The Democratic debates demonstrate how central health care will be in the 2020 election. Whether this debate leads to meaningful relief for the millions of families struggling under the financial burden of medical care depends largely on how the issue is framed and on the clarity with which we see our policy goal. Here are five observations that may help.
Observation 1 flows from the immortal words of hockey legend Wayne Gretzky: “Skate to where the puck is going, not where it’s been.” As public funding becomes a larger percentage of the payer mix, and cost shifting into the commercial market becomes increasingly constrained, the “health policy puck” is going toward a global budget in which providers will be at financial risk and accountable for quality and outcomes.
Observation 2. A central reason we have failed to reform our health care system is the lack of broad agreement about our goal. As the Roman Senator Seneca famously said: “No wind is the right wind if you don’t know what port you are sailing for.” So, it is important to start there … to agree on our destination, our objective.
Observation 3. No one wants to need medical care or to be a “patient.” We want be healthy. When sick or injured we need timely access to effective, affordable care—but health care is a means to an end, not an end in itself. Furthermore, among the factors contributing most to lifetime health status, our medical system is a relatively minor contributor. Far more important are things like housing, nutrition, stable families, education, good jobs and other “social determinants of health.” Yet the cost of medical care directly undermines investments in the very things that contribute most to health.
Our policy objective, then, can be captured in one sentence: to improve the health of the population through a system that is financially sustainable, ensures that all Americans have timely access to effective, quality medical care; and makes, strategic long-term effective investments in the social determinants of health.
Five elements are required to achieve this policy goal: (1) universal coverage; (2) for an affordable defined benefit; with (3) the delivery system assuming risk and accountability for quality and outcomes; in (4) a global budget indexed to a sustainable rate of growth; and (5) with some of the savings reinvested upstream in the community to address the social determinants of health. A system that incorporates these elements can take many forms, but without all five we cannot achieve our goal.
Observation 4. The most significant obstacle to achieving this goal is the total cost of care and cost shifting. Health care is the only economic sector that produces goods and services none of its customers can afford. This system only works because the cost of medical care for individuals is heavily subsidized—increasingly with public resources—either directly through public programs like Medicare and Medicaid; or indirectly through the tax exclusion for employer sponsored health insurance; and the public subsidies for those purchasing insurance through the ACA exchanges.
As Thomas Pynchon wrote in his novel Gravity’s Rainbow: “If they can get you asking the wrong questions, they don’t have to worry about the answers.” For decades, we have been asking the wrong question by focusing on these subsidies—on who pays them and how much they pay—rather than on why health care costs so much in the first place.
We are politically paralyzed on this issue because neither Republicans nor Democrats assume any change in the health care delivery model: we either pay for it or we don’t, creating a false choice between cost and access. Neither Republican efforts to repeal the ACA or Democratic efforts to enact Medicare for All or a Public Option directly address the root problem, which is the total cost of care.
The fact is that the cost of care has exceeded the ability of the government and employers to pay for it—but instead of seeking to reduce this cost, payers use one of five strategies to shift it to individuals who cannot afford it; or to future generations. These strategies include: reducing eligibility, cutting benefits and/or raising copayments and deductibles—all of which shift cost to individuals; reducing provider reimbursement, which often results in efforts by providers to avoid caring for those who cannot pay; and pushing the cost of care into the national debt, thus shifting cost for future generations to pay.
Cost shifting is the way we avoid directly confronting both the reality of fiscal limits and the fact that health care in the United States has simply become unaffordable for individuals, employers and the government. Cost shifting does not reduce the total cost of medical care.
Observation 5. The only path to a solution is through a global budget indexed to a sustainable growth rate, while requiring providers to assume financial risk and accountability for quality and outcomes within that budget. Taking this step will fundamentally shift the debate from the subsidies to the delivery system.
If we can agree that this is where the health policy puck is going, we can get there first by working backwards to create a health system that meets the objectives of both Democrats and Republicans: expanding coverage and improving health and quality; while reducing the rate of medical inflation through fiscal discipline and responsibility.
