Our 20th birthday continues with a few classics coming out. Back in 2005 I was really cutting a lyrical rug, and would never miss a chance to get that Cambridge training in Marxism into use. This essay about whether health care should be a public or private good has always been one of my favorites, even if I’m not sure Starbucks is still making Frappuccinos. And 18 years later the basic point of this essay remains true, even if many of you will not have a clue who Vioxx or Haliburton were or why they mattered back then!

Those of you who think I’m an unreconstructed commie will correctly suspect that I’ve always discussed Marxism in my health care talks. You’d be amazed at how many audiences of hospital administrators in the mid-west know nothing about the integral essentials of Marx’s theory of history. And I really enjoy bring the light to them, especially when I manage to reference Mongolia 1919, managed care and Communism in the same bullet point.

While I’ve always been very proud of that one (err.. maybe you have to be there, but you could always hire me to come tell it!), even if I am jesting, there’s a really loose use of the concept of Marxism in this 2005 piece (reprinted in 2009) called A Prescription for Marxism in Foreign Policy from (apparently) libertarian-leaning Harvard professor Kenneth Rogoff. He opens with this little nugget:

“Karl Marx may have suffered a second death at the end of the last century, but look for a spirited comeback in this one. The next great battle between socialism and capitalism will be waged over human health and life expectancy. As rich countries grow richer, and as healthcare technology continues to improve, people will spend ever growing shares of their income on living longer and healthier lives.”

Actually he’s right that there will be a backlash against the (allegedly) market-based capitalism — which has actually been closer to all-out mercantilist booty capitalism — that we’re seen over the last couple of decades. History tends to be reactive and societies go through long periods of reaction to what’s been seen before. In fact the 1980-20?? (10-15?) period of “conservatism” is a reaction to the 1930-1980 period of social corporatism seen in most of the western world. And any period in which the inequality of wealth and income in one society continues to grow at the current rate will eventually invite a reaction–you can ask Louis XVI of France about that.

But when Rogoff is talking about Marxism in health care what he really means is that, because health care by definition will consume more and more of our societal resources, the arguments about the creation and distribution of health care products and services will look more like the arguments seen in the debates about how the government used to allocate resources for “guns versus butter” in the 1950s. These days we are supposed to believe that government blindly accepts letting “the market” rule, even if for vast sways of the economy the government clearly rules the market, which in turn means that those corporations with political influence set the rules and the budgets (quick now, it begins with an H…).

That’s how defense has always been and how pharmaceuticals will increasingly be. Rogoff recognizes the centrality of this argument in his description of what’s wrong with American health care:

“Part of the rise in U.S. healthcare costs stems from the breakdown of the checks and balances that more centralized systems provide. (For example, Americans are several times more likely to receive heart bypass surgery than Canadians, where the procedure is reserved for extreme cases. Yet several studies suggest that patients are no worse off in Canada than in the United States). And even the most fanatical free marketers recognize that healthcare is different from other markets, and that the standard supply-and-demand principles don’t necessarily apply. Consumers have poor information, and there is an obvious case for greater government involvement than in other markets.”

But he then goes on to say that the much greater spending seen here as compared to Canada and the UK creates both a terrible service level (and by implication quality level) and diminishes innovation in health care services. And if all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology.

“Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt. Even as the status quo persists, I wonder how content Europeans and Canadians will remain as their healthcare needs become more expensive and diverse. There are already signs of growing dissatisfaction with the quality of all but the most basic services. In Canada, the horrific delays for elective surgery remind one of waiting for a car in the old Soviet bloc. And despite British Chancellor Gordon Brown’s determined efforts to rebuild the country’s scandalously dilapidated public hospital system, anyone who can afford to go elsewhere usually does.”

His conclusion is that because for the sake of social equity government intervention in the system is warranted, the health sector will be a “battleground” between capitalism and socialism through this century. If you get past his mis-use or mis-understanding of the terms “capitalism” and “socialism”, the point he’s making is quite interesting. It does though suffer from a typically Amero-centric bias. Rogoff assumes that the extra spending on health care in America leads to better services and by implication better quality. But that’s an old chestnut. By that measure the higher spending in Canada (11% of GDP) should lead to a better system than in France (9%) or Germany (10%). But in those two nations access to drugs and technology is much greater than in the UK or Canada, and things like waiting times are comparable to the US — in fact in Australia and New Zealand they’re better than they are here. A few years back The Economist said that the Swiss system (again several percentage points cheaper than here) was better than the American on an absolute level. Furthermore recent studies of international care quality suggest that particularly for primary care, the US is results-wise (at best) in the middle of the pack. All of those nations have a heavier proportion of government funding of health care spending than in the US, and all of them spend a whole lot less money. Note that the US government spends more per head (and damn nearly as much as share of GDP) on health care as the whole of the UK.

