Healing Healthcare: Video Roundup

Healing Healthcare: Video Roundup
By CNBC.com Staff
| 25 Jul 2007 | 11:28 AM ET

Healthcare reform may finally be on the way. With Democrats controlling Congress and both political parties gearing up for a presidential election, the issue is moving to the fore. What’s more, American business is also pushing the issue, with both big and small companies getting involved.Health insurance expenses are the fastest growing cost component for employers, according to a McKinsey and Company study. Since 2000, premiums have increased 87%, compared to cumulative inflation of 18%.

U.S. health care spending is projected to reach $2.9 trillion in 2009. Healthcare in the U.S. consumes far more of the nation’s GDP, for instance, than other G7 nations such as Germany, France and Canada. Yet at the same time, about 47 million Americans –roughly one out of six — are uninsured, which is priced into the system.

The bottom line is that a largely private sector-based healthcare system is not cheaper than a government funded one and it certainly is not an egalitarian one. .

In Britain, for instance, 11% of a taxpayer’s income to a certain level, goes directly to National Health System. Private plans also exist, but they’re considered supplemental.

The U.S. healthcare system is a drag on corporate profits, national competitiveness and government budgets.

Given that backdrop, there’s a growing sense that some form of universal health care system is needed, regardless of where the money comes from. Who pays is indeed another — and equally complicated — question.

Business, which supplies 60% of the nation’s healthcare, is ready to back reform efforts. No national plan has yet to emerge, but states such as Massachusetts and California are making progress.

There’s no shortage of opinions out there, either, but it’s part of a constructive dialog.

Take Robert Crandall, former chairman and CEO of AMR, the parent company of American Airlines, for example.

“I want to put everyone on Medicare,” Crandall recently told CNBC. Medicare works.”

Crandall says Medicare, the federal government’s health insurance program — which covers about 40 million Americans, most of whom are 65 years of age and older — has administrative costs that are 20% that of private health insurance.

“You save billions of dollars on administrative cost.” says Crandall. “If we fund Medicare properly, we’d have a very satisfactory system. “

CNBC undertook a five-part series, “Healing Healthcare”, to look at what business and government are doing to address the problem. Here’s a roundup of Bertha Coombs reports.

Part 1 — Health Coaching

With as much money as employers are spending in health care, some are taking a hands on approach.

UPS, for one, it trying to help employees get healthier through a “health coaching” program, which will also help lower healthcare costs. The company’s program has been underway for a year and is entirely voluntary. Two-thirds of US companies either have or plan to implement such programs.

Health coaches have access to employee health records and then target high-risk individuals, calling them directly to address health hazards and/or concerns. The goal is to get the employee on the healthy track and in turn, save the company money.

Part 2 — Healthy Dose of Venture Capital

Venture capital invested $2.8B in health care companies in the first quarter of this year – the most ever. With more and more VC money pouring into healthcare, there’s a new emphasis on cutting costs with more efficient technology.

Electronic medical records, for instance, coud play a critical role in reducing costs but it will require an enormous upfront investment. Medicare will soon offer free software to get doctors to use its electronic system.

Meanhile, one VC firm, Boston Millennia Partners, has invested in a technology that is changing the way the Leahy Clinic operates.

Watch this space in the coming days for more of Coombs reports or catch them live on CNBC’s “Power Lunch”.

Part 3– The Costco Solution

The warehouse giant may have a cure for small business.

The Washington-based company now offers small business health and dental plans in its home state as well as Oregon, Washington, Nevada, Hawaii and California.

Costco’s insurance arm says it offers competitive rates and desirable deductable levels as well as a wide selection of providers.

John Conlon, the company’s director of insurance services, says expanding the program has been hard because “each state is individually regulated.”

