How Health Care in the United States Works Right Now

break it? Health care? Health care reform. Everyone seems to be really confused about what lies ahead in the United States and our health care system. It's so confusing, Chuck that I'm not even certain if healthcare is spelled as one word or two. That's pretty much the level that we're at an understanding the idea of health care, let alone healthcare reform. Right, So we're trying to figure this out and along with you guys, and maybe you can learn something here. Yeah. So, um, I guess let's kick

it off. Let's get this ball rolling. Yeah, we're gonna We're not gonna talk about future plans. We're gonna talk about how it is today. Yeah. Well, in this podcast in this edition, in this edition, Part one of four, Part one of four. Yeah, it's about the current health care system in the United States. And Chuck, have you ever gone without health insurance? Yeah? How long? Oh? Man?

I seem to think that after my parents. Uh see, I think it's the familiar story for everyone, sometime around after college until I got my first real job, which was at least seven or eight years later. Yeah, I think I did a decade. Yeah, same same story, And the parents are always on you, you know, like, oh, you know if you had an accident, and I was like, I'm yeah, exactly, And luckily it worked out the same here. I don't think it works out quite so well for everybody,

but sadly you and I are lead charmed lives. Uh. I guess we'll get to the uninsured soon enough. So Chuck, let's go back to the beginning nineteen twenties. In Texas, a guy named Justin Kimball, uh founded a company named Blue Cross still around to day. As I understand, we share. We understand because they have a floor right below us. I believe that's right. That's where I've heard that name before. We shared building. So he started an insurance UM a

program plan where UM women contributed. I think teachers specifically contributed fifty cents out of every paycheck UM toward their eventual maternity needs. Right, so when they went to the hospital to have a baby, they were already prepaid. It's not really insurance prepaid plan, but there was something that came out of it that really gave birth to the

insurance industry in the US. If you'll forgive the metaphor, um, not all of these teachers had kids, so you could actually make money selling premium selling policies to people because not everybody's going to get cancer. And that's how the whole system still works today. It's a gamble, you know. Ned Flanders once said on The Simpsons, actually wasn't Ned Maud Flanders was explaining Med's position that UM they don't have any kind of insurance because Ned considers it a

form of gambling. And it really is. On one side view, the insured are betting that at some point in time, some injury or illness is going to befall you, that's going to cost more to treat than you've put in in monthly payments towards your policy. It is total gambling.

The insurance company, on the other hand, is betting that you will be hit by a bus and die immediately, something along those lines where you're not going to need any kind of care, right, or that you just lead a healthy life and nothing nothing happens to you, which is not gonna clearly not gonna happen. I think the hit by the bus scenarios the absolute best that can

happen for a insurance company. But so, yeah, it's a form of gambling and you're going head to head with the insurance company, and sometimes it pays off, sometimes it doesn't. But for the most part it it's a pretty good system basically speaking. Yeah, and you pay for peace of mind a lot of times. Is what a lot of people say. You know, he sounds like a chill That sounds like I'm selling interest. I believe that was from Barton Fink. It was John Goodman said that he sells

peace of mind. Nice. Well, Chuck, let's fast forward a little bit. By the nineteen forties, UM companies had already begun offering employer uh space insurance plans. Yeah, it's a great incentive to get the best and the brightest, definitely, and actually still is because of this business, which is a sector of US society obviously part of the economy, which is what I wanted to say. But business is a sector just like you know, populations of sector, governments

of sector, that kind of thing. Um business said we're going to take the burden of healthcare on our shoulders. Yeah. In ninety three, the i r S supported this and encouraged it with a ruling that said, UM, employers can pay for these programs, these plans for their employees out of pretext dollars, which makes the whole thing really attractive.

And all of a sudden, the U S has what amounts to a state sanctioned employer healthcare system, right, and which still thrives today, which is good, same pretax dollars, same deal with I R S. The chances are good that you if you have insurance in the US, you have it through an employer. Yeah. Most people have insurance through their company and their employer UM. Not as many people have the more expensive and harder to get individual insurance. Yeah.

