Jonathan Cohn wrote a book about the 10-year struggle to get and keep the Affordable Care Act. In an interview on Fresh Air, he mentioned all the factions that were aligned to prevent anything serious from materially changing the current health care system. It reminded me of a point Uwe Reinhardt and Tsung-Mei Cheng have made about the concept of Political Sustainability of the health care system in America.
When we normally consider the sustainability of health care in America, we typically think of economic sustainability to the nation, and financial sustainability for the individual or the family. The macroeconomic figures are both familiar and staggering.
- Eighteen percent of GDP goes to healthcare.
- We spend $3.4 trillion a year.
- Eleven percent of the US workforce is involved in healthcare.
- Healthcare is 24% of all government spending.
- 1/3 of healthcare spending goes to hospitals. (They are typically the largest employers wherever they are.)
- Health Insurance is 24% of nonwage compensation. (It is the biggest chunk taken out of American workers paychecks of any kind.)
- Healthcare is 8% of consumer spending.
And these numbers are not trending in a sustainable direction – they are getting rapidly and steadily worse. I remember being on the Board of my state medical society in the mid-2000s, when healthcare was approaching 15% of GDP hearing the argument “What’s so wrong about spending this much for the health of our country?” I can hear you internally listing the reasons this is crazy. (We don’t cover everybody, we have lousy outcomes, etc.)
As we near 20% of GDP, still without universal coverage, still with lousy outcomes, still causing financial hardship with the randomness of a crazed sniper picking off targets, the realization of the unsustainability of it all appears to be reaching critical mass. Drew Altman of the Kaiser Family Foundation, noted that big business is finally going to do something. But I have been hearing this for nearly twenty years: “Businesses can’t afford to keep up with these skyrocketing premiums – they’re going to put their foot down!” To which I always respond, “When?”
Altman notes that employers will continue to “pursue value-based payment, raise cost sharing,” and their other typical tricks to temporarily gain some fraction of a percent lower rise in premiums. They’ll get a nice cash bonus for their ingenuity, and prices will continue to climb, and more wages will be lost to healthcare spending.
When Reinhardt and Cheng were talking about political sustainability, they were saying that all the money and all the employment in the American healthcare system naturally flows into political coffers and campaigns and wherever needed in order to sustain itself. If ad campaigns and armies of public relations people are needed to dissuade the public from supporting healthcare reform, the money is there.
We've seen this for several decades now. The US healthcare system is politically sustainable because so many people have so much invested in it and therefore preventing change is paramount. We all have status quo bias, but when our very livelihood is on the line, it focuses the mind.
"It is difficult to get a man to understand something if his livelihood depends upon his not understanding it." -- Upton Sinclair
This is important to keep in mind. When you think about why ordinary people act the way they do, why politicians pontificate and vote the way they do and why people in the medical industry act the way they do it's because most are trying to preserve the current system.
Another reason it is so important to him understand this is because of an old saying “One man's waste is another man's revenue.” We look at the healthcare system and see colossal waste. And, and in terms of adding value to the system, that's exactly right. There are huge segments of the medical industrial complex that add no value. They only extract money out of the system and contribute virtually nothing. The problem with that revenue is it's vast, 3.4 trillion a year. It's a lot of money and that money can and is translated into political donations, buying good will and more.
All that waste accruing to your community's largest employers leads to massive philanthropy (of a kind). Look around your city and note who sponsors the sports teams and look at who has the biggest buildings in town and if you’re ambitious, check out the salaries of the highest-paid executives in your region. I know that here in Pittsburgh, two of the biggest buildings in town are owned by health plans and they have big prominent logos up there! They have big prominent logos on the NFL team, the NHL team, the major league baseball team, the college teams, the symphony, and more. Their logos are everywhere. That is a lot of clout. A lot, lot, lot of clout. And again, 11% of people work in healthcare. That's a lot of people,
Wendell Potter said "Health insurers have been successful at two things, making money and getting the American people to believe they're essential." They spend a lot of money making us believe that they're essential and they earn a lot of money by making us think they're essential. It is critical to understand how the public views these companies, because so much money has been spent making health insurers and pharmaceutical companies and the rest to appear to be adding value to the system when, if they are adding value, it's marginal value at best (a topic for another day, but I refer you to Elisabeth Rosenthal’s An American Sickness or Reinhardt’s Priced Out). But the point is that it contributes to the political sustainability of the system: going against the common wisdom - even if that common wisdom is manufactured- is difficult.
What is a “bullshit job?” I bring this up just because I think it makes important points about jobs in many fields, but maybe nowhere more acutely than in the Medical Industrial Complex. The reference here is from an Economist article titled Bullshit jobs and the yoke of managerial feudalism. It's an interview with an author of a book, David grayer about pointless work. I think you already know what I’m talking about without me explaining! What is a bullshit job? Graeber explains:
A bullshit job is one that even the person doing it secretly believes need not, or should not, exist. That if the job, or even the whole industry, were to vanish, either it would make no difference to anyone, or the world might even be a slightly better place.
