Health care quandary

Despite a good job with his family’s business and a decent health care plan, electrician Gary Trew, 48, still cannot afford the surgery he needs to relieve chronic back pain.

The Apison, Tenn., resident delayed the spinal fusion procedure for fear of the cost, which he said could approach $65,000, including a hospital stay. Although his BlueCross BlueShield of Tennessee insurance will cover the bulk of the costs, he cannot come up with what he thinks he will owe — about $13,000, or his 20 percent copayment.

“I can’t save any money for that right now. I’ve got to get a new car and pay the bills. Groceries are expensive,” he said. “I’d really like to get it taken care of, but I just have to put it off.”

Rising health care costs are squeezing millions of Americans, said Rae Bond, executive director of the Chattanooga and Hamilton County Medical Society.

“If you’re really poor, you can normally get help,” she said. “I think our middle-class families are feeling really stuck, and I think it does drive (their) medical decisions.”

The squeeze on family pocketbooks will only get worse, according to new federal estimates.

Annual health care spending is expected to double by 2017 to $13,101 per person, up from $7,026 per person last year, the Centers for Medicare and Medicaid Services reported Monday. Americans will spend about one dollar of every five on health care, according to CMS predictions.

Analysts and industry experts attribute rising costs to a growing demand for health care services and the swelling ranks of the uninsured — 47 million nationwide and 809,000 in Tennessee. Other contributors include advances in technology, drug costs and unhealthy lifestyle choices that lead to chronic health conditions.

“Health care expenses are just absolutely staggering right now,” said Dr. Clifton Cleaveland, a retired Chattanooga physician and former president of the American College of Physicians. “There was no way you could foresee both the advances and the cost of the advances.”

Fixing the system remains an elusive goal. Debate about solutions often crests in presidential election years when the topic is on the lips of politicians, doctors, payers, employers and American consumers.

Though presidential candidates often discuss health care proposals to expand coverage and improve the system, concrete strategies have yet to emerge, said Dr. Arthur Garson Jr., former dean of the University of Virginia’s School of Medicine.

“What’s lacking right now is any real detail in what that really looks like,” he said.

Meanwhile, consumers struggle to manage their health needs.

Mr. Trew said his back pain is sometimes too much for him to work through.

“I’d say that a lot of my stress is having to deal with that, not being able to come in every day. ... Pretty soon I’m going to have to file for disability and quit working,” he said. “I don’t know if I can afford to do anything just on disability.”

Widespread impact

No segment of the $2 trillion health care industry is immune from the pressures created by the explosive spending growth:

* Declining federal reimbursements for a growing Medicare and Medicaid population constrain hospitals and doctors, themselves faced with increasing demands from patients, rising inflation, labor costs and investments in technology and equipment.

* Insurers paying out a growing number of claims, often for expensive treatments, limit provider reimbursements and boost premiums paid by employers and their workers.

* Higher health care expenses compel employers to pass along costs to their work force, shifting more of the financial burden to the individual.

* Employees paying higher premiums, deductibles and out-of-pocket expense see their benefits erode and paychecks shrink.

* Higher out-of-pocket payments from patients, who often can’t afford them, means more bad debt for hospitals and doctors to absorb.

Tracy Johnson, education specialist with the local Consumer Credit Counseling Service, said she encounters many people who have maxed out credit cards to pay medical debts.

“It’s middle-class people. It’s people that do have insurance, but they still owe so much,” Ms. Johnson said.

Medical problems contribute to about half of all bankruptcies, and those numbers are increasing, according to a 2005 report in Health Affairs, a health policy journal.

Tennessee leads the nation in its rate of bankruptcy filings per household, according to a January report by the National Bankruptcy Research Center. In 2007 more than 38,500 Tennessee households filed for bankruptcy, the report states.

Chattanooga bankruptcy attorney Kyle Weems said those filing for medical reasons include people dealing with catastrophic illness and those shouldering an accumulation of medical bills.

“Mostly it’s the incremental costs,” he said. Most common are those individuals between age 50 and 65 who struggle with health care costs until Medicare kicks in, he said.

However, Mr. Weems said he increasingly is seeing people in their 40s going bankrupt.

“The increase in health costs is so exponential that people can’t cope,” he said.

The current health care system is unsustainable, one hospital executive said.

“We can’t just keep on like this,” said Carol Newton, chief financial officer for Memorial Hospital. “Something will have to change.”

Insurance issues

Insurance premiums paid by consumers are rising, though annual increases have lessened in recent years.

BlueCross’ premiums grew by 8.1 percent in 2006, more than 21/2 times the general rate of inflation, according to BlueCross data.

Chattanooga employee benefits consultant Russ Blakely noted that premium rates have tripled here since 1995, when some BlueCross and Cigna plans offered family coverage for $325 in monthly premiums. Now, the average family plan has a monthly premium of more than $900.

Some employers deal with rising rates by reducing benefits and increasing employee contributions. A few choose to drop employee coverage, he said.

At Chattanooga-based Innovative Realty Group, which employs 18 people, hefty premiums led owner Eric Judd to switch to a high-deductible health plan in 2006. The plan, used with a tax-free health savings account, saves the company — and its employees — 25 percent on their monthly premiums, Mr. Judd said. But out-of-pocket expenses are higher for employees until they reach their deductible.

As a small-business owner, Mr. Judd still worries that if premiums continue to rise, providing insurance for his staff could become too burdensome.

“That is something that I keep on the table,” he said. “That’s a tough struggle. You want to take care of your employees, but at the same time your bottom line is your bottom line.”

Craig Becker, president of the Tennessee Hospital Association, said that as the number of uninsured patients rises, hospitals and doctors’ bills must be borne increasingly by the commercially insured population.

In Georgia 1.7 million uninsured patients are straining the system, a problem that needs to be addressed at the federal level, said Kevin Bloye, spokesman for the Georgia Hospital Association.

“It truly is a runaway train, and that is the true driver of health care costs,” he said. “When people show up at the hospital with no way to pay, those costs have to be transferred to those who can pay, and right now that system is buckling.”

But Erlanger hospital Chief Executive Officer Jim Brexler said the true burden of the uninsured — who have minimal access to primary care and preventive care — is felt in the money that is required to treat their conditions.

“The real cost of the uninsured is that their lack of access to early stage intervention is causing the cost to care for that same person to be much more (down the line) when they come in acute distress,” he said.

For Fort Oglethorpe resident Danielle Long, 20, lack of insurance coverage for rehabilitation stands in the way of her ability to walk independently.

Danielle sustained brain injuries after a car accident in 2006. Georgia Medicaid paid for a year of physical therapy at Siskin Hospital for Physical Rehabilitation but stopped covering the services last year, and the family cannot afford rehabilitation without that assistance, said Angie Collins, her legal guardian.

Miss Long can walk now only by holding on to the wall.

“In 10 years I hope I’m normal again. That would be nice. ... I want a normal job, like before,” said Miss Long, who used to waitress at the Teriyaki House in East Ridge.

Mrs. Collins said not having money has made the difference in Miss Long walking or not.

“Physically, her body could get better. If she was in the therapy all these months, she would be walking. If I had money, the kid would be walking.”