I think fifty percent get it through the employer UM and thirty get it through the government run program Medicaid or Medicare, right. Medicaid Medicare were created in I think ninety five by the Johnson Administration j and UM. The s CHIP is the other big one for children, and that's state run like Medicaid. Medicare is for the elderly and the chronically disabled, and peculiarly UM people with with kidney failure, renal failure. Yeah, Uh, Medicaid, as I said,

it's state run. UM is for other people with disabilities, the poor you can't afford it, and pregnant women. And then s CHIP is for kids, yes, and that is UH covers uninsured children under the age of nineteen whose families earned up to thirty six thousand, two hundred per year. Look at you with the stat I've got a lot of stats. I was gonna say, sinse that that's the first of many, right, and then actually there was one more that I don't know if you knew about the

high risk health insurance pools. And these are people that have pre existing conditions that normally would not be able to get insurance at all. And they what they do is a group these people together, same concept as as an employee employee based deal. Those are the ones you see on little ninety nine cent signs. On the side of the road, like need insurance kind of thing, you just get lumped together. UM. So yeah, there's that. You just pointed out one UM type of insurance, which is

group insurance. Most employer plans, probably all employer plans UM are group insurance. And it works because it is a group because you're and these are good because you usually don't have to fill out the big questionnaire about your eating habits and you're smoking habits and um, there's no physical exam exactly, and pretty much anybody who wants to take part can contribute and be insured. Any employee, I

should say, and usually their family kids, that kind of thing. UM. A very small portion of the US population has UM individual plans. And one of the reasons why is because you have to go through a rigorous screening process. It's not cheap. If you are found to have a pre existing condition, Um, you can be denied insurance very easily, I imagine, pretty heartbreaking. And yeah, it's it's really expensive. It's it's very it's an expensive UM proposition, UM, whether

you're an employer or an individual, and increasingly an employee. Right, So we'll get to that in a minute. What are some of the types of insurance plans that are out there in the US today, there's pretty much too umbrellas. Right as far as models go, I would say, so that I think you're talking about the f f S, the fee for service model, and then the managed care model, which so well you know which under the managed care is when you hear about HMOs and p P O

s and pos and that those are all managed care. Yeah, the big the I guess the main characteristic of fee for service is and this is the original model for insurance indemnity insurance. You you, you pay your monthly premium and you're you're insured. You come down with the cold,

You go to the doctor, the doctor cures you. He gives you a coke and says, drink this and you'll be fine, right, and smoke the cigarette, right yeah yeah, um, And uh, you pay the doctor, you file some paperwork, your insurance company reimburses you, and you go along your merryway, continuing paying your monthly premiums. Again, right, this kind of old school model like what our grandparents probably hadn't right.

And then I think in the eighties that hm mos came about, managed care became um much more popular than the FFS model, and actually there's some UM plans that kind of combined the two. But with managed care UM with fee for service, the the emphasis is on treatment.

With managed care, there's more emphasis on prevention, supposedly, and that's where it really that's one of the big sticking points with this whole mess that we have in this country is a lot of doctors and a lot of managed care still don't practice enough preventative care, they say, right, So, at the center of the managed care model is a primary physician who's supposed to know you, know your family, know your history, know that you eat more donuts than

you should, know that you lied on your insurance form when you said you don't smoke, and is saying you're gonna get the beats, you're gonna get lung cancer. Somebody who knows you, who you've seen, and who who can you you can trust to kind of guide and manage your health. Right, they're kind of a dying breed too, sadly, definitely, And um, there's a good reason why, Chuck, you read

that CNN article that was distressing. Actually it was an editorial by Dr Vance Harris, I believe, and uh he basically gave a rundown of why the primary care physician is becoming a dinosaur, right, Yeah, it was pretty pretty depressing actually. So he was saying that for every several thousand dollars he saves the healthcare industry by using his medical training to actually make diagnosis rather than really expensive

screenings like treatment as opposed to procedure. He said that for every several thousand dollars he saves the industry, he makes fifty bucks. Um, so he's there. It's a primary care physicians are not making a lot of money. What's more, there's a lot, uh, there's a lot of issues surrounding malpractice.

On one hand, you can say, well, the very fact that there's malpractice losses out there, and they often add up to astronomical amounts of money being paid out to people who are found to have been the victim of malpractice. Doctors are a little nervous about relying on their medical training to make a diagnosis when there's an m R I machine in the next room that they can just say this is going to solve it one way or another.

Although fo a fact. And then at the very least, even if I'm said, I could say, well, the m r I manufacturer screwed up. You know. Uh, there's a lot of passing the buck because of that, supposedly, but there's another way of looking at that correct well, medical malpractices. You hear a lot about UM doctor saying that's driving us out of business. We can't afford the premiums UM. We have too many patients. We haven't to squeeze in patients that that come in for you know, because they're worried.

