A variety of factors have lead to a lack of coordination in our health care policy. First, insurance as we know it through employers didn’t even occur until World War II when employers were looking for ways to attract workers in the face of wage and price controls. Insurance has been regulated largely on a state level. States can have different coverage requirements. The rise of ERISA plans is an example of how large employers have tried to ease administrative burdens and provide the same plan for employees in different states. While these plans are not subject to state regulation, they are reflective of the business providing the coverage – and how they want to control health care costs. Companies will have different approaches. Second, health care in some ways is organic to a state or region. States have experimented in care delivery through Medicaid. You only have to look at two states to see the wide variation in payment policy. Maryland has a unique waiver from the federal government to have an all-payers system which means that all payers in the state pay hospitals relatively the same for services (based on a formula). Oregon, using a Medicaid waiver, essentially decided they had limited funds and in order to expand coverage, that meant some services would not be covered. There are also differences in medical practice and utilization of services that can be attributed to several factors. Two of those factors are how a physician is trained and financial incentives. For example, in the 1970’s President Nixon imposed wage and price controls that included Medicare. While prices stayed the same, the volume of services increased.

Our current system can leave you out in the cold. If you work for a small employer who can’t afford to provide insurance, and you are at the beginning of your career, it may be expensive to get insurance on your own. And if you don’t take insurance, takes only one accident or serious illness to make getting coverage even more expensive.

A) Intensity of Services and Aging of the Population: As the population ages and has longer life spans; there is greater prevalence of chronic illnesses. This places and increased need for treatment of ongoing illnesses and long term care services. B) Technology and prescription drugs: Advancements in health care technology and spending on prescription drugs are often cited as major contributors to the increase in overall health spending. The availability of expensive state of the art drugs and technological services means spending increases.

That is a complicated question. There is no one perfect way to fund a system. What we ought to look at is how to fund a system so that it is sustainable and in a way that health care dollars are best used. Many point to the current use of the tax code to underwrite employer sponsored health insurance as an irrational use of dollars. This could be a great source of funding, but could also be controversial depending upon how the system is funded. Some also believe that each one of us should contribute to our health care spending either through something like a Health Savings Account, a high deductible or in some other manner that requires personal responsibility.

Under the Healthy Americans Act, employers could provide insurance if they wanted to, but otherwise they would be required to turn over to each employee in the form of tax free dollars, the amount of money the employer now pay for that employee’s health coverage. In addition, the employers would pay a fee, based on their size and revenues, to a fund that would be used to provide federal subsidies to help families buy policies. The bill also gets rid of the employer tax deduction for providing health insurance which also frees up funds for subsidies.

“Global budgets” and caps have been talked about for a long time. Simply saying we won’t spend more than X is ineffectual unless you have an enforcement mechanism. Would that enforcement mechanism mean that you ration care, reduce fees to providers or reduce subsidies to those who can’t afford care or coverage? These are painful decisions because they all have serious implications. And the overarching question is how do balance spending so that all get the care they need and/or want, while keeping under the cap?

Its easy to pick a villain – and blame some sector one for all the problems. In reality however, our system is simply broken.

Health IT – particularly electronic medical records and tools that help providers make the best decisions for patients - will help the system because we will have fewer tests repeated and presumably better information among other benefits. However this won’t happen overnight and hopefully the Health IT provisions of the stimulus bill will push the system along.

The Healthy Americans Act would require you to have insurance, and help you pay for a policy that you pick. And while young adults often think they don’t need insurance because they are healthy, the Healthy Americans Act has provisions to help you stay well and emphasizes prevention so you can stay as healthy as possible as long as possible. Most importantly, it creates a sustainable health system.