So that all tells us one thing. We’re paying a lot more for health care here, but it isn’t necessarily getting us better outcomes, innovation or even services. We might though have nicer waiting rooms and we certainly lead the league in surgeons with Porsche 911s. Therefore it’s a stretch to imply that higher private spending leads directly to innovation and better services, particularly if the system is not set up with either government-based or real market-based coercive capabilities to promote efficiency and value for money. And lets be real, the US system is set up to provide revenues and profits for providers and suppliers. It’s a bit like saying Tammany Hall provided the best government services because it cost the most, when huge chunks of the money were getting diverted off into corruption.

Furthermore, it’s also a stretch for Rogoff to suggest that by definition government spending creates lower innovation compared to private spending. After all government spending led to the creation of the Internet and biotechnology. Private spending created reality TV. And despite the fact that there is no private spending on defense, well the boys and girls in the US military are no longer riding around on horses pulling gun carts. Somehow innovation and progress seems to find a way to happen even in government sponsored sectors. And if we want to drag real communists into the equation, the reason that we’re not all speaking German is that Hitler lost WWII to a nation that ten years before he invaded was inhabited by peasants. Yup, unpleasant as it might have been, Stalin’s Great Leap Forward in the 1930s was by far the fastest period of economic growth seen in any nation, probably any time…..just in time to save our arses in 1942-4.

I’m not exactly advocating purges, slave labor camps, collectivization and enforced Ten Year Plans as a panacea for the future of health care (although David Brailer keeps going on about his ten year plan). But the overall point is that greater government involvement in spending and regulation of health care doesn’t necessarily mean the disaster in services and innovation that Rogoff suggests. And there are excellent reasons from the “socialist” angle for greater government involvement in health care than we have now.

The first is the fallacy that there can be such a thing as a private health insurance market with free use of underwriting. Social insurance (or universal insurance), in which everyone pays in and everyone receives at least a basic level of benefits is the only way to get around the problem of the uninsured and the uninsurable. It of course means a relative redistribution of income from the healthy and wealthy to the poor and sick, but in fact that can be budget neutral to the healthy and wealthy if the overall price tag is kept down. That though would require a redistribution of income from the health care sector to the rest of society. Such universal insurance is good enough for everyone over-65 in this country and good enough for everyone else in the developed world, but the concept just can’t seem to get the attention of the American public enough to force it past the “special interests” in Congress. And everyone (apart from actuaries and underwriters and some participants in the system) suffers as a result.

The second is the role of government or someone like it as a clearinghouse of information or as a standards-setting body in a market where information access is very lopsided. Health care is very, very complex and someone has to provide decent information (preferably with some regulatory teeth) so that consumers/patients are not at the mercy of providers and suppliers who know far more than they do and in whom most patients still are forced to place their trust blindly. This is the role of the NICE in the UK, and in theory ought to be the role of the FDA here. Adding an economic element to that role by giving information on value for money would probably be derided as socialism by Rogoff’s “capitalists”, but is a rational role for government. And one they are likely to add as spending increases — of course the Brits and Aussies already have done so to some extent, and are linking cost-effective performance to payment.

So overall I don’t think there’s any basis for suggesting that if we have more “socialism” in health care — and by that I’m using Rogoff’s meaning of government spending, regulation and income redistribution — we will necessarily have worse services or lower innovation. Although we may have lower drug prices and a less profitable health care industry. Anyone awake during the last three months of Vioxx breast-beating is becoming painfully aware that expensive “innovation” can be costly for the wrong reasons and actually not be innovative–COX-2s didn’t really do what they were supposed to do (reduce GI problems) but they did cost a lot more than NSAIDs in both money and increased heart disease. But it’s that kind of “innovation” that Rogoff correctly says that Americans are paying more for than anyone else.

However, Rogoff is making a very important point when he discusses the likely trade-offs between basic health care and lifestyle enhancements that will dominate the politics of health care for the next century. We’ve already seen this begin with the medicalization of social afflictions (ugly teeth, small breasts), the medicalization of several “diseases” that aren’t really diseases (impotence, shyness), and the medicalization of old age (osteoporosis, prostate cancer). Now the nano-gurus are discussing the medicalization of death — which will presumably lead to a cure, or at least a delay, for it at a hell of a price.