I know, cyberchondria feeds into it. People read on the internet, I've got reflux, I need to get a endoscopy, and they go in there and demand one, which I mean, really, it's it's there. It's your right. You're a patient and you want to make sure that you have a healthy body. It's tricky business, though, it is, because there what did you call it, cyberchondria? Yeah, excellent, it's uh an argument

that's often used against pharmaceutical companies. Uh. Advertising on television, you get the impression that they are educating the consumer, just say hey, here's the words you use when you talk to your doctor and get our pill. You know, I mean, how how much of an effect has that had on UM over prescription. I'm sure a bunch and there's uh, there's so much information out there now, that's the first thing I do. I diagnose myself on the internet all the time, and I know a lot of people.

Do you really Oh yeah, man, what's you What do you have? Like that? Reflux? Big time? You're not much of a complainer, Chuck, shut up, really had no idea you have reflex bad reflux, dude. Let's take it back to uh can when you talk about my practice again real quick, because I do have a study. UM, so you hear a lot about how how those costs are driving doctors out of business. And I'm not saying one way or the other. I'm just gonna throw the study out.

The Americans for Insurance Reform they are a coalition made up of Consumer Federation of America, Consumer Watchdog dot organ a hundred other public interest groups. They release a study UM this week actually that found that malpractice premium are down and at the lowest they've been in thirty years. UM malpractice claims are down since two thousand and in states where the states have limited the consumer's ability to sue for malpractice, premiums are about the same as in

other states. So I'm not saying they're not paying a lot and it's not putting a dent. But they do say that malpractice claims only constitute one fifth of one percent of annual healthcare costs in the United States, So that's kind of an obsolete argument these days. Well, it may be a little overblown. I mean, of course, tell the doctor that that has to pay a lot of money. But from what I read, it's it's not the central problem like some people say, like it needs reform, it

needs to be controlled by the government who knows. Okay, I'm just here to report the facts, and you did an excellent job. Thanks. Let's go back to UM talking about where you get your insurance, right. We talked about employer based plans. We talked about people who who get the their insurance individually, right, people who get it from the state. UM. And then there's another group known as the uninsured. Yeah, and this is where it gets really hinky.

The number of the uninsured is uh, kind of all over the map right now. Well, yeah, and also it's one of the central folk I of UM the insurance

or healthcare reform debates. Well that there's forty five actually as far as August two thousand nine, UH Census Bureau figures forty five point six million uninsured Americans and that if you're a person who believes that healthcare is a human right, you think that these people should be covered in some form or fashion, right, right, And they're really nitpicking this number because this number, the number of uninsured, is largely what a lot of the financing is going

to be based on. Yeah, we'll trying to project like a decade into the future. And if they don't get that number right, you know, the money doesn't work out, then that's when you're really screwed. Well sure, um, you were saying that not everybody's on the same page. Who the uninsured are? How many there are? Um, there's a guy named Michael D. Tanner of the Cato Institute, and he pointed out that actually, I'm more of a Brookings Institute Fann. Cato is pretty good to be all about Kato.

I was, I've, I've, i've, I'm still am I, but I like Brookings these days. So Tanner's Tanner points out that UM about twelve million of the forty five point six million people who are uninsured in the US UM are eligible for Medicaid or s CHIP. They just haven't signed up. It's a really good point. He also points out that if they ever go in for treatment, that should pop up um in in whatever patient data that the administrator takes in, and they'll be automatically enrolled in

whatever program suits them. Right, So that takes care of twelve million. One of the ones I don't necessarily agree with. And I think people who think that health care is a universal human and Wright would disagree with very much, as he points out that about ten million of these people who are uninsured in America aren't Americans. You're illegal. And you know, it depends on when you start looking at these numbers. I started looking around there, people are

throwing all everybody's got a number. It's because it's hard to count and account for these people. Yeah, Uh, they're generally illegal. Immigrants aren't gonna step forward and say, you know, count me on your report. So that's one reason. But he Tanner also makes one last point that, um, you and I are kind of anomalies, Chuck and having gone several years without insurance when we were younger men. Uh, about fifty of the uninsured in the US go six

months or less without insurance. So really, this forty five points six million Americans, even if the number remains the same, who makes up this population is changing constantly, right, it's a snapshot. Basically, I saw this one person put it in one of the articles you sent me, So yeah, exactly how many uninsured people there are and who they are is kind of a big part of this debate about whether you know health care needs reform. Actually, let

me let me correct myself. I haven't run across anybody who says that healthcare doesn't need reforming. Of you. Now, everybody agrees that there's something wrong, that it's broken, and the World Health Organization would probably agree with well, hold on, first, let's talk about some of the different arguments. There's some people who say that public health care is nothing more than just uh, a weak part of the American welfare state. And why should my taxes pay for some other guys

health insurance when I'm paying through the nose? Um. The you could say that competition might ease this this, you know, um, giving people vouchers to go buy their own insurance might make them a little more penny wise with how they spend their money. Um. Really, ultimately, what seems to be agreed upon by every buddy, is that the American healthcare system is too expensive for what it provides big time.

