I’ve long been passionate about health care reform, but that passion skyrocketed when I became a Sick Person myself. Suddenly, I was experiencing our system’s many shortcomings firsthand. In this post, I depart from my own story to outline how we might fix what’s broken.
I’m so grateful to President Obama and all who supported Obamacare, which has saved my husband and me many thousands of dollars ever since I got sick. I developed ulcerative colitis when Ron and I were in transition. We didn’t have a long-term home, and neither of us had a steady job. If Obamacare had never passed, I might have had a debilitating preexisting condition that prevented me from being insured at all, and I shudder to think what might have happened to us. Potentially, we would have had to pay for all of my medical needs—specialists, colonoscopies, MRIs, expensive medicines, and hospitalization—out of pocket.
But despite the progress of Obamacare, America’s health care system is still very broken.
Millions of Americans are still uninsured, and thus at risk of death or bankruptcy due to lack of insurance. Obamacare’s main success has been reducing the number of uninsured, from 48 million to “only” 28 million. But that’s 28 million too many.
All other industrialized countries ensure universal health coverage. The United States is the only wealthy country where anyone ever dies or goes bankrupt for lack of health insurance—and yet, in our country, tens of thousands of people die each year as a direct result of being uninsured. One oft-cited study found this number to be 45,000 people ages 18 to 64 per year. And hundreds of thousands of Americans go bankrupt annually due to medical bills (see this study and this article).
Perhaps, if it was common throughout the industrialized world for people to die or go bankrupt from health problems, I might accept this happening in my country too. After all, humans have been dying without health insurance since the dawn of our species.
However, considering that every other rich country has managed to prevent such calamity for its citizens and residents, it seems almost criminally negligent that we haven’t. In a country like ours, there’s no excuse for letting tens of thousands of people die preventable deaths each year.
And although Obamacare has made progress in this realm, it’s still very imperfect. Since its implementation, premiums have risen dramatically for many middle-class people and employers. Health insurance has become unaffordable for some.
Perhaps most disheartening is the way all this scarcity has pitted Americans against each other, embittering those with increased premiums towards those with low incomes or chronic conditions, and vice versa. When not everyone is covered, it begins to feel as though we’re fighting over scraps of health care. But affordable health care ought to be available to all of us.
Of course, everyone knows our system has problems, but the precise causes of those problems, and how to fix them, are much less clear.
For that clarity, I turn to TR Reid’s The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. I cannot recommend this book highly enough. I’ve heard it was widely read by U.S. members of Congress in 2009 during the national health care debates.
Most of the rest of this post is a summary of Reid’s reporting; the ideas here are his, not mine. Below, all uncited quotes are from his book. For another brief and excellent summary of his findings, see Reid’s 2008 FrontLine episode “Sick Around the World.”
Reid, a foreign correspondent who has lived in several other countries, traveled around the world in the mid-2000s to compare our health care system with those of other industrialized countries. The Healing of America was first published in 2009, during the national debates about what would later become Obamacare. The book’s latest edition has an afterword about Obamacare, and Reid is currently involved with health care reform efforts in Western states.
The book starts with the shocking story of a 32-year-old American, Nikki White, who died of lupus. It was our health care system, Reid argues, that killed her: “If Nikki White had been a resident of any other rich country, she would be alive today.” Lupus is a treatable disease, but because she lived in the United States before Obamacare’s protections, White couldn’t get access to the care she needed.
So she died.
My own disease is autoimmune, like lupus. I can imagine that, were I uninsured and poor, I might die of my disease. With symptoms such as severe diarrhea and chronic pain, and without medication to treat those symptoms or doctors to diagnose or explain my condition, I could easily weaken and waste away to nothing, dying of malnutrition or a secondary illness.
In a chapter called “The Paradox,” Reid describes America’s strange juxtaposition of both excellent and terrible care:
The United States has the best-educated doctors, nurses, and medical technicians of any nation…For anyone with the money or the insurance policy to pay for it, American medical treatment ranks with the best on earth. But the fact is, we’ve squandered this treasure [by creating a system] that prevents millions from receiving the treatment they need.
Reid breaks our systemic problems into three categories: coverage, quality and cost. The gist: We pay more, to cover fewer people, at worse quality.
Coverage
Twenty-eight million Americans don’t have health insurance; tens of thousands die per year due to lack of coverage; hundreds of thousands go bankrupt per year due to medical bills. Need I say more? In other developed countries, health care is provided for every resident.
Quality
Reid points out that, although some Americans do have excellent medical care, overall our quality is “mediocre” compared with that in other wealthy countries.
