Thinking Through Access to Healthcare

My my parents are retired healthcare practitioners, who have long opposed a universal healthcare system. So I am familiar with the doctors’ side of the story on healthcare, which is reflected in the American Medical Association’s longstanding opposition to the idea of healthcare as a basic right. However, the policy of the AMA is beginning to change. In June of 2018, the medical student caucus of the AMA revolted against older physicians and forced the AMA to begin deliberating universal healthcare:

When the American Medical Association — one of the nation’s most powerful health care groups — met in Chicago this June, its medical student caucus seized an opportunity for change.
Though they had tried for years to advance a resolution calling on the organization to drop its decades-long opposition to single-payer health care, this was the first time it got a full hearing. The debate grew heated — older physicians warned their pay would decrease, calling younger advocates naïve to single-payer’s consequences. But this time, by the meeting’s end, the AMA’s older members had agreed to at least study the possibility of changing its stance.
“We believe health care is a human right, maybe more so than past generations,” said Dr. Brad Zehr, a 29-year-old pathology resident at Ohio State University, who was part of the debate. “There’s a generational shift happening, where we see universal health care as a requirement.”

In contrast to what young physicians and many Americans want, my parents’ position is closer to the current official position of the AMA:

The AMA has long advocated for health insurance coverage for all Americans, as well as pluralism, freedom of choice, freedom of practice and universal access for patients.

Which sounds like a wonderful set of ideals:
(1) freedom of choice: consistent with the ideal of liberty for all Americans.
(2) freedom of practice: doctors retain the right to decide the best medical care.
(3) universal access: no-one is turned away from emergency rooms or the care of physicians who choose to disregard ability-to-pay.
(4) health insurance for all Americans: if you can’t pay fee-for-service, then you have the right to have insurers cover your costs.

What is not mentioned explicitly in the AMA’s position, however, is:
(1) …their opposition to healthcare as a universal right. Opposition to a national healthcare program implies a preferred ideal: fee-for-service. Since the vast majority of Americans cannot afford fee-for-service, most people end up paying for health insurance. Those who cannot afford insurance (a) remain at risk of financial ruin, (b) under-utilize preventive care and health maintenance, (c) over-use emergency rooms at great public cost, and (d) die early from preventable conditions.
(2) …that doctors are extremely irritated by the fact that insurers—who are not qualified physicians—decide what gets covered, and what reimbursement-rates are.
(3) …that doctors might be charitable enough to treat any patient regardless of their ability to pay, but that does not mean that the poor can actually access care. Hospitals, pharmacies, and laboratories do not share this charitable policy of physicians, and those costs are often much larger than the actual doctor’s fees.

The trouble with normative idealism

Unstated support for fee-for-service among doctors is a normative position that distorts actual policy. It is normative because it is a strong belief in what should be; but since only a tiny fraction of Americans can afford medical costs out-of-pocket, the actual policy is that most Americans pay via private insurance. Doctors suffer an unintended consequence of their own normative ideal: a lot of medical decisions are made by for-profit insurers. Patients are also deeply aggrieved by denial-of-coverage, shocking unexpected co-pays, and unilateral cancellation of their policies. However, patients are not the ones who direct the AMA to block the recognition of healthcare as a fundamental right.

Sticking to a normative position has also blocked another possibility: doctors could have been the ones who shaped and governed health-insurance policy. The ideal of ‘fee for service’ and the deference to ‘freedom of choice’ has meant that doctors stayed out of governing insurance policies. Such involvement would have been interventionist and socialist—precisely what the doctors have opposed, as they have shown for decades through their AMA lobbying positions.

Furthermore, since doctors have recused themselves from governing the system of health insurance, the insurers, pharmaceuticals, hospitals, and labs share a perverse incentive to raise fees well beyond reasonable costs. The structure of private medical care is non-competitive. In Adam Smith’s words, is a market-failure. In fact, there may be no feasible way to set up a healthy, competitive marketplace for healthcare. Some services cannot be delivered effectively through the market mechanism, and healthcare might be one such service.