As more and more health care services become luxury goods, there is a justifiable discussion about what’s a basic necessity and what should someone have to pay for out of their discretionary income. At the moment no-one’s seriously suggesting that your boob job or teeth whitening should be other than an individual expense, or that your cancer treatment is a luxury good to be chosen if your mood and wallet fits. But clearly the middle of that continuum will continue to fill up.

This leads me to what has been called the mocha-Frappuchino problem. I read an article once (that I can’t find anymore) that discussed the increase in productivity of the US workforce since the 1930s. It’s doubled. Which means that we could work half the time and have a 1930s standard of living, or we could work as hard as we do now and have more stuff. The author noted that in the 1930s you couldn’t get a Mocha Frappuchino; so you’ve been spending Wednesday 1pm through Friday afternoon working for your Frappuchino (or similarly frothy goods and services).

We’ve always thought of health care as an “essential”. And eventually even in the US I believe we’ll figure out a way to solve the problem of creating an equitable and sustainable social insurance model for that “essential”. But increasingly, the health care Frappuccino will be paid for and delivered privately, in a separate system. Of course it’s the blurring of those two systems that concerns bleeding heart liberals like me, as that can well lead not as it has done here for the Medicare population, as society giving Frappuccinos to everyone, but instead society deciding to take away essential services from those who can’t afford Frappuccinos.

And that will be the real socialism versus capitalism battle of the next decades.

Matthew Holt is the founder of The Health Care Blog

BY KIM BELLARD

OK, how many of you had on your women-in-power bingo cards that, in 2022, Sheryl Sandberg would be out at Facebook but Queen Elizabeth II would still be Queen?  It’s the Queen’s Platinum Jubilee, marking seventy years on the throne.  She’s getting a lot of love for that tenure, but it makes me think, geez, some people just don’t know when to step away.

Perhaps what sparked my cynicism about the Queen was an op-ed by Yuval Levin, Why Are We Still Governed by Baby Boomers and the Remarkably Old?  Dr. Levin is, of course, referring to the U.S., and he’s spot-on about our governance problem.  But I think the problem goes further: we have too many old people running our companies and major institutions as well.  

Whether it is, say, healthcare, education, or the military, we’re so busy protecting the past that we’re not really getting ready for the future.

———–

To Dr. Levine’s point, the President, Speaker Pelosi, Senate Minority Leader Mitch McConnell, and our most recent former President are all members of the Silent Generation, as are the House Majority Leader and Majority Whip.  Senate Majority leader Chuck Schumer at least is a Baby Boomer.  According to the Congressional Research Service, the average age of House Members is 58.4 years, of Senators is 64.3; both numbers are trending up. 

As Dr. Levin points out, “Our politics has been largely in the hands of people born in the 1940s or early ’50s for a generation.”  

But the private sector, you might object knowingly!  OK, about that: Statista tracked average age at hire of CEOs from 2005 to 2018, and the average age of CEOs rose from 45.9 to 54.1 during that period (making them solidly Baby Boomers).   Fortune confirms that the average age of Fortune 500 CEOs is 57; again, Baby Boomer territory.  

Sure, there’s a Jon Ossoff (35) in the Senate and a Mark Zuckerberg (38) running a Fortune 500 company, but let’s not pretend that power is not still concentrated in the hands of Baby Boomers and the remarkably old, as Dr. Levin charges.  

The Senate and corporate boardrooms are alike in another unfortunate way: they’re still the provenance of white men.  Twenty-four Senators are women (compared to about 29% of House members), but only 3 African-Americans are in the Senate.  Less than 10% of Fortune 500 companies had a female CEO, but there are only 6 African-American Fortune 500 company CEOs.  Not 6%, mind you – just actually only 6 people.

And, of course, members of Congress are much richer than most Americans; according to OpenSecrets, “The median net worth of members of Congress who filed disclosures last year is just over $1 million.”  Many count their wealth in the tens, if not hundreds, of millions.  In the private sector, of course, CEOs are paid 351 times the average worker, and CEO pay has increased 1322% since 1978, both according to the Economic Policy Institute. 

If you’re not a Baby Boomer or some other “remarkably old” person, and certainly if you’re not a white male, and you think that either our political leaders or our corporate leaders understand, much less are acting in, your interests, well, think again.

Dr. Levin argues: “It’s often said that Americans now lack a unifying narrative. But maybe we actually have such a narrative, only it’s organized around the life arc of the older baby boomers, and it just isn’t serving us well anymore.”

Baby Boomers and our elders are focused on preserving their wealth (including Social Security, pensions, 401k/IRA) and health insurance (especially Medicare).  Social justice, climate change, voting rights, gun control – these are the things many of us say we’re for, but they’re not necessarily the things we’re voting for, not if that’s going to risk what we have.  

