Saturday, April 15, 2017

United Airlines, health care, and a system designed to privilege the powerful

The spectacle of Chicago Department of Aviation security officers beating and dragging a passenger off of a United Airlines flight was recorded by other passengers and quickly went viral on the Internet, generating outrage across the country (and internationally, particularly in China, where the fact that the passenger was Asian was a source of fury). A series of statements from United and its CEO, Oscar Muñoz escalated from tone-deaf explanation (essentially “well, we told him to get off first”) to most recently apparent contrition, saying it should never, ever, happen to anyone and that United would never, ever, have local police board its planes to take off a legitimate, paying customer.

It is unlikely that this too-little too-late response is going to appease anyone, and it is profoundly to be hoped that United suffers severe financial repercussions; the passenger, who suffered a broken nose and lost teeth, almost certainly will sue. It is not clear how to make this happen to the Chicago Aviation Department. The fury of the public is almost certainly increased by the personal experience of (coach) airline passengers. It also is not limited to either United or to airline travel, as Helaine Olen articulately describes in her NY Times op-ed “United Airlines is not alone”, on April 12, 2017. Ms. Olen goes through the list of issues that were raised by this incident, including not only the concerns about racism (would it have been worse if he were black?), but about the militarization of our police response to relatively minor issues. Although the officers involved were from Aviation Security and not the Police Department, it is understandable that a friend from Chicago posted the question “Was anyone surprised that the Chicago PD used such violence?” on Facebook, given that department’s history of “overreaction” and use of military-type tactics.

But Olen’s main point is that this event (if not necessarily the attendant violence) reflects the vast disparity in treatment provided, not only by United and other airlines but across our society, of people in different socioeconomic situations. She goes through the multiple enhancements to the first class cabins (sleepable seats with Saks 5th Avenue bedding, better meals, etc.) and compares them to the growing level of discomforts and indignities inflicted on coach passengers, with no food, increased crowding, baggage fees, and the like. The crowding is worse than on a bus, and Greyhound doesn’t charge for baggage. Full-fare first class passengers are a big profit center, but most people in first class are not the 1%ers who can pay these fares, they are business travelers whose companies have bought coach tickets and upgraded to first based on miles earned through an airlines loyalty program. And airlines love that, because it means they will keep flying with them. The rest of us, tough. And don’t believe that they “need” to stay so lean; Olen notes that United made $2.3 Billion in profit last year.

Olen also makes the connection to health, observing that
In a study published in 2014, Martin Gilens at Princeton University and Benjamin Page at Northwestern University found government policy and actions rarely reflected majority sentiment, but instead favored corporate interests and the wealthiest Americans. When congressional Republicans offered up a health insurance reform package earlier this year that would have covered fewer people than the Affordable Care Act, Representative Jason Chaffetz, Republican of Utah, initially defended it by claiming Americans needed to choose between spending on necessary medical care or buying an iPhone. Meantime, the fabled 1 percent would have received an average tax cut totaling $37,000 if the legislation were fully enacted.

And if anyone doubts that this is how the health system functions (although I doubt that many readers of this blog do), I recommend the new book “An American Sickness: how healthcare became big business and how you can take it back”, by Elisabeth Rosenthal (Penguin Random House, 2017). Rosenthal, a former New York Times reporter whose fantastic series “Paying till it hurts” ran in the Times a couple of years ago, is now the editor-in-chief of Kaiser Health News. I have cited her reporting frequently in this blog and in my 2015 book “Health, Medicine and Justice: designing a fair and equitable healthcare system” (Copernicus Healthcare). Indeed, “An American Sickness” overlaps considerably with my book, but is by a much better-known figure, and hopefully will be widely read. Rosenthal, a physician, pulls few punches in this work, saying unequivocally that the US health system is designed and functions to maximize the income and profit of providers (especially hospitals), insurance companies, and pharmaceutical and device manufacturers. (An excellent review of the book by Jacob Hacker, Professor of Political Science at Yale, can be found here.) Rosenthal identifies the ten “Economic rules of the dysfunctional medical market” (which I have reproduced in the figure); all are important but #10, “Prices will rise to whatever the market will bear” is particularly critical, and reflects that the health system bears little or no relationship to a true market, and does not play by Adam Smith’s rules.

(E. Rosenthal, “An American Sickness”)

1.      More treatment is always better. Default to the most expensive option.
2.      A lifetime of treatment is preferable to a cure.
3.      Amenities and marketing matter more than good care.
4.      As technologies age, prices can rise rather than fall.
5.      There is no free choice. Patients are stuck. And they’re stuck with buying American.
6.      More competitors vying for business doesn’t mean better prices; it can drive prices up, not down.
7.      Economies of scale don’t translate to lower prices. With their market power, big providers can simply demand more.
8.      There is no such thing as a fixed price for a procedure or test. And the uninsured pay the highest prices of all.
9.      There are no standards for billing. There’s money to be made in billing for anything and everything.
10.   Prices will rise to whatever the market will bear.

