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INSURANCE BREAKDOWN More and more Americans are finding health system doesn't work for them

Anyone who's lost control of a speeding car knows the feeling: The world in front of the windshield suddenly looks like a movie running in slow motion -- the disorientation, the loss of control, the seeming eternity until it all stops.

Such is the condition of the American system of health insurance. The vehicle began skidding out of control sometime in the past decade, but for many Americans that realization is just dawning. No one is predicting disintegration tomorrow, but without action a crack-up is all but inevitable. Look at the skid marks:

The number of Americans without health insurance is growing -- 47 million at last count, or 16 percent of the population. Of that total, 2.5 million live in New York. In Erie and Niagara counties, about 109,000 people -- 10 percent of the population -- lack health insurance.

The cost of health insurance is rising two to three times faster than inflation.

The proportion of companies offering health insurance is shrinking, and those who do offer it are restricting benefits and raising employees' costs through higher premiums and higher deductibles or co-pays.

The number of Americans facing financial disaster because of health care costs -- far and away the No. 1 cause of personal bankruptcy in the United States -- is rising.

Americans pay more for health care than citizens of any other nation, obtaining results that often are worse than those in countries that spend significantly less. And costs are expected to double to $4.1 trillion in 10 years, government economists say.

Together these facts have contributed to a health care system that is a "dysfunctional mess," according to an article published last month in the Journal of the American Health Association.

They also show, in an updated report by the Commonwealth Fund, that American health care compares poorly to that in Australia, Canada, Germany, New Zealand and the United Kingdom. The study ranked the U.S. system worst for access, patient safety, efficiency and equity, and concluded that while it is the world's most expensive system, it "fails to achieve better health outcomes than the other countries." (See the full report at

That's not a car, it's a jalopy, belching exhaust fumes and rattling toward the junkyard.

>An entrenched system

Plainly, the system needs changing. But a lot of money circulates in this bloated $2.1 trillion industry, and many powerful interests have a stake in its current organization.

Most obviously, insurance companies are anxious to protect the source of their revenue, not to mention the jobs of thousands of employees. Indeed, the insurance industry bankrolled the infamous and deceptive "Harry and Louise" television commercials that helped sink President Clinton's proposed health reform 13 years ago.

Physicians, often frustrated with the insurers that control treatments, are more open to change than they have been in the past, but there is also a comfort level in dealing with the devil they know. The same goes for hospitals.

Politicians are driven in large part by the desires of their big-dollar donors and by a deep-seated aversion to change. Change causes stress and stress can cause change -- in constituents' voting patterns, if nothing else.

But now, constituents themselves are changing, including many traditionally thought of as conservative. Business groups, in particular, are calling for a new model. Generally associated with the Republican Party, the voice of business is now among the loudest demanding change.

"It's a crisis, in every single state in the union," said Elliott Shaw, former health policy lobbyist for the Business Council of New York State. Member surveys show health care is an overwhelming issue, regardless of the size or location of the business. "It's the leading problem, by a long-shot," he said.

Americans, in general, also support universal coverage, and by a wide margin, according to a recent New York Times/CBS poll. Nearly 80 percent of respondents said providing universal health insurance was more important than extending recent tax cuts. And 60 percent said they would pay more taxes to provide universal access, including 46 percent of Republicans. Some of them may have had an experience like Donald Korman's. Or Sara Siracuse's. Or Lisa Lundy's.

>Donald's story

The pain of Donald Korman's loss cuts across the lines on his face. Married for 30 years, the 60-year-old Grand Island resident has been a widower only five months. He tries to contain his emotions as he speaks about his wife's ordeal, but tears form, anyway.

"It's bad enough to have this terrible disease," he said, "but when you have to fight for your benefits, too . . ."

Shelagh Korman was 56 when she died on Feb. 1, a year after she was diagnosed with bone cancer. Her doctor had her set up for a clinical trial, one that Donald Korman believes helped others who took part.

At first, his insurance company simply said no. Eventually it agreed to pay $50,000 toward the treatment -- not an inconsiderable sum, but only 5 percent of a bill that could have reached $1 million, he said.

