How a 1950's Horror Movie Explains Our Healthcare Crisis (And Why the Supreme Court Just Made The Right Decision) PART 1

Disclaimer: I work as a Senior Public Health Policy Analyst at a large Health Insurance company in the Philadelphia area studying the exact problems Healthcare Reform tried to solve. But rather than bore you with dry statistics and mind numbing analysis, I'll use a 1950's horror movie explain our health care crisis. And why The Supreme Court made the right call. (And why conservatives who opposed it will be glad in 20 years)

Part 1

In the 1958 movie 'The Blob' starring Steve McQueen, a meteorite crashes outside a small, rural Pennsylvania town. When a local farmer checks it out the rock opens to reveal a bio-mass blob that looks like jello but quickly proceeds to eat the farmer, and the hospital he was taken to, and the town the hospital resides in, and anyone too slow to run away from slow moving mass of Cranberry sauce (not exactly great special effects back then). The blob essentially gets bigger as it devours everything in its path growing larger and larger until virtually unstoppable. Film buffs note the movie's symbolism had shades of the Cold War with blob representing communism devouring freedom loving America.

Not exactly high end effects back then

However in today's context The Blob can explain the healthcare crisis as it slowly devours America's economy, people, and way of life:

1. What The Is Healthcare Blob and where did it come from - Globally there is a spectrum of two kinds of healthcare systems. On one end is universal health care (or single payer health care) in Canada, UK, Japan, and most of the Industrialized World where health care is free of charge and available to any citizen. The caveat being high taxes are needed to pay for 'free' health care system that everybody uses. On the other end is the US and most of the Developing World where no health insurance is guaranteed and people must get insurance on their own unless poor (Medicaid) or old (Medicare). The caveat being people have lower taxes and freedom to choose health care systems, but get sick without it and you are U-P-S-H-I-T-C-R-E-E-K-W-I-T-H-O-U-T-A-PA-D-D-L-E.

The American healthcare blob is comprised of two things, 1) Escalating healthcare costs due to us becoming unhealthier, living longer, and new technologies that save lives but cost a fortune and 2) 50+ million uninsured who when sick and use health care probably can't pay for it which also drives up the costs. President Obama's plan tried to focus on the latter in hopes it would bring down the former.

2. It's eating our jobs - Here in the US most health insurance is provided by employers because back in World War II when price controls were in place employers could not offer prospective employees higher wages but could offer benefits like health insurance. They also get tax breaks for providing health care to employees. Back in 1958 this was win-win for both employer and employee since health care costs only accounted for 2% of an employees cost to an employer. In 1985 it grew to 9% to where today its 17% of a worker's cost is tied up to their health benefits due to the escalating cost of medical care and is the main reason job growth in our country has slowed down. This also why outsourcing jobs overseas to places like Asia and Latin America are so attractive, employers don't have to pay for health care and in some cases don't have pay employees at all.(I'm looking at you Apple and Nike)

3. It's eating our paychecks - Next time you get a raise from your work try this exercise. Compare the raise in your salary to the increase in your health insurance premium. I will bet money that whatever raise you got in pay was negated by the increase in your health coverage. Generally the rate of inflation in the US is 3% for most consumer goods. As long as worker's annual salary increases stay ahead of inflation, their net income should grow. But health care costs increase 7% each year, and if you have private insurance guess where they pass those increased costs? To you the member. Add in publicly traded health insurance companies where the shareholders have have to get paid first and profits are wrung out by raising premiums, not lowering costs. So 3% increase income - 7% increase in health care = Disappearing Middle Class.

 

USA is #1: in escalating health costs per year Source: OECD

4. It's eating our economy - Health care expenses comprise 15% of America's GDP meaning $1 out of every $6 spent in this country goes toward medical costs. Conservatives have longed poo-pooed universal healthcare saying individuals should not pay for someone's else health costs. But here's the irony, everyday we pay for someone else's healthcare. Built into the price of every consumer product sold in America is a manufacturer's healthcare costs. Buy a new Honda and 18% of the car's price is to pay for Honda employee's healthcare. Buy a coffee from Starbucks and 18% of that Grande, Choca, Latte whatever is the Starbucks employee health care costs. So how can companies lower that 18% to stay competitive and offer a lower price? By laying off employees (and the burden of their healthcare) and shipping jobs overseas.

