In 2006, the Academy Award winning documentary "An Inconvenient Truth" was released. The film features a slide show that former Vice President Al Gore gave many times across the country to raise awareness about global warning. The "truth" was that global warming is real, and while this knowledge and the necessary solutions may be "inconvenient", the effects would be cataclysmic if we don’t act now. While it's hard to quantify the impact of this film on efforts to combat global warning, there is no question that this movie helped to give significant momentum and attention to the issue of global warming such that attitudes and actions have changed substantially. While we still have a long way to go from where we as a county and as a planet need to be, progress fighting climate change has definitely been made. Electric vehicles are everywhere (some car manufacturers have committed to going entirely electric), you can get a plant based burger at Burger King, and the recently passed Inflation Reduction Act contains some most meaningful legislation ever to combat global warming.
Recently, I wrote an article
suggesting that physicians who were on the fence about leaving their current insurance based practice in hopes that our current system would get better shouldn't hold their breath, as I don't see our healthcare system changing anytime soon. This was based on my observation that if gun laws can't change in the wake of each mass shooting, change in healthcare is going to be next to impossible. While our sharply divided and industry influenced political situation hampers change in many areas, including gun violence and healthcare, at least with gun violence most Americans (on both sides of the political spectrum) agree on actions that should be taken (assault weapons bans, background checks, etc.), making future change possible with some slight political shifts. However, when it comes to healthcare no one on either political side seems to know what to do, let alone agree on some basic principles for change. In addition, with more pressing current needs (COVID, inflation, Ukraine), it is unlikely that either side starts fighting about healthcare anytime soon. However, this is precisely why now is the perfect time to have some difficult conversations, some "inconvenient truths" if you will, about healthcare. While policy talk may be on the back burner, let's instead talk about the actual problem. While there will likely always be differences on how to best address the problem of healthcare in this county, if we are ever going to make progress on this issue, we must first be able to talk about some of the core issue surrounding our failing health care system. Perhaps getting at the core issues now, without getting at specific policy changes or political posturing, might better help us enact real change if and when the political landscape makes this possible.
One core issue, or inconvenient truth, is that healthcare is not a right. While this may not sit well with a lot of people, we need to have this difficult conversation. As a physician, while I feel strongly that high quality, affordable healthcare should be available to all, healthcare is not a right ; just as food or shelter are not a rights. I can't walk into a restaurant and demand a fancy diner because I have a right to food. I can't walk into the Ritz Carlton expecting to stay there for free due to my right to shelter. A right is not a thing that is given to you, but something you intrinsically have like free speech or freedom of religion. That said, most advanced societies have recognized that there are certain basic needs; such as food, shelter, and healthcare that any advanced society should ensure for all. For example, tax payer dollars ensure that every child can attend our public school system, not because they have a right to be educated, but we as a society feel it is in our best interest to educated all children. More importantly, those parents who don't want a public education for their children can send their children to private school or homeschool. I believe we need to start talking about healthcare in this same context, not as a right but as something that we as a society want to provide for all Americans.
Another inconvenient truth about healthcare, which should surprise no one is that healthcare is very expensive, and that costs continue to rise. However, one thing that many don't seem to consider is that our country can not financially continue to support our expensive and inefficient healthcare system or we will not be able to function. Even prior to COVID, health care spending has been increasing for decades, and is now about 20% of GDP. At some point, in order for our country to function, we are going to need to raise taxes significantly, or cut spending from other sectors such as the defense budget or social security to keep pace with our spending on healthcare. None of these options are popular , viable, or even a good idea. Even at an individual level, people can't continue to pay higher and higher costs for co-pays and premiums, and expect to feed their families. Thus, similar to climate change, as long as health care spending continues to increase, at some point in the not too distance future, our country will not be able to sustain its other activities. We as a country are going to need to make some tough choices about healthcare spending in order for our country to survive.
There are many reasons for the increasing costs of healthcare. Many immediately point to the high costs of pharmaceuticals. While this is an important factor, it is only about 10% of all healthcare spending. The bulk of the cost of healthcare are doctors and hospitals, which represents over half the money spent. Essentially, the wonderful technologies (MRI, CT) and treatments (advanced surgery, chemotherapy) we are blessed to have in the United States to keep us alive come at a very high cost. It costs nearly $3,000 per day to stay in an ICU, and the cost of the average hospitalization is about $12,000. Since these costs would be too much for most Americans to afford on their own, we have an insurance based healthcare system, with Medicare and Medicaid being essentially government funded insurance. We don't have a Canadian system where the government both pays for an provides healthcare. Healthcare is primarily provided by private, non-government entities, and paid for by either private or government funded insurance. One should note that exclusion of employer contributions for medical insurance from taxation is one of the largest entitlements in our country at approximately $150 billion annually, so even health insurance paid for by employers is partially funded by the government, i.e. our tax dollars.
