Creating a sensible healthcare system: society must answer tough questions

In 2015, US healthcare spending totaled over $3.2 trillion – approximately $10,000 per citizen.1 This amounted to almost 18% of the entire US GDP, with predictions that this number will rise above 20% over the course of the next decade. 2 The healthcare industry is one of the largest in the United States, and inflation-adjusted growth in costs – though slowed since the passage of the ACA – demonstrate no sign of abating. The Affordable Care Act – more commonly known as Obamacare – was enacted in 2010 as a legislative solution to address ballooning US healthcare spending, limitations in health insurance access, and comparatively poor health outcomes with comparable industrialized nations. Many articles – such as those found herehere, and here – have done a good job of laying out the basics of how the Affordable Care Act was structured. In essence, the law aimed to expand insurance coverage to a significant portion of the United States that was previously unable to afford insurance. This included some specific low income groups, students between the ages of 18 and 26, those with pre-existing conditions, and other specific populations. The plan was structured to work under the existing framework of the private insurance market that had long dominated the US healthcare landscape, built on ideas generated from conservative think tanks and political strategists in the 1990s. In order for these private insurance markets to work effectively for everyone, the law leveraged the fundamental principle of effective insurance markets: risk sharing. By establishing an “individual mandate” that required everyone to purchase insurance, enough people – including healthy younger individuals — would be included in the risk pools to make insurance plans affordable for all purchasers regardless of existing health status. However, as is the case with many new laws, especially one of its scale, it was not without problems. It is important to note that healthcare spending in the United States is roughly equivalent to the entire GDP of France, 3 so any law that sought to overhaul the delivery and structure of health insurance was akin to developing an entirely new economic system for a large European country. The process is complicated, and it was unrealistic to expect early perfection. So the question that now faces us from a policy perspective is: what is wrong with the current system, and what changes can be made to ensure that we provide affordable and high-quality healthcare to all US citizens? Only in answering this question will we be able to move forward with effective policy solutions.

The first step: what is the goal of healthcare reform?

Before you can design an effective system, it’s important to understand and articulate goals. Many of the problems at the center of the healthcare debate stem from disagreement about what healthcare should look like in America. Often times, underlying philosophical questions get buried in rhetoric. But at its core, healthcare reform revolves around differing philosophical ideas about what we should cover, who should pay for this coverage, and the minimum basic standards of “health.” Providing healthcare is expensive, and someone has to pay for it. Some the questions that must be answered before talking policy specifics include but are not limited to:

  • Is healthcare a human right? Are all citizens – regardless of background, income, or social standing – entitled to a baseline quality of care? If so, what constitutes “baseline”? A.k.a what is the minimum level of coverage that must be provided?
  • Are those who do not see healthcare as a human right willing to deny coverage and emergency care to those who show up at the doors of the hospital? If someone is having a heart attack but does not have health insurance, should they be left to die? If not, who pays for their care? What if they require $100,000 surgery, and work a minimum wage job with no possibility of repayment?
  • If healthcare is simply a commodity to be purchased – and it is not important to ensure accessibility is a basic human right – what is an acceptable amount to pay for basic healthcare coverage? Is it morally permissible for healthcare to be inaccessible to 10% of the population? 20%? 70%?
  • What types of coverage should actually be covered from an insurance standpoint? Most insurance policies do not cover cosmetic surgery – this seems to be in line with public opinion: as a society we do not take moral issue with excluding “elective” procedures from coverage. Should hepatitis C treatment be covered, even though the cost of the medication approaches $100,000 a year? In vitro fertilization, a last resort procedure to help couples seeking pregnancy, at a very high cost? How should we weight coverage care – should we reward primary care providers more than specialists, given that they have such a large role in community and population health outcomes? And when making these decisions, who gets to be the “decider”? Who determines what is covered and what is not? Patients and politicians from across the political spectrum took issue with insurance companies when they denied coverage for specific conditions under managed-care plans in the 1990s; many are clearly uncomfortable with the idea of insurance companies being the arbiters of healthcare approvals and denials. At the same time, conservatives resist efforts to increase government involvement in the healthcare system. If neither private insurers nor the government are responsible for making these difficult decisions, then who is?
  • How do we determine healthcare “value” in outcomes? Should we forgo funding of experimental drug programs which “only” alleviate conditions for limited segments of the population? We already make calculations based on how health interventions correlate with number of life-years saved or quality of life improvements. Do we limit healthcare expenditures for patients at the end of life in and attempt to limit systemic healthcare expenditures? When presented with these questions, many respond with disgust and outrage; however, these things cost money, and if voters and policymakers feel that these issues are important enough, they also have to be willing to find a way to pay for it. More importantly, these decisions are already being made – with or without thoughtful consideration.

Inconsistencies between policy and philosophy

The United States must first make a fundamental philosophical decision about whether healthcare is privilege or a right. If someone is uninsured and does not have the means to pay for healthcare, should they be treated when they come to the ER with a medical problem? This initial question since at the crux of how we structure health policy. Few would answer “no” to the above question, but for those who do, it then follows logically that the healthcare system should revolve around a free market system where those with resources have access to care, and those without resources are not entitled to medical care. Although this presents a dizzying array of moral questions, there is at least some logical consistency between philosophy and policy objectives.

Conversely, the instant that one decides there is a moral imperative to cover basic medical services and emergency care, it is time to get to the business of figuring out how to do that in the cost and outcome efficient way. As existing law stands, the Emergency Medical Treatment and Labor Act (EMTALA), enacted in 1986, requires the large majority of hospitals to treat anyone who presents with acute symptoms of sufficient severity regardless of their insurance status or ability to pay. Many politicians and voters criticize government spending on healthcare initiative such as Medicaid, but fail to remember that as the system currently stands, in the absence of care, these patients with still present to the emergency room and receive care that was provided at the taxpayer expense. Furthermore, many ignore the consequences to broader society of not providing health insurance to those who cannot afford it. When the sick are unable to access care, society as a whole suffers. It removes people from the labor force, increases incentives for crime and fraud, and further drives a wedge between those who are able to prepay for services in those and lower socioeconomic status is who are not able to pay.

In the interest consistency, those who refuse to deny coverage to those facing medical emergencies should by default be thinking about how we as a society can create a safety net system that treats people without coverage in a way that remains cost-effective, generates beneficial societal outcomes, and provides preventative and longitudinal care as opposed to emergency level triage interventions which are profoundly costly. For instance, imagine a child with asthma living in a low-income community. During the summer, his family does not have money for daytime childcare coverage and is forced to stay at home in the summer heat. Unable to afford an air conditioner, this child suffers from frequent and severe asthma attacks during the summer months. When these asthma attacks occur, he presents to the emergency room and requires highly expensive interventions. Instead of subsidizing this costly emergency care, everyone would win simply by providing the child with $200 needed for a window air conditioner. His rates of asthma attacks would go down (supported by a wealth of health outcomes research), his overall health would improve, and society would save money otherwise spent on an ER bill. The solution is not palatable to many conservatives who see this as a form of welfare that discourages personal responsibility. Standing on principle, they refuse to support these types of initiatives and instead work to create a system in which social welfare is routed through an opaque system of complicated government interventions and tax transfers ultimately routed through the private market. This is what the Affordable Care Act attempted to do in many respects – it used government tax revenue to subsidize insurance plans purchased through the private market, infusing money into the private insurance system. Unfortunately, there is a lot of evidence that the most effective health interventions are also social interventions.

Until we have difficult conversations about these philosophical and moral issues about how best to structure society, it will be very difficult to develop goal-based health policy, simply because we haven’t agreed on the goals.