When leaders, be they political or corporate, have been in power for 10 or 20 years (much less 70!), if they don’t have clear, already capable successors at the ready, that’s a failure of leadership.  That’s a culture of “me;” that’s a culture of “now.”  Those leaders are not leading towards the future; they’re protecting the past.  Dr. Levin nails it again: “And our politics is implicitly directed toward recapturing some part of the magic of the mid-20th-century America of boomer youth.”

———-

To be leading towards the future, we have to be willing to not only build upon the past, but sometimes to tear down what the past has built.  The Democrats revere the New Deal and the Great Society programs, but we need to recognize that both were deeply flawed and brought, at best, uneven results.  

No one designing a social retirement program in 2022 would structure it like Social Security; no one designing a health insurance program for seniors now would come up with anything that looked like Medicare; no one would who actually cared about disadvantaged people would ever purposely design something like Medicaid.  

Yet here we are.  We’re stuck with these cultural institutions; talk about MedicareForAll or Baby Bonds or even capping prescription drug prices might as well be talking about things in the Metaverse.  

I’m not ready for a Senate with Jon Ossoff, Josh Hawley, Tom Cotton, and Krysten Sinema (the four youngest Senators), not a House ruled by AOC and Madison Cawthorn (the two youngest Representatives).  He may be really remarkably old, but I’d still trust Warren Buffet over Mark Zuckerberg.  We should want younger and somewhat more reckless, but there are limits.

Dr. Levine proposes more “middle-aged leadership,” but he admits:

Yet they have not broken through as defining cultural figures and political forces. They have not made this moment their own, or found a way to loosen the grip of the postwar generation on the nation’s political imagination.  

———–

What people love about the British monarchy is that it stands for the history and traditions of England.  The cost of that, though, is that it is also bound by them.  The test of a true leader, be they a monarch, a President, a Senator, or a CEO, is that they know when it is time for new traditions and for forging a new path in history – and when it is time to step aside for new leaders to achieve those.  

But, as Dr. Levine laments, “We plainly lack grounded, levelheaded, future-oriented leaders.”  Where are they?  And who needs to step aside for them?

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.  

By MIKE MAGEE

In my course this fall at the President’s College at the University of Hartford, we began by exploring the word “right” at the intersection of health care services and the U.S. Constitution.  But where we have ended up is at the crossroads of American history, considering conflicting federal and state law, and exploring Social Epidemiology, a branch of epidemiology that concentrates on the impact of the various social determinants of health on American citizens.

What makes the course timely and relevant is that we are uncovering a linkage between health and the construction or destruction of a functional democracy at a moment in America’s history when our democracy is under direct attack.

This was familiar territory for Eleanor Roosevelt. She spent the greater part of World War II creating what she labeled in 1948 “Humanity’s Magna Carta” – aka the “Universal Declaration of Human Rights (UDHR.)”

Embedded in the declaration was a much broader definition of health. It reads “a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.” The Marshall Plan, for reconstruction of war torn Germany and Japan, embodied these principles, and successfully established stable democracies by funding national health plans in these nations as their first priority.

Although our nation signed the UDHR, it carried no legal obligations or consequences. In fact, the U.S. medical establishment’s bias was to embrace a far narrower definition of health – one that targeted disease as enemy #1. They believed that in defeating disease, health would be left in its wake.

In contrast, neighboring Canada took the UDHR to heart, and as a starting point asked themselves, “How do we make Canada and all Canadians healthy?” Where our nation embraced profiteering and entrepreneurship, leaving no room for solidarity, Canada embraced the tools of social justice and population health.

By 1966, the U.S. has passed Medicare providing health insurance to all citizens over 65 years of age. Canada, that same year passed their program (also called “Medicare”) which covered all Canadian citizens.

The United Nations, in the same year published their “International Covenant on Economic, Social and Cultural Rights” (ICESCR). Article 12 was explicit. It reads:

1. The States Parties to the present Covenant recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

2. The steps to be taken by the States Parties to the present Covenant to achieve the full realization of this right shall include those necessary for:

“the reduction of the stillbirth-rate and of infant mortality and for the healthy development of the child”;

“the improvement of all aspects of environmental and industrial hygiene”;

 “the prevention, treatment and control of epidemic, endemic, occupational and other diseases”;

“the creation of conditions which would assure to all medical service and medical attention in the event of sickness.”