Find out how it made a difference at two companies — G.G. Consultants and Mattress Depot USA

Editor’s Note: Watch this space as the week progresses for more of Bertha Coombs’ reports.
© 2007 CNBC, Inc. All Rights Reserved

URL: http://www.cnbc.com/id/19853280/

The American healthcare system is just a train wreck compared to its industrialised counterparts. If anyone has watched “SiCKO” they would only have a rough idea of the crap Americans have to go through just to receive treatment that would be unthinkable in most parts of the developed world. It was sad to see someone being denied life-saving treatment because they were either not affiliated with another health insurance company, or because that same company wanted to reduce expense that would come from saving their customer’s life.

It’s just sad to learn that the problem has become more painful to not just regular customers but from corporations that purchased such plans from various insurance organisations, such as Aetna, UnitedHealthCare, and Kaiser Permanente. Many of these corporations purchase such plans with the assumption it would meet their employee’s needs and that they would get a fair price out of it. However, they soon realise that they are essentially getting ripped off as many of their employees learn that their treatment or medication is conveniently denied and the countless bureaucracy that is faced to get simple procedures completed such as getting prescriptions or life-saving treatment.

It has been proven time and again by economists that the government is usually the best entity at reducing transaction costs. In this case, we can see that Medicare, an underfunded socialised health insurance plan for the poor, only spends a faction on administrative costs compared to private corporations. This programme actually does its job for the poor and indignant and proves that the United States government is actually capable of providing universal healthcare to all taxpayers if implemented. The US military is also able to receive government-funded healthcare for its service personnel. Why can’t civilians get the same?

Many critics of socialised healthcare bring up incidents of bureaucracy and taxes in countries that have it such as the UK and France. Its interesting to note that although these countries do have issues with bureaucracy and large taxes for funding such programmes, no sane person in these countries would be willing to trade their universal health care in favour of an American-based system. Besides, these discontented individuals can elect officials to reform their national insurance to suit their needs unlike Americans with private health insurance.

What is more, people in these countries are in a position to take their universal healthcare for granted to the point where they make mild complaints about waiting in line to get treated for free or having their life-saving treatments take too long while the average American is simply worried about not being able to afford deserved treatment or being denied life-saving medication/treatment at the last minute because his or her private insurance company needs to make a large profit in the coming fiscal quarter.

It’s really sad to learn in America how private corporations are implementing their own preventative medicine programmes to reduce expenses paid to their corporate health insurer. It’s even sadder to know that many countries with universal healthcare regularly perform preventative medicine to not only reduce taxpayer expenses going to public healthcare but because doctors there get paid at market value for regularly treating patients.

According to “SiCKO” many doctors working for the NHS in the UK also receive hefty bonuses from preventative medicine if they are able to improve the overall health of their regular patients. This actually forces the government to have sizable expenses in the short-term but it will reap long-term benefits seeing patients from contracting severe ailments that require expensive treatments or surgery that would result in greater medical expenses, lost productivity at work and emotional anguish.

Some American doctors I have spoken to welcome preventative medicine because it allows them to regularly meet with patients to not only help them from getting serious ailments but it also gives them a consistent stream of income from the regular visits. I mean we often go to our dealerships to get our cars serviced to prevent future and expensive problems from happening, why can’t we do the same with healthcare?

It’s even sadder to learn how many private companies are able to exploit this American healthcare debacle for their own benefit. Some companies are creating technologies that are targeted at expense control stemming for corporate bureaucracy from private health insurers while others are diversifying into private health insurance by offering their own plans, such as Costco.

In “SiCKO”, America’s healthcare system is ranked 37 according to the WHO which is just one rank above Slovenia. Ironically, Slovenia is in the process of implementing a universal healthcare system modeled on those used by other EU member-states such as France, Italy and the UK. At the rate of its economic progress, Slovenia will surpass the United States in the areas of healthcare despite being a small, former Yugoslav republic since it was also one of the countries that came out of the Balkan Wars unscathed and it was one of the first new EU members to adopt the Euro.

America is either falling behind or the world is catching up. The United States can either make the necessary reforms in healthcare to benefit their citizens and big businesses or continue to wallow in their self-absorbed jingoistic backwardness while the world moves ahead with or without them.


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