Two speakers at a forum Thursday at the Clinton Presidential Center had differing perspectives on health care in the United States.
Dan Rahn, chancellor of the University of Arkansas for Medical Sciences, saw government innovations in recent years -- from the federal to the state level -- as steps in the right direction to improve care and limit costs.
Mike Stock, president and chief executive of Little Rock-based QualChoice Health, said government cannot fix the system and that it is up to the private sector to come up with its own innovations and strategies. The event was sponsored by Little Rock-based Bean Hamilton Corporate Benefits.
Rahn said the rise in health care costs has actually slowed, now rivaling that of the low inflation rate.
Still, health care accounted for 17.7 percent of the U.S. gross domestic product last year, Rahn said. That was the greatest in the world, with The Netherlands next highest, at 11.9 percent of its GDP. The average for 34 developed countries was 9.3 percent, according to the data supplied by Rahn.
Per-capita expenditure for health care in the United States in 2011 was $8,508, compared with $3,339 for a 34-country average. Slightly less than half of the U.S. expenditure was from government programs, compared with about two-thirds on average for the other countries.
Yet life expectancy in the United States, 78.7 years, is lower than the average for developed nations, 80.1 years.
Still, health care produces jobs, he noted. Arkansas is one of 36 states in which the health care industry is the largest job generator and employer, Rahn said.
The Patient Protection and Affordable Care Act of 2010 is not the first "disruptive" health care program in the nation's history, Rahn said.
There have been "dramatic successes" in the past 50 years, including Medicare and Medicaid, which were established in 1965. It was bitterly debated in Congress and across the country, but now Medicare, which is insurance for people older than 65, is politically hands-off, he observed.
"It's not that everything is broken and everything needs to be thrown out," Rahn said.
At the state level in regard to Affordable Care Act, the private option was set up whereby Arkansans who qualify by income level can buy health coverage through an exchange with the use of Medicaid money. Until the exchange was set up in Arkansas by the federal government, there were 200,000 Arkansans without coverage, he said.
The state Legislature narrowly renewed the program this year, which appropriated $915 million in federal Medicaid funds to buy private health insurance for poor Arkansans.
Rahn insisted that the private option "cannot go away."
Rahn said the changes in health care do not portend socialized medicine, although he conceded that diligence is important so that "mission creep" doesn't bring that about.
Stock, the QualChoice executive, said that President Franklin D. Roosevelt had the political clout in 1932, during the Great Depression, to nationalize health care. The American Medical Association, which represents physicians, strongly opposed it, Stock said.
Eighty percent of controlling health care costs is in lifestyle choices, Stock said.
So it is up to businesses to give their employees the incentive to take better care of themselves, and thus save money, he said. He said that Americans are among the most sedentary people in the world.
Because the U.S. is so economically advanced and has a capitalistic system, he said, the profit motive plays a significant role in driving up costs.
"Government cannot fix the problems in health care," Stock said. The solution is "people driven, not policy driven."
The Affordable Care Act is causing a shift in tax streams because many employers cannot afford to provide health care, and small employers, with fewer than 50 employees, are not required to provide insurance, Stock said.
Employers offer "cafeteria" plans, which means that the employee's share of the premiums is not taxed. With fewer employers offering insurance, that means that individuals will buy insurance with "post-tax" dollars and thus increase revenue to the government, Stock said.
Since the 1960s, about 70 percent of Americans got their insurance through their employers, until about 2000, when the numbers started dropping.
"We're lucky to get 50 percent of the employees signed up," Stock said of QualChoice. Part of that trend is younger people simply not thinking they need coverage, he said.
Many employers turn to self-funding their coverage, the idea being they can better control costs, because the Affordable Care Act requires certain coverage, which companies don't see as necessary, he said.
A selling point for the law was that insurers could no longer turn someone down for a pre-existing medical condition.
However, the Health Insurance Portability and Accountability Act of 1996 meant that "in reality, very few people were subject to pre-existing conditions" as they changed insurers, Stock said.
Business on 08/22/2014