Friday, August 16, 2019

America's Health Care Dysfunction Gets Real

by Neil H. Buchanan

Yesterday was my first official day as an employee of the University of Florida.   The day included the usual experiences for a professional worker: seeing my office for the first time, signing up for internet service, getting a parking pass (which I will not need, thankfully), meeting a bunch of friendly new faces, getting lost in the building, and so on.  It also meant that I am once again covered by health insurance ... I think.

Because I occasionally write about health-care policy issues, this seems like a good moment to revisit a few of the many things that are so wrong with the current system in the U.S. -- not just for people who are uninsured or underinsured, but also for the very lucky ones like me who have what at least seems to be adequate (albeit expensive) coverage.  We often become so accustomed to those background facts that it is all too easy to allow the political conversation about health care to become utterly abstract.

I am at this very moment supposed to be choosing my health care plan (along with dental and vision), yet I am instead writing this column about the absurdities of the current system, explaining why this is not an acceptable way to run a nation's health care system.  The very desire to delay this annoyance is, of course, a key bit of evidence that there is something very wrong with the way even supposedly good coverage is administered.

One conclusion is clear: We can and must do better.

To acknowledge the big policy question first, I continue to think that we should move toward a single-payer plan as quickly as possible.  On the other hand, I disappoint some like-minded souls by being willing to say that an incremental approach might be necessary (for example, adding the public option that Joe Lieberman -- awash in medical lobbyists' money -- all but single-handedly forced the Democrats to drop from the Affordable Care Act in 2009) for electoral purposes.

By "electoral purposes," of course, I mean that eliminating private insurance currently polls badly, because people are so afraid of change that they are even willing to put up with the current system.  I get it.  This is the only issue on which the liberal approach is not clearly more popular than the Republicans' cruel and retrograde position.  On the other hand, there is something to the idea of actually trying to convince people and lead the political system in a better direction.  Just a thought.

For those who are interested in a good, recent, clear explanation of what single-payer would mean and a strong argument for adopting such a system, Washington Post columnist James Downie's column from earlier this week is the place to go.  It mentions eye-popping perversities such as the fact that a hospital stay in California for an appendectomy can cost anywhere from $1,500 to $182,000 -- the former number being 0.82 percent of the latter -- and more generally summarizes arguments from a book by a former private insurance insider who now advocates for single-payer coverage.

As I wrote above, however, my central purpose here is to walk through the more mundane aspects of our system that make it so infuriating.  Apologists for the current system -- and especially those who would repeal even the still-inadequate-but-much-better Affordable Care Act -- tell us that the "discipline of markets" is essential to rein in health care costs.  This in turn relies on informed consumers making choices that result in sellers changing their products, giving us -- as if through the intervention of something that one might call, I dunno, an invisible hand -- the best possible result without Big Government's supposed inefficiencies.

This was always nonsense, and it was always clear why it was nonsense.  For anything like the Invisible Hand to work, consumers must be reasonably well informed and have clear alternatives.  "I know that this is a bad offer, so I shall take my business elsewhere!" says the savvy buyer.  "Oh dear, then I will have to innovate and give the people what they want," laments the temporarily chastened entrepreneurial hero.  If that is your experience with medical care -- or with air travel, internet service, or so much else -- congratulations!  Everyone else can read on.

In the real world, people are forced to make annual choices (or, in cases such as mine, initial choices upon taking a new job) about their health and other insurance coverages.  When I say "people," of course, I actually mean the lucky people who have any employer-provided coverage at all.  But let us put that minor thought aside, because I am one of those supposedly lucky people, and I do not feel all that lucky.

Based on my previous experiences and on my reading more generally, it appears that the state-provided coverage for University of Florida employees is indeed relatively very good.  Even so, the university feels compelled (for excellent reasons) to pour resources into explaining the system to us so that we can sort through the different choices that the university offers.  This includes having the university pay someone to create and maintain an online cartoon character named Alex, who is programmed to talk the employee through a series of questions to converge on the best choice.

After working through Alex's algorithms and reaching the point where "he" wanted me to sign up, I balked.  I still was not sure that I had answered every question the right way, which meant that I would need to run through it again, and perhaps again.  Meanwhile, it turns out that there is a different website at which I am actually supposed to sign up, which Alex did not tell me.

This is not to say that providing something like Alex is a bad idea.  Indeed, under the circumstances, this is not only a good thing but an act of mercy.  Even so, I have had open tabs on my browser for Alex and other user-friendly-ish informational sites literally for months; but every time I dive in, planning to finish the process, I end up stymied.  I have wasted literally a week of work time on this so far, and only because I was told that I now have to finish this will I close my eyes and hope.

What is the big deal?  To begin, there are the different co-pays, coinsurance, and deductibles.  (Why should anyone even need to know the difference between those things?)  Then there is the question of in-network and out-of-network coverage, a problem that arose for me in 2010 when I was visiting at Cornell and had an emergency that required calling an ambulance.  I learned later that there were two ambulance services in Ithaca, New York, one of which was in my insurance provider's network while the other was not.  Because the local 911 service happened to forward my emergency to the non-network provider, I was charged over $1000 rather than $0 for ambulance services.  (And there were also, of course, emergency room and physician charges.  And lab tests.  And ...)

I need not go into further detail, of course, because I am confident that everyone reading this column has at least one if not multiple stories from their own lives where something similar or worse happened to them.  As the 1970's novelty act Devo once sang, "Freedom of choice is what you got; freedom from choice is what you want."  Not true in all cases, of course, but in the case of health insurance and medical care, all too true.

