Tuesday, May 26, 2009

The mess that is US health care

The inefficiencies and inequities of the US health care system are legendary -- the country spends 15% of its GDP on health care (vs an OECD average of 8.4%), and despite that, is ranked 79th among 191 nations by WHO in terms of "overall level of health". Infant mortality rates are higher than all other developed countries. And 15% of the population is uninsured. One of the bizarre quirks of the US sytem is that it is employment based; lose your job, and you're out of health insurance, just at the time when you're likely to need it most.

And here's another strange quirk of the employment-based insurance system, courtesy of Princeton's Uwe Rhineheart on the NY Times' Economix blog:

"...the group health-insurance premiums employers pay to private insurers are “experience rated” over that employer’s group of employees. This means that the group premium is based on the claims experience – that is, the health history — of just that small group of employees. For small employers, it can mean that if serious illness befalls one or several employees in the group, it can drastically and unpredictably drive up the premium for every employee in the group."

Astounding.

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