In 2000, the World Health Organization ranked the US thirty-seventh in terms of quality and fairness of health care compared with other countries, and this ranking has been consistent up through the present. We are worst by a wide variety of different measures. We’ve got the highest infant mortality rate of any rich country, much higher rates of death from curable illnesses, and the highest rate of death due to surgical or medical mishaps. Those of us with asthma are likely to die sooner than asthmatics in other rich countries. Etc.
Cost
Despite our abysmal coverage and mediocre quality, the United States has, by far, the most expensive health care of any developed country.
We have the highest health expenditure as a percentage of GDP (this, and this)—17.1% in 2014. The next-highest was Sweden at 11.9%.
We spend $9450 per person per year on health care. Japan, in contrast, spends $3730, even though Japanese citizens visit the doctor almost three times as often as we do.
We generally spend around twice as much as do other rich countries on health care.
T. R. Reid’s Proposed Solutions
What are some solutions to this health care nightmare? While the dozens of other rich, industrialized countries have created a myriad of successful health care systems, all those varying systems have several things in common. These are the changes we, too, need to implement.
Reid again breaks them down into three simple concepts: universal coverage, a unified system, and nonprofit financing. He also mentions unified pricing as important, and to emphasize that idea, I’m separating it into its own fourth pillar of a successful U.S. health care system.
Together, these four, long-overdue pillars would bring our system in line with other countries’ superior systems. They would ensure that every American receives health care—and overall, that that care would be better and cheaper.
Universal Coverage
In all other wealthy nations, universal coverage is a key pillar of health care. Not only is everyone granted access to health care, but everyone is required to enroll in health care.
This requirement, known as an individual mandate, is crucial. It’s driven by basic economics: “If insurance companies have to cover everyone who applies, they need to have everybody in the insurance pool to cover the costs.” The only way to provide universal coverage is to require that everyone pay into the system, either through taxes or premiums.
As basic as this concept seems, U.S. Republicans have managed to convince much of the public that it’s a bad idea. House Republicans argued against Obamacare’s individual mandate during the 2017 Obamacare repeal effort, acting indignant that the healthy might have to “pay for the sick.”
As one pundit quipped in response, “Paul Ryan Doesn’t Know How Insurance Works.” The idea behind insurance is that you pay in hopes that you’ll never need to file a claim. The healthy do indeed need to “pay for the sick”—but with the critical recognition that any of us, at any time, could become “the sick.”
Car insurance is mandatory in the U.S.: everyone pays, even though only some people cash in. Health insurance is mandatory in other industrialized countries for the same reason.
And universal coverage is patently fairer than our current system, in which simple bad luck can lead to death or bankruptcy. Universal coverage also has the potential to lead to a healthier population, because it creates an incentive for insurance companies to invest in preventive care:
One of the major reasons the United States ranks low…in standard measures of health care quality is that millions of Americans don’t get any care until they are acutely ill… [I]t is much cheaper to treat a problem early than to take heroic medical measures when the illness becomes life-threatening.
What would universal coverage look like?
Throughout his book, Reid takes pains to argue that Americans need not abandon capitalism in order to fix our health care system. Universal coverage doesn’t have to mean “socialized medicine.”
Different countries provide universal coverage in widely diverging ways. Some countries, like Japan, Germany, and France, rely on multiple insurance plans from which either the employer or the individual may choose. This closely resembles employer-based American health care, but with key differences that ensure universality.
In France, for example, employers cover most of the premium for health care…but “[w]hen a French worker loses her job, she keeps the same insurance plan [and] the government pays the employer’s share of the premium.”
Other countries, like Britain, do have nationalized systems wherein the government runs a single insurance program—the more “socialized medicine” that many Americans distrust.
The bottom line is that ultimately, there are various options for universal coverage. The concept simply means there is some guaranteed way for everyone to be covered, whether through private or public insurance—and that enrollment is required.
I know what you’re thinking, especially if you lean conservative: that’s all well and good, but how would we pay for it?
Reid’s other three solutions deal directly with reducing the costs of health care so that we can pay for it. Ultimately, if all of these were implemented, he concludes that American taxpayers would pay less than we currently pay—even if universal coverage was funded largely out of tax dollars.
A Unified System
Reid’s second pillar of good health care is a unified system. Our own system’s outrageous costliness stems largely from its complexity—our system is far more complex than that of any other developed country.
Other countries tend to have one single system in place for all residents, regardless of age, employment status, or military background. As I mentioned above, some of these systems are more capitalistic and some are more socialistic. But regardless, what they have in common is their unity across the board, for all citizens and residents.
