Quantifying the Health Care Problem

In recent months, the subprime mortgage meltdown and the global financial crisis have justifiably occupied much of the public's attention. Underlying our current, deep economic trough, however, is an issue that affects nearly all Americans - not just the 9.4% of us who are currently unemployed: the cost of health care.

The past several weeks have witnessed the early stages of a battle over the fundamental way in which health insurance will operate in the United States, and with good reason; the existing system is flat-out broken. Consider these alarming facts:

• In 2007, the latest year for which government data is available, nearly 46 million Americans - 18 percent of the population under the age of 65 - were without health insurance. Between 2005 and 2006, the number of uninsured rose 2.2 million, and has increased by almost 8 million people since 2000.
• Eighty percent of the uninsured are native or naturalized citizens, NOT illegal immigrants. More than 8 in 10 uninsured people are in working families, and almost 70 percent come from families with one or more full-time workers.
• The percentage of people (including workers and dependents) with employer-provided health insurance has dropped from 70 percent in 1987 to just 62 percent in 2007.
• The number of uninsured children in 2007 was 8.1 million, or just under 11% of all children in the United States.

The United States spends a larger percentage of its GDP on health care than any other developed nation. One might reasonably think, then, that the quality and availability of health care in this country would be top notch. One would be wrong; for all of that expenditure, the U.S. is just 37th in the most recent World Health Organization (WHO) rankings of the world's health care systems, slightly ahead of Slovenia and Cuba, but behind such powerhouses as Costa Rica, Dominica, Chile, Colombia, Morocco and Greece.

Anyone who was alive during the Clinton Administration knows that this has been an issue for some time, and that access to health care is actually declining. In addition to the human cost of this situation is the sheer economic waste involved. Each year, the United States spends almost $100 billion to provide uninsured residents with health services - often for preventable diseases or ones more easily treated with early diagnosis - and hospitals shell out another $34 billion worth of uncompensated care on top of that.

Perhaps worst of all, however, is when human and economic costs intersect. In 2001, an American Journal of Medicine (AJM) study found that 46.2% of all personal bankruptcies were directly related to medical problems and the lack of adequate health insurance. In 2007, the AJM ran the study again, and what they found is truly staggering:

Using a conservative definition, 62.1% of all bankruptcies in 2007 were medical; 92% of these medical debtors had medical debts over $5000, or 10% of pretax family income. The rest met criteria for medical bankruptcy because they had lost significant income due to illness or mortgaged a home to pay medical bills. Most medical debtors were well educated, owned homes, and had middle-class occupations. Three quarters had health insurance. Using identical definitions in 2001 and 2007, the share of bankruptcies attributable to medical problems rose by 49.6%. In logistic regression analysis controlling for demographic factors, the odds that a bankruptcy had a medical cause was 2.38-fold higher in 2007 than in 2001.

Clearly - at least if one believes that adequate health care should be available to everyone, not just the rich or the fortunate - the employer-based system of private health care that has been in place in the United States since World War II does not meet the needs of the American people.

NEXT: Exploring the Health Care Options