Re-examining healthcare through a planning lens

As a city planner, I think more about the long term well-being of whole populations, and the public fights necessary to promote that well-being. Through this lens, the question of healthcare looks very different from ‘healthcare as a right versus healthcare for those who can pay.’ Instead, we look at collective benefit of outcomes. Sometimes societies create markets where firms can compete and deliver excellent goods, services, and innovations at low costs. Sometimes societies need an asset which cannot be delivered by any effective profit model, such as roads and comprehensive education. Initially we tried both private and hybrid public/private agencies to build infrastructure and education. Some private and semi-private agencies still exist; but by the early 20th century Americans decided to fund most of these goods through taxation.

Public K-12 education might be the closest analogy to healthcare. We collectively decided that we needed all Americans to be well-educated both for an informed democracy and a productive, innovative economy. In fact we decided that we cannot afford to have Americans who are not educated. Therefore, primary and secondary education in America are not only universally funded; they are also compulsory.

The planning lens makes clear that we also cannot afford to have some Americans remain chronically uncared for, nor allow Americans to avoid medical care. One example of avoidance is the anti-vaxxers; their behavior makes a strong case for compulsory vaccination, just as we have compulsory education. Another, less-known example is the outbreak of Hepatitis-A among the homeless population in San Diego in 2018. At minimum—that being enlightened self-interest—we need to keep whole populations healthy, because diseases like Hep-A and the measles are highly contagious.

There are also several economic reasons to implement universal healthcare. First is to maintain the health of the working population. Fewer sick-days and fewer premature, preventable deaths is actually more profitable for employers. Second: if individuals do not have to worry about losing their healthcare when a business fails, they will be more willing to take business risks. This is precisely the behavior we need to maintain an innovative economy.

Furthermore, a government healthcare system can push back against profiteering by labs, pharma, hospitals, and doctors in a way that insurance companies clearly do not do. I think we all have seen the astounding costs that we don’t have to pay (whew!) when we do have insurance, and the insurer pays most of the various fees. Americans pay more per capita for medical care than any other wealthy country—all of which have universal healthcare systems. There are flaws in any complex system; certainly public systems have gone awry many times, as have private corporations. The question here is about basic structure: the for-profit healthcare system has perverse incentives which seem incorrigible. And since any complex system can go awry, it helps when that system is publicly accountable, as a fundamental mechanism for correcting errors. Trust the private sector? Three words: Wall Street banks. Or two more: petroleum industry. Or just one word: tobacco.

In today’s private, for-profit system, part of what we pay for is the excessive labor of paperwork generated by private insurers. Supposedly only governments create paperwork and red tape; and yet private health insurance paperwork exceeds any other paperwork I have had to deal with. Yes, public agencies can also get bureaucratic. But if healthcare is accepted as a right, then the whole process of determining eligibility for treatment, restricted enrollment periods, and scrambling to deal with denial of service—all of that goes away. Struggles over healthcare shift entirely into the public realm, such as fighting the malicious efforts of leaders in Georgia, Alabama, and Ohio to harm women. The public sphere is the proper realm in which to oppose harmful policies.

I call on physicians to reverse course from your libertarian absenteeism and actually engage in the management, design, and refining of a universal system. This is where your Hippocratic oath and your obligations as citizens overlap. Government administrators are no better qualified than for-profit insurance administrators for determining the structure of appropriate care. Don’t recuse yourselves this time; engage in governing health policy.

Private insurance is useful for spreading risks related to investments in property. It has a valuable role in the economy, when used as it was originally intended. Managing the health of an entire society, as we have seen in America over the past 70 years, should not be done through the profit model.Economies are social creations, and the health of the society comes first. Human health is foundational; it is a precondition for a healthy economy. In this respect, a comprehensive public healthcare system is essential infrastructure.

One of the great distortions in modern political debate is the assumption that capitalism and socialism are mutually exclusive. In practice, political economies have always had a mix. In the U.S., public streets, public schools, police, the courts, firefighters, and the military are all tax-funded, socialist organizations that have actually supported and promoted capitalism in other sectors of the political economy. The normative, idealist either/or presumption is a hazardous distraction. The relevant question is: what combination of capitalism and socialism works best?

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