My Credo – Universal Health Care

Introduction

Universal healthcare is a controversial issue in the 2020 presidential election. The rhetoric has been mostly extreme on both the left and right sides of the political spectrum. Bernie Sanders best represents the left extreme. His pitch as a presidential candidate was to replace the entire current market based system over a 4 year period with a Medicare-for-all government mandated and funded single-payor system. Trump and evangelical Christian leaders represent the opposite extreme. Their concept continues to favor the market system, but reduced engagement by the federal government. They would eliminate the Affordable Care Act in its entirety, further restrict qualification rules on Medicaid, and rely on the faith community and charity actors to fill gaps in healthcare coverage.

These extreme partisans seem not to share any common ground. But frustration is growing among Americans at the rising cost and other shortcomings of the current private for-profit healthcare system. The issue is not likely to go away regardless of which party holds the presidency or controls Congress after the 2020 election.

Today’s Reality

Proponents of the existing market based system argue that the US has the best most advanced healthcare system in the world. It is certainly true that health science and technology in the US is ahead of many other countries in a variety of diagnostic and treatment disciplines. Advanced drugs and therapies are also more accessible in the US than many other places, but generally only if one can pay the exorbitant prices. However, if you are wealthy the US is definitely where you can get healthcare as good or better than any other in the world.

There is another side of the US healthcare system though. In broad per capita terms, according to the Kaiser Family Foundation, Americans pay roughly twice as much for healthcare as residents of other wealthy countries; Healthcare costs Americans about $10,000/year per capita while the equivalent cost in other wealthy countries averages about $5,000/year. At the same time people in those other countries live longer, have lower infant mortality, and lower prevalence of comorbidity disease groups such as those of the heart and lungs.

A quick comparison of the healthcare system in Canada, our next door neighbor, with the US illustrates the disparity of outcomes in the two systems:   Canadians live to an average age of 82; Americans live to an average age of 79. Canadian infant mortality rate is about 4.5 per 1,000 births; US infant mortality is about 5.8 per 1,000. The Canada/US comparison is not unique. Comparing the US with any of the other ten wealthiest OECD member countries* shows the same result. For skeptics:  you can get more detailed information at commonwealthfund.org. The report is titled:  “US Health Care from a Global Perspective, 2019: Higher Spending, Worse Outcomes.” So, is the US system truly the best in the world? It seems to depend almost exclusively on how much money you have.

The fundamental difference in healthcare outcomes between US and other wealthy countries seems to result from the fact that other wealthy countries provide universal healthcare for all citizens. But in the United States today many poor or low income Americans do not even seek medical treatment, especially preventive care, because they can’t afford it. And nearly 30 million Americans have no health insurance.  More than an additional 40 million are under-insured; under-insured generally means that out-of-pocket insurance costs exceed 10% of income. As a result of such factors there is another sobering statistic about life in the US under our market based system. Life expectancy of the top 25% of income earners is 10 years longer than those in the bottom 25% of earners.

Of course aside from the pure health considerations there is an economic impact on Americans as well. Every year around 500,000 people are driven into bankruptcy as a result of high medical expenses. And while the statistics are hard to come by, it is known that besides financial ruin, high medical bills lead to serious depression and even suicide of a significant number of Americans.

It is clear from the cost/benefit evidence that the current for-profit market based healthcare system does not serve Americans well. Healthcare buyers/users are generally not qualified to assess the relative value of competing services for themselves; and they have no capacity to negotiate prices. In most cases they will not even know what the elements of particular healthcare services are, if each is truly necessary, or whether there are equally effective treatments available with lower cost. They are simply at the mercy of their medical service providers, who themselves may have an economic interest in one treatment over another.

Going Forward

I believe universal healthcare is a human right of every American citizen. One of our key national goals must be to move as quickly as practical toward that end. If our liberal democracy survives another 30 years (by no means a certainty if we don’t overcome today’s political polarity and/or if Donald Trump is re-elected) I am confident by that time the American electorate will demand and get some version of universal healthcare service, including vision, hearing, and dental. It may be a medicare-for-all government program, a public/private shared system, or some other combination. But everyone will have affordable health insurance that will cover all basic health services. How we get to that “utopian” dream and how long it takes is the question.

