Health Care

Introduction

Americans are becoming more critical of many aspects of the healthcare system, according to a survey by the Employee Benefit Research Institute (EBRI), Washington, D.C. The 2006 survey also found continued concern about raising healthcare costs and a lack of confidence in the future of the healthcare system, particularly among women and those in poorer health. Almost 25 percent of the survey respondents reported strong confidence in their ability to afford health care and prescription drugs without financial hardship during the next 10 years. Half of the respondents who currently are not eligible for Medicare are not confident that they will be able to afford health care when they are eligible for it. EBRI also found that respondents' familiarity with the term "managed care" is declining. (Bann, 2009) The percentage of respondents who described themselves as somewhat familiar with managed care dropped from 29 percent in 2004 to 23 percent in 2006, while 39 percent of respondents to the 2006 survey said they are not at all familiar with managed care, up from 28 percent in 2004.

The respondents tend to believe that their employer is better able than they are to choose a health insurance plan, and many respondents with employer-based coverage say they would be unlikely to obtain health insurance coverage on their own if they lost their current coverage. Almost half of the respondents who are covered by employment-based health insurance are extremely or very satisfied with their current health insurance plan, while 40 percent are somewhat satisfied. (Clark, 2008) If their employer were to stop offering health insurance, 26 percent of the respondents expressed little likelihood that they would be able to purchase coverage on their own. Uninsured respondents are largely unaware of state low-cost insurance programs.

Discussion

Corporate America's health-cost holiday is coming to an end. For three years, employer costs rose slowly, or even fell (chart). But for 2003, healthcare spending is raising more quickly than other prices--and in 2004, costs could shoot up at a double-digit pace. America's health-care providers still have plenty of costly facilities and inefficient practices to prune. With 40% of hospital beds empty every night, "we have enough excess capacity to keep a lid on costs through the turn of the century," says John F. Sheils, vice-president of health forecaster Lewin Group. But even optimists say costs will grow faster than inflation through 2006--and then accelerate. If the raising cost of health care, which accounts for 15% of the economy, triggers a jump in overall inflation that could have widespread repercussions next year and beyond. Even with slow health-care inflation, companies have cut coverage and shifted costs to employees. The share of full-time workers with health insurance fell from 76% in 1998 to 73% in 2000, according to Princeton University economists Alan B. Krueger and Helen Levy. As costs rise, more workers are likely to face limits on medical care as employers struggle to cope.

Costs are headed up because the overhaul of the health-care system that began in the ...