Costs of health care: Don't ask, they won't tell!


You’ll never find out why: The cost of health insurance is soaring, the New York Times reports today. Reed Abelson’s news report appears right at the top of page one.

Will you ever find out why the cost of insurance is soaring? With history as our guide, we very much doubt it.

Abelson lays out some basic facts about the rise in prices. Prepare for some of that déjà vu all over again:
ABELSON (9/28/11): A study released on Tuesday by the Kaiser Family Foundation, a research group, showed that the average annual premium for family coverage through an employer reached $15,073 in 2011—9 percent higher than in the previous year. And even higher premiums could be on the way, particularly in New York, where some companies are asking for double-digit increases for about 1.3 million New Yorkers in individual or small-group plans, setting up a battle with state regulators.

The higher premiums are particularly unwelcome at a time when the economy is sputtering and unemployment is hovering at about 9 percent. Many businesses cite the cost of coverage as a factor in their decision not to hire, and health insurance has become increasingly unaffordable for more Americans. The cost of family coverage has about doubled since 2001, compared with a 34 percent gain in wages.
Let’s assume this study is right—that premium costs are soaring again. Will we ever learn why this is happening? Don’t bet the house on that prospect, unless it’s under water. To his credit, Abelson includes a few minor suggestions—and presumably, this topic isn’t the focus of the Kaiser report. Along the way, he also records these shrill suggestions by others:
ABELSON: In New York, consumer advocates contend that the latest requests exceed any documented rise in costs, with some companies enjoying three years of record profits and paying millions of dollars in dividends and executive compensation.

“We’re at a watershed moment,” said Elisabeth Benjamin, who represents Health Care for All New York, a group of 100 organizations advocating affordable care. “The Cuomo administration has to decide, will the Department of Insurance stand up for the little guy, John Q. Public, or let the insurance companies get away with this nonsense?”
Oof! Beyond that, Abelson includes this tragicomical passage. This is part of a longer discussion about rate hikes in the state of New York:
ABELSON: But to Leslie Moran, senior vice president of the New York Health Plan Association, an industry group, the result confirms that under the new law, the process bows to political pressure, not actuarial reality.

“There was an effort to somewhat artificially suppress premiums to prove that the prior approval system was working,” she said, noting that New York requires at least 82 percent of premium revenue be spent on paying medical claims. (Nationwide, under the new health care law, the minimum is 80 percent.)
The cost of insurance is soaring again. But don’t worry! Eighty cents of every dollar you spend will actually go toward your health care!

Why are insurance costs soaring again? Where is all that money going? We doubt that the Times will ever answer such questions, based on past performance. To wit:

In 2009, our country pretended to conduct a year-long discussion of health care. How can we contain the soaring costs of health care? This was one of the central topics our country pretended to discuss.

But the New York Times and other such orgs never made the slightest attempt to report and explain the ludicrous cost of health care in this country. Why does our country spend two to three times as much on health care, per person, as other developed nations? Given the alleged focus on health spending, this was the most obvious question in the world. Relentlessly, it was ignored. Most people have never heard that we spend that much more than everyone else—and they’ve certainly never seen any attempt at giving a real explanation.

The NewsHour didn’t tackle that topic; neither did the Post or the Times. Our biggest news orgs have agreed not to go there. And by the way:

As the sounds of silence evolved, the liberal world sat there and stared.


  1. The entire "liberal world" didn't exactly sit there and stare. You explained quite clearly the cost differentials between US health care and major European countries' health insurance programs. You even ran a chart that I recall sending to friends and posting to numerous sites. James Fallows, I believe, also focused on this with clarity, and broke things down. And of course Michael Moore made a very informative film about the sick, greedy US health care industry that was widely mocked, even though many of the criticisms of the movie did not hold up to scrutiny. I even watched Sanjay Gupta, I believe it was, attack the movie on a news program, but there was nothing but vagueness and minor quibbles in his critique. It was clear that the health insurance industry wanted to shut Moore up, but many people did see his informative film. So the entire liberal world wasn't silent, though as usual, the Ezra Kleins etc. just babbled and talked about percentages of GDP as if everyone in the world is a Washington/Versailles insider policy wonk and it's all just a game of jargon. In the real world, the horrendously high cost of health care was impacting and continues to affect the lives of millions of middle-class, working-class and penniless Americans.

  2. $15,073 per year for health insurance when the median family income is about $32,000

    What's wrong with this picture?

  3. Anyone who has visited a medical facility recently knows part of the answer: palatial, half empty buildings that are owned by the physicians themselves; even so-called nonprofit hospitals tearing down functional buildings that are replaced by medical Taj Mahals in the suburbs; your primary care physician who only worked 4 days a week retiring in his late 50's.
    The root problem is that our medical education and qualification requirements week out anyone who actually wants to help people and rewards the profit motivated who are willing to be degraded for 8 years in expectation of a big payoff and an early retirement in the end.

  4. You may be little wrong about the PBS news hour. They did air at least one special from their economics correspondent, Paul Solman, on the details of health care systems, including costs, in some other countries. The program I saw (part of) had Taiwan and Germany. I'm not sure if it was during the News Hour or right after it.

    Even so, you could think of this program as an exception that proves the rule.