Unraveling American Health Care

On June 20, 1991, I reported for my first day of work at the billing office of a health maintenance organization (HMO). Sitting on the desk in front of me was a calculator and two twelve-inch-high stacks of charge sheets. My job: to wade through the charge sheets, tabulating total daily fees. Later, I would enter the billing information into patient accounts so that charges could be mailed to insurance companies.

After ten weeks working at the administrative heart of our health care system, I now understand why George Bush left the prospect of health care reform to his successor.

The United States spends more on health care than does any other country in the world, both in absolute and relative terms. Health care, costs are third only to defense and social security in the percentage of government expenditure they consume. And yet compared to citizens of Germany, Canada or Great Britain, relatively fewer Americans can count on receiving sufficient medical attention. Where is our money going?

The past several administrations have avoided this question. But as with most sicknesses, ignoring the problem has succeeded in aggravating it.

In this regard at least, President Clinton has already taken a step beyond his predecessors by acknowledging the immediacy of the situation. But if he is hoping for a neat and easy-to-implement solution anytime soon, he will inevitably face the same disappointment he already confronted with his flailing jobs bill and his scuttled effort at lifting the military ban on gays.

Our health care crisis will not yield to a quick-fix solution. Hillary Rodham Clinton and the Task Force on Health Care Reform face a Herculean ordeal in sorting through the issues and wrestling with countless conflicting interests. Unless you have a Master's in health care administration, a quick glance at the structure of the current system would probably leave you thoroughly confused.

In my summer at the HMO billing department, I found a set of institutions that were hopelessly entangled. Layers of bureaucracy, each with its own set of health care actors, suffocate the system. It's as if it were designed to be wasteful.

To get a sense of the convolution, follow a dollar bill as it winds its way through the health care system. As the system currently stands, companies usually pay most of their employees' health care costs. Beginning in the employer's pocket, the health care dollar moves on to one of dozens of private insurance companies. If the employee visits the hospital to receive treatment for an illness, the hospital forwards the charges to the insurance company--which pays all costs above the deductible and transfers the rest of the cost back to the patient. The hospital then pays the physicians and nurses, and foots the operating expenses.

So far the system may not seem too complex. But if you take into account all the different possible insurance companies which the patient may choose, the number of potential paths multiplies quickly. Throw in Medicare and Medicaid, with all of the bureaucracy of the federal government. By this time, the number of intermediaries almost rivals the number of actual health care providers.

If it still seems simple, don't worry. It gets worse.

Hospitals further rechannel the health care dollar to pay the pharmaceutical companies. This chunk of the health budget is growing--medical technology continues to surge ahead at a breakneck pace, bringing with it skyrocketing costs for designing and testing frontline drugs. As the average life expectancy lengthens, the desire to prolong a high quality of living will spur the use of more and more expensive medications.

Even fast-paced technological advances have been unable to keep up with the American public's rising expectations. Americans have an unrealistic appraisal of what doctors should be able to do. They are often too quick to blame health care professionals whenever the outcome of a medical procedure is less than perfect. This has forced physicians to allot up to 40 percent of their incomes to malpractice insurance. Once again, the health care dollar is divided; the patient incurs the resulting hike in doctor's fees.

These are the principal actors in this haphazard health care hierarchy. And as much money goes to administrative middle men, from insurance company executives to billing clerks, as is used to cover the costs of actual medications and health professionals.

Two summers ago, amidst the stacks of physician charge sheets, I arrived at the unavoidable conclusion that our system is an administrative nightmare. Ira Magaziner, a leading member of Clinton's task forces has already sought to tackle the health care issue in this light. If Clinton's plan emerges within the next few weeks as promised, it will be surprising if one major facet of the scheme does not involve tidying up the bureaucratic mess.

Only by streamlining the system can we attempt to use the health care dollar more efficiently. And only if we use our health care budget more efficiently can we ever hope to grant health care benefits to every American.

"It's almost as if the current system were designed to be wasteful.