4 Key Things to Consider About Health Care

Share this post:

A recent Opinion piece in the New York Times addressed four beliefs many people have about health care – from what drives costs to who actually pays for it. While we may not have all of the answers to every health care question, it’s helpful to consider this information when forming your own health care opinions.

According to Ezekiel J. Emanuel and Victor R. Fuchs, who wrote the NYT Op-Ed, most Americans believe that employers pay for the major part of employees’ health insurance premiums. Not so, they posit. While employers write checks to the insurance company, they say, employees are the payers behind these checks – both the employee portion AND the employer portion. As evidence, they point to the period from 1999 to the present, when health care premiums increased 147% and employer profits increased 148%. During this same period, employee wages increased by just 7%. Emanuel and Fuchs conclude that if employers were applying profits toward premiums, less money would have come out of worker paychecks and employees would have quickly seen an upward momentum in wages.

The idea that employers generously pay the bulk of employees’ insurance is something opponents of national health care leverage in their favor, the Op-Ed continues. This brings us to another point of consideration: whether or not Medicare for All is affordable. Opponents say that Medicare for All would increase federal health care spending. However, explain Emanuel and Fuchs, increased federal spending does not equate with increased total spending. An independent study estimated Medicare for All would cost $2 trillion less over 10 years than continuing with our current health care system.

So what is it that actually drives health care costs? If you thought, “health care profits,” you share in the nationwide momentum that believes eliminating health care profits would reduce costs. The Op-Ed piece tells a different story, stating that health care costs are increasing at six times the rate of insurance company profits. Even the eighth largest, for-profit insurance companies achieve just a 5% profit margin – nearly inconsequential compared to the 20% margins seen in many other industries. It’s questionable whether eliminating insurance industry profits would do anything to reduce health care costs.

The final belief noted in the NYT Op-Ed is that using price transparency tools to price shop for medical procedures, facilities and providers can save money. Unfortunately, claim Emanuel and Fuchs, research doesn’t support the effectiveness of price transparency, despite the current administration’s faith in it. Some of the reasons for these less-than-favorable results:

  • Insurance pays for 80% of health care costs, so employees aren’t motivated to price shop
  • When price transparency tools are available, only 4-12% of patients use them
  • Price shopping is only useful for routine procedures (e.g. lab tests or MRIs), which account for just 40% of medical care 
  • Most Americans favor relationships with providers over the price

To advocate for accessible and affordable health care, it’s essential that we all speak the same language and find solutions that work. Knowing the beliefs that Americans regard as truth, the results of independent research and the opinions of industry authorities can help you be a more informed voter and make better decisions about your health care costs. Health care is not a simple problem and there are no easy answers – but there are answers.

You can read the original article by Emanuel and Fuchs here.

Share this post: