Fixing U.S. Healthcare blog has argued that unsustainable healthcare spending is the Real Problem with healthcare. How can we tame this giant healthcare tapeworm machine, as Warren Buffett has dubbed it?
This blog has described how medical professionals of the post-war generation built up our current system. Our system now delivers previously unimaginable healthcare miracles. But built into the system is a maze of complex institutional structures. And these structures have taken on a life of their own. The healthcare tapeworm currently gobbles one sixth of the U.S. economy. It is draining the financial vitality from everything around it.
As a result, healthcare spending – and similarly rigged parts of U.S. law, business, and government – threatens to break America if left unchecked.
This is the claim made by investigative journalist Steven Brill. But Brill asserts in his new book Tailspin that each cog in the vast healthcare tapeworm machine, for example, was put there by human ingenuity. And each one can also be retooled by human ingenuity.
So, how do we start?
How to Tame the Tapeworm Machine
My answer is to first define the root problem and the corresponding framework for the solution. The root problem is costs built into every corner of the healthcare system.
All of us wittingly or unwittingly feed the tapeworm. Medical providers, insurers, government, medical schools, media, society at large, and even patients themselves contribute to the feeding frenzy.
Jeff Bezos, Warren Buffett, and Jamie Dimon are tackling this problem with a framework of their own. Amazon, Berkshire Hathaway and J.P. Morgan envision an integrated healthcare benefits enterprise. Its aim is to organize care delivery, to ensure efficiency and quality, and to bring down costs. Bezos hopes this will tame the tapeworm machine.
But can this enterprise overcome the costs built into the system over decades? Can it stand up to local hospital monopolies? How will it leverage drug prices propped up by federal policy? How will it confront professional guilds that limit educating or importing more doctors, and prop up doctors’ income?
Bezos’ enterprise must take on these laws, regulations, and payment systems. Otherwise, it will quickly be coopted by the tapeworm machine. See more about the rigging of healthcare prices in Elisabeth Rosenthal’s book, American Sickness.
Is Amazon Big Enough to Tame This Tapeworm?
I wish Bezos success, but I admit I’m skeptical.
I think that the only institution truly big and powerful enough to bring the tapeworm machine fully to heel is government. I am not arguing here about what form this initiative should take. It could be a public-private hybrid finance plan like the Clinton plan of 1992. Or it could be a single payer like Bernie Sanders’ “Medicare for All” plan. Some have called for a completely nationalized health delivery system like Britain’s National Health Service. Or, more in line with America’s tradition of private competitive enterprise, it could be a regulatory body to oversee existing healthcare systems as a large national utility.
Whatever approach is taken, I hold that only an institution “of, by, and for the people” will have the public trust and clout to persuade all stakeholders to come together to reform the whole system.
Defining the Mission
The second step is to define the mission of healthcare delivery and finance system. My previous blog post outlined the philosophical principles of a costworthy health finance system. Social commentator Malcolm Gladwell has made the obvious point about the need for clarity about healthcare’s mission. Gladwell reminds us that the other 10 richest countries have done the hard work of forging a consensus on healthcare. And they have agreed on the trade-offs that are needed.
But it will take persuasive statesmen, not just reflective philosophers or commentators, to guide Americans to agreement on our healthcare system’s mission. Here are some key questions that need an answer:
Purpose of Health & Healthcare
- What is the meaning of health? Is it just physical? Should it include mental health? What about social and family relationship health, and overall wellbeing?
- What is the purpose of healthcare? Is it just to maintain or restore ability to work? Or does it entail “pursuit of happiness” and societal participation? To what extent is the purpose to give health workers jobs or to earn profits for investors or researchers?
- Is healthcare a commodity to be sold commercially for profit? Or is it a “public good” that should be available to all and that benefits all directly or indirectly, like infrastructure, education and defense?
- Who should have access to healthcare? Should access be determined by income, ZIP code, health status, employment? Or should all citizens have access as part of the “social contract”?
- Should society provide for disabled? Catastrophically ill? If so, to what extent?
Paying for Healthcare
- Who should pay? Rich/poor? Healthy/sick? Young/old?
- How should we finance healthcare? Rely on employer-based insurance? Provide subsidized public insurance options? Fund a single-payer system with taxes?
- If we choose commercial insurance funding, what is the purpose? Is the purpose profit, cost minimization, or subscriber health? Should commercial insurance be non-profit?
- If we choose commercial insurance, may insurance companies exclude chronic care (pre-existing conditions)? Low-value services? Expensive services? Who defines “essential benefits”? Who ensures fairness?
- If we choose public financing (taxpayer-funded), how can we ensure accountability, transparency, performance?
- Is the for-profit “free market” more important than administrative efficiency? If so, is “free market” inefficiency worth the cost of a half trillion dollars, $1 trillion, $1.5 trillion?
- How to fund innovation and research? Set up research as public “moonshot” programs or competitive profit-for-risk-taking?
- What is economic trade-off between healthcare and other public goods? How to balance healthcare against education, defense, infrastructure, security, social order?
Only after there is sufficient consensus about these questions can ingenious healthcare professionals, administrators, and public policy leaders begin taming the tapeworm machine, one cog at a time.
The political parties have chosen their candidates. Now in November, citizens will be choosing their new representatives.
Do you agree that government of, by, and for the people needs to tackle real healthcare reform? Do leaders need to challenge all of us to set priorities and tame the tapeworm machine? Won’t all of us need to bend a little, and some bend a lot? What incentives will each stakeholder need to do so? How could this be done fairly and deliberately without excessive disruption?
Think about all of these questions, and tell your candidates what you are thinking. More than ever, America needs the ingenuity of its people, along with renewed brotherhood, self-confidence, and devotion to our ideals in order to meet the challenge to taming the tapeworm machine.
Image Credit: By Chicago Bank Note Co., publisher [Public domain], via Wikimedia Commons – Source: Library of Congress – Date: 1888. This work is in the public domain in the United States because it was published (or registered with the U.S. Copyright Office) before January 1, 1923