If our economy is to grow, health care reform must become reality, sooner rather than later. It is no longer realistic to expect this nation’s employers — large and small — to bear the skyrocketing costs of insuring employees and their families.

Yet there has been a rising swell from some conservative quarters that there is no relationship between the economy and the current state of our health care system.

Here are some facts:

1. Health care spending is growing at an exponential and unprecedented rate, and has grown faster than inflation and wages in recent years. In 2008, health care spending represented 17% of the GDP. If it continues as it is, it’s projected to reach 20% of the GDP by 2017. (By comparison, health care spending in Switzerland accounted for 10.9% of GDP, 10.7% in Germany, 9.7% in Canada, and 9.5% in France)
2. The group hit hardest by the costs of health care are young adults, aged 25-34. These are the heart of this nation’s workforce now and in years to come.
3. Average out-of-pocket medical debt for those who filed bankruptcies was $12,000. 68% of those who filed for bankruptcy had health insurance, and medical expenses were responsible in part for 50% of bankruptcy filings. (details here)
4. Approximately 1.5 million families lose their homes to foreclosure each year because of unaffordable medical costs.
5. Employers’ cost for health insurance premiums rose by 5% in 2008. Small employers’ (25-100) premiums rose 5.5%. The smallest businesses, representing the largest sector of business in the country, saw premiums rise by 6.8%, even as workers contributed 12% more toward the cost of insurance than in 2007. Health insurance expenses are the fastest growing cost component for employers, outpacing inflation and threatening to outpace profits.
6. Increased employee costs mean less discretionary funds for savings, investment, home purchases, and consumer spending. Increased employer costs decrease profits, funds to expand, and funds for research and development, while limiting the number of jobs an employer can offer.

There is no doubt that home foreclosures and personal bankruptcies are the largest contributing factors to our current economic crisis and bank implosion. We can argue over whether derivatives and selling risk is at the heart of the crisis, but the fact is that if homeowners were not facing foreclosure, those instruments would have continued to function as a profit center and lucrative investment vehicle.

It is axiomatic: If an uninsured homeowner or family member suffers a severe health crisis, they will lose their home, either by fire sale or foreclosure. Without the COBRA subsidy provided in the recently passed American Reinvestment and Recovery Act, nearly 84% of those newly unemployed workers would not have had the means to pay for their insurance on their own (I am one of them), because continuation premiums are often far higher than unemployment benefits. This is particularly true in the case of family coverage.

Any economic recovery is going to involve not only the rehabilitation of existing businesses, but also the growth of new businesses, startups and innovators. The hidden cost of healthcare is no more obvious than in this sector. As long as employer-based health care insurance is the standard in this country, innovators and self-starters will have to seek employment rather than consider self-employment, simply because they do not have access to affordable health insurance. It is really that simple. For all of the discussion over the auto and banking industry, the truth is that small businesses (1-24 employees) are the heart of this economy, and if new businesses cannot start and have fertile ground in which to grow, the economy will stagnate and die. Our best talent will be stifled in corporate environments, simply because of their need for affordable health care coverage. Options will be limited, creative solutions to difficult problems lost, the potential for the creation of jobs in growth sectors crippled.

Economic recovery and health care reform are inextricably tied together. Every single citizen in this country, every single company doing business here, every single market has the mark of a broken health care system on its struggle to survive.

To take the economy off life support, health care reform must be implemented. We can have a debate about solutions, but let’s not waste time debating the problem.

Additional resources:

• Testimony of Cathy Schoen on Underinsured Trends, Health and Financial Risks, and Principles for Reform (2/24/2009 – Charts and full testimony (PDF)
• Commonwealth Fund Comprehensive Suggestions for Insurance, Payment and System reforms
• BusinessWeek: Want Real Stimulus? Try Universal Health Care

This is now cross-posted at Huffington Post.

This is a personal story that starts out scary but has a fairly happy ending.

I’m quite certain the ending would not be as hopeful were it not for the healthcare benefits available to federal employees, elected federal officials, and their families Even with those benefits, the ending may still not be so favorable under the current models for “managed care, if not for the other life experiences I am about to share.

I survived a spinal cord injury in 2003 and I’m very fortunate that it was not the kind of spinal cord injury that leaves a person permanently paralyzed. I did lose my ability to walk for a period and I was unable to use my hands for awhile, except for balancing things with assistance from my thumb and first two fingers. Obviously, I couldn’t drive so I was totally disabled and unable to work at any kind of job. Fortunately for me, my job as an Environmental Public Health Specialist came with Long Term Disability insurance as part of the compensation package. It was a State government job. Such compensation keeps government agencies competitive with private employers or I would never have accepted a government job back in the 1990s.