So let's talk about if you mentioned the World Health Organization, this was huge and this this still the study was from two thousand and it remains a real um piece of ammunition that's used many different ways in the debate on healthcare reform. It was a groundbreaking study. And like you said, we are the most expensive. We spend more

money on healthcare than anyone in the world. We spend sixteen In two eight, we spent sixteen point six percent of our GDP on healthcare, not just government spending, but just across the board GEZ sixteen point six of the market sixteen point six percent of the market value of the United States, and that that year was spent just on healthcare. That's more than defense. Buddy. We were in

Iraq and Afghanistan at that time. If you, if you give me a number like that, I would say in response, Josh, that of the during ninety one countries, say study, then that probably means that we're at the top of the list. Then for what you get for your dollar, you would think we should be since we have the most expensive and technologically sophisticated healthcare system in the world, top ten to one. You would think, oh, where we should be? Yeah, I mean I don't easy, yeah, but I'm gonna give

you some leeway and say, top ten. Okay, how what is it really? Seven in the world out of a d countries? You know who is just above us? Costa Rica? Awesome? You know who's just below us? Slovenia. Wow, Yeah, that's where the US ranks against Slovenia. But yeah, since we have the most expensive health care system in the entire world on the planet, we should by proxy have the best health care system is rated by the World Health Organization.

You want to hear something else, chilling? Uh, Americans life expectancy is lower than Canada, half of the Caribbean, including Puerto Rico, in Cuba, Chile, all of Western Europe, some of Eastern Europe, Israel, Jordan's, Singapore, Hong Kong, Japan, Australia, and New Zealand are life expectancy is lower than all of those countries. And I'm not necessarily saying that definitely means that their health care system is so much better,

but it probably lends itself to to that argument. I know the study you're referring or the article you're referring to, Chuck and um. It references a study from the New England Journal of Medicine from about ten years ago that showed that the average black man in Harlem was less likely to reach age sixty five than a man in Bangladesh. That is messed up. That's not supposed to be. No, no, not when you're spending the kind and we're not saying

because America is so much better. It's because we spend the kind of money we spend in respect better results. That's one thing that a lot of people have agreed up on the um. The other point to this is by the way we spent two point four trillion dollars in two eight on healthcare. Right, healthcare spending and costs continue to increase, but as someone else pointed out in are mortality rate flattened, it hasn't gotten better since then. So, in short, the US is not getting enough bang for

its buck as far as it's health care system. We're not getting healthier, but we're certainly spending more money. What's going on, Well, I mean, there's a Jesus there's a lot of reasons. I know. One thing a lot of people point at is the aging baby Boomerson out the age where they need a lot of care in the hospitals and buy doctors. Uh, there are fewer and fewer doctors and nurses, so uh, they're not getting as good

at care. And there's more. Um. I think they just called the medical errors in the article I read because of understaffing. That's one reason you're what you're talking about could actually be considered symptoms. And we should probably say, just for c o A, that if you what Jerry and Matt in here, you would get a totally different

podcast with all the same research. There are so many ways of looking at this issue that all you and I can do here, Chuck is try to get to the central focus of it without you know, leaning into

partisan politics or anything like that. It seems to me from what I saw come up time and time again from UH sources on both the left and the right, pro business, pro labor, is that the American health care system is too sophisticated, it's too advanced, and patients have too much access to it, too much, you could say, frivolous access to it. So that m R I scam.

We were talking about demand, right, the patient demands it because that money that goes towards your employer based insurance policy comes out of your paycheck, right and when when so right there, this is money you haven't even seen it comes out before hit your your paychecks direct deposited into your account. Right. Secondly, it's relatively cheap, and when you go to the doctor, you're not actually shelling out money nor so you have no real incentive to be

um cheap. What was the Simpsons huh episode you're talking about? So you remember? Do you remember the one where the home Homer and Lisa go into isolation tanks um, which, by the way, I did recently and it was cool. Um. And Homer's isolation tank is repossessed while he's in there, and one of the laborers who's repossessing this thing tells the other one to lift with his knees, and the

other guy goes, screw it. I've got health insurance, right, And that's kind of the attitude some people take is I'm paying for this, I'm gonna get my money's worth out of it, exactly. So I got some heartburn, I'm gonna go demand the camera down the throat instead of trying to treat it and see if or not eat chocolate and read right. Well, that that's the other thing that it portrays is that we aren't taking responsibility for