Rosenthal supports each of these rules with data and examples. Regarding rules #8 and #9, in an NPR interview with Terry Gross on “Fresh Air” ,she emphasizes the importance of getting an itemized bill from the hospital and going through it line by line, citing a person who found $70,000 in outpatient surgery charges for an inpatient hospitalization, and others billed for circumcisions their newborn sons did not have. But it is not always easy; in the book she tells of a person who demanded an itemized bill rather than the one she received, where the total of $45,000 was simply labeled “Miscellaneous”! The hospital never sent it, despite it being her legal right, but did send her to a collection agency! Rosenthal says we would never tolerate shopping at a supermarket with no prices where they just sent us a $2000 bill every week. We should not tolerate this in healthcare.  Every single service must have a listed, easily accessible public price. It may be fine to discount it for some insurers, and even more for some than for others, but the list price must be as clear as we expect it to be for anything else that we buy.

I learned some things from Rosenthal that had not even occurred to me; for example, the ACA’s 85% limit on “medical loss ratio” (i.e., the percent of premiums that insurers actually have to spend on medical care) ironically helps encourage them to be willing to pay higher prices to providers. Why would they pay $130,000 for a treatment that cost $19,000 only 15 blocks south (the opening example in the book)? Well, they get to keep 15%. And 15% of a bigger number is more in their pockets. And they just pass on the cost as higher premiums! Rosenthal discusses an important conservative health economist who is known for saying the high cost of US healthcare is overblown, but (amazingly) sings a very different tune when confronting the hospital bill for his father!

“Dysfunctional” is the wrong word for our health non-system. It functions just fine to make lots of money for the biggest corporate (including ostensibly “non-profit”) players. For the rest of us, it doesn’t always provide the best, or even adequate care, and it drains our individual and collective pockets, significantly contributing to individual bankruptcies and bad health outcomes when folks go without care. It also results in governments at federal, state, and local levels not having funds for other social programs that might actually improve health more.

Yes, we can change it but it will require resolve and a lot of work, because the opponents of change are rich, powerful, and entrenched. We cannot accept any excuses from our bought-off politicians or “pragmatists” who are the ones who suffer the least. We are least able to fight when we are sick and need care, just as we are least able to object to our conditions when we have a ticket and are on a plane bound for where we need to go. But just as we can fight the latter, we can fight the former; the social media response to United is an example of a good start.

But it is going to take more than a good start to get the thieves and profiteers out of healthcare, and get a system that benefits us all. It is going to take a long fight with a lot of hard work. Up for it?


Paula Friedman said...

Superb connecting of dots here. I would note that, while Dr. Rosenthal's name may be better known, your work and your book are also superb.
One point left unmentioned, and very relevant to the struggle ahead of us all, is that the Inernet's (and social media's) importance in the United Airlines case, as in the Black Lives Matter struggle and the Sanders campaign, must surely be clear to the oligarchy as well as to us, and so our struggle *must* include the fight to retain equality in Internet access/usage.
Paula Friedman

Matthew Anderson said...

The idea that the health care system's main function is profit maximization was clearly formulated as early is the mid-1960's by Health/PAC, the health policy advisory center. (see: Health/PAC also originated the concept of the Medical Industrial Complex.

A clear formulation of their ideas can be found in the book The American Health Expire written by Barbara and John Ehrenreich in 1970:

The medical reformers have assumed, understandably enough, that the function of the American health industry is to provide adequate health care to the American people. From this it is easy enough to conclude that there is no American health system. But this is like assuming that the function of the TV networks is to give comprehensive, penetrating, and meaningful information to the viewer (...)

Like the mass media, the American medical industry has many items on its agenda other than service to the consumers. Analyzed in terms of all of its functions, the medical industry emerges as a coherent, highly organized system. One particular function-patient care-may be getting slighted, and there may be some problems in other areas as well, but it remains a system, and can only be analyzed as such. The most obvious function of the American medical system, other than patient care, is profit-making. When it comes to making money, the health industry is an extraordinarily well-organized and efficient machine.

The Health/PAC critique went far beyond health care financing - which is usually the focus of all discussion regarding health care - and examines issues of racism, sexism, and impact of medical empires. It is interesting to speculate why activists of the 1960's were so much bolder (i.e. more radical) than those of today.

Thanks for an interesting post.

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