number of people without health insurance.[22]

·         It’s getting worse:  In 2006, the population of the U.S. rose by three million people, while the number of uninsured rose by 2.2 million, 73% of population growth.

·         One in three Americans under the age of 65, nearly 90 million people, lacked health insurance at some point during 2006–2007.  This is 17 million more than 1999–2000.[23]

·         Health insurance premiums in the U.S. are rising fast.  In 2007, health insurance premiums rose 6.1%.  Growth rates in insurance premiums are far greater than both inflation and wage increases (2.6% and 3.7%, respectively).[24]

·         In 2006, employer premiums for medical care plans averaged over $1,000 a month per participant for family coverage.  Workers pay an average of $3,281 per year out of their paychecks for their share of premiums.  This marks a $1,500 increase over the past six years.[25]

Who Are the Uninsured in America?

·         Hard working Americans:  47% of the uninsured (22 million people) worked full-time in 2006.  Fifty-nine percent (27.6 million) worked at least part-time.[26]

·         Union Difference:  In 2006, 80% of union workers had jobs with employer health coverage, compared to 49% of nonunion workers.[27]

·         Eighty percent of the uninsured are adults.[28]

·         Fifty-two to 59% come from low-income families.[29]

·         Thirty-three to 38% are not college-educated; more than 25% did not graduate from high school.[30]

·         Surveys show that the nonelderly uninsured are racially and ethnically split:  about half are white and half are minorities.[31]

Small Firms, Part-Time Workers, and Younger Workers Have Less Coverage

·         Between 2001 and 2005, rates of self-employment, part-time work, temporary or contract work, and employees in smaller businesses went up.  While 2.2 million more workers joined the workforce, 1.8 million have incomes below the Federal Poverty Level.[32]

·         Smaller firms are significantly less likely to provide health benefits.  In 2005, while 92% of firms with 100 or more workers offered health insurance, only 65% of firms with up to 24 workers provided benefits.  Fifty percent of the smallest firms (less than 10 employees) offered health benefits, down from 54% in 2001.[33]

·         Uninsured workers are found in every industry:  agriculture, service, wholesale and retail trade, manufacturing, and the public sector each have a sizeable portion of uninsured employees.[34]

·         Firms that employ union workers are much more likely to provide health benefits:  96% of firms with union workers offered benefits, versus 61% of firms without union workers.[35]  In addition, union workers paid an average flat monthly contribution for medical insurance of $174.60 for family coverage in 2003 and $196.60 in 2006; nonunion workers paid $234.35 in 2003 and now pay $308.88.[36]

·         In 2006, the number of full-time workers without health insurance rose to 17.9%, up from 17.2% in 2005.[37]

·         Only 23% of all firms offer benefits to part-time workers.  Moreover, firms with a large number of part-time employees, with high employee turnover rates, and with lower overall wage levels, are less likely to offer benefits to any of their employees.  Only four percent of all workplaces offered health insurance to temporary employees.[38]

·         More than three out of five Americans of working age rely on employment-related health insurance for themselves and their families,[39] but the number of jobs providing health coverage is decreasing.  The percentage of firms that provide employees with health benefits has decreased from 69% in 2000 to 61% in 2006.[40]  Only 5% of people under 65 purchased health insurance on their own in 2005, down from 6.6% in 2002.[41]  The rise in uninsured people shows a decline in both employer-sponsored health and private insurance.

·         Eighteen to 24 year-olds are most likely to be uninsured:  29.3% were uninsured in 2006.[42]  A Commonwealth Study found that nearly 60% of employers who offer coverage do not insure dependent children over the age of 18 or 19 if they do not attend college.[43]  Twenty-five to thirty-four year olds were the second most likely age group to be uninsured:  26.9% were without insurance in 2006.[44]

Minorities and Children Have Less Access to Health Insurance

·         Racial and ethnic minorities are disproportionately likely to be uninsured:  10.8% of whites, 20.5% of African Americans, 15.5% of Asian Americans and 34.1% of Hispanics are uninsured.[45]

·         African American adults are more likely (35%) to use the emergency room for conditions that could have been treated by a primary care doctor.[46]

·         In the past year, 27% of uninsured Hispanic adults with health problems did not visit a doctor, while 17% of white and African American adults did not.[47]

·         Between 2004 and 2005, there was no increase in Medicaid/SCHIP coverage to offset declines in employer-sponsored insurance.  As a result, 300,000 more children are uninsured.  This reverses the decline (400,000) that happened between 2000 and 2004.

Less Coverage Means Fewer Healthy Americans

·         In 2002, 1,930 people between the ages of 25–34 died due to lack of insurance.  From ages 35–44, there were 3,431 deaths due to lack of insurance, and from 45–54, there were 4,734.  While a greater number of young people are uninsured, it appears that larger numbers of older adults without insurance may die because they lack it.[48]

·         The Institute of Medicine (IOM) reports that uninsured people receive too little medical care, too late.  As a result, among 25–64 year olds, some 18,000 unnecessary deaths each year are attributable to a lack of health insurance coverage.  This is 4,000 more deaths than HIV/AIDS.[49]

·         In 2003, 43% of adults without health insurance did not seek medical help for health problems, compared with 10% who were insured.  Uninsured individuals with diabetes, HIV, cardiovascular disease, and mental illness have been consistently shown to have less access to preventative care and worse clinical outcomes.  Uninsured car crash victims have been found to have a mortality rate 37% higher than people with insurance, and uninsured women with breast cancer have a 30–50% higher risk of dying.[50]

·         The uninsured are twice as likely to have an unmet medical need because of cost and four times more likely to have an unmet need for prescription drugs.[51]

Quality of U.S. Health Care in an International Context

·         The U.S. ranked 37^th out of 191 member states in terms of “overall health system performance” in the World Health Organization’s (WHO) 2000 World Health Report.  The rankings were based on measures of the health of the population, the level and distribution of respect and attention shown to patients, and the fairness of financial contribution, all in relation to overall health system expenditures.  A ranking of 37^th places the U.S. below such countries as Colombia, Saudi Arabia, and Portugal.[52]

·         The U.S. has the seventh highest infant mortality rate of the 30 OECD member countries.  The countries with higher infant mortality than the U.S. are Hungary, South Korea, Mexico, Poland, Turkey, and the Slovak Republic.[53]

·         The U.S. also has the ninth lowest life expectancy of the OECD member countries.[54]

·         The U.S. ranks lower than the OECD median in all three categories of physicians, nurses, and hospital beds per capita, despite its high level of spending.[55]  Low nurse-to-patient ratios have been linked to higher instances of medical errors and patient complications, including death.[56]

·         Twenty-eight percent of Americans find it is extremely difficult to get care when needed, as compared to 21% of Canadians, 18% of New Zealanders, and 15% of the British.[57]

·         There are 14,000 AIDS-related deaths in the U.S. each year—more than in Russia, Canada, France, Germany, Italy, and the U.K. combined.[58]

·         A recent study in Health Affairs compared the quality of care in five countries:  the U.S., the U.K., New Zealand, Canada, and Australia.[59]  No country scored consistently best or worst, and each country had at least one best and one worst rating.  The U.S. had the best five-year survival rate for breast cancer, for instance, but the worst survival rate for kidney transplants, and an increasing rate of mortality among asthmatics.

·         The following chart provides a few key statistics from single-payer nations and the United States.