Before looking at private health insurance, it is important to look at the private insurance sector that doesn't involve healthcare. I am certain that non-health insurance companies are doing incredibly well, based on the fact that every other commercial I see on television has Progressive's Flo and her friends, the Geico Gecko, or Liberty Mutual' s Limu Emu. How do they do these private, for-profit insurance companies do so well? Essentially, they work on actuarial tables, i.e. they calculate how much it would cost to ensure a population against certain catastrophe's and charge them premiums to cover those expenses as well as make a profit. Prices are nicely controlled by free market economics, so everyone one wins. This is Capitalism at its finest. Do you know much it costs to get flood insurance in Florida from one of these popular brands in case of a hurricane? The answer is that these insurance companies don't offer this. It simply would not be profitable, as the actuarial costs would be too high for the population to pay for. However, homeowners can protect themselves by getting coverage from The National Flood Insurance Program (NFIP) which is managed by the FEMA and is delivered to the public by a network of more than 50 insurance companies. In other words, because floods are so common in Florida and can be devastating, the very successful actuarial model for private insurance companies no longer works, and the Federal Government via FEMA steps in.
With this in mind, you can see why private health insurance doesn't work. First, unlike regular insurance, which is designed for emergencies only, health insurance in its current form pays for everything. Can you imagine using our car insurance to pay for gasoline or your home insurance to pay to fix your deck? Think of not only how high your insurance premiums would be, but also the bureaucracy of trying to get anything done. If you are running low on gas, I hope that a gas station that is covered by your auto insurance is nearby. Second and more importantly, the concept of insurance to cover emergencies like hospitalization and surgeries in theory makes sense, but the issue is that even regular health care is very expensive. Every day things like medications for diabetes, cancer treatment and monitoring, inhalers for asthma and emphysema, treatments for chronic pain like injections and regular physical therapy, etc. are all very expensive and common for many Americans. Given the high cost of common health care elements, private, for profit insurance would be like Nationwide or Farmer's insurance trying to provide coverage if every state had flood and hurricane rates similar to Florida or if traffic accidents were 10 times the current rate.
Given that the economics of private health insurance simply don't work out, you would think that most insurance companies are barely surviving financially. However, the opposite is true. CVS Health (who owns Aetna) and United Health Group are #4 and #5 respectively on the Fortune 500 list, behind only Walmart, Amazon, and Apple; and ahead of #6 Exxon Mobile and #8 Alphabet (Google). Please stop and read that again: Aetna and United's parent companies make more money than big oil and Google! How do they do this, when the actuarial model used by non-health insurance can't work. The answer is long and purposely complex and includes questionably legal arrangements such as the insurer, pharmacy benefit manager and pharmacy being owned by the same company, and cost-shifting to patients in the forms of higher co-pays and deductibles. However, the main way for-profit, private insurance companies make these high profits is by denying care. Ironically, the big ticket emergency items like hospitalizations are usually covered fairly well. It's the more common, every day things like prior authorizations for medications, radiology studies, and elective surgeries that are usually denied. Insurers create a purposely difficult maze of necessary approval steps required for coverage in hopes that patients and doctors will simply give up. Quite simply put, given the high overall cost of healthcare, the only way private insurers can make a profit is by cost-shifting and denying care. It's no wonder that the most common cause for individual bankruptcy in the United States is from medical debt, of which most patients have insurance.
It's important to note that most efforts to reform healthcare in the United States have not been focused on fixing our broken insurance based system, but rather doubling down on that broken system. While the Affordable Care Act (Obamacare) has certainly led to some positive changes (we are now at an all time high in terms of the number of Americans who have health insurance, and pre-existing condition exclusions from insurance have been eliminated), the primary feature of the ACA was to use government funds to help the uninsured pay for private insurance. Essentially, those who did not get private insurance through their employer, are not old enough for Medicare, and were not poor enough for Medicaid can now go on the Obamacare exchanges where they can choose the private insurance they want, which should be affordable because it is now partially subsidized by the government. The Affordable Care Act really should have been called the Affordable Insurance Act. More recently, the health care provisions of the recently signed $430 billion Inflation Reduction Act, give $64 billion to the Obamacare exchanges to ensure prices stay low, which is essentially tripling down on the broken insurance system. While the Inflation Reduction act finally allows Medicare to negotiate SOME drug prices with the pharmaceutical companies (a good and small first step), Democratic efforts have done absolutely nothing to fix our broken system. In fairness, the Republicans haven't done any either, except trying over and over again to repeat the ACA.
