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What Are the Major Trends Affecting Health Care?

We are in a period of dramatic change. In analyzing the major trends affecting health care in this country — trends that impact the cost, access and quality of health care — it is important to understand that the forces which led to the recent national debate over health care reform have not gone away. While the threat of government intervention prompted private insurers and providers to take action, the situation is expected to get worse. The aforementioned forces include:

Health Care Costs

The run-up in health insurance costs that prevailed through much of the 1970s and 1980s made employers take action to control costs. Increased competition is causing hospitals to do whatever they can to reduce costs. As a result, the rate of growth in health care spending on a national basis is now more moderate than in recent years and the growth of corporate health care costs has slowed to a standstill.

Questions remain about the sustainability of the downward trend in aggregate spending. In any event, the pressure on providers to cut costs is expected to increase, which will make providing quality care increasingly difficult.

Problems with Access to Care

Estimates of the number of people nationwide without health insurance now run as high as 43.4 million. The number has grown by over a million in each of the last three years. The percentage of Americans with health insurance coverage has dropped for the past six years as employer-based coverage declined (60% of all private insurance is obtained through a current or former employer or union). Half of the uninsured are in families where the head of household has a full-time job. Pie Chart showing Health Insurance Coverage of Nonelderly Population, 1994. Private Employer-based 60.5%, Uninsured 17.3%, Medicaid 12.2%, Individual Private 10%, Total - 225.1 Million People

Not only is the number of uninsured growing, so too are the ranks of the underinsured. About 29 million people in this country with private insurance are at risk of financial disaster in the case of serious illness or injury. This number increased by nearly 50% in the last decade.

Denial of coverage for pre-existing conditions is a common practice by insurance companies whereby the insurer refuses to provide coverage for already-existing conditions such as asthma, diabetes, heart disease or cancer (if they have been treated and are not currently active).

The additional threat of a $450 billion reduction in Medicare and Medicaid funding over the next seven years could add four to nine million people, including children and people with disabilities, to the ranks of the uninsured.

Unfortunately, despite the fact that one in five Americans under age 65 has no health insurance coverage, expanding access is not a critical issue in the free market.

AFSCME and others have warned for years that the continued failure of our nation's leaders to deal with these issues would lead to dire consequences for America's health care delivery system. Our union has long supported the idea of health care coverage for all Americans. We know that health care — its cost, accessibility and quality — directly touches the families of our 1.4 million active and retired members, particularly the 350,000 who work in health care. America can, and must, do better.