The private company I where I worked prior to that as a Research Scientist also included LTD insurance as part of the compensation package. The drawback of working for that company was a very lax attitude toward routine safety precautions and OSHA requirements. While that wasn’t true for most of that company, I had transferred to a department where that had been the norm. So I was quite happy to leave the private sector to become a government specialist in environmental public health!

I’m not a young woman, so my professional background is quite diverse. That has turned out to be a fortunate thing with regard to my recovery from the spinal cord injury. I majored in chemistry as an undergrad, financed by grants and scholarships. To supplement that other financial aid, I was employed by Washington University as a part-time Clinical Chemistry Technician at St. Louis Children’s Hospital. For about 3 years after graduation, I worked at a research institute as an Associate Research Biochemist in neurochemistry and neuropharmacology before deciding to pursue a Ph.D. in Biochemical Pharmacology at the University of Missouri-Columbia. This experience in the 1970s gave me a lot of exposure to what healthcare delivery was like before the era of managed care.

The next few paragraphs will sound like a sob story. It is not. It all ties together as a perspective of how the current healthcare system in the US has evolved into what it is now with a possible solution for the current US Health Crisis.

In 1980, job prospects for Ph.D. pharmacologists and biochemists were becoming dismal. Two weeks into my first semester in the graduate program, the Chairman of the Pharmacology Department informed us new students that he and his large, esteemed research team were transferring to another university. So his team, a third of the department, left. Another third of the department took his offer to transfer with him as a bargaining chip to land better jobs elsewhere. None of the entering graduate students followed him, so we all wanted to work with the remaining professor who was reputable and had funding.

That one professor happened to be the main reason I had chosen this program, along with the fact that I would be living only two hours away from my aging parents. First semester was tolerable but financial aid on this campus was not what it had been in St. Louis. That made the second semester terribly difficult and, besides that, my elderly parents were beginning to have major health problems. So I left the Ph.D. program.

That year was not a total loss. I was still able to complete enough work in the research (non-classroom) part of the program to be included as third author on what would turn out to be my final scientific publication for a major medical journal. Things I learned in the course of doing that work would turn out to be helpful when my own medical crisis occurred in 2003.

After leaving graduate school, I took the registry exam from the American Society of Clinical Pathologists to become a licensed Medical Technologist in Clinical Chemistry. By doing that, I thought, it would be more likely that for the rest of my career I would be able to work where I wanted to live, rather than live where I could find work. I decided to stay in Columbia and work in the Clinical Pathology Lab. at the local VA Hospital, where I met my husband. I’ve done other work since then, some related to medicine and some not so much. One job included scientific/medical analytic instrument sales, which added another dimension to my knowledge about healthcare costs.

The reason I’ve included the detail up to this point is to highlight part of my experience with the inner workings of science and medicine. Of value is that I was able to see how it all worked together, ultimately for the benefit of patients prior to the mid-1980′s.

After the early to mid-1980′s, things changed dramatically. There was no such thing as a degree in Hospital Administration prior to then. Medicine was not a “for-profit business” and pharmaceutical companies didn’t subsidize medical schools and graduate programs in the medical sciences like they do now. The Clinical Laboratory Improvement Amendments of 1988 (CLIA) enacted by HCFA (the Health Care Financing Administration) were not yet in existence. Life in the clinical laboratory, as well as everywhere else in medicine, changed dramatically when CLIA was enacted. In my opinion, the change was not for the better in terms of patient care.

Lucky for me, all of this prepared me for dealing with my current health challenges. I had become familiar with how the existing healthcare system worked and had the opportunity to watch it evolve to the mess it is now. I gained sufficient scientific and medical knowledge to know what treatments should be available and, more or less, how to raise hell when it wasn’t being offered. I had enough of an understanding of biological systems to know that patience, perseverance, and a positive attitude are needed to allow modern medicine to work its magic.

Also lucky for me, my husband and I changed our health insurance after I left my job as a Research Scientist for the private contract R&D company where I had been working in the early 1990′s. We’d each carried our own individual coverage through our employers prior to that but we decided it was a good idea to add me to his insurance policy at the VA. His was the same kind of policy that I’d had when I worked at the VA after graduate school but, with me added, it was a Self-and-Family plan. There was no waiting period for any pre-existing conditions, had I had any when he added me to his health insurance policy. The small, additional cost was the same for adding just a spouse or an entire family.

The trauma of sustaining a spinal cord injury comes with an array of problems, some of them medical and some of them not. Neurosurgeons don’t work cheap, but I was not even required to pay a co-pay except for my initial consultation. Neurosurgery, MRI’s, CT’s and physical therapy are not cheap, yet all of that was covered up to a point. Any “additional” physical therapy required a $15 co-pay, same as a doctor visit. This year, our co-pay has increased to $20.

Neuropathic pain is something that goes with a spinal cord injury all through the recovery process and, possibly, beyond. Traditional medicine can only do so much but non-Western medicine has its own magic. Acupuncture helped me to a great extent and it was covered by our health insurance through the VA. The acupuncturist I chose was not on the list of preferred providers, so I was reimbursed 60% for each visit.

