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Meet the Working Poor: Possibly Yourself

Philip Betbeze, for HealthLeaders Media, June 5, 2009

All right, I'll admit to hyperbole in the headline that got you reading this article, but now that you're here, hear me out.

A recent report from the McKinsey Global Institute says, among other important points, that because of the development of employer-sponsored healthcare over the past 50 years or so, healthcare's share of worker compensation among all income groups has increased dramatically. That's no big surprise. We've all known for years that ultimately, increases in our take-home pay have suffered because healthcare costs have risen much more sharply than inflation or take-home pay for many, many years. But follow their conclusions a little further into the future, and big problems crop up for the entire country.

Because employers can't keep up, they've been cutting benefits through higher co-pays, co-insurance and yes, consumer-directed healthcare initiatives. Regardless of the necessity for further consumer involvement in healthcare decision-making, which I support, these programs ultimately result in a reduction in benefits. After all, how many companies have you seen that are boosting pay by the same amount they're saving on this type of plan? Zero? Yes, me too.

So we've established that these plans ultimately reduce compensation for most employees. But not for all.

If you're reading this column, you're likely one of the lucky ones. As a (relatively) well-paid leader, you're tough to replace, therefore, it's much more difficult for your employer to cut your healthcare benefits. Not to mention the fact that most of you work for a healthcare provider anyway, which naturally has a tougher time cutting the very benefits that allow employees to access the services they're actively providing. But if they cut you, you'll go somewhere where your talents are more appreciated.

That's why rapidly rising healthcare costs are contributing to income disparities we haven't seen in this country in a long time, and it's why the government, despite fighting two wars, is so keen on reforming the healthcare system to eventually bring healthcare cost increases down to the level of inflation, at least.

Ever been to a developing country for healthcare? With few exceptions, the good care is available to the people with means. Everyone else gets far cheaper (and in many cases, worse) care, if they can get care at all. Even the sainted government plans of Europe still allow people to go outside the national system for upgraded care, if they have the cash.

Compared to developing countries, our currency is strong and good healthcare is cheap if you go to the right place. For us, that means excellent, high-quality healthcare is available relatively cheaply in foreign countries like Mexico, and several countries in the Far East. That's why medical tourism has grown so substantially, and is expected to continue to grow.

As a hospital leader in the United States, this should concern you. Not on an individual hospital basis, but do you want our healthcare system to look more like a developing country's? We're headed that way. Although we're not to the point in this country that there is a separate system of facilities for the rich and poor, continued healthcare cost increases that outpace inflation year after year will get us there.

Is that what you want? My guess is no. But without shared sacrifice, that's where we're headed.


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Philip Betbeze is senior leadership editor with HealthLeaders Media.
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