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.