Consumers need role in health care, not government
Dave Racer, author of several books on health care policy, focuses on one question during today's controversial path to health care reform:
"Why would we want to give our sovereignty on something like health care to the federal government?"
Racer, who spoke to two Bemidji financial planning groups on Thursday, briefed members on health care reform bills going through Congress now, but is left pondering that sole question.
"Why is it that we're even having the discussion that the federal government needs to run health care?" he asks. "That certainly wasn't the way that we thought 50 years ago or 100 years ago or 400 years ago when we started as a nation."
While much of Washington is focused on the so-called "public option" of health insurance provided by the government, Racer said other proposals such as a health care cooperative or health care exchanges are also public options that sooner or later involve public subsidies and control, or simply replace insurance agents.
He theorizes government involvement began in earnest in the 1960s, culminating in Medicare -- the government-run health insurance for Americans over age 65.
In the run-up to Medicare, Ronald Reagan in the early 1960s characterized such a system of compulsory health insurance for seniors regardless of income as "simply an excuse to bring about what they wanted all the time, socialized medicine."
In 1965, Medicare was estimated to grow at a level to reach $9 billion a year by 1990, Racer said. Now it's at $67 billion a year with 34 million Americans now enrolled, plus another 7 million under age 65 while chronic kidney disease -- a group that uses 60 percent of Medicare expenses.
The issues of the 1960s are the same that are brought up today, said Racer, who has written extensively about health care since the early 1990s, including "Your Health Matters: What You Need to Know About U.S. Health Care."
"It's an emotional debate -- everybody's emotional about it, saying people are dying needlessly and dying on the streets" without access to health care or without health insurance, Racer said. "And we must have a mandate and it needs to be a government-run program."
But while President Barack Obama expected throngs of Americans to join with him for health care reform through a single-payer system that downplays the insurance industry, he instead got town hall meetings in August packed with people with lots of questions.
"This is a good thing," said Racer. "This is really, really a good thing that we've got this much fervor and emotion out there now, and people demanding to get answers."
Supporters of the public option say there are nearly 45 million uninsured Americans and that 45,000 people die each year due to a lack of health insurance. But Racer maintains that 2.4 million Americans die each year in the United States, so apparently 2.38 million Americans die with insurance.
"Humans die with or without insurance," he said.
And, the percentage of Americans without health insurance is nearly the same as the percentage of Americans who don't pay income taxes, Racer said. While the Internal Revenue Service has ways of gaining compliance, there is nothing in the health care bills before Congress to verify if someone has health insurance, mandatory or not.
Racer, however, says that already some $89 billion in health care is shifted from the government to taxpayers for those already directly or indirectly in government plans -- those on Medicare, in the Veterans Administration or military systems, children in protection and government workers. It involves 141.5 million Americans out of 307.7 million.
Obama supporters say a public option for everyone is necessary to allow competition in the marketplace, lowering health care costs, he said.
"There are 1,300 insurance companies out there already competing with each other, mainly regulated by states," Racer said. "We're talking about a government health plan with a benefit set and reimbursement set at Medicare or Medicare plus 5 (percent), not at Medicare plus 40 or Medicare plus 35 like most private insurance policies reimburse."
Competition isn't on an even ground, he said. And doctors would receive even lower reimbursements for services at a time when 29 percent of doctors refuse to see Medicare patients.
"This is an amazing thing, and we're going to tell doctors you're going to take public option health insurance at a lower rate than what you're able to survive by," Racer said.
Instead of having the government control health care, consumers need to take control, he said.
What Americans want is less expense health care, lower cost insurance, access to quality care when they want it, an they also don't want Canadian-style health care, Racer said. Canadians spend 10 percent of their gross domestic product on health care, but a shortage of primary care doctors sends most Canadians to urgent care or emergency room waiting lines.
Foremost what's needed is more preventive care, Racer said, putting in a plug for the use of vitamins such as D3 to reduce diseases and flues, plus exercise.
"You need to become a consumer," Racer said. "We teach them how to ask the simple question, 'How much does this cost?"
The cycle needs to be broken where doctors ask for tests that are covered by insurance, so the patient doesn't really ask. Racer cited a case where when a doctor found out the patient didn't have insurance, he canceled a test which he said was only requested to placate the patient.
He told of another case where a doctor was going to prescribe a treatment at $200 a month ongoing and covered by insurance, but the patient could outright buy the equipment for $2,000 when he asked.
"It causes negotiations between patient and physician," he said.
Other measures to control health care costs include high-deductible health plans and Health Savings Accounts, Racer said. "Minnesota has the highest rate of HSA participation in the country, and that's because agents are informed here."
The American Academy of Actuaries has estimated cost savings as much as 20 percent the first year with HSAs, he said, "and a significant increase in preventive services and no indication that employers are shifting costs."
Other measures include a better kind of gap plan for employees who lose their job and until they get a new job and health plan, plus finding new kinds of health plan options such as pooling risk.
Chiefly, the public and private sectors must be separated in health care coverage, Racer said, adding that 175 million Americans are covered currently under private insurance.
What's not needed, he said, is "micro-management of the private health insurance system."
Racer, who heads St. Paul publishing house Alethose Press LLC, was sponsored Thursday by the Headwaters Estate Planning Council and the local chapter of the National Association of Financial Advisers.