May 16, 201712:37 PMInside Wisconsin
with Tom Still
Controlling health care costs appears lost in latest debate over insurance plans
(page 1 of 2)
Just across Wisconsin’s southwest border in the Iowa city of Dubuque, about 1,000 people showed up Tuesday night for a town hall meeting with U.S. Rep. Rod Blum, a Republican software company owner who represents northeast Iowa in the House of Representatives.
By all reports, it wasn’t a lovefest.
People upset with Blum’s May 4 vote in favor of repealing the Affordable Care Act shouted him down as he tried to explain why he believed the repeal of “Obamacare” would help far more Iowans than it would hurt. Many in the crowd weren’t buying it, however, and loudly expressed their frustrations over the GOP’s repeal of Obamacare’s insurance rules.
It’s a scenario being repeated across the United States as the debate over health care reform has reverted to a fixation on reforming health insurance — at best, only part of the problem — versus health care itself.
The real problem with health care in the United States is that it costs more than what the nation’s economy gets in return. Health care costs in the United States stand at 17.1% of gross domestic product, compared with 13.1% of GDP in 1995. Those figures are far higher than comparable GDP shares in other industrial nations, including Germany (11.3% today versus 9.4% in 1995); Japan (10.2% and 6.6%); Great Britain (9.1% and 6.7%); and China (5.5% and 3.5%).
While health-care costs are rising around the world, too, the threat to sustainable prosperity in the United States is larger because of the GDP share devoted to health care is much bigger.
Businesses bear much of the burden under the U.S. system, which means they must struggle to compete in the face of rising costs. Corporations spend about $12,600 annually to cover a family of four, concluded a study by the Kaiser Family Foundation. That has increased 54% since 2005.
Which is a bigger drag on companies trying to compete in a global economy: Health care costs at 17% of GDP or corporate taxes at 2% of GDP? For most companies, the answer is health care costs.
That’s a nuanced and somewhat qualified answer, of course. Most companies will pay what it takes to cover their workers if higher quality care leads to better employee recruitment, attendance, morale, and retention. Fortunately, Wisconsin fares much better than most states on the health care quality scale.
Health care costs will remain high nationally, however, so long as the debate continues to focus on health insurance reform versus health care reform.