 

We spend more money but get far less out of our health care system. Source PBS

5. It's Eating Our Uninsured - If you have insurance, next time you get a bill from your doctor, call them up and ask how much of the bill is from 'the uninsured tax'. They'll look at you the way Martin Scorsese looks at Lindsay Lohan when she asks to be his next leading actress. You won't find on any itemized medical bill nor will any health provider ever admit to it but tacked onto the price of any medical service is the cost of uninsured patients who could not pay. So to recoup costs they append it spread out of course to anyone with private health insurance.

 

Rate of uninsured from 1987 to 2008 Source: Census

Classic example: I once needed a head CT scan once for my cleft palate surgery but my health insurance (also my employer, let that irony sink in for a moment) would not pay. So the billing lady says normally they charge $1,500 to the insurance but if I pay cash out of pocket its only $150. Think about it for a second. If the actual CT only costs $150, why would you charge insurance $1,500 (a 1000% markup)? Answer: the uninsured who could not pay for CT services rendered.

Now the uninsured fall into two general classes. First are the working poor, too rich to get Gov't assistance but stuck in a job with no health insurance or underemployed. These are the people who the State Healthcare Exchanges were intended to help by providing affordable insurance plans to individuals who need them. Premiums would be subsidized by financial need and in exchange for all the new guaranteed business, health insurance companies could not deny coverage to people with pre-existing conditions.

Second, are the functionally stupid who have means and opportunity to pay for employer based health insurance but don't because they think they are young and invincible thus will never get sick and won't need insurance. These are the groups of people the Individual Mandate intended as an encouragement to take up employer offered health insurance or pay a $2,500 tax at the end of the year.

The functionally stupid are people like that hotshot motorcyclist going 120 mph down the freeway weaving in and out of traffic like an asshole. Then they flip their ride sustaining severe injuries, but with no insurance, and no ability to pay for that CT scan of his busted face. So the hospital bills his CT scan..to mine...and yours...and anyone with insurance to pay for that $1,500 CT scan.  

6. It's eating our young - In demography, a universal indicator of public health is the Infant Mortality Rate (# Infant Deaths per 1,000 live births). In countries with excellent health care, the IMR should be less than 4 out of 1,000. So where does US rank? 43rd with a IMR of 6.81 (Singapore the lowest at 1.92). Add in indicators for child health such as nutrition, obesity, and preventable diseases we rank last among Industrialized countries. So how can it be that despite having the most technically advanced healthcare system in the World, we trail Cuba in infant mortality? Unequal access to healthcare caused by unequal availability of health insurance coverage. Obamacare will now be able to fix it.

 

In a country with abundant resources, why is this happening? Source: WHO

7. And if left unchecked The Blob will completely devour our current healthcare system as we know it - Think of America's age distribution like a Python with young forming the head and tail being the old who die off. Now picture a Python that just ate a large pig where there's a giant bump in the middle. That's caused by Baby Boomers between the ages of 45 and 65 and its a ticking time bomb to our healthcare system. At every stage of their life cycle Baby Boomers consumed everything, and left nothing for later generations like affordable higher education, jobs, the concept of retirement, etc.

 

The bulge in the middle = DOOM Source: Census

And now this gluttonous horde of narcissistic, whining, self-aggrandizing ass wipes are about to reach retirement age. Oh joy. The people who destroyed the American dream are about to lay waste to our healthcare system. (Full Disclosure: If you're a Boomer reading this and find this offensive. Good!  Because I'm a Gen X'er and everytime I open my retirement statement or look at my falling home value, my hatred for you grows throughout every fiber of my Nirvana listening body).

Good luck getting a doctor's appointment in 20 years, or quickly getting a elective health procedure in a hospital without waiting for the steady march of walkers, wheelchairs, and canes to go by ahead of you. Also if you're expecting an inheritance from a Baby Boomer, forget it because over the long term health care costs will eventually erode those away as well.

Though I advise purchasing stocks in private hospitals and long-term care because think of all that profit baby! On second thought don't do that. Because if Boomers can drive up costs for real-estate and education, just wait til they get to drive up everybody's healthcare costs. And it's because of the Baby Boomers that our current healthcare system becomes unsustainable and will eventually collapse. But the Obama health care reform will be a turn in the right direction.

And in Part 2 I will explain how and why the Supreme Court just made the best decision in this country's history