Graber says that 37 to 40% of workers, according to surveys say that their jobs make no difference. I will only add on to that, read An American Sickness about the medical industrial complex with the bullshit job concept in your mind, you’ll find there's definitely synergy there in thinking about the jobs that are in the medical industrial complex that either add value or don't. If you read that book, you will be enraged by how many jobs don't add value and only extract money.
When we ordinarily talk about the sustainability of healthcare system, usually from the left, we're talking about economic sustainability and the sinkhole that is the US healthcare system. This is not economically sustainable. These numbers are getting worse, not better, and it is economically unsustainable and yet remains politically massively sustainable. Something's gotta give at some point, but sadly, the smart money right now is still on the political sustainability!
The last thing I want to talk about is financial sustainability.
5% of Americans counted for half of healthcare spending. Why is that important? It's important because if you're in that 5%, you're in big trouble. Unless you're very wealthy, you are going to have major financial hardship. Healthcare expenditures are high and variable for those with the poorest health. Healthcare spending per privately insured person is three times higher in some parts of the country than others. So, depending on the lottery of where you were born and where you live, you might be spending far more than your cousin who lives somewhere else. Half of all money raised in GoFundMe is for medical expenses. It is astounding how we ration care in America and how cruel we can be to each other by not providing care. Uwe Reinhardt used to say, America is capable of unfathomable generosity and unfathomable cruelty at the same time.
We will have a GoFundMe campaign and raise millions of dollars for the cute kid that needs a transplant. And yet we will let 10% of the population essentially live in a third world country of healthcare, because of our rugged individualism and other things that I've talked or written about here or on YouTube.
It is important to think about the financial sustainability because it is somewhere where we might be able to get some empathy from people about the hardship of others, but also to perhaps generate a little fear of what could happen to them or their family. Everybody knows somebody that's suffered a major illness and if you ask them about it and what it has done to them financially, it it's a hardship and it's a big hardship and no other country in the world does that to their citizens. And yet again, with our cruelty and I will grant that many are either benignly or willfully ignorant, sometimes it is not ignorance at all, just a lack of empathy.
In a 2011 Republican Presidential debate, candidate Ron Paul was asked a pointed question about what to do with someone who needed expensive healthcare but did not have insurance: “Are you saying that society should just let him die?” Some in the crowd jeered “Yeah!” Paul indicated that as a physician, he did not find it acceptable to do so and offered charitable care from “churches” based on his experience of practicing medicine in the in the early 1960s, before Medicare and Medicaid, eliciting applause from the crowd.
When the crowd cheers, “let him die,” that's kind of rough. But as I posted recently, we have done some polling of self-identified Republicans around this and it may not be as bleak as I had believed. These may be zealots who do not represent more than a small majority of conservatives.
I want to give you these final few statistics here because I think they are so important. Tt makes the point about how random financial devastation from healthcare costs can be. You can be living your middle-class life, doing fine, fully insured through your job, and boom, you get the C word, you get cancer. A study done in 2018 in the American Journal of Medicine showed that Americans newly diagnosed with cancer had, at year two after the diagnosis, more than 40% had depleted their entire life's assets. Average losses were $92,000. Only 7.9% of these were uninsured. These were insured people that were financially devastated by a cancer diagnosis. Cancer is of course one of the leading causes of death, but heart disease, dementia, and stroke, in my experience, are not that different financially. So, your best bet is an untimely, accidental death. Financially speaking, anyway. Unless some liberal drags you to the Trauma Center to get some of that expensive care! Yay, America!
A major illness entails massive expenditure, massive hospital bills, massive doctor visits, massive pharmaceutical and technology expenditures. You name it. It, it all goes together. Getting sick is devastating enough physically and emotionally, but in America we pile on financially as well! There is an undercurrent of the puritanical streak in America that makes many of us not want to help the “undeserving.” But I think, more than that, really what's going on in healthcare and healthcare insurance in particular is that it's not about the deserving/undeserving, it's about the sick and the well. The well subsidize the sick, and as the saying goes there, but for the grace of God go I. It's something that we can use to create some empathy, and also maybe some fear, to try to get people to think differently about universal healthcare.
On top of all the financial toxicity and the economic unsustainability, I think it’s important to discuss the cruelty in the system that Professor Reinhardt talks about. We routinely subject people to small cruelties and large cruelties. The small ones are the prior authorization process, delaying care, being treated as lesser people. The major cruelties are unaffordable medications, forcing people to choose between medications and rent and food. The examples are endless and again, a topic for another day, but the cruelties in the system are important, and I think it's important that we spend some time highlighting it.
I'm hoping that if we can persuade enough people that we should do universal healthcare, we can break down the political sustainability. Everybody knows somebody who's had an unexpected illness and had a financial hardship from it. I think we need to use these stories and experiences as effectively as conservatives us stories about the nightmare of universal healthcare the rest of the world is subjected to!
Thanks for getting this far! Not my best writing, but I was working from a video transcript, so I hope you’ll cut me some slack! Looking forward to the discussion!