Cuban vs. American Health Care

David Gonzalez
Jul 25, 2017 · 8 min read

Taking the Pulse of the Healthcare Debate

We Don’t Need Jedi Mind-tricks to Solve This Issue

“Even with all its problems, there are three things that keep me here. Free healthcare, education, and national security,” said Chavez, the cab driver taking me back to my aunt’s house after dropping Tanya off at the airport.

This is a common refrain amongst Cuban citizens. Despite the indisputable mayhem the Castro regime has inflicted upon the country, public opinion remains positive regarding the early successes of the socialist state. Chavez summed up these feats in his statement, citing the comfort he felt from free access to healthcare and the safety of a nation with very little drug trade and even fewer guns.

I’ve lived in several different countries, each with a unique healthcare infrastructure. I also familiarized myself with the Affordable Care Act after working at Blue Cross Blue Shield. The main thing I’ve realized is that while every system has its merits, each one is far from perfect. That may come as no surprise to you. However, as our congress continues to work on fixes to a system which most can agree needs amendment, I’ve spent some time contemplating the trade-offs between private and socialized healthcare.

Considering the complexity of the healthcare dilemma, the aim of this article is not to propose a one-size-fits-all policy. Instead, it reflects the opinions of people I’ve listened to at home and abroad. To add a dose of clarity, I’ve eliminated any radical, one-off opinions. Every anecdote is constituent to widely held, non-consensual beliefs.

One thing I do believe is that perfecting a healthcare system which covers every citizen should be a priority for every country. How a country arrives at such a goal is dependent on variable local and external factors. While government should play a role in this, I believe it’s up to us to strip away political dogma from this issue and arrive at sensible conclusions which our policymakers can use as guidelines. Doesn’t that sound reasonable to you?

If you’re ready to dive into this important conversation, let’s not waste time.

The Benefits of Socialized Care

When I say social care, I’m talking about universal coverage with no price discrimination. This is a synopsis of the Cuban system. Whether you are sick, injured, or receiving preventive care, you can access healthcare at zero cost to you at any time. Every branch of healthcare falls under this umbrella from inpatient surgery to mental health.

The benefits?

Healthcare just isn’t a concern for Cuban people. I’m not saying that health isn’t a concern — just that healthcare isn’t a table topic. Every Cuban is confident that any negative indicator of health will be monitored, treated, and most likely fixed. Doctors are perhaps the most trusted public servants in the country and receive an enormous amount of respect. No matter how you paint it, that type of confidence in authority is unique for a populace which has been betrayed by its representatives since Cuba gained independence.

My cousin broke her foot at night and she had a cast on it before lunchtime the following day. There was no waiting in line and no transaction. She wasn’t anxious about meeting her deductible or being in-network. Her only concern was being physically unable to work. In the U.S, your stomach would be in a constrictor knot as you waited for the bill to come. Even worse, there’s a non-zero chance that your insurance premium bill would come on the same day as the hospital bill. I think they call that a Double-Whammy.

People get anxious when they feel they are on the wrong end of asymmetric information. From my experiences selling health insurance, I can tell you that the average consumer has no idea what any given procedure will cost. In fact, consumers will go to great lengths for the tiniest insights on what insurance does and doesn’t cover. But insurance companies aren’t in the business of transparency. They are in the business of using semantics, confusion and consumer apathy to their advantage because the ACA is basically water-boarding them financially.

This lack of transparency causes consumer contempt toward insurance companies and the government alike. If you don’t believe me, it’s because you’ve never been on the other end of a phone call with a single mother making $60K/year who couldn’t understand why a plan with a $7,000 deductible would cost her almost 10% of her income. When the relationship between insurance companies and consumers is mandated by the government, it builds distrust and dissatisfaction with the system. These issues carry indisputable social costs.

With socialized care, these burdens are alleviated if not eliminated.

What American Health Care Gets Right

The healthcare complex might be the most fractured American system, but it certainly has its merits. I feel safe going to a hospital and I feel confident in my physician’s counsel. Education for healthcare providers is rigorous and people from all around the world come to learn from our institutions. Furthermore, our providers are justifiably well-paid for their expertise.

You can also count on the U.S leading in innovation. I think this is easy to ignore from the consumer side because it doesn’t help you pay your insurance premiums, but innovation is what makes the U.S a global leader in what seems like every relevant industry. Our propensity for research and development always has us on the verge of the next big breakthrough which could revolutionize our healthcare consumption. This could lead to dramatic price decreases and better care any day. Maybe that day will come soon.

Of course, these are hypothetical situations, but they cannot be ignored or discounted.

Choice is another important dimension. While your personal financial situation may corner you into choosing in-network providers, it’s better than relying solely on the government for care. If Raul Castro decided to overhaul the Cuban system and make it a private one, the populace would have zero leverage and most would go without care. Again, this is an extreme and hypothetical scenario, but it’s basically the gun control argument disguised in a physician’s lab coat. In short, choice equals protection from uncontrollable factors.

