What a Waste

Note: After the Supreme Court releases its ruling on the Affordable Care Act, OHPM will be publishing analysis and commentary on what the decision means for key subgroups of the population.  Come back to this site early and often for writing that will cut through the noise! 

Just before he was forced out of his job as a senior Florida public health official – joining thousands of his colleagues across the country who have recently met the same fate – Daniel Parker commented that “we are victims of a false portrayal of public services as waste.”

He is so right.

Source: CMS Data, Health Affairs, June 2012 (online)

Last year, we spent over $86 billion on public health services.

That may seem like a big number.  But it represents only 3% of our nation’s total health spending. 

For that 3%, we have doubled our life expectancy over the last century.  We’ve immunized our children, improved the quality of our food and water, and gotten dangerous chemicals out of our homes and neighborhoods.

We have prevented cancers and heart attacks, and wiped out once-frightening diseases like polio.  

Does this seem wasteful to you?

If not, just imagine what public health might have done with 6% of the nation’s health budget.  Why 6%?  That’s how much we pay for the “net cost of health insurance” every year.

The “net cost of health insurance” doesn’t include any payments for actual health care.  It refers to what’s left over after payers pay the bills – mostly administrative costs and profits, better known as health insurance bureaucracy.

If you find it as troubling as I do that public health professionals are losing their jobs while insurance bureaucracies are bloated, then you’re about to get really irritated.

According to new national health expenditure projections released last week through Health Affairs by representatives of the Centers for Medicare and Medicaid services, our spending on the net cost of health insurance doesn’t just dwarf what we spend on public health.  It dwarfs what we spend on a lot of other essential health services, too.

In 2011, the $152 billion we spent on health insurance bureaucracy was:

• 41% more than what we spent on all of our nation’s dental care;
• 49% more than what we spent on our veterans, active duty personnel, and children’s health insurance programs combined; and
• 108% more than what we spent on home healthcare services for everyone in the country who used them.

As public officials bring down their budget cleavers on the people and services that protect our health, mental health, and well-being, they might want to think about two other things. 

• Health insurance bureaucracy alone costs us more than we pay for all the nursing home care everyone receives in the United States each year. 
• The cost of private health insurance bureaucracy alone is roughly equal to the total state and local share of every state Medicaid program combined – which are, according to public officials, the biggest fiscal burdens breaking the backs of our state budgets.

Does anyone – including health insurance bureaucrats – really believe that health insurance bureaucracy is more needed than all the public health, dental care, children’s health services, nursing home care for elders, and home care for people with physical and mental disabilities we provide in this country?

Or that health insurance bureaucracy is more important to the health and well-being of our country than all the health care we give every year to every living person who has ever served in our armed forces? 

Is it any wonder that some people feel strongly that they shouldn’t be forced to contribute to this monstrosity by purchasing private health insurance?

Certain politicians this year may sing the praises of an unfettered insurance marketplace as a health care panacea and an alternative to the Affordable Care Act.  But the numbers don’t lie.

It is hard to imagine a less productive health system than the one an even less regulated health insurance marketplace could deliver to us. 

But too many public officials are doing the worst possible things, and too many people like Daniel Parker – and all of us he was pledged to serve – are paying the price.

They are ignoring the value of public health. 

They are forgetting their history, and why they expect to live longer than their great-grandparents did.

They are cutting the services we need – dental care, nursing home care, home care, veterans’ care, mental health care, and children’s health programs – thinking that no one will mind. 

And they are turning public services over to some of the very private companies that are already draining our health system dry with their “net” bureaucratic costs.

What a waste.

If you have questions about OHPM or this column, please email gionfriddopaul@gmail.com.