This can have real effects on the way people behave.  A year or so after my incident in Ithaca, I slipped and hit the back of my head on an icy road.  It was highly likely that I was concussed and thus could die if I fell asleep, but I kept thinking about what an expensive hassle it was to deal with out-of-network coverage and managed to convince myself that I would be OK.  (And it all worked out because I'm still alive, so what's the problem, right?)

Such grim choices are still being made every day.  I know a young woman (probably in her late 20's) who is a veterinary technician (meaning that she has more education and scientific knowledge than the vast majority of people) who was working part-time when she experienced extreme abdominal pain.  She decided that it was probably "merely" a ruptured ovary, and even though she knew that she needed intravenous fluids and non-opioid pain killers, she had no insurance coverage and no savings to cover any co-pays or other charges from an ER visit.

After managing to stay alive and semi-functional for a week or so, she reached the date that her medical coverage from a new full-time job kicked in.  Immediately going to a doctor, she learned that her appendix had burst and that she needed emergency surgery.  (Remember that $1500-to-$182,000 price range for appendectomy hospitalization?)  She is lucky to be alive, but even now, she is not sure how she will pay for the ancillary costs.  And this is for something that is, medically speaking, plain vanilla stuff.

That person's situation highlights the insanity of a system that ties health care provision to a patient's employment status.  I was lucky that my coverage from my previous university could be extended during the six-week gap after after my old coverage ended and my UF coverage begins, but even there I was given only the choice of paying much more than I had been paying or risking it and not being covered for a month and a half.

For that matter, I am not honestly sure that what I just wrote is true.  I talked with two helpful people, one at the interim insurance provider's billing subcontractor and the other at my former university's human resources office -- more hidden costs of the U.S. health care system -- and they both told me pretty much the same thing about the rules governing my transition coverage.  Truth be told, however, I have no way of knowing whether I understood them, and even with my legal and economic training, I would not be able to make the case that I was misled.  The written documents are simply impenetrable.

One might nonetheless object that having the federal government set the rules for health coverage in a single-payer system (and remember that the single payer need not be the government itself if one is ideologically committed to using a non-government provider, a la private utilities, although I think that is a pointless fig leaf) would put people at risk of having their health insurance degraded by dishonest politicians. "Hey," someone might ask you, "Do you really want Trump and his people to be in charge of the only health care system that you have available to you?"

The answer to that concern is one word: Brexit.  Boris Johnson, who is now -- incredibly -- the British Prime Minister -- famously ran his dishonest campaign to have the U.K. leave the E.U. on a blatant lie.  The British people, Johnson and his crowd insisted, were sending billions of pounds to the Brussels bureaucrats and getting nothing in return.  Again, that was a lie.

Tellingly, however, the Leave campaign insisted that all of that money be diverted to a particular purpose, which was to support the National Health System.  The NHS is not a single-payer system but actually government-run health care, and it is wildly popular.  Indeed, for voters across the ideological spectrum, the NHS is a point of national pride.  Once something is both universal and effective (albeit imperfect), even supposedly anti-government people protect it.

Perhaps I am wrong about that.  What I can say is that our current situation is unsustainable, hugely expensive, all but random at times, and ultimately cruel.  I am one of the lucky ones, but every aspect of it is crazy even from my perspective.  Again, we can and must do better.

Now, if everyone will excuse me, I need to get back to making semi-blind choices about life-or-death matters.  Just another American exercising his freedom from Big Brother.

3 comments:

CEP said...

There's another problem with invoking the invisible hand, which sort of gets into "if the glove don't fit (the invisible hand) you must acquit!" territory. Perhaps automobiles provide a good example, parallel to the distinction among costs for an appendectomy hospital stay in California:

How much does, or should, a car cost?

"A car" is about as specific as "an appendectomy hospital stay." Use, condition, complications, sensitivity to other needs (e.g., whether "a car" for consumer X also requires a wheelchair lift), and so on. People understand this about cars, and can accept and rationalize a huge range of possible results to the inquiry, even leaving luxury aside. People do not understand this about healthcare, and therefore can't rationalize anything but instead rely excessively on personal experience and expectations, leading to various forms of inductive fallacies.

The irony that getting better data would require systematically breaching medical privacy also seems to have escaped consideration in the "debate."

Frank Willa said...

Professor, thank you for these insights, and using your personal experiences to illustrate the sense of frustration experienced, in my view, by nearly everyone. So, I would like to share a summary of an experience I had while traveling from a health care appointment. I was sitting next to a fellow passenger on an airplane and she replied to my telling her that my travel was for health care, that she was having a difficult time with her health care provider- what was covered and how much they or she would pay. After listening to the details of her frustrations, I asked her if she was happy with her Health Care? Immediately, she said "no"; I then asked if she knew anyone that was happy with their Health Care, again "no". I then shared my views that a national, single payer system would take the frustrations and diversion of money for care that is siphoned off for profit, etc. thus lowering the costs or improving the care. I mentioned that other industrial countries all had a national system; she was not aware of this ( not an unsophisticated person at all ), and that it had not hurt their economies. I illustrated this by saying look at all of the foreign cars - BMW, VW, Toyota, Honda, etc.- that are on our road- they all come from countries with national health care. She got the point. Of note to me, when I said for example a country like Germany had had a system in place for decades without harm to the economy; she seemed truly surprised how long it had been in place. In my opinion, when this topic is discussed, the length of time that national health care has been successful around the world is not cited. I view this as a significant fact that would offset some of the fear mongering that proponents of the free market utilize.

JS said...

If Boris Johnson and his ilk have their way about Brexit, Britain's National Health will become a "system" run by U.S. for profit insurance companies.