So, if the problem is really for-profit, private health insurance, then shouldn't the solution be to go the Bernie Sander's Medicare For All route? If you remember the many and long Democratic Presidential Candidate Debates for the 2020 Election, discussions regarding improving healthcare ranged from Medicare For All (Sanders, and initially Warren) to Medicare for some (Buttigieg wanted Medicare for those who wanted it, Biden wanted to add Medicare as an option to the ACA exchanges). Sanders even went further, suggesting that Medicare For All should also include things that our current version for seniors doesn't cover, such as vision and dental., to which Biden responded, "but how are you going to pay for it ? " which Bernie never really answered. To be fair to Sanders et. al, cutting out the exorbitant profits of healthcare insurers (remember, at least two are making more than Exxon and Google) would help lower costs to some degree, as will the government being able to negotiate drug prices for Medicare. However, insurer profits and drug prices are not the biggest determinants of health care costs. Healthcare, especially that which comes from our private, for-profit providers, is simply expensive. The top notched doctors, hospitals, radiology suites, dialysis centers, surgical centers, cancer centers, etc. that we are blessed to have in this country come with a very high price tag.
While I have discussed why private, for-profit healthcare insurance makes no sense, having the rest of the healthcare industry run as for profit businesses actually does. The financial incentives for the private health care industry (including the drug companies), have led to some of the best treatments in the world. The converse is also true: when there are no financial incentives, innovation suffers. Treatments for rare diseases and vaccines, where there is little incentive for profits, are two very good examples where innovation is stagnant due to lack of potential profits. The only reason we got highly effective COVID vaccines so quickly is because our government decided to give a few pharmaceutical companies essentially a blank check to do what they do best- and it worked! In other words, the incredible healthcare technologies and innovations that are available in the USA exist primarily due to the financial incentives for a for-profit healthcare industry, which in turn is one of the primary reasons why healthcare in the United States is so expensive.
In summary, while meaningful change to our dysfunctional healthcare system is likely many years away, now is a perfect time to discuss some of the real challenges we face, as opposed to political posturing of the recent past. Like the "inconvenient truths" of climate changes, these discussions will not be easy, making now a perfect time to have these conversations. Just like education, food, and housing; healthcare is not a right, but something we as a society should provide all of our citizens such that everyone is able to have high-quality, affordable healthcare. Unfortunately, healthcare in our country is too expensive, and if we continue to spend at our current rate, we will not be able to function as a country unless we raise taxes substantially or cut funding from essential programs such as defense or social securities. Our current system uses both private and government funded insurance to pay for these expenditures, but recent efforts to improve healthcare have only focused on providing insurance to those that can't afford it, which overall hasn't lead to substantive changes. While having a for profit heath insurance system simply makes no sense (as they can only make their exorbitant profits by denying care), simply relying on non-profit or government funded insurance alone won't solve the problem of the ever increasing health care costs, because the root of the problem is that medical wonders provided by for-profit healthcare come with a high price tag, regardless of who pays for it. Quite simply put, the only way to continue have the best healthcare in the world without bankrupting our country is to limit what is provided for all. Another term for that would be called rationing, and that is the real inconvenient truth healthcare: in order to provide high-quality, affordable health care for all of our citizens, not every citizen is going to be able to have every treatment or procedure we have to offer.
It is not surprising that no politician on either side of the aisle will discuss this- the concept of healthcare rationing is incredible unpopular. Prior to the passage of the ACA, part of the legislation called for reimbursing primary care physicians for having difficult end-of-life discussions with their patients to hopefully avoid extra and unnecessary $3,000 a day stays in the ICU. The Republicans (incorrectly) labeled this as "death panels," and this provision never made it to the final version. Ironically, we currently have rationing in our healthcare system. For-profit, private insurers (two of which make more than either Google or Exxon) use prior authorizations, high deductibles, non-covered procedures or medications, etc. We simply ration irrationally, giving everyone the illusion that having healthcare insurance means having high-quality, affordable health care, when in fact this is not the case for most Americans. However, when viewed from how we handle other "non-right" issues like food, housing, and education, the concept of limited spending to ensure everyone gets something makes a lot more sense. While every child in America is able to get a free K-12 education, we have chosen not fund certain beneficial things such as a 1:10 teacher to student ratio, a college education, or pre-K. While arguments can and have been made that perhaps we should fund education to cover these things, there is at least an understanding by everyone that our country can not afford to send every child to private school and to Harvard when they graduate. If we can at least start having the conversation now that, just like education, we are simply not going to be able to provide every citizen every medical treatment and technology without bankrupting the country, we might then finally able to make progress on developing actual proposals that will make meaningful change. An incredible, affordable, high-quality healthcare system for all Americans is certainly within our grasp if we can simply put politics and policies aside and start having the difficult conversations that lead to a shared common ground to build upon.
Matthew L. Mintz, MD, FACP