In contrast, in the US we have four different systems in place! The same person might even travel between all of our systems as her situation changes. The four systems are:
- Employer-based health care. For working people under 65, health insurance premiums are shared between the worker and the employer. A similar system is available in several other countries, but it’s available to all citizens, as described above. For working, non-elderly Americans, “we’re Germany, or France, or Japan.”
- The V.A. This is nationalized (socialized!) health care, with government-run hospitals and clinics. For military personnel, veterans, and Native Americans, “we’re Britain, or Cuba.” Americans never see medical bills under the Veteran’s Administration system.
- Medicare. This is nationalized health insurance, a government-run plan available to older Americans and people with disabilities. For such people, “we’re Canada. U.S. Medicare is essentially a National Health Insurance scheme.”
- Out-of-pocket. For the uninsured, “we’re Cambodia, or Burkina Faso, or rural India.” Such people can access medical care if they can afford to pay out of pocket, if they have access to charity, or if they’re so sick they need emergency care. Otherwise, they are out of luck.
We can see a hint of our system’s complexity on our paychecks, where we often pay for two different health care systems at the same time—Medicare and our employer-based health insurance premium.
Because of our system’s ridiculous complexity, exorbitant amounts are spent in the U.S. on health care administration. Hospitals, clinics, and other providers spend a great deal of time and money tracking who has which insurance plan and is thus eligible for which medicines, treatments, doctor visits, etc.
Typically, prior to Obamacare, each U.S. insurance company spent around 10-20 percent of health care premiums on administrative expenses. Thanks to Obamacare’s 80/20 rule, American insurers are no longer allowed to spend more than 20 percent on admin and/or profit. This has been construed as a victory, since insurance companies lobbied fiercely against the 80/20 rule, not wanting their admin-and-profit dollars to be so limited. However, that “victory” is laughable when you realize that admin costs are consistently around 5 percent in other countries!
What would a unified system look like?
Again Reid emphasizes that with a unified system, we could still keep our capitalist values of competition and choice. A single-payer system is just one way of creating a system that works the same for everyone.
Some countries, such as Germany, have many different insurance plans, akin to the way U.S. workers might have different plans tied to their different workplaces. However, these other countries’ multipayer systems are still much simpler and fairer than ours. All the different payers must follow the same set of rules and use the same forms, and all medical fees must follow a unified payment schedule—more on that below.
In case this still sounds too socialist, Reid again offers an out: In all of these countries, “there is one group of citizens who are not bound by the unified health care system: the rich.”
The rich can afford care above and beyond what their countries provide. If they want to, they can even fly to other countries for care. Germany allows the richest ten percent to opt out of health insurance entirely, although most don’t choose to do so.
A unified system would mean that even with multiple plans, certain standards would apply across the board. Those standards would drastically reduce admin costs.
In France, for example, there are no “in-network” and “out-of-network” lists—anyone can see any doctor in the whole country. Reid describes French doctors’ offices without file cabinets: no stacks of confusing paperwork to fill out and keep track of, since the same rules apply to everyone. As a result of this simplicity, hospitals have 67 percent fewer administrative staff and more medical staff per patient than American hospitals.
Bottom line: Unifying the system would slash administrative costs, thus lowering the total cost of any health insurance plan, and allowing for lower overall contributions by us, the taxpayers.
A Unified System Would Bring Fairness and Ease
It’s appalling that some Americans receive treatment while others die, depending on which situation (age, health, employment, etc.) they happen to fall into at the time of illness. In other industrialized countries, everyone is entitled to the same quality of care.
It was precisely such unfairness that had me outraged when I moved from state to state in 2014. Due to the fragmented nature of the U.S. health care system, I was subjected to a gauntlet of insurance bureaucracy as I tried to enroll in a new plan and connect with new doctors. And this gauntlet was laid out exactly when I was least physically and emotionally fit to navigate it.
Having studied Reid’s book in the past, I knew that in any other wealthy country, I wouldn’t have been forced to spend months submitting paperwork, making phone calls, and re-enrolling in new plans just because I’d moved and my husband’s employment status had changed. It feels absurd and inhumane to put this burden of complexity onto the sick, who are least well-equipped to navigate such a stressful, confusing, time-consuming system.
Reid points out that unification would lead to greater ease for doctors and patients alike, because digital record-keeping could more easily be streamlined, making it easier for doctors and pharmacists to see patients’ medical histories.
Every time I’ve switched doctors or locations, I’ve diligently submitted release-of-records requests so that all my previous records are sent to my new doctor’s office. Each new doctor needs to see how my ulcerative colitis was diagnosed, my medication history, etc. But just imagine a world where doctors easily have access to your entire medical record.
That world exists in other industrialized countries!
Unified Pricing
Price controls are another important element of a functional health care system. Generally, governments in other countries set the prices of health care services, and it’s high time that our government does the same.