The U.N.’s idealism was tempered by realism. They highlighted what is called a “reasonableness standard” using the tag phrase “highest attainable standard” as a goal for each nation to pursue. They recognized as well that a nation’s cultural, economic and social conditions would evolve, affecting the speed with which certain goals designed to meet basic human needs, such as food, shelter, education, health care, and gainful employment, could be met.

In 2005, I gave a speech to a group of international leaders at the Library of Congress titled “Why health is political.”  It focused on the social context of health, power politics, and the domain of law. At the time, more than 70 nations had ratified ICESCR, Article 12. In doing so, they pledged to avoid retrogressive measures, reject discriminatory policies, hold unhealthy polluters at bay, and establish proactive planning to address health disasters.

At the time, the U.S. was (and remains today) missing in action. Then and now, we remain the only industrialized country in the world without a plan for universal health coverage.

FDR had slated this health security to be part of his “Second Bill of Rights”, but died in 1944. The AMA and Pharmaceutical Manufacturer Association (PMA) then short-circuited the effort by successfully labeling Truman as a representative of the “Moscow party line.”

The challenges today remain much the same. The American culture lacks a communal identity, favors individualism and tribalism, has a weak labor movement, distrusts its own government, and often treats its own Constitution as an exercise in semantics.

ICESCR, Article 12, celebrates human rights as universal, indivisible, interdependent, and interrelated. Where our tradition is individualistic and transactional, their philosophy is holistic, and commits to addressing human needs in order to break the bondage of fear and want that can dominate in uncaring or ineffectual authoritarian societies.

The UDHR was a universal declaration of the General Assembly of the United Nations that created no technical binding legal obligations on its signatories.

In contrast, the ICESCR is a covenant– “a treaty which, under the rules of international law, creates legal obligations on all states that ratify it.” It was completed on December 16, 1966. President Carter did finally sign the covenant on October 5, 1977, but elected not to pass it on to the Senate which must give its “advice and consent” before the U.S. can ratify any treaty.

As of 2021, over 170 nations have ratified the covenant. The United States is not one of them.

 Mike Magee, MD is a Medical Historian and Health Economist, and author of “CodeBlue: Inside the Medical Industrial Complex.“

By DEBORAH AFEZOLLI, CARL-PHILIPPE ROUSSEAU, HELEN FERNANDEZ, ELIZABETH LINDENBERGER

“Why did you choose this field?” Most physicians are asked this question at some point in their early careers. We are geriatrics and palliative medicine physicians, so when that question is posed to us, it is invariably followed by another: “Isn’t your job depressing?”

No, our job is not depressing. We are trained in the care of older adults and those with serious illness, and we find this work very rewarding.  What truly depresses us is how many vulnerable patients died during the pandemic, and how the scourge of COVID-19 revealed the cracks in our health system. Never before in modern times have so many people been affected by serious illness at the same time, nor have so many suffered from the challenges of our dysfunctional health system. Our nation has now witnessed the medical system’s failure to take comprehensive care of its sickest patients.  This is something those in our own field observed long before the pandemic and have been striving to improve.

All of us practicing geriatrics and palliative care have had a loved one who has been challenged by aging, by serious illness, or indeed by the very healthcare system that is supposed to help them. As medical students and residents, we personally confronted these systemic deficiencies and wondered about alternatives for those patients with the most complex needs. We chose fellowships in geriatrics and palliative medicine because we wanted to try and make a difference in the healthcare that is offered to our most vulnerable patients.

During the New York City surge in the spring of 2020, we were front line workers at a major academic medical center. While the global pandemic took us all by surprise, our clinical training and passion for treating vulnerable populations left us feeling capable and ready to serve. Due to the urgent needs of overwhelming numbers of extremely sick patients, our Department was charged with rapidly expanding access to geriatrics and palliative care across our seven hospitals. We were embedded in Emergency Departments (EDs), hospitalist services, and critical care units.  We roamed the hospitals with electronic tablets and held the hands of dying patients, while urgently contacting families to clarify goals of care.  For those who wanted to receive care in the community, we scrambled to set up telehealth visits and coordinate the necessary support. Way too often we could not meet their needs with adequate services, forcing them to visit overwhelmed Emergency Rooms.

While we helped individual patients and eased some of the strain on our hospitals, our system was overwhelmed and mortality numbers continued to steadily rise. Within our hospitals, staff were redeployed to care for the most critically ill in the emergency departments and intensive care units.  In this frantic time, we were fortunate that our hospitals had sufficient medical resources to care for the sickest patients and for the staff.  However, the sub-acute nursing facilities (SNF) and long-term care facilities strained to protect their residents and their employees. Shortages of PPE, staff, space, testing supplies, and funding all contributed