Paying for health care

You will notice that relatively few of the fistful of legislative bills addressing health care in Maine are actually concerned with the practices and procedures of helping people get well. Instead, they often are about who pays for the care.

The long answer to that question usually is presented as a complex network of private for-profit and nonprofit insurers, government programs for the poor, young, disabled or elderly, the self-insured and the medical profession itself. The short answer is simpler: You, if you are employed.

John K. Iglehart, a national correspondent for the New England Journal of Medicine, last month summed up this little-considered phenomenom. “Although funds for personal health services flow from three basic sources — employers, governments and individuals — all of these resources are initially extracted from households as payroll deductions from the wages of working adults, as taxes and other surcharges and as direct payments to providers and suppliers. In reality, government and employers are only intermediaries in the process.”

Who pays matters particularly in the United States because its health care system is the most expensive in the world. In 1997, the U.S spent nearly $4,000 per person on health care; the next nearest country was Switzerland, at $2,500. Worse, approximately 16 percent of Americans are uninsured, a number that grows each year, despite the slowing of medical inflation during the last few years. Worse still, Medicare beneficiaries whose incomes fell below the poverty level but did not receive Medicaid spend, on average, half of their incomes on out-of-pocket health care costs.

Mr. Iglehart’s report, one of a series in NEJM on the health care system, is important to Maine because it gives nationwide perspective on a problem that is also local. The number of uninsured in Maine approximates the national average, but the rate at which Mainers are losing or dropping their insurance is considerably higher. From 1989 to 1997, the number of uninsured in Maine increased from 110,000 to 182,000. Cost-shifting — in which the insured pay higher charges to compensate for the care of the uninsured — is likely to grow more serious.

A couple of other observations from the report:

“In recent years, spending for prescription drugs has increased at double-digit rates: 10.6 percent in 1995, 13.2 percent in 1996, and 14.1 percent in 1997.”

“Medicare has low administrative costs, as compared with those of managed-care companies or private insurers. Benefit payments represent 99 percent of outlays for Medicare Part A. … More than 98 percent of the Part B outlays are for benefit payments.”

Maine can’t solve the related problems of rising costs and a lack of health care coverage alone. It is a national problem that requires a national solution. But as the Legislature reviews health care proposals this session, it’s overriding goal should be to increase access. Everyone’s paycheck is riding on it.