Had I known which ones were on the preferred provider list, I would’ve paid $15 for each acupuncture visit. Physicians (MD’s and DO’s) who weren’t on the list would have been reimbursed at 80%, but I’ve only encountered one physician who I ever wanted to see who was not on the list. The only reason he wasn’t was because he had plans to retire the following year so he didn’t fill out the paperwork to be included for that final year he was my doctor.

The VA (Department of Veteran’s Affairs) offers its employees the same health insurance offered to all other federal employees under the Federal Employees Health Benefits (FEHB) program. There is an array of health insurance companies who choose to participate and, as far as I know, any insurance carrier is eligible to bid on being included in the FEHB plans offered to federal employees every November.

Both HMO and Fee-for-Service plans are offered. HMO plans are usually more restrictive than Fee-for-Service plans in different ways. This year, there were 43 pages of HMO plans offered and 18 Fee-for-Service plans for each of the thousands of federal employees to choose from. The HMO’s are regional plans with specific service areas. That partly accounts for the fact that there are pages and pages of them. The Fee-for-Service plans are all available nationwide or, in some cases, world-wide.

Another caveat is that not all federal employees are created equal. Postal Employees are charged lower premiums but have the same selection of health plans. Federal employees working for the Foreign Service have some benefits not available to most others. Members of Congress and their staffs have a similar but different set of benefits that used to be more clearly outlined than what’s immediately apparent on the FEHB web site now.

The good news is, the structure for “universal” health insurance exists and it’s NOT a single-payer system. There is no waiting period for pre-existing conditions, at least not with the plans my husband and I have had. It doesn’t exclude any insurance company that is willing to meet the requirements to compete for the large pool of federal employees. Adding the rest of us would only increase the size of the pool and SHOULD lower the premiums paid by all insured individuals.

The bad news is that costs are still rising. Healthcare providers who remember how things were prior to HCFA are retiring. Insurance companies had a big hand in writing the HCFA regulations and continue to be the “experts” consulted when writing new legislation. Pharmaceutical companies are staffed but not run by medical researchers and those who worked for them prior to HCFA are also retiring or being given “golden-handshakes.”

One challenge is that youthful experts have never known healthcare delivery to be any other way than how its been for the past 20 years. Another challenge is that greedy players who know how to game the system are in the best position to have the most influence.

The BOTTOM LINE is that the infrastructure for first-rate healthcare ALREADY EXISTS for those insurers and the uninsured or under-insured who desire to participate. Our job is to do what we can to remove the barriers that prevent it from being available to the rest of us.

If you’re recently unemployed, I’m sure you’ve had the same experience as I when that COBRA notice arrives in the mailbox. That generous offer of the opportunity to continue your employer’s health coverage just doesn’t seem quite so generous when you read the page with the premiums. Mine arrived just the other day. By my calculations, maintaining coverage under COBRA will require me to magically produce a payment equal to a hefty mortgage payment at a time where I’m unemployed.

At the time of its passage, COBRA was a great idea, a concept intended to help workers bridge the time between jobs with existing health coverage rather than trying to find their own. It worked for about six months, and then premiums started climbing at an alarming pace, and haven’t leveled out yet.

Families USA published a study today which clearly illustrates the problem with COBRA: In 41 states, COBRA Premiums Cost more than 3/4ths of Unemployment Benefits; in Nine of those states, They Cost More than 100 percent.

The average unemployment insurance (UI) benefit varies substantially from state to state, as do average COBRA premiums. According to the report:

* On average, nationally, UI monthly benefits are $1,278, while COBRA monthly premiums for family coverage are $1,069, or 83.6 percent of UI benefits.

* In 41 states (AL, AK, AZ, AR, CA, CT, DE, FL, GA, ID, IL, IN, IO, KS, LA, ME, MD, MI, MS, MO, MT, NE, NH, NM, NY, NC, ND, OH, OK, OR, PA, SC, SD, TN, TX, UT, VT, VA, WV, WI, and WY) plus the District of Columbia, COBRA family coverage premiums, on average, consume more than three-fourths of average UI benefits.

* In nine of those states (AL, AK, AZ, DE, FL, LA, MS, SC, and WV), the average COBRA premiums equal or exceed average UI benefits.

* In 17 states (AL, AK, AZ, DE, FL, LA, ME, MS, MO, MT, NE, NH, SC, SD, TN, WV, and WI) plus the District of Columbia, COBRA premiums for single coverage of workers consume, on average, more than one-third of UI income.

“COBRA health coverage is great in theory and lousy in reality,” said Ron Pollack, Families USA’s Executive Director. “For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured.”

