For college seniors preparing to graduate college this spring, the debate surrounding universal health care might become a lot more tangible as the challenge of finding good health insurance coverage becomes a reality. For the most part, everyone wants accessible, affordable, and quality health care. However, there are various perspectives about how to accomplish these objectives while also getting the 47 million uninsured Americans access to health care coverage that adheres to these same principles.

At its conception, health insurance was never intended to meet the demands that citizens place on the health care system today. The first form of health insurance emerged in 1911, when the Equitable Life Assurance Society of America began providing �medical catastrophe coverage� for employees at large companies to help finance treatments for rare and dire medical events. The demand for more inclusive health insurance offerings intensified as doctors began to realize that many other patients with less severe medical conditions would experience better health outcomes if they were treated in hospitals rather than at home. In 1929, Baylor University established a program with its teaching hospital to allow faculty up to 21 days of in house hospital care per year at a cost of six dollars a year. The Baylor program would eventually evolve into the Blue Cross and Blue Shield health plans that collectively cover over 100 million Americans today.

By the mid 20th century, wartime shortages of skilled workers and government-imposed wage controls led employers to pursue other options to entice new employees to join their companies. In 1945, in lieu of offering better wages, shipbuilder Henry J. Kaiser began providing health coverage to his employees on a prepaid basis. The program was hugely successful, and has grown to become what is now known as Kaiser Permanente, the largest health maintenance organization (HMO) in the United States.

Between 1944 and 1964, per capita spending on medical care barely increased from slightly less than $500 to less than $750 (in 1992 dollars). After Medicare and Medicaid were founded in 1965 to provide free health coverage to elderly and low-income citizens, the massive influx of patients into the healthcare system began to strain resources and rapidly increase healthcare spending. During the next 20 years, per capita spending shot up to above $2000, and the spending has continued to increase ever since. By 1989, government spending on health as a percentage of national income had increased three fold from about 5% in 1965 to 16%.

Per-capita spending on US medical care 1919-1997 (1992 dollars)¹

The escalating cost of health care shows no evidence of slowing down. Between 2001 and 2002, the cost of health insurance for employees rose 13%. A Kaiser study found that 72% of uninsured Americans cite the cost of health insurance as the primary reason they were not insured. Even physicians admit they are sometimes asked to take cost into account when diagnosing patients and suggesting treatments.

Today, most people receive health insurance through discounted rates offered by their employers. HMOs like Kaiser Permanente are the most affordable way to receive health care, and insure more than 50 million Americans. Even so, the cost of HMOs can be steep. Claremont College employees pay nearly $300 a month for HMO coverage for their families. The only other low deductible option, which is to be insured through a preferred provider organization (PPO) like Blue Cross & Blue Shield, is more than $1,000 a month.

There are two major opinions about how to best finance the health care system: 1) a single-payer solution where universal health insurance is managed through the government and financed by tax-payers to provide health care for everyone, and 2) a consumer-driven solution which keeps health insurance private and expects market forces to drive down the costs of health care. At the heart of each policy is a philosophy about how to cut the costs of health care while maintaining quality care.

Neither government-financed nor consumer-driven plans are ideal for meeting the current health needs of Americans. The financial impetus and bureaucratic methodology for government-financed health care are at best unclear. Consumer driven plans don�t guarantee that everyone will qualify for health coverage, such as citizens who have pre-existing health conditions that make them undesirable customers for insurance companies and low-income families.

Yet perhaps the fundamental flaw in each approach is the similarity between them. Insurance-backed healthcare might no longer be the appropriate model for a system that no longer operates in accordance with an insurance framework. Insurance only works if there are more people in the system who don't use insurance funds than those who do. Despite frustrations over high deductibles and confusing car mechanic jargon, auto insurance works because it has a narrow objective, catastrophes, and doesn't pay for every aspect of car maintenance that is important for "car health."

Just as car insurance companies simply don't have the resources to pay for new wiper blades and oil changes, no health insurance plan has the resources to provide coverage for every aspect of a patient�s health. Yet as life expectancy swells and better treatments become available for many ailments, there are a growing demands being placed on a system that was never designed to handle the load. As lawmakers and health advocates nit-pick around these policies and criticize their opponents, everyone is addressing the structure of health care in America without asking a different kind of critical question: How should we change our own health care expectations?

Surly we are all tempted to play it safe and go to the doctor during those �what if� worse case scenarios, and occasionally these are moments when when the merits of health care reify themselves most clearly. But is there a point at which we should begin to scale-back the extent that we hope health care will improve our overall pursuit of personal health? It seems that "normal" and "healthy" have entered an ironic positive-feedback loop in the public conscious: the healthier we get -- and by a certain, albeit limited set of standards, we are surely healthier now than during any other stage of human history -- the healthier we want to be. Many economists feel comfortable citing the law of diminishing returns in cases when the ratio between the magnitude of a desired benefit shrinks in proportion to the cost of achieving that benefit. Perhaps we're reaching a point in medical spending where investing in more health care is no longer a sustainable strategy for improving the quality of health and health care. As we begin to consider new health insurance policies and pick a side in the debate surrounding universal health care, we ought to ask ourselves how much we should really expect out of health insurance, and to what extent we should allow it to contribute to our perceptions of vitality and quality of life.

Published on May 10, 2010 in Medicine