He decided to do whatever was necessary to buy into the trial, until Shelagh's doctor discouraged him, promising to start her on a different treatment. In the meantime, two months had passed.

"While we were waiting for the squabbling to end, she could have been having this treatment," he said, his voice edged with frustration and disbelief.

Whether that delay sped his wife's death, Korman does not know. What he does know is that fighting cancer is a crushing emotional weight. Fighting with his insurance carrier for treatment took what was already horrible into the realm of the unspeakable.

Like most people who are forced into prolonged arguments about insurance coverage, Korman has collected reams of paperwork. The documents read like a prescription for bankruptcy. The co-pay for just one of the drugs Shelagh needed came to $1,400 a month. Another would have cost $4,400 a month, except that she died before she could start it.

The Kormans weren't poor. Donald makes about $50,000 a year delivering cars to dealerships and, back when she could manage it, Shelagh made around $20,000 doing occasional work as a nurse. Still, even with a benefit that raised $24,000, the couple's savings were ravaged by the costs of care.

Korman says he doesn't resent the costs. "I'd give everything I have just to have her back; just to keep her here," he said, struggling to tame the quaver in his voice. What bothers him most is the inhumanity of the hassle and, now, in the aftermath of bitter loss, not knowing what might have been: Could she have lived with earlier treatment?

"I've got to wonder," he said.

Since his wife's death, Korman has worked to help his ailing mother-in-law get the medical care she needs. More obstacles. And he received a letter from Roswell Park Cancer Institute that he may still owe a co-pay for Shelagh's care. But no one seemed to know for sure.

>Paying more for less

Like many other public and quasi-public schemes, employer-provided health insurance arose not as a result of careful national planning, but of happenstance. Like a forest -- or perhaps a jungle -- it grew as it did because of the conditions that prevailed, mainly war and taxes.

Although the system's roots reach much further back than the mid-20th century, it was during World War II that employer-based health insurance first sprouted. The federal government, fearing the threat of wartime inflation, limited the ability of employers to raise wages, but left them free to compete for workers on the basis of benefits.

That was when many businesses started to offer health insurance to their employees. The practice was cemented through subsequent labor laws and an IRS decision holding that health benefits were not subject to income tax.

Ever since then, sporadic efforts at providing some form of national health insurance have run into a stone wall of opposition, largely built by the insurance industry that arose in that fertile mid-century soil and that produced something of value to protect.

Among Western nations, only the United States followed that path. Canada and Great Britain, for example, created national single-payer systems in which the government pays doctors and hospitals for the health care they provide. Each system has its strengths and weaknesses, but a couple of key criteria suggest that their systems have basic advantages:

Each spends far less on health care than the United States, where health spending accounted for a staggering 15.4 percent of gross domestic product in 2004, compared to 9.8 percent in Canada and 8.1 percent in Great Britain. In 10 years, government estimates are that health care expenses will account for 20 percent of all spending in the United States. Insurance alone is expected to balloon by an average of 6.4 percent a year.

Americans die younger than residents of Canada and Britain. As of 2005, the life expectancy for Americans was 75 for males and 80 for females, according to the World Health Organization. In the United Kingdom, life expectancy was a year or two longer for each sex, while in Canada it was three years longer: 78 for men and 83 for women.

If you dig into those numbers, matters become a little grayer: Americans are more likely to survive cancer than Canadians or Britons, for example, and while American children under age 5 are far more likely to die of an injury, they are less likely to die of other causes.

But maternal mortality is high in the United States, at 14 per 100,000 live births. That's nearly three times the ratio in Canada, which records 5 such deaths per 100,000 births. In the United Kingdom, the figure is 11 per 100,000 births.

Still, while such factors are important, they do not obscure the bottom line: Americans spend vastly more money on health care but die younger. Obviously, more than the insurance problem undergirds that paradox. Poverty, diet, exercise, lifestyle, violence and the environment all influence life expectancy. The same factors also may affect the cost of health care. Those who are poor, for example, may not get enough care to live a healthy life, and what care they do seek is more likely to come from emergency rooms, an enormously expensive place to get routine care.

But it is also clear that insurance is a significant issue. In a system where access to care is increasingly unstable and arbitrary, and which provides ever shrinking benefits at ever higher costs to ever fewer people, something has to give. That something is liable to be health.