The Challenge

Even before the current coronavirus pandemic our federal budget deficits were forecast to be a trillion dollars annually for the foreseeable future. And we need to spend several more trillions of dollars just this year to combat the economic effects of the pandemic. Regardless of anything else we do we need to address budget deficits. But reducing deficit spending and providing universal healthcare seem mutually exclusive goals. That must not be; we must find a viable solution. So what to do?

Our current healthcare system is much too complex. That must be one of the key elements of any reform. Regardless, that complexity and the political implications of it make it impossible for me to offer a specific plan for revision/replacement. That will require major analysis and planning effort by an army of sincere professional medical, economic, and public policy people to produce a system that meets the needs of all Americans; it must take into account the cost, funding mechanism, and a rational transition. I am not going to try to do any of that here. I will only offer a few background facts maybe not generally known as well as some guiding principles I think such a system must include:

Important Background Facts

  • According to the Center for Medicare and Medicaid Services (cms.gov) government (local, state, and federal) already pays through various programs half the total cost of the for-profit healthcare services in the United States. Individual citizens and private insurance companies pay the other half while 70 million Americans are uninsured or under-insured.
  • As highlighted earlier half the annual per person cost of healthcare paid by government in the United States (about $5,000) is approximately the same as the total cost per person in Canada.
  • Therefore if the US market based healthcare cost system were as efficient as the public system in Canada the federal government should be able to provide universal healthcare to every American with no additional tax revenue required.
  • Logically, if the US adopted the Canadian model we should also be able to enjoy the higher life expectancy, lower infant mortality as well as other physical and emotional health benefits of the Canadian system.
  • Currently healthcare costs the highest paid 10% of Americans about 3.5% of before tax income; they also use 4 times the healthcare services of the lowest paid 10%. At the same time the lowest paid 10% of Americans pay 35% of before tax income for healthcare. Clearly the system is grossly inequitable.

Implementing US Universal Healthcare

Definition: Universal healthcare means that every individual has access to a full menu of affordable curative, preventive, and palliative healthcare services including mental health, hearing, vision, and dental care.

We must implement Universal Healthcare in the United States as quickly as practical. It is simply un-American for citizens to be suffering or dying because they can’t afford to pay for the healthcare they need. To be sure implementation will require significant federal legislation, a rational transition plan, and public support. Following are some guiding principles I offer in addressing our healthcare crisis:

  1. Public Healthcare Insurance Option – To achieve universal healthcare the federal government must initiate a not-for-profit public health insurance option to compete with our current mostly for-profit system. America simply can’t afford universal healthcare at imbedded for-profit market prices. A competing federal not-for-profit system will be one step toward bringing cost reform to the entire healthcare system. The goal is not to eliminate the private system but to efficiently insure every American while over time producing a per-capita cost model that more closely resembles the economic efficiency in other wealthy countries.
  1. Healthcare Services – Healthcare insurers must be required to cover all medical services including mental health, hearing, vision, and dental care throughout the United Stares and its territories. The federal government must provide appropriate graduated subsidies for families with low and mid-level incomes whether covered by the public option or private insurance. Further doctors, hospitals, and other healthcare providers must not be allowed to refuse services to patients who have the public healthcare insurance; they must offer the full range of services in the same priority they offer services to patients with private insurance. Neither the public insurance option nor private insurance carriers may refuse to insure persons with preexisting conditions or charge higher premiums to those individuals.
  1. Drug Prices – Only the US government has the capacity to control drug prices. The US is the only one of the 11 wealthiest OECD countries without regulation of drug prices. The federal government must immediately develop a system of national regulation of prices on all prescription drugs sold in the US as every one of the other wealthy country already do. I would prefer the simplest of regulations: We have the largest drug market in the world; therefore drug companies should just not be allowed to charge Americans more for drugs than the price of the same drugs in any of the ten other wealthy OECD countries. Most of those countries actually already have similar comparative price regulations in place protecting their citizens today.
  1. Best Medical Practices – A federal non-political national panel of public health, medical, and hospital experts should be created to establish the best most effective treatments and therapies for all common medical conditions, including mental illnesses. The panel must maintain, regularly update, and publish a database of such recommendations for use by hospitals, doctors, and insurance companies in their authorization and provision of medical services. The panel must also establish a reasonable price structure for all related medical services, similar to but more comprehensive than the current Diagnosis Related Groups System** (DRG). Prices for medical care should be consistent across the nation perhaps adjusted only for regional labor costs. Of course the public option insurance should not pay more than those prices for the medical services; private insurance companies may still negotiate their own pricing or endorse the federal price structure.
  1. National Healthcare Database – A confidential national database should be created to maintain the healthcare records of American citizens. The goal would be to eliminate unnecessary redundant medical testing and treatment as well as errors by giving healthcare providers immediate access to a patient’s medical history, treatments and therapies provided, drugs prescribed, and results of previous tests regardless of where such services occurred. I know this is controversial. However, we currently have remarkably secure federal databases. The IRS already has secure financial information on every taxpayer; similarly, private banks, credit card companies, and healthcare systems already have the critical information on virtually every client or patient, but with inconsistent and less stringent security protocols.
  1. Research Funding – The federal government should promote and share costs of fundamental research into drugs and therapies for chronic (ie arthritis, diabetes) and debilitating conditions (ie heart attack, stroke). The goal of such federally funded research should be to prioritize focus on those medical conditions that will maximize the health benefit to the most people while reducing the total national cost of healthcare. Universities, hospitals, medical labs, and pharmaceutical companies doing such sponsored research should not be granted patents for resulting approved drugs or therapies but may have licensing rights to recover their own investment and a reasonable profit margin.
  1. We must implement an auto-enrollment program to make sure everyone’s healthcare is covered either by the public option or a private carrier. Other countries have successfully done that. If there is no required enrollment many young and healthy people will not choose insurance; that increases the cost for everyone. Likewise poorer people likely will not enroll because of the cost. With appropriate federal legislation which can pass the constitutionality tests combined with auto-enrollment, and generous subsidies for low and middle income families we can assure everyone is covered.