our own health as Americans. We don't. And that's where it has a start, buddy, definitely, And part of that is putting that focus back on prevention again rather than treatment. Because consider this, if you have a an advanced disease, how much more rigorous is your treatment going to be? How many more doctors business does that entail? How many more UM scans does that, m R I scans does that entail? How much more for medication? And don't get

me started in the pharmaceutical companies. Yeah, that's a different podcast. Um how much more UM time and effort and just cost is it going to take to treat an advanced stage disease? Then it's going to be to prevent it or treat it early on exactly. So like when they recommend it, I think forty or so for women to start getting your mamogram and for men to get the old how's your father treatment from your doctor? Yeah, these

kind of things. People people avoid this stuff and then all of a sudden, you have, like you said, holy cow, got a tumor that's in an advanced stage because I haven't taken care of myself and I haven't done the regular checkups like I need to. And uh, it cost a lot more so this infrastructure that we're talking about, the health system infrastructure, it keeps growing and growing. Uh. It costs a lot to manufacture an m R I machine, and I keep I keep using that. But it's just

such an easy example. Yeah. Um. And as a result of just not just the m R I machine, but all of these different external factors and possibly corporate greed um, from two thousand four to two thousand nine, the average cost on healthcare premiums increased four times faster than the

average wage in the US. So, all of a sudden, healthcare is just getting more and more and more expensive, and not just for you and me, chuck, um, we are premium From into two thousand nine, are the employee contribution went from an average of fundred and forty three dollars to three thousand, three hundred and fifty four dollars.

That's just our contribution. This isn't including employers contributions, which is affecting their bottom line, and as healthcare costs rise, they're losing a competitive edge in the global market in an increasingly globalized world, and all businesses have budgets. They work on budgets that also might affect the rays you might or might not get because of the budget and

how much they're having to spend. I know, my father in law has a small business and did he has a really small business, like he only has a handful of employees, but he has a health insurance program. And one of the ladies that works with him is one of these people that does not take care of herself. She has like three or four surgeries a year and

it's driving him out of business. Dude, this one lady. Yeah, and let me tell you something else, but buddy, the World Health Organization estimates that between nineteen and of the to dollars spent on healthcare here spent on administrative costs. Administrative costs. And another reason that it's so expensive is, uh, there's been a big shift I don't know if you've noticed in for profit hospitals as opposed to the old nonprofit model, the community model, and that's kind of helped

drive up prices too. So they say, well, sure, not only that, but the uninsured drive up prices. Um, the the Medicaid Medicare are notoriously terrible. I'm paying out billing

to physicians. Hospitals have started to use something called balanced building, where they um start building patients for procedures they didn't know they weren't covered for, and the insurance companies refusing to pay, and all of a sudden, you've got a collection agent all over you because the hospital didn't say, oh, by the way, this doctor right here, who you're you're about to see is out of your network, so you're

gonna have to pay for him out of pocket. There's just there's we have big problems here, kidding, So Chuck, how do we solve this? I have no idea. Other people to thank heavens for that. Well, one of those people is a man named Mr Barack Obama. You may know him as President Obama. He's got a plan for healthcare reform, and we're gonna cover that in the next installment of the podcast, Barack Obama's Healthcare Reform Plans Soup to nut. But again, this is kind of a weighty

topic and we're gonna need some help. So we're gonna recruit Molly Edmonds, right, Molly Edmunds of Stuff Mom Never Told You, popular sister podcast and all our our healthcare writer. Well, yeah, she's been completely submerged in healthcare for the last three weeks, health in general. She's our health writer, she is, but she's been studiously studying healthcare reforms. So she's gonna come in for the next few uh podcasts to help us sort through things. We can rely on her a little bit.

And we also spoke to Dr Michael Royson, who is the chief Wellness Officer of the Cleveland Clinic and more famously known as co author of the You the Owner's Manual series of books. With Dr got him on the phone. Yeah, he was awesome. So it's gonna be like a whiz bang, super big healthcare reform podcast and hopefully by the end you will know as much as Molly Edmonds, which is substantial. So stay tuned for the second episode, which will be

out in a week. And in the meanwhile, you can go to how Stuff works dot com, type in healthcare in our handy search bar and you're going to find a slew of really thoroughly researched and well written articles by Molly Edmonds, and if you want to send us an email about healthcare or anything else, you can shoot that to stuff podcast at how stuff works dot com. Perfect for more on this and thousands of other topics. Does it how stuff works dot com. Want more how

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