>Sara's story

That something has already given for the family of Sara Siracuse. The Amherst mother has to make some of the hardest decisions any woman can face: She must choose which of her three children will get the special care they need and which will have to wait. She and her husband can't usually afford to tend to more than one at a time.

The family, living on a single income of around $30,000 a year, is caught in a vise between rising co-pays and significant illnesses, including autism and food allergies. They're coping, but only by spending everything, borrowing some and rationing care.

Siracuse and her husband, Scott, had to pay for detailed blood tests on their children -- 11-year-old twins Jacob and Kathleen and 9-year-old Emily -- because their doctor wouldn't order them. The cost for testing and interpretation was $200 each for the three children and later for Scott, who also has food allergies. The first tests on the children were conducted in 2000, followed by additional tests in 2002, 2003 and 2005. The total was $1,600 for food allergy testing alone. That doesn't include out-of-pocket expenses for heavy metal testing for the three children.

Finally, last year, her doctor saw the need and agreed to order follow-up tests, she said, but a new wrinkle appeared. Women and Children's Hospital of Buffalo didn't accept their insurance. They turned to a local testing laboratory, which first required Sara and her doctor to fill out detailed and time-consuming forms. The laboratory then performed the tests -- in conjunction with Children's Hospital.

Worse still, at least financially, is the auditory therapy for Jacob, who is autistic, and Kathleen. Sara said Jacob had the more severe problem; he couldn't distinguish between background noise and the person talking to him. The family's insurance wouldn't cover the therapy, so the Siracuses paid it out of pocket, shelling out more than $18,000 since 2004. There's also vision therapy and psychiatric services and B12 shots for Jacob, which he needs every six weeks at $50 a pop.

With all that going on, not everyone gets what is needed. "It's awful," Sara said from the kitchen of her small, tidy home in Pendleton. "I have to choose between my children. Which one needs therapy more?"

She's managed, she said, by becoming very good at borrowing from Peter to pay Paul. It's also helped that while some co-pays have gone up, her insurance had dropped co-pays for children's visits to the doctor's office.

In the meantime, she has to find a new gynecologist. Her husband's company offers only one insurance package, and it recently revised the terms of the plan. While her gynecologist was on the insurer's previous plan, she is not on the new one.

>States seek a cure

Governors and legislatures understand that health insurance has become a critical issue. Less ideologically hidebound than their federal counterparts, and living closer to the consequences of difficult issues, leaders of state governments have begun addressing the problems of health insurance.

The number of states grappling with this issue seems to grow by the day. Maine, Vermont, Rhode Island and Massachusetts all have, or are developing, plans for expanded or universal coverage. The same goes for California, Missouri, Minnesota and others. New York just adopted a plan that Gov. Eliot L. Spitzer says will provide coverage to 400,000 uninsured children, or almost all who lacked it.

Some plans are far-reaching. Massachusetts, for example, is crafting a plan that requires every citizen to have health insurance. It's a hard goal to achieve. Even with state subsidies, deductibles can be high and plans are age-rated, meaning they cost more for older residents. Ultimately, Massachusetts had to exempt nearly 20 percent of the state's low-income uninsured, who simply couldn't afford the mandate to buy insurance.

In Maine, participation in DirigoChoice is voluntary. (Dirigo, Maine's motto, is Latin for "I lead.") It is part of a larger health reform program meant to cover more residents while controlling costs and raising the quality of care.

Vermont's plan, called Catamount Health, aims to insure 96 percent of state residents by 2010 and to better manage chronic care. It includes subsidies for low-income people, with costs paid through assessments on businesses, a higher tobacco tax and federal matching funds.

Washington, D.C., also may be reawakening to the problem of health insurance after a 13-year slumber. The last time the federal government seriously tried to address the issue was in 1994 when then-first lady Hillary Clinton led an effort to craft a national health insurance program. Poorly managed by the administration, the plan collapsed under the barrage of attacks from the insurance industry and the political right.

Particularly among Democrats, health insurance is a prominent issue and, once again, Clinton figures into the effort. Campaigning for her party's 2008 presidential nomination, New York's junior senator lists "affordable and accessible health care" among her top domestic issues.

