Why are we paying wealthy corporations billions to limit our healthcare?

In an excellent “Guest Essay” in the New York Times (July 18, 2023) Linan Eirav and Amy Finkelstein ask a very important question: ‘We’re Already Paying for Universal Health Care. Why Don’t We Have It?’ It is a question that many people, including me, have asked many times over many years. This article answers several important concerns. One, as indicated in the title, is that the economic argument against it (“It will cost too much”) is nonsense, as we (the US) already pays more from public funds (per capita and overall) than other countries that have universal healthcare coverage. This has been documented for decades by authors such as Woolhandler and Himmelstein; when we consider Medicare, Medicaid, government employees and retirees at all levels, military retirees and families, and (least obvious) the lost revenue from the taxes not paid on employee health insurance contributions by employers (when it would be if it were salary) it is not only more than other countries pay for covering everyone, it is more than half US health expenditures.

The authors emphasize that while the emphasis is often on those Americans who are uninsured (and despite decreases as a result of the ACA, it is still far too many), there is also great suffering and uncertainty among those who have health insurance. This is because 1) their health insurance may be of poor quality, not covering all their health needs, and subject to the whims of insurance company denials, and 2) because there is uncertainty about whether they will continue to have it. The former is a real concern:

Many insured people still face the risk of enormous medical bills for their “covered” care. A team of researchers estimated that as of mid-2020, collections agencies held $140 billion in unpaid medical bills, reflecting care delivered before the Covid-19 pandemic. To put that number in perspective, that’s more than the amount held by collection agencies for all other consumer debt from nonmedical sources combined.

And the latter, losing health insurance, can be because temporary government programs end or because employer coverage (and amount of employee contribution) changes. Or because the requirements for qualifying for many programs can leave people out because they didn’t know they were eligible, because they weren’t aware of or able to fill out the paperwork, or for many other reasons. The most simple, profound, and perhaps important paragraph in the article is:

The risk of losing coverage is an inevitable consequence of a lack of universal coverage. Whenever there are varied pathways to eligibility, there will be many people who fail to find their path.

This is incredibly important. The risk of losing coverage is an inevitable consequence of a lack of universal coverage.  The cobbling together of different mechanisms for covering different groups of people (employer based insurance, various government funded insurance, self-pay, etc.) intrinsically leaves the opportunity for people to lose their insurance coverage. Only one solution prevents this, one so subtle and elusive that every other wealthy – and most middle income – country in the world has done it: cover everyone. Period. No qualification, no sign-up, no criteria, and preferably in one program. Just cover everybody. You are American, you are alive, you are covered.

That would take care of who is covered – everyone – but in itself is insufficient, as the coverage must be good coverage. It must pay for all needed healthcare and none that is unneeded. Thus, if we were to accomplish this by passing Medicare for ALL, that Medicare program would need to pay 100% (not 80%) of what is covered and cover all health needs include mental health, eyeglasses, hearing aids, and long-term care, without payments from users at the time of service. Unlike Eirav and Finkelstein, I do not think that the best answer is to provide basic coverage to everyone and allow wealthier people (or their employers) to purchase “upgrades”  as if it were an airline. Indeed, the best way to ensure that poor, uneducated, or unempowered people get the coverage and care that they need is to require the wealthy, educated, privileged and empowered to be in the same program. They will make sure that it works for them, and that will mean it works for everyone. The “upgrades” (if you like that term) should only be to allow people to purchase things they’d like but are not medically needed (most commonly cited is purely cosmetic surgery).

The money is there. It is currently going into the pockets and profits of insurance companies and pharmaceutical manufacturers (see, for example, How a Drug Maker Profited by Slow-Walking a Promising H.I.V. Therapy in the Jul 22, 2023 NY Times). Their greed is without limits. As I have discussed (Why do drugs cost so much? And what can we do about it?, Apr 18, 2023) Medicare is the only drug purchaser in the US with sufficient clout to negotiate down drug prices (other than the VA and TriCare, which already do). In response, the administration has carried through with its promise to the American people to let it do so, originally forbidden by the pharma-supported legislation creating the Medicare drug program, “Part D” (Fantastic (& fantastical) hospital charges: The industry + insurers + Pharma making money hand over fist!, Mar 26, 2023). This is  incredibly popular among Americans of all political persuasions, but not, of course, among the drug companies, who the NY Times reports are going all out to keep us paying the highest drug prices in the world (Drugmakers Are ‘Throwing the Kitchen Sink’ to Halt Medicare Price Negotiations, NY Times, Jul 23, 2023).

The money is also there and being pocketed by the owners of hospitals, health systems and practice groups, whether for-profit (often owned by private equity) or ostensibly non-profit but making and socking away money hand over fist. It is outrageous, but these companies are able to limit people’s access to healthcare and provide administrative or paperwork obstacles that discourage access, as shockingly demonstrated in another recent article by Chavi Karkowsky, (NY Times July 20, 2023), The Overlooked Reason Our Health Care System Crushes Patients. In discussing how her patient almost died because of the bureaucracy, Karkowsky says

This is the story of our medical system — quick, massive, powerful, able to assemble a team in under an hour and willing to spend thousands of dollars when a patient is sick.

This is also the story of a medical system that didn’t think my patient was worth a $12 medication to prevent any of this from happening.

This patient’s story is a result of the space between the care that providers want to give and the care that the patient actually receives. That space is full of barriers — tasks, paperwork, bureaucracy. Each is a point where someone can say no.

