Why can’t people agree on strategies to fix health care? It is due to many things, including disagreements on health economics, self-interest, and fundamental differences in ideology. Every public intellectual has an idea that may, or may not, do anything to improve health care. Take former NBA team owner, Mark Cuban, for example. He says his mission is to revolutionize US health care. To that end he established Cost Plus Drugs, a way for consumers to buy many drugs at lower prices without using insurance. It is a great program. In an interview he also suggested free medical school would boost the supply of doctors. Yet, there is no shortage of students willing to pay for medical school. Furthermore, the number of medical school slots is not easily scalable in the short run. The bottleneck to physician training is a limited number of residency slots. Add residencies for all who need them and the U.S. could train 10,000 more doctors a year. Another, obstacle to increasing the physician workforce is state regulations that prevent doctors trained abroad from practicing medicine in the U.S. without repeating a 3-to-7-year residency program.
Every stakeholder has an idea about what should be done. Many of the ideas are self-serving:
Hospitals. If you ask hospital executives what will fix health care they will likely say: 1) universal coverage where all patients have good insurance. 2) reimburse hospitals more. Some would even be happy to manage the health plans for patients in the local community in ways that maximize hospital reimbursements. Hospitals are unlikely to support pay-for-performance, site neutral payments, reference pricing, or competition.
Doctors. I tend to side with doctors 95% of the time but they too are not immune to flights of fancy. Over the years I’ve run across numerous doctors whose idea of reforming the health care system entailed: 1) put doctors in charge; 2) pay them what they’re worth (i.e. pay them more); 3) prevent health plans from meddling in medical decision making; 4) boost access to care (e.g. preventive care, primary care and access to specialty care). This goes along with the (incorrect) notion that preventive care will save money by reducing acute care, hospitalizations, and medical bills down the road. There is no evidence that preventive care saves money. The reason is due to the added spending on preventive care that has no effect on health status but raises overall spending. Doctors also tend to reject the use of lesser trained providers (e.g., nurse practitioners) unless they work for doctors.
Public health. Public health advocates mostly support Medicare for All as the ideal reform for the U.S. health care system. They overlook the shortcomings that exist in Medicare, ignore that about half of Medicare beneficiaries are enrolled in private plans and do not recognize the political obstacles to expanding Medicare to 330 million people. Proponents of public health also believe they should oversee the health care system, set priorities, and control all the money that goes into it. They generally believe the key to funding lies in taxing the rich and making employers pay more. Consumerism and incentives are rarely considered.
Insurers. More than 70 years ago the prominent health care reform idea was boosting health coverage by making it tax exempt through work. It took hold despite a flawed design. Making medical care purchased through a third-party tax exempt, but care purchased directly as a consumer taxable created perverse incentives for consumers to overuse inefficient third-party payers instead of comparing prices. Our current system, where 90% of medical bills are paid by someone other than the patient, resulted in bureaucracy, bloated overhead, no transparency, and a lack of competition. Insurance works best for unforeseen events that are rare, not routine maintenance of the underwritten item.
Drugmakers. Pharmaceutical companies profit from the status quo. They could never charge the prices they do if selling directly to patients. Drugs costing $1 million or more exist because Congress mandates coverage for them. Drugmakers advertise directly to patients, but these drugs are usually extremely expensive. Drug companies assume insurance will pay the bill. It they wanted to sell directly to consumers more companies would petition the FDA to switch their drugs to over the counter.
Patients. Patients should be in charge of the health care system, by exercising consumer sovereignty. Oddly enough, it seems many patients do not want to be in charge even though they would never surrender that power in other areas of the economy. Many consumer’s idea of ideal health care is great insurance coverage, not greater control. They have been conditioned into believing they cannot, should not have to shop for medical care. The result is that providers do not compete for patient’s patronage, which makes it harder to be a prudent consumer of medical care. Indeed, hospitals make it especially difficult to compare prices.
Probably the biggest reason health reform does not pass is because too many entrenched stakeholders lobby for a continuation of the status quo.