I woke up before sunrise a few Sundays ago to catch a flight to Seattle. On my way out the door, I wiped away beads of sweat from my forehead without wondering why I’d be sweating on a frigid early February morning. After spending most of the following week in a hospital, I’ll share my hard-won lesson: if you’re running a temperature and feel a dull pain in your abdomen, don’t try to treat it for three days with Tylenol and sleep. Unless you want to experience a burst appendix first hand.
But for all my stupidity, my end-to-end medical experience was flawless. There was hardly a wait in the ER, the surgeon delivered competence, and I enjoyed a private room during recovery. In the throes of a breaking 104 degree fever one night, I remember thinking what might’ve happened if the dull aches had begun a few months earlier while I was on the back of a camel 50 miles from the Pakistan-India border (doing some contract work for the NSA, can’t really talk about it).
Instead I found myself in a New Jersey hospital bed, with nothing much to do but think while waiting for the infection-induced fevers to subside. And given my surroundings, I thought quite a lot about how silly politicians’ rants against “socialized medicine” seemed from inside a hospital. I doubt that many of us would leave the Hispanic mom in the room next door to die on the hospital floor, even if she was poor, uninsured and/or an illegal alien. Most of our moral compasses tell us that healthcare is a right, not a privilege. So the question isn’t whether to provide socialized medicine—we’re doing that today. It’s about how to provide the best possible socialized medicine at a cost that society finds acceptable.
Most of my frustrations, not surprisingly, centered around my insurer:
• The naysayers might warn about the evils of government bureaucracy. But after my recent dealings with my insurance carrier, I can't imagine that the feds couldn’t possibly do a worse job. The claims are already pouring in, and the insurer has improperly calculated reimbursements on 3 out of 10 of them, and still hasn’t processed a fax* I sent to them more than two weeks ago. When I was left wistfully pining for the customer service I received at the New Jersey Motor Vehicle Commission, I knew something was horribly amiss.
• The same naysayers warn about violating the sanctity of the relationship between a patient and his doctor. No such relationship exists. The doctor I choose and the procedures he chooses to perform are choreographed by my insurance company, which has a profit motive to minimize the reimbursement made for the care is delivered to the patient. Case in point: a “Physician Assistant” submitted a bill for $3,000 (a sum higher than the surgeon billed) for treating me. You can’t blame the hospital or the caregivers for starting the negotiations with the insurers with a high first bid—they are also running a for-profit business. But caught in the middle is the patient, who found himself arguing with the insurer’s refusal to pay the Physician Assistant. She said her services were worth $3,000, the insurer said they were worth $700 (but being “out-of-network,” they wouldn’t cover them). My argument was simple—flat on my back and under general anesthesia, I wasn’t able to check that everyone treating me was “in-network.” Luckily, the insurer said they’d take another look at the bill. The patient and doctor both reduced to arguing over a bill: that’s how the doctor-patient relationship works in real life.
Reform to reduce healthcare costs or ensure universal coverage need not eliminate the role of the private insurer. Japan, Germany and Switzerland utilize private insurers and still manage to achieve universal coverage while spending far less as a percentage of GDP on healthcare (8%, 11%, and 12% respectively, compared to 15% for the United States). The government need not set prices: while the Japan Ministry of Health sets the price for every procedure, Germans pick between 200 non-profit insurance pools that negotiate as a group with doctors to set prices. And “non-profit” need not drive inefficiencies: the German insurers’ management are compensated on whether they are attracting new patients, incentivizing them to compete for patients on the price they charge for coverage.
Healthcare reform in the United States won’t begin and end with changing the way we’re insured. But it certainly can’t be done any worse than it’s being done today. But common wisdom says that Americans have nothing to learn from the “socialists” in East Asia and Western Europe. But if citizens in these countries are living longer and spending less, surely we can take a second look at how they do it. Every 1% of U.S. GDP represents $150 billion: lower our healthcare costs to German levels, and we’ll have an additional $600 billion to spend or save as we like. Replicate Japan’s ability to reduce costs, and we’re talking about $1 trillion deposited into our bank accounts annually.
And there isn’t anything socialist about that.
*An archaic communications device popular in the pre-email, pre-Internet 1980s to transmit images of documents over phone lines. Still apparently in use in some technologically-backward industries.
