COST: Singing the Blues on Health Care

Wall Street may be singing the blues, but on Main Street another song keeps playing: the one about how growing health care costs continue to burden American families and business.

The New York Times carries that tune nicely examining two surveys released today by the Kaiser Family Foundation and the Center for Studying Health System Change in the context of our country's financial woes.

Kaiser's annual Employee Health Benefits Survey is to health wonks what Baseball Prospectus is to Fantasy Geeks: required reading. Quick highlights from this year's findings:

• Costs continue to rise, for both employers and employees. The cost of an average family premium rose to $12,680—an increase of 119 percent from 1999 ($5,791). Employee contributions continue to rise, from an average of $1,543 in 1999 to $3,354 in 2008.
• Small business is struggling to offer health benefits. Only 62 percent of small firms (less than 200 workers) offer health insurance, while virtually all large firms offer health insurance to their workers. For small firms that did not offer coverage, nearly half cited high premiums as the reason.
• Businesses are investing in wellness and prevention. More than half of small businesses (53 percent) and 88 percent of large firms offer at least one type of wellness program (weight loss, smoking cessation, etc. to their workers.)
• Employee cost-sharing continues to rise. In 2008, 18 percent of all covered workers were in a plan with deductibles of at least $1,000. The growth in employee cost-sharing is seen across the board, but is particularly concentrated in small business where 13 percent of covered workers are in a consumer-directed health plan.

A quick aside on the last point: as we've noted before employee cost-sharing has potential to produce savings, but it's not without shortcomings. Proponents of this approach say patients who are more involved in spending their health care dollars will spend it wisely, which should lead to savings. But studies have shown they're also more likely to skip recommended care which can lead to greater costs down the road. In economic hard times, like right now, the temptation to skip or delay medical care grows.

Today's second survey (pdf), from the CSHSC, looks specifically at how American families are struggling to keep up with medical bills. Key findings:

• 57 million Americans or one in five families had trouble paying medical bills last year.
• Of those reporting medical debt, 65 percent had problems paying for other necessities like food, clothing and housing.
• The uninsured were nearly twice as likely as insured (34.4 to 18.4 percent) to report problems paying medical bills.

Neither survey produces anything that would be particularly surprising to the average American who knows first—hand that health care's expensive and getting more expensive. But by drawing the parallel between the health care and the financial crisis, the Times article paints a stark picture of what the failure to enact meaningful health care reform might look like. As the director of New America's Health Policy Program Len Nichols told the paper: "This makes clear the cost of doing nothing is high and growing." He also elaborated on this point in today's Salt Lake Tribune saying: "If we just do what we're doing, we're just taxing ourselves at an increasing rate in terms of lost opportunities, while we cover fewer and fewer people every year."