Picture a pizza — a huge pizza, in fact — that’s worth about a trillion dollars (that’s about what the US pays for heath care each year.) The money that goes into the pizza comes from just a few places: dollars collected by federal and state governments from taxpayers and steered into health care programs; health care dollars spent by employers as benefits, including health insurance premiums; and health care dollars spent by individuals and families, either directly to doctors, hospitals, and pharmacies or indirectly by payments towards health insurance premiums.
That’s it. There’s nowhere else for the money to come from. Either more taxes, more money spent by employers (which would presumably mean less money spent towards wages, or higher prices for services), or more money spent by individuals and families. With the current economy, I don’t see how it’s going to be very easy to make that pizza any bigger.
OK, then, let’s look at how the pizza is sliced. Money to the hospitals and doctors. Money to nursing homes, and pharmaceutical companies, and labs and imaging centers and home health agencies and therapists. And money to administrators and health benefit reviewers and insurance coders and, well, you get the idea. It’s a huge pizza, but it’s being cut into many slices — and don’t forget, with every slice, a little cheese sticks to the knife.
How much pizza is left for health care for children?
A few recent developments should remind us that we need to keep an eye on the children’s slice. In the proposed 2012 budget, the Obama administration proposed terminating a program that supported the training of about 40% of the nation’s pediatricians. We’re talking about savings of $300 million a year — essentially a single half-pepperoni on our huge pizza — which could drastically reduce the availability of pediatric care for decades.
The program is necessary because of a historical quirk in the financing of public hospitals, which train most physicians. Funding is funneled through Medicare, but Medicare only pays for health care for adults over 65. So pediatric hospitals get nothing from the federal pool for doctor training. A separate program to support children’s hospitals was created, and that’s now on the chopping block.
Kids don’t vote or contribute to political campaigns, you see.
More scary news: the portion of the Affordable Care Act that prevents health insurers from excluding children with pre-existing conditions is now in effect. That might sound like a good idea, but there’s been an unintended consequence. In 17 states, child-only health policies are now completely unavailable; in many other states, choices are very limited.
Insurers, when forced to insure all children, have chosen to completely drop their insurance products. Their concern is that when families know that they can buy insurance at any time, they won’t bother to buy insurance until they’re actually ill — and will stop paying premiums once the acute illness is over. Insurers rely on a large, stable risk pool that includes many healthy individuals to offset the costs of the sick ones. If the healthy individuals leave the pool, insuring only the sick people becomes impossible at the rates approved by state insurance boards.
Some states have fought back. Kentucky tried to force insurers to resume covering children, though they allowed the insurers to enroll kids only for one month in a calendar year, and allowed insurers to try to develop other ways to discourage families from waiting until the last minute to begin coverage. It’s unclear whether this effort helped much.
So more and more people are supposed to be served from the same pizza, and efforts have begun to further shrink the kids’ share. Furthermore, unintended consequences have led to some children losing their slice entirely. My best advice: try to keep your kids healthy, and save up for in inevitable time when you’ll have to pay a bigger share for you and your children’s health care. That pizza isn’t going to be cheap.
- Roy Benaroch, MD