Why should we want to say no? In a rational system, everyone would be eligible and get the same benefit. No obstacles are necessary. Then the money we already spend would not only get us better healthcare, it would leave enough left over to begin to ensure that people have sufficient housing, food, and education.

All that would suffer would be the already bloated wealth of billionaires and huge corporations. And that should have zero weight.

Consumer experiences with health insurers: Not always good

I have often written about the particular burdens that people with no health insurance have accessing adequate healthcare. However, these problems affect Americans with health insurance as well. To look more into the experience of insured Americans, the Kaiser Family Foundation (KFF) did an extensive poll on consumer experiences with health care insurance to understand

how health insurance works involves exploring how people feel about their health coverage, how affordable that coverage is, how they interact with their insurance provider, the problems they experience, and, critically, how insurance works for people when they get sick.

The findings often seem to be in conflict, but this is largely because different people are experiencing different things. For example, 81% of people surveyed (91% of those with Medicare) rated their insurance as “excellent” or “good”, but for those who described their own health as fair or poor, that satisfaction was down to 68% (still a large majority, but a lot lower). This is to be expected; insurance in general is something you hope to not use, and when things are going well and you don’t need it, it functions well (except for those premiums). When you have not had a fire in your house, or a car wreck, or a close relative die, your homeowner’s, automobile, or life insurance are working just fine. What matters is how they function when you have a need. And health insurance is different from other forms of insurance because, for a bunch of bizarre historical reasons, it is the common, routine and accepted method of paying for your health care, not something you buy hoping to never have to use like other insurances. And, yet, when you get sick, and need hospitalization, surgery, cancer treatment, etc., is when the rubber meets the road, and why sicker people are less satisfied.

Let’s spend a little more time with this. It doesn’t matter much if you are happy with your health insurance when you are well if it is not going to serve you when you need it.  While that could be never, it is unlikely; if you are young and healthy, you will get old – or get sick sooner. If you are middle-aged or older and are healthy, terrific – until you are not. You may ‘not have been sick a day in your life’, and that is good, but then one day, you find out you have cancer. Or are in a car wreck. Or a pretty-well-controlled chronic condition gets out of control. Being concerned about the minority of people and their health and insurance coverage is not just a matter of social responsibility (although that is important) because there is a great likelihood you will be too, one day. Maybe not soon. Or maybe soon.

 Remember also that, although this poll (and others) are one-time snapshots, the group of people who are sick is not static. Over time (say looking at it each year), some people who used to be in that group leave it – either through recovery or death. Others join it. This is how the magic of consultants work – hire us and the 1000 most costly people you had last year will cost you, as a group, less this year. Of course.

Going beyond this issue, the KFF poll found other seemingly contradictory information. Despite expressing a high degree of satisfaction with their health insurance, people also identified a lot of problems.

A majority of insured adults (58%) say they have experienced a problem using their health insurance in the past 12 months – such as denied claims, provider network problems, and pre-authorization problems.

Unsurprisingly, this rate was higher (about 2/3) among sick people, but was still well over half of those in good health. And, furthermore, only half of those who had problems with their insurance were able to resolve those problems to their satisfaction; a significant number of folks simply did not get the health care that they need. And these problems were even worse among some groups of people, such as those with mental health problems.

 

Trying to understand these seemingly contradictory findings can be hard, but clearly some horrible psychological factor is present which allows the American people to think something is “good” when it is not because their expectations have been so diminished. It is likely that some of this is “well, it’s not as bad as I was afraid it might be” or “it’s not as bad as what happened to my neighbor or cousin”. If you set the bar low enough, a lot of bad can pass over it. Note that the cycle of bad that affects Medicaid recipients even more than others – poverty makes illness greater, and makes it harder to get treatment and to recover, and illness increases poverty. To be “satisfied” with your health insurance should not require you to be without healthcare needs!

Good healthcare is something quite different. It is getting all the care you need (and none of the care you don’t need) promptly, efficiently, courteously, and affordably. It should not require long waits to get into see a clinician or to get into a hospital. There should be adequate staffing, both of medical professionals such as doctors and nurses and other staff necessary. There should be no out-of-pocket cost for medical services (or a very minimal one which can be waived for the poor). It should be paid for proactively by “social insurance” (such as traditional Medicare) and adequately funded for 100% of the cost (unlike, currently, traditional Medicare). This does not mean the wealthy should not pay more, but they should do so through higher taxes to support this health system, not when they are ill. The randomness of “you pay today because you got sick or injured, I don’t (until, maybe tomorrow, when I am)” should be abandoned.

Standards for approved drugs and procedures should be established by independent scientific panels whose members are forbidden from taking corporate dollars. Such standards may be more or less restrictive, but must be applied equitably to everyone regardless of where they live or their ability to pay. Inequity has no place in healthcare.

And, of course, all profit-making must be eliminated. This means from both for-profit and ostensibly non-profit hospitals and other healthcare facilities like long-term care, insurance companies, device and drug manufacturers, and other parasitic leeches. Indeed, we could keep private insurance companies, provided they are adequately regulated – i.e., they must provide all the same benefits and must charge the same amount and not be permitted to make a profit. This would require them to compete on the only legitimate factor, customer service. Let the ones who don’t do a good job go out of business. This is more or less the Swiss model. There are several potential models, but all must include financial and service equity for all.

They should not be about being happy with your insurance because you didn’t get sick, or because they screwed you less than you feared they might!

If you want a little laugh, read this by Kendra Allenby from the New Yorker. But somehow, if you have ever been in the hospital, I don’t think you’ll laugh too hard because it will be too familiar.