Health Care at the Brink

John Anderson

John Anderson has been involved in many aspects of the health care industry from 1954 to 2001. He was vice president at Blue Cross of Minnesota from 1954 to 1968. He was the president of the western division of Blue Cross Blue Shield of Ohio from 1978 to 1989.

Having spent approximately 40 years in the health care industry in various roles, including that of CEO, and now in a retired status for the past 15 years, I have an accumulation of experiences and observations from which to reflect about where we are, how we got here, and what’s ahead.

In the 1930s health insurance was a new concept, motivated by non-profit entities such as Blue Cross, by which individuals could handle hospital bills, in association with non-profit hospitals that were mostly church related or publicly owned. Blue Shield came later with professional medical care, largely surgically related, to meet health care costs and to be a reliable source of payment for medical professionals.

Later the purchase of health insurance moved from an individual’s choice to an employer-paid benefit in which the employee who was the patient was effectively shielded from the burden of cost decisions. This was compounded in 1965 with the creation of taxpayer-supported Medicare, followed by Medicaid. Thus, the population largely consumed ever-increasing amounts of health care without regard to the ability to pay — for a costly product.

The next major event was the emergence of a societal assumption that health care is a public right, covering minimal or extensive care, regardless of the individual’s ability to pay. This became dramatically apparent to me in 1991, while CEO of a Blue Cross Blue Shield organization, when a public outcry, driven by the media, made it impossible to abide by the terms of a contract between Blue Cross Blue Shield and an individual’s treatment costing approximately $250,000 (at that time), even with life expectancy very limited. This one incident became to me a demonstration of the problem. Who is to pay? The $250,000 was borrowed from other Blue Cross members in the form of subsequent rate calculations. To be sure all companies have expenses that may seem irrelevant to their product pricing, but the expenses of other industries are not as driven by societal pressures as is true in health care. And, when applied to Medicare or Medicaid, these costs explode taxes and federal debt.

Other exacerbating factors, each very large, are a) the increasing recourse to legal action by patients when practitioners of health care have been alleged, or are proven to be, negligent in unfavorable health outcomes, involving both the patient’s circumstance and attorneys anxious for fees as a percentage of lawsuit awards (frequently “settled” to avoid costs of litigation); b) the patient’s desire coupled with the health care provider’s need for additional income, to cover all potential forms of treatment for diseased or disabled bodies; and c) capital invested in anticipation of all types of future products and new modes of treatment — spawning ever-increasing specialties and sub-specialties in the practice of medicine (this is especially true for treating the last months of life).

The explosion of expense is a perfect storm, building for years, and coming to a climax. Health care is no longer affordable and it is an out-of-control driver of our national debt. Insurance premiums are unaffordable for many, and the financial burden on corporations, competing in a global market where the competition has no comparable burden, is unsustainable.

One way or another there will be a solution, orderly or catastrophic. Lack of congressional action will result in catastrophe, pushing the national debt and premiums past the breaking point with enormous societal impact.

There will be either political action or inaction in the very near future, either of which will have major impact. Inaction due to political/moral paralysis will ultimately yield to catastrophe.

Action will emerge in either of two primary forms: in a revised semi-competitive private health care insurance market, or in a total government-managed solution, such as Medicare/Medicaid.

With either solution there will be a rationing of care. If there is a private market payment will be made either up front or by insurance premiums. If there’s a public market, governmental regulation will prevail. In either scenario there will be care for some, but not all.

Within a public system a morally relativistic approach would likely prevail with a strong bent toward a secular-humanist world view, involving abortion rights, transgender procedures, euthanasia, and limited care for the disabled and elderly.

With a private insurance model, taking account of present day attitudes, there could be room for differing views, religious or secular, concerning benefits and exclusions. It is probable that the influence of major corporations would slant to a secular view — note the recent controversy of the North Carolina bathroom bill.

Christian Reflection: Health care in its inception and until recently was recognized as a province of the church, involving compassion for neighbors. The preeminence of compassion has largely disappeared, with health care organizations being “managed” by governmental regulations and by payment mandates. The motivation to compassionately serve is perhaps still there, but this compassion is subordinated to the politically calculated interests of the State.

In this charged political environment what should be the role of believers and church entities? Should we be less concerned than 100 years ago, when the church in its various forms created the health care institutions? Or do we stand on the sidelines as the parade goes by, not engaging with clear minds and caring hearts? Unfortunately, participating in the politics is necessary. It’s easier to abdicate than to engage.

With the cost of health care at 17 percent of GNP, and climbing, current costs are not sustainable in the context of a global market. Nor are the astronomic premiums sustainable for individuals.

To successfully address our health care difficulties would be a monumental achievement. I don’t have much hope. Powerful and entrenched bastions would have to undergo fundamental change — the pharmaceutical industry, advertising interests, legal professionals, medical specialties, the expectations of the public, etc., etc.

New health care delivery systems must be conceived and allowed to exist in which costs could be meaningfully reduced without a diminished quality of care.

Perhaps an experiment could be done in a sizable community of 100,000 or more where reforms could be attempted. Such a community project would need to be created and managed by public and non-profit entities working in collaboration with representatives of health care providers.

In summary, fixing health care in America is a monumental challenge requiring enlightened leadership and a society willing to rise above self-interest.     *