In our country, “the same operation in the same hospital on the same day can have ten different prices, depending on who is paying.” This variation leads to additional huge expenses in administration. Standardizing costs would eliminate the problem.
Providers of drugs in the US charge more than they do in other countries, according to The Economist, “simply because they can.” The pharmaceutical industry is so powerful in the United States that, due to its phenomenal lobbying power, it was virtually the only industry left untouched by the Obamacare changes.
Unlike European governments, which control drug prices, the U.S. still allows pharmaceutical companies to set their own prices. They often charge Americans two to ten times as much as people from other countries for the exact same pills.
The pharmaceutical industry is among the most profitable in the United States. According to Marcia Angell’s The Truth About the Drug Companies: How They Deceive Us and What to Do About It, “The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R & D.”
This is why I decided unified pricing should be its own pillar of a sound health care system. In order to accomplish this one, the formidable power of pharmaceutical companies will need to be reckoned with. That power seems to be the sole reason drug prices in America are so outrageously high.
Nonprofit Financing
There’s a final major reason the American health care system is far too expensive: for-profit health insurance. We’re “the only developed country that relies on profit-making health insurance companies to pay for essential and elective care.”
As I’ve mentioned, some other rich countries do allow people to choose among various private insurers, just like many of us can in the U.S. But in other countries, the options are all nonprofit insurance companies. In contrast, around 80 percent of non-elderly Americans get health insurance through for-profit companies.
That means that for most of us, a portion of our premiums goes not to medical bills but to marketing and profit (as well as the expensive administrative costs previously described).
Not only does our profit-based system result in elevated premiums, but this system operates on misplaced morals. Rather than prioritizing care, American health insurance companies prioritize profit.
In other wealthy countries, health insurance companies are required to pay every claim, but as of Reid’s writing in 2009, American health insurers denied around 30 percent of claims. That percentage has probably gone down since Obamacare was enacted, although insurance companies are notoriously secretive about their claim denial rates. When Vermont began compelling insurers to release these numbers in 2012, they ranged from 7-21 percent claim denial, with the state’s lone for-profit insurer denying significantly more claims than its non-profit insurers.
In contrast, the other wealthy counties have realized health insurance cannot be a for-profit operation.
Health insurance companies don’t have to be cruel to their customers if they don’t have to worry about paying dividends to investors. It may be possible to finance fair and cost-efficient health care all through profit-making health insurance. It may be possible, but no country has ever made it work.
It hasn’t worked in the U.S., where we spend more for worse coverage and still leave millions of people uninsured. For-profit health insurance does exist in some countries as an option—but only for non-essential health services.
What Would Nonprofit Financing Look Like?
Reid points out that nonprofit insurance in most other rich countries still leaves room for fierce competition among insurers. Germans can choose among around two hundred private insurance plans. These insurers still compete with each other for customers, since their CEOs earn more money and higher prestige if they recruit more customers.
But other countries’ insurers are not allowed to compete for profit. In most countries, insurers that wind up with a surplus at the end of the year are required to redistribute it to those other insurers that lost money.
In case this sounds nonsensical, Reid points to an American system that has similarly balanced competition and regulation: our market for home telephone (landline) service. American phone companies are private entities, and they compete with each other, but they don’t compete on the price of landline service—that price is set by government regulators.
The result of all these models for nonprofit insurance, competition, and unified pricing? “[T]he insurance plans—sometimes run by the government, sometimes private entities—exist only to pay people’s medical bills.”
That’s the way it should be.
Conclusion
Reid has much more to say than what I’ve briefly described here. Please buy and read his book. It’s every bit as relevant and urgent now as it was in 2009.
As polls show, a paradigm shift is happening: the majority of Americans now believe it’s the government’s responsibility to ensure health care for all. (That majority is 60 percent as of 2017—up from 51 percent in 2016.) I agree, especially because so many other countries have shown that it’s possible to do so.
In this country, the debate about how to get there is still far from over. Republican efforts to repeal Obamacare keep reappearing, and even Democrats are divided on whether to focus on shoring up Obamacare or push for a reformed, single-payer system that could, at last, provide universal coverage. (T.R. Reid is a leader in that reform effort.)
Whatever course we take, I feel it should be taken thoughtfully and transparently, with ample time for public debate, research, and input from patients, medical professionals, and insurers. It must not occur swiftly, behind closed doors. Health care is too important.
And it must occur. We must fix our still-broken system. As we do so, T. R. Reid has me convinced that we should aim for universal coverage (including the individual mandate), a unified system, unified pricing, and nonprofit financing. These are the four shared pillars of the many successful health care systems around the world.