Lastly, the ACA and state-specific Medicaid expansion has helped many lower income American families get better access to healthcare. Sure, a lot of that burden is simply shifted to another portion of the populace, which goes against certain American “values”, but I’m in the camp that believes in the value of progressive taxation in the right spaces. I find it ironic that many of the people making the free-market argument on the basis of values are the same folks who would have no problem with excluding coverage for preexisting conditions as long as it protects their bank account. I guess that’s why values are always arbitrary and rarely logical.

The Drawbacks of Each Model

Social Model

Milton Friedman is right when he says there is no such thing as a free lunch. The median salary in Cuba is approximately $25/month. For a doctor, that sum is generally a whopping $45/month. You know that’s a problem when doctors across the country are becoming cab drivers to support their families. Transportation industry workers shouldn’t be making more than doctors.

The most common criticism for the socialized model is the long waiting lines for care. In Cuba, this problem is nearly nonexistent when it comes to emergency and urgent care, where it has the potential be most problematic. However, less time-sensitive treatment can be delayed for months depending on the malady. I found this to be the case in Costa Rica, too.

My grandmother, for example, was put on a long waiting list to have cataracts removed from her left eye. A friend also waited several weeks before he was granted an opportunity to visit a psychiatrist. Things tend to move a lot more quickly in the U.S, where it isn’t uncommon for an MRI to be performed within a week after a diagnosis.

The largest issue with the Cuban healthcare system is a general lack of resources. Doctors don’t have the right tools and the scarcity of medicine is so palpable that even finding aspirin outside of an international pharmacy can be difficult. Beyond that, there are physicians seeing upwards of fifty patients per day. Not only does this indicate a shortage in providers, it is also indicative of the intrinsic moral hazard characteristic of free healthcare. When healthcare is free, people tend to overuse it. That’s not optimal for allocating tax dollars under a universal system.

Private Model

This doesn’t take much explanation. When a healthy 20-some-year-old is paying nearly $200/month in premiums for a deductible upwards of $7,000, you have some serious problems. Sadly, our policymakers make it seem like these exorbitant prices are the only solution for extending coverage to more individuals. I’m going to call bullshit on that one.

There is no reason why we need to completely overhaul the ACA at this point. We just need to simplify it, but the good folks on Capitol Hill and the media won’t have it. Why is there even a conversation surrounding preexisting conditions? Was it not evident enough the first time around that this violates what many consider a basic human right?

The economic implications of our broken system are obvious. Less evident are the implications of a completely static bureaucracy. We should be demanding more compromise from our representatives and proposing our own solutions to problems that are exclusively ours. I don’t expect much sympathy toward our problems from a President who seems to know more about judging beauty pageants than the price of healthcare for the average citizen.

In short, it’s time to take this matter into our own hands. Here’s how I think we can start having that conversation:

Focus on What Works

Singapore has done a tremendous job of meshing public policy with individual responsibility to create a functioning system. There, they emphasize contributions toward health savings accounts. By forcing employee and employer contributions to these accounts while limiting the ability of citizens to withdraw from them, Singapore has made it possible for people to afford their deductibles and out-of-pocket maximums.

Imagine a similar solution here. One of the few things Bernie Sanders got right was that we don’t have an insurance coverage problem. Plenty of people are insured, but many of them can’t afford the out-of-pocket expenses of most plans. Even if you can afford $7,000 out-of-pocket, it’s easy to see why many can’t fathom having amassed those types of savings.

But what if parents contributed a portion of their paychecks to a child’s health savings account from the day it was born? The contributions would have a minimum and maximum range, but the minimum contribution would cover 1 year’s out-of-pocket expenses in case of a catastrophic event by the time the child reach maturity (18 y/o).

Ex 1.1:

Insurance Out-of-Pocket Max = $10,000 (insurance covers everything after that point)

Health Savings Balance @ age 18= $10,000 (patient can cover for catastrophic events)

That’s a solution that meshes individual accountability with regulation. Rand Paul might have a heart attack from the words “mandatory contribution”, but he would be hard pressed to present a coherent argument as to why we can’t have that conversation.

One thing Paul could agree on is to start slashing regulation and improving transparency, especially with prescription drug companies. That way, we can bring drugs to market at lower prices and offer them to consumers who can’t afford their higher priced alternatives. You might scoff at the health hazard this presents for these consumers, but it is better for them to have this choice rather than none.

In the end, the U.S will always offer the choice for higher income households to access whatever provider they want. In fact, the savings account solution described above would give these households a nice safety net to withdraw from to pay for this private care.

Conclusion

No system is perfect. Let’s take some partisan partiality out of the healthcare conversation and start having a meaningful dialogue amongst ourselves — the people whom are truly affected by a deficient system.

If you’re ready to join this conversation, leave your comments below.

“You know my coins are counterfeit, but you accept them anyways. My impudence and my pretending.” — Rumi

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