She's hardly alone. Sen. Barack Obama of Illinois is committed to "creating a health care system that works." Former North Carolina Sen. John Edwards, the Democrats' 2004 vice presidential nominee, is intent on "guaranteeing affordable, quality health care for every American," and has released a plan to show how he would achieve that goal.

Republican candidates, thus far, are less talkative about health insurance. But former Massachusetts Gov. Mitt Romney calls for providing insurance to all Americans, "not through a government program or new taxes, but through market reforms." And Edward Cox, chairman of Sen. John McCain's New York campaign and son-in-law of former President Richard Nixon, says he believes the issue is so critical to the business community that Republican candidates will have to address it.

President Bush already has. In his State of the Union speech this January, he proposed a system based on tax deductions for those who buy their own insurance. The minor buzz it created quickly subsided, but the fact is that the leader of the Republican Party tacitly acknowledged that the current system won't do any more.

>Lisa's story

Lisa Lundy doesn't need to be convinced of that. The Cheektowaga woman and her husband have spent tens of thousands of dollars testing and treating their daughter's food allergies. Their insurance won't pay. Their out-of-pocket cost is $3,000 a month -- more than $90,000 over 3 1/2 years.

The problem, Lundy says, is that the treatments her doctor is providing, and which she says are working, are considered an unproven therapy. Never mind that at one time, 5-year-old Anne couldn't eat without suffering diarrhea, hives and other frightening repercussions, and that since she started therapy, she is improving.

Therein lies the problem. Insurance companies aren't in business to lose money. They operate under a variety of strategies designed to share costs and limit payouts.

In the real world of business, that makes sense. But when it comes to health care, especially life-and-death issues involving a child, the business model breaks down.

"Before, we had a little more than one month's pay in the bank," Lisa Lundy said. "Now we have no money in the bank."

At some point, clearly, health dollars can be wasted. It makes less sense to aggressively treat an 85-year-old with terminal lung cancer than it does a 5-year-old who can't eat properly. Yet the American health care system has trouble distinguishing between such circumstances.

Part of the reason is that, as devoted as insurers may be to health care, they are first and foremost businesses. That creates limits that, clearly, can be unhealthy.

After years of arranging for expensive treatments, Lisa Lundy says Anne is now improving rapidly. Credit the doctor who helped the family navigate the dangerous currents of this illness and the universal impulse of parents to risk everything for the safety of their children.

Credit the American system of health insurance with guaranteeing that Anne's parents did, indeed, have to risk everything.

>National change

Changing a program as entrenched and broadly based as health insurance is difficult in any democracy, but it is especially so in the United States, where the Constitution creates purposeful obstacles. That makes it hard to count on the prospects for serious change at the federal level.

But this isn't 1935, when President Franklin Delano Roosevelt decided against pushing for universal health insurance, fearing his Social Security bill would fail if he did. And it's not 1994, when businesses and doctors still were content to muddle along with the existing system of employer-based insurance, regardless of its obvious deficiencies.

Today, employers are rebelling at the soaring costs and at the competitive disadvantage they suffer with foreign companies. Doctors, especially younger ones, are more likely to support universal health insurance today, according to an informal survey by the New York State Medical Society. And insurers seem to see the writing on the wall, though they will fight to be part of any solution, rather than its victim.

Even if Washington fails to act, many states are reaching for the controls, trying to steady the car. That approach is not without advantages, allowing the states acting as social laboratories on a significant national problem.

Over the long term, though, that will be unsatisfactory. Ultimately, thousands of struggling businesses and millions of exposed citizens will want an actual solution, not a series of experiments.

Meanwhile, the car is still skidding.



Families suffering

Three Western New Yorkers share their stories about their fight to obtain coverage

"It's bad enough to have this terrible disease but when you have to fight for your benefits, too ..."

- Donald Korman, with his late wife Shelagh

"It's awful. I have to choose between my children. Which one needs therapy more?"

- Sara Siracuse, with Jacob, Emily and Kathleen

"Before, we had a little more than one month's pay in the bank. Now we have no money in the bank."

- Lisa Lundy, with her daughter, Anne

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