By MIKE MAGEE, MD
It is now well established that Americans, in large majorities, favor universal health coverage. As witnessed in the first two Democratic debates, how we get there (Single Payer vs. extension of Obamacare) is another matter altogether.
295 million Americans have some form of health coverage (though increasing numbers are under-insured and vulnerable to the crushing effects of medical debt). That leaves 28 million uninsured, an issue easily resolved, according to former Obama staffer, Ezekiel Emanuel MD, through auto-enrollment, that is changing some existing policies to “enable the government agencies, hospitals, insurers and other organizations to enroll people in health insurance automatically when they show up for care or other benefits like food stamps.”
If one accepts it’s as easy as that, does that really bring to heel a Medical-Industrial Complex that has systematically focused on profitability over planning, and cures over care, while expending twice as much as all other developed nations? In other words, can America successfully expand health care as a right to all of its citizens without focusing on cost efficiency?
The simple answer is “no”, for two reasons. First, excess profitability = greed = waste = inequity = unacceptable variability and poor outcomes. Second, equitable expansion of universal, high quality access to care requires capturing and carefully reapplying existing resources.
It is estimated that concrete policy changes could capture between $100 billion and $200 billion in waste in the short term primarily through three sources.
1. Lowering drug prices: Our 4% of the world’s population is currently responsible for nearly half of the world’s drug spending. Total health spending per capita in the US in 2018 was $1,443 annually, 54% more than the 2nd biggest spender, Switzerland. Nearly 13% of that spend was on drugs.
2. Capping hospital private insurance fees: According to a recent RAND study, hospitals now charge the private insurance companies which insure 160 million Americans 141% more than they do for Medicare patients. It was 6% more in 1996, and 75% more in 2012. If we mandated that charges could not exceed 120% of Medicare charges, it would capture $90 billion in savings a year according to a 2015 NBER policy analysis. Just freezing fees where they are would capture $30 billion.
3. Reforming billing practices: After WWII, American taxpayers funded the creation of national health plans (through the Marshall Plan) for Germany and Japan. Both countries have hundreds of insurance companies but centralized clearing houses for billing and insurance processing result in low billing cost. Were we to implement this in the US (where we have 16 health care employees for every one doctor), we would save $90 billion a year.
The Medical-Industrial Complex has burdened the United States with an untenable and flailing health care system. Extending coverage and access to this highly variable and markedly inequitable system may improve the lives of some, at the margins. But to truly make a difference in our nation’s health and productivity, and the creation of healthy Americans, true reform with a focus on cost efficiency and true health planning will be required.
Mike Magee is a Medical Historian and author of “Code Blue: Inside the Medical Industrial Complex” (Grove Atlantic/June, 2019).