The current state of the healthcare marketplace is in disarray and is not functioning well. First, it is expensive. In 2004, the total spending on healthcare was $1.7 trillion; $5,900 for every living person in the nation. The average annual cost was $9,470 for a family health plan and $3,540 for an individual plan in 2004. Healthcare consumers feel that they are losing their freedom to choose doctors, and doctors are leaving their practices because of the financial burden of administrative billing paperwork and reduced compensation.

Second, even with $1.7 trillion expenditure, some 15% of the GDP (more than 46 million individuals) were uninsured in 2005. Most of these individuals are working uninsured or underinsured. According to the AccountingWEB.com report, employers with 10-49 employees required employees to pay, on average, 64% of the PPO premium for family coverage. Employers with 1,000-1,999 employees required a premium contribution of just 30%, and, not surprisingly, a far greater percentage of their employees elected it (57%). The uninsured impose costs on the rest of us, too: According to a June 2003 report from the Institute of Medicine, the U.S. loses between $65 billion and $130 billion annually as a result of poor health and more than 80,000 early death due to lack of insurance.

Third, healthcare is a paperwork nightmare for patients, doctors, insurers, and employers. The New England Journal of Medicine published a study that found that it cost $300 billion annually to administer various health insurance plans. It takes some three million clerks and managers to run our healthcare system; that’s nearly four times the number of doctors practicing medicine in the United States. A $25 claim can cost a practice as much as $10 to process. It costs between $8 and $18 to file each insurance claim, and a third of them have to be refiled. In a survey published in 2004 by the American Hospital Association’s Trendwatch, 64 percent of doctors said they were either extremely concerned or very concerned about the level of paperwork and administration with which they have to deal.

Net Impact of the crisis - Today, we are paying more for less than ever before.