N E W S R E L E A S E

Embargoed for Release: Monday, October 20, 1997

Contact:
Pat Schoeni
(202) 637-6839THE STATE OF THE NATION’S HEALTH CARE SYSTEM:
A REALITY CHECK

Washington, DC (October 20, 1997) — The National Coalition on Health Care (NCHC) today released studies which examine the interrelated issues of access, cost and quality of health care. The studies’ findings indicate that “reality” differs substantially from current perceptions that 1) the marketplace, alone, will take care of most of the problems, and 2) incremental reform is sufficient and an appropriate model for future reform.

“Our country’s health care system, which was described as in “crisis” in the early 1990s, has not improved, but actually has become worse,” according to Henry E. Simmons, M.D., President of the National Coalition on Health Care.

“While some of those incremental changes can have a positive impact upon our society, the reach of those changes is limited and the outcomes uncertain,” said Coalition Co-Chair, former Governor Robert D. Ray. “What is certain is that, in the absence of effective oversight, the marketplace is not taking care of the problems. Our health care system needs major systemic change if this country is going to provide high quality, cost effective health care to all Americans.”

The problems identified in the three studies are:

• The recent upturn and expected acceleration in the rate of increase in health care spending;
• The continuing increase in the number of uninsured people, especially among middle-class, uninsured workers and families, despite a strong economy;
• A disproportionate adverse impact on the middle class and America’s small businesses; and
• Widespread problems with the quality of care which are causing major harm and waste.

The cost study, conducted by Kenneth E. Thorpe, Ph.D., Director of Tulane University’s Institute for Health Services Research, released earlier this year by the Coalition, shows that health care costs are increasing at twice the rate of inflation and consuming an increasing share of national spending. In 1987, we were spending just less than $500 billion a year on health care. In 1994, at the height of the national health care reform debate, we spent $937 billion, a 5.1% increase over the previous year. In 1997, that number is projected to reach $1.1 trillion, an increase of 6.3% over 1996. In other words, we are in worse shape than we were three years ago, with the rate of increase escalating. By the year 2007, we will be spending almost $1 of every $5 in the American economy on health care, and there is no end in sight.

Middle-income American families, especially single parents and couples with children, are hardest hit by increases in health insurance premiums. While increases affect all income sectors, married couples with children are paying an average of 5.5% above inflation and single-parent families are paying as much as 10% above inflation each year for their health insurance.

Families with incomes of between $20,000 and $40,000 per year are spending a higher percentage of their incomes on health care than any other segment of the society. The very poor are covered by Medicaid, and, for the wealthy, health insurance increases constitute a small percentage of income. Between 1993 and 1995, families earning between $40,000 and $50,000 saw their health insurance payments rise 8.5% per year, and families earning $50,000 to $60,000 faced an average increase of 5.6%. In contrast, families earning above $60,000 had nearly no growth in health insurance payments.

Despite one of the greatest economic growth periods in our history, coupled with low inflation and low unemployment, there were more than 41.7 million Americans uninsured in 1996, a number that is growing at the rate of almost one million people every year. A second study conducted by Professor Thorpe projects that there will be 47 million uninsured people by the year 2005, and 60% of them will be uninsured workers and their families. Again, as on the cost side, the uninsured problem has been growing worse and is projected to become even more serious in the coming years.

A study conducted by the RAND Corporation shows that, while many consider the United States to have the finest health care system in the world, there is a large and growing body of literature that documents major problems with the quality of much of our care, including significant underuse, overuse and misuse of health services. The study’s authors, Mark A. Schuster, M.D., Ph.D., Elizabeth A. McGlynn, Ph.D and Robert H. Brook, M.D., Sc.D., demonstrate that millions of Americans are injured and tens of thousands die unnecessarily due to these problems. The problems take many forms, but can be summarized in four major areas:

• Wide variations in the delivery of care across regions and among providers;
• Inadequate information for providers and patients to make informed decisions;
• Thousands exposed to medical errors, inappropriate or unnecessary care, and resultant harm; and
• Inadequate systems to assure quality care is delivered to patients.

“The problems of access, cost and quality are interrelated, and when seeking solutions to one, it is very important that the others are not exacerbated in the process,” said Coalition Co-Chair, former Congressman Paul G. Rogers. “Unless we find systematic and comprehensive solutions to these problems, we cannot reach our goal of providing affordable and high quality, cost effective care for all Americans,” he added.

The three studies were conducted with support from the W.K. Kellogg Foundation and the Henry J. Kaiser Family Foundation. The National Coalition on Health Care is the nation’s largest and most broadly representative health care alliance working to improve America’s health care. The Coalition is a nonpartisan organization comprised of almost 100 member organizations representing 100 million Americans in large and small businesses, labor unions, and the nation’s consumer organizations, religious faiths and primary health care providers. In existence since 1990, the National Coalition on Health Care has as its Honorary Chairmen former Presidents Carter and Ford.

For more information, contact the National Coalition on Health Care at (202) 637-6830.