There are some challenges I have not discussed here but are nevertheless critical to achieving efficient universal healthcare. Generally they are structural in ways for which I am not competent to offer useful solutions. I only know they must be addressed:

  • The US population of Americans over the age of 65 is growing rapidly. As it does a larger and larger portion of our healthcare costs will necessarily shift to long term medical care and living assistance; however we have no public longterm insurance program. Private longterm care insurance is available but it is very expensive and few Americans have it. Meanwhile we don’t even have a broad strategic plan for how to address that increasing need;
  • Our current medical system has been built over many decades to be hospital-centric focused on treating infection, trauma, and other acute illnesses. Yet today 80% or more of our healthcare needs are treatment of chronic illnesses like diabetes, hypertension, cancer, asthma, chronic pulmonary disease, and inflammatory diseases. Treatment in acute care hospitals is not optimum for patient quality of life or efficient either from a cost or a lifelong health management perspective. We need to shift away from that institutional approach to a more distributed care strategy. Because of the emotional and structural investment in these hospital institutions that will be a heavy political lift but a critical one.
  • Healthcare providers and insurance carriers need to move away from a fee-for-service payment structure for healthcare services; a value based care model will be much more economically efficient, deliver better medical results for patients, and be much less confusing to insurers and patients alike. In a value based system the driving forces are improving outcomes of medical care while efficiently managing costs. Combined with “best practices” above it has the potential to dramatically improve the character of healthcare service delivery in the US.

Critics of my views expressed here will probably say we are already doing many of the things I am concerned about and/or recommend. In some cases they would be right …… kind of. There certainly are some experiments on alternative approaches being conducted. But the complexity of our healthcare system leaves even sincere efforts to find better ways full of gaps and overlaps and insanely inefficient. It also makes any progress much too slow and inequitable. We have to change that paradigm.

In this paper I am not claiming to offer a full plan or even a solid strategy for implementing universal healthcare in the US. I am trying to present a set of concepts and ideas to initiate discussion about the elements of a fair, equitable, and practical approach to universal healthcare. And I recognize that transition cannot occur “over night”. Any manipulation of 20% of the national economy requires careful planing and a long conversion period. But it is past time to get started.

As I continue to research healthcare and further educate myself on the subject I may update or revise this document base on the evolution of my thinking.

*  The ten other wealthy countries in the OECD that I compare the US system to are:  Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom.

** DRGs are fixed, prospective payments designed to reflect the resources used to treat a typical patient with a specific condition. As currently applied they generally cover the core elements but do not cover necessary peripheral services like anesthesia and other support functions. 

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