Common Good Healthcare
The pandemic in the US is fundamentally altering health care and the changes will be not be positive for most Americans. Those that are able to anticipate and understand what will happen have a once in a generation chance to direct that metamorphosis towards a better system.
Health care spending in the US was over 17% of GDP in 2018 or roughly $11,000 per person. All those dollars support a delivery system that is the best in the world in some important areas, but as a nation we not are not “healthier” for all those dollars being spent on us. Attempts to reform the existing system have either never gotten off the ground (see 2017) or at best have failed to deliver on their promises (healthcare.gov)
The pandemic is going to cause 3 distinct trends that change both the nature of care in the US and the average citizens view of system which delivers that care. The predictions below are what I believe to be the “base state” without a policy plan to direct the sector towards a better outcome.
Consolidation: Many smaller mainly independent care providers are going to go under along with the thousands of other small businesses that will not make it through the downturn. Most affected will be primary care providers and provider groups (urban health clinics, rural hospitals) that act as the gateway for many patients into the health care system. Larger more sophisticated concerns will absorb these small providers and begin the process of finding “efficiencies” in their systems to improve their bottom line. Some will embrace the leading edge of care delivery that focuses on effectiveness of care and not just cost, but many won’t.
Paternalism: The culture of health care in the US is definitively paternalistic. And as the saying goes, “culture eats strategy for breakfast” so most strategies that don’t account for that reality are not going to move the change vector. The existing culture will heavily influence the strategy that enlarged providers and delivery systems use to guide care delivery. The trends towards digitization, micromanagement of the doctor/patient interaction and care process flows will accelerate and the nascent movement to engage patients more in the management of their care will lag due to the additional investment of time and money that it requires. To deliver on the efficiencies that predicated the aforementioned consolidations, they will squeeze headcount and compensation. As more and more of the population comes under the aegis of fewer provider systems with advanced data and analytic systems, the MD/MBA’s within their ranks will quickly move to the lowest common denominator for the delivery of care.
Ideological Antagonism “The Fauci Effect”: One of the trends of the last decade is the consistency with which major institutions and the elites who run them have lost their cultural authority and power. The polarization of opinion around the good doctor between “the right’s” caustic view and “the left’s” lionization of the man is an indicator that the next group of experts to fall prey to this phenomenon will be physicians and medical professionals. At a meta level the average American is going to see the societal damage wrought by the shut-downs whose purpose was to save the health care system from destruction and question whether it was worth the cost and probably grow resentful of an already wealthy industry that won’t be as damaged as many others. Add to that the fact that doctors as a group have spent the last 30 years moving leftward on the political spectrum while the nation at large remains center-right and you have a recipe for a adversarial mindset between physicians and a significant portion of the population. That is becoming more apparent to those on the right as they seen pictures of counter protestors in scrubs showing up to block those who are protesting the overreach of the lockdowns and their catastrophic economic effects.
Consolidation, Paternalism and Ideological antagonism. The result of these trends will be decreases in provider morale, increases in system complexity, opacity and increase in patient dissatisfaction as the focus on costs inevitably lead to less personalized and satisfactory outcomes from the patient perspective. This state of affairs would increase the calls for, and legitimacy of schemes for socialized medicine.
What could a state that wants to change the system do to realign their residents “common good”, and why are the states the best vehicle for delivering that change? We have an example for people interested in the common good to look too, but each side specific orthodoxies forbid them from considering them, even if they achieve their ultimate goal of a cheaper, better well-run system. The nation state of Singapore.
Here’s a paragraph from Ross Douthat’s 2017 column about healthcare in Singapore:
“So, the Singaporean structure does not necessarily minimize state involvement or redistribution. It minimizes direct public spending and third-party payments, while maximizing people’s exposure to what treatments actually cost. And the results are, again, extremely impressive: By forcing its citizens to save and manage their own spending, the Singaporean system seems to free up an awful lot of money to spend on goods besides health care over the longer haul of life.”
Minimized direct public spending, maximizing individual choice, money freed up from health care costs to be used on and in other sectors of the economy. A public policy dream come true that could free up a trillion dollars of GDP for other uses here in the United States, (that’s trillion with a T). In essence the nation state of Singapore has accomplished what public policy professionals have failed to for the better part of the last century by embracing ground truth of healthcare market dynamics. Those truths are:
1. Low cost/high deductible catastrophic insurance plans MUST BE PAIRED with subsidized highly portable savings accounts that the patient has significant direct control of.
2. A mechanism of forced savings IS NECESSARY for those accounts, even if they are heavily supplemented by employer contributions and government subsidies for specific demographics (poor, very ill, etc).
Because America is not Singapore, two other “truths” that would be needed to accept here in the US to approach the same level of system performance as Singapore.
3. Rolling Funds: Most US based HSA type accounts have to spent in a calendar year or the funds lose some of their value. Why? Rolling over unused funds would allow entities and individuals to make better long-term decisions about their use and when situated correctly take advantage of the most powerful force in the world, compound interest. As Douthat notes, we Americans like spending money, but generally speaking we’ve been conditioned not to touch money that looks like a retirement account. Make the operation of the account something closer to a 401k and watch how much more judicious spending becomes.
4. A great marketplace needs a great middleman: The level of sophistication necessary to effectively navigate our health care system is daunting even for patients versed in its idiosyncrasies. Most health care patients have neither the time, inclination, nor expertise to navigate the system effectively. What’s needed is a cohort of market making brokers who price and quality shop for individual users who then rely on them to deliver a satisfactory outcome.
A system that incorporates these concepts would harness market forces to deliver quality care at lower costs while fulfilling a moral imperative to support and empower the poor and at-risk who are at the margins of the current system.
As we’ve seen for the last decade, most federal efforts failed either partially or entirely and those that did make it into law spend most of their time in courts. The constitutional structure of the USA makes the states the obvious place to innovate in the delivery of health care. As the sovereigns closest to their citizens, they are the best situated to adapt a common good model to the needs of their residents and tailor their systems accordingly. There’s no reason that California should have the exact same coverages as New Hampshire and their systems should reflect that.
So, what’s a first step? Embrace a central precept (at least according to Adrian Vermeule) of Ragion di Stato. Preserve the current systems outward form as you push forward incremental changes with the intent of transformation.
Translating that theory into action, a hypothetical scenario might be a state led by forward thinkers doing the following: Apply for a Medicaid block grant that came attached with incentives that acknowledge that startup costs that would be involved and that the savings would accrue (roll) to both the federal government and the state in question over a multiyear period. The state would use those funds to set up 401k style accounts for recipients that paired with low cost high deductible insurance policies provided by private insurers. The theoretical savings (unused funds) realized from this plan should be placed in endowment that fulfills the same role as the Singaporean MediFund program.
The next decade is going to see significant changes in the delivery of healthcare within the US. What those changes look like is going to look like is dependent on understanding the path we’re on versus where want our system to go.