That’s right. Get laid off, face the choice to eat and pay the mortgage or forego health insurance. The weight of job loss is clearly heavier with the prospect of losing everything if anyone in the family is ill in the interim.

Worse yet, employees eligible for COBRA can’t go out and get an individual policy that might cost less than the COBRA continuation policy, because they’re eligible for COBRA. If they opt out of COBRA, they’re not released to shop for an individual policy because they could have opted COBRA.

It doesn’t work. I’m not sure what we’re going to do here, because pre-existing conditions mandate continuing coverage, but at the same time, the payment is more than our house payment.

Read the full study here (PDF).

Are you caught in the COBRA’s grasp? Post a comment with your story. Let’s get the word out and include it in the health care reform debate.

Just over a year ago, US Senator Barack Obama spoke these words:

One year from now, we can stop campaigning on the outrage of 47 million uninsured Americans and finally start doing something about it.

That time is NOW. Yes, the economy is in the tank, Israel is bombing Gaza, we have troops in Iraq and Afghanistan is looking gloomier by the day. Still, the true foundation of the ‘fierce urgency of now’ is reforming our health care system and opening access to all citizens of this country without regard to employment or pre-existing conditions.

As employees are laid off and jobs outsourced to foreign countries, more and more people are faced with this choice: Go bankrupt paying for health insurance or go bankrupt paying for health care. I know this from personal experience. I am a self-employed person who was also a full-time employee with health insurance benefits until December 31st, when I also made the layoff list.

The fierce urgency of now means that I must maintain my health insurance for me and the family no matter what the cost, because of pre-existing conditions which require that I have continuous coverage in order for them to be covered in the future. Did you follow that? It’s an important distinction for many, many Americans facing layoffs and looking for new jobs.

The cost for me to continue this insurance is exhorbitant. It costs twice what I can get as an individual, except that if you are an individual and you have COBRA continuation available, you must exhaust the COBRA coverage first. That means that I will pay $1,300 per month instead of $650 per month for similar coverage as an individual.

Or, I can go without coverage and take the risk that no catastrophe strikes our family before I find another job with insurance. That would also mean we would be forced to wait six months before getting any coverage for pre-existing conditions, which could be a catastrophe in itself.

I’m one of the lucky ones. Other families have no means with which to pay for health coverage and have to rely upon good luck and Medicaid, which means they are less likely to focus on wellness, much more likely to wait until a condition becomes an emergency, and ultimately become the responsibility of the government.

On the business side of things, profit margins drop with every new enrollment period. Employers shave away benefits without dropping them completely in order to stay afloat.

Health care is not optional. When George Will rather sneeringly suggests that the issues surrounding Medicare are a function of overutilization, price-fixing, and — gasp! — recipient ignorance about the cost of goods and services being furnished to them while ignoring the fact that the patient is a captive audience, he misses the larger and far more urgent picture: People die without health care. If they can’t pay for it, the government picks up the tab. This is because health care is as urgent a need as shelter, food, and warmth, and it is slipping from our grasp in real time.

I have paid (or my parents, their employer and my employers have paid) for health insurance since the day I was born. After 50 years, I do not wish to be told that I am responsible for a drain on the national budget or a spike in the national debt. Amortize what has been paid by me and on my behalf for 50 years and it will surely exceed the average lifetime cost of health care that has been provided to me, even with the birth of three children on that tab.

This is it: the future of our country in real time. ‘Bankrupt or bare’ are not viable options. Health care reform has to be on the agenda at the very first Cabinet meeting on January 21st. President-elect Obama has asked for our stories, suggestions, and solutions to the problem. Let’s be ready to serve them up on the first day of his Presidency.

Here are my suggestions for the first steps to take:

• Establish baseline federal standards for health care that override the widely varying current state-to-state standards.
• Begin an immediate public audit of the payor/payee system, beginning with insurers and related entities. There should be full transparency as to actuarial assumptions used to calculate premiums, criteria for claims processing, administrative fees and costs, as well as any profit-taking from related companies. In particular, examine the relationships between Pharmacy Benefit Managers and Insurers, which appear to me to be rather incestuous in some cases. This audit must be undertaken in public, in real time, either via streaming video, webcam, or on CSpan so that the public will have the opportunity to follow and participate.
• Give immediate education financing incentives to qualified pre-med and medical students to enter the field of general medicine rather than specializing.
• Streamline and consolidate medical records. Electronically, of course.
• As a stopgap measure, open enrollment in the Federal government plans to private citizens at the same rates (as candidate Obama promised) so that laid off, unemployed and self-employed individuals have the opportunity to buy health insurance at a cost that won’t bankrupt them and get coverage that will be meaningful when needed.

These are my first-blush ideas. We have 2 weeks until Barack Obama’s inauguration. I hope you’ll add your ideas, thoughts, suggestions and stories in the comments. As more voices rise, so will the best ideas rise, answering the urgency, the absolute need of NOW.