Common Questions & Answers

Ezekial Emanuel MD PHD made the following statement in the JAMA (2/27/08): Health care reform has become equated exclusively with expanding coverage to the 47 million uninsured Americans. This is a mistake. . we need to focus on cost.

Health care costs are much higher in the US than anywhere else in the world. We spend more than $8000 per person each year on health care while other developed countries average about half that much. This amounts to total health care expenditures of about $2.5 trillion per year, of which $1.5 trillion comes from public taxation with the remainder from private sources of health care funding (private employers and individuals). The reason we have so many uninsured people in the US is that health care costs too much. We can not pretend to solve the problem of the uninsured if we do not first reduce our health care costs.

There are two principle problems causing high health care costs: 1) poor quality care (which costs an estimated $700 billion per year); and 2) inefficient health care financing (which costs an estimated $400 billion per year). If we were to reorganize our health care system so that we provided higher quality care (less inappropriate care, less patient injury, and more timely, clinically sound care) and paid for it more efficiently (lower the administrative cost of payment to below 5% of the health care revenue stream), we could save $1 trillion per year. And we would virtually eliminate our future unfunded federal debt.

Congress has tried to reform the American health care system many times, beginning with the efforts to include comprehensive care in the New Deal legislation and ending most recently with the so-called "Affordable" Care Act. All of these efforts have been attempts to increase 'coverage'. None have seriously attempted to eliminate the wasteful poor quality and inefficient business practices so characteristic of American health care delivery. But Congress has laid down many rules, funding procedures, and other barriers to serious health system reform. Congress is enthralled by the special interests which make remarkable profits from the business as usual approach to American health care. Therefore, the first step towards comprehensive health system reform will be to get the federal government out of the way. Allow the states to try out different approaches to comprehensive health system reform. Just such an approach has been proposed in legislation known as "The States' Right to Innovate in Health Care Act" (see a copy of this proposed bill on this website). To be sure, the federal government provides the lion's share of health system funding. So we propose to have the federal government set minimum standards for each state health system. Compliance with these would allow the state to receive all federal funds projected to be spent on health care in that state. States that do not wish to enact comprehensive health system reform could keep the health care system anticipated by the Affordable Care Act.

Eliminate the wasteful spending associated with poor quality care and inefficient health financing. A number of different approaches come to mind. For example, the state of Vermont has proposed forming a new governmental agency responsible for paying for all health care--the so-called government based single payer. Massachusetts has already passed legislation requiring its citizens to purchase health insurance. Many more options might present themselves if states really had the freedom and funding necessary to be creative.

Utah has a unique health care payer already functioning--the Public Employee Health Plan--which has a very low overhead (less than 4%) while paying for the care of more than 200,000 Utahns. PEHP is a non-profit, private trust fund which handles health care benefits for state and local government employees and their dependents. Because this trust fund is already functioning in the Beehive State, it would not be difficult to enlarge it to pay for the care of all residents. We propose renaming it--The Utah Health Cooperative.

We also propose borrowing an idea from the state of Washington, where a commission approach has been used to identify clinically useful (and useless) medical interventions. Decisions by this commission affect what the Washington Medicaid, workers compensation, and public employees health benefits will be. Thus, we suggest that a new commission be created in Utah--the Utah Health System Commission--with two principle tasks: 1) identify all clinically useful medical interventions deserving inclusion in a uniform health benefit package for all Utahns; and 2) adjudicate (without jury trials or punitive damages) all claims against the health system in Utah.