A Perfect Storm: The Confluence of Forces Affecting Health Care Coverage

Remarks of
Henry E. Simmons, M.D., M.P.H., F.A.C.P.
President
National Coalition on Health Care

“A Perfect Storm: The Confluence of Forces Affecting Health Care Coverage”

November 15, 2001

Good Afternoon and thank you for joining us for this briefing on the state of our nation’s health care system.

The views you will be hearing are those of the National Coalition on Health Care – which is the nation’s largest and most broadly representative alliance working to understand and to address the serious problems in our health care system. Our Coalition is rigorously non-partisan and has always carried out its decade-long work in a “no-fault” manner. Former Presidents Bush, Carter, and Ford honor us as Honorary Co-chairs and our Co-chairs are former Republican Governor Robert D. Ray of Iowa and former Democratic Congressman Paul G. Rogers of Florida. Our 80 members are listed in your handouts and include major corporations, the nation’s largest consumer, provider and labor groups, as well as all the nation’s major religious faiths. Our members relate to, represent or employ over 100 million Americans.

The principles we have long supported are listed on this chart and a description of their rationale is contained in your packets.

After a long period of intensive analysis, we have concluded that our health care system has three serious and interrelated problems – rising costs, decreasing coverage, and very serious and pervasive quality problems. We have further concluded that systemic problems of this magnitude cannot be solved by a “patch work” strategy and that 40 years of national experience attests to the bankruptcy of such an approach. In fact, we will soon be releasing a separate study which establishes and quantifies the shortcomings of a piecemeal approach.

Most of you are probably familiar with the national best selling book “The Perfect Storm”, which chronicles the formation and unleashing of the most powerful storm in this century. It occurred because of the unprecedented confluence of nature’s most awesome forces. As with most storms there were warnings, and those who ignored those warnings lost their lives. We are here today to report that a Perfect Storm has now formed in our health care system. But unlike nature’s storm, this one will not abate in short order. In fact, there is no end in sight, and there is reason to expect ever increasing intensity and damage.

We will show today that the set of circumstances we now face is unprecedented. Never in our history have we faced this number of forces and of this magnitude simultaneously. If unaddressed, the consequences will be devastating to tens of millions of Americans and to our society.

The real tragedy here is that none of the tools we are currently using — or currently contemplating – including a Patient’s Bill of Rights, tax changes or MSA’s — have even a remote chance of successfully addressing our problems.

As you know, this storm has been brewing for some time, long before the economic downturn and the events of September 11th. For example, we have long known that even a robust economy will not solve our large and chronic problem of the uninsured. Despite a decade of the most vibrant economy in recent history, more than five million people were added to the ranks of the uninsured. Long before September 11th, we were warned that our nation has no plan to meet the health care needs of our 77 million baby boomers.

Long before the economic downturn and September 11th, we were warned by the Institute of Medicine and others that our health care system was “broken” and needed comprehensive restructuring and major improvement. More than two years ago, we were warned by the President’s Quality Commission that our health care system was plagued with errors and with overuse, underuse, and misuse of health care services. As a result, millions of preventable injuries and over 100,000 deaths occurred yearly. Months ago, Treasury Secretary Paul O’Neill warned a Senate hearing that because of our lack of attention to quality, our nation was wasting 30-50% of the 1.3 trillion dollars we were spending in health care.

More than a year ago, and at a time of unprecedented budget surpluses, the CBO warned that rising health care costs were the largest single force that was going to drive our nation back into unsustainable budget deficits and that this would continue unless major changes were made at every level in health care. And finally, though we have long known that delivery system consolidation would make it even harder to get desirable competition into our system, consolidation has proceeded at an accelerated pace. And despite all these warnings, very little was done to prepare for the storm which is now upon us. We believe our nation and our people are about to pay a heavy price for such inaction.

For what has suddenly changed is that, on top of these existing major problems, new and even more powerful forces have been laid which will have devastating consequences. These include health care premiums that are expected to increase five times the rate of general inflation — the greatest margin of increase in our history — and a serious economic recession, with resultant major increases in the number of unemployed and uninsured. And now, layered over these forces, we face international terrorism which could suddenly impact the health of tens of millions of our citizens. Never have we seen such forces converge on our society and never before have they posed such a threat to the middle class. We believe our nation and our political leaders must again return to dealing with this transcendent domestic crisis.

So with this as background, we now want to share with you the data behind our conclusions and our projections of the impact these forces will have on the American people and our economy. I want to stress that the projections you will hear use “Best Case Scenarios” and are very conservative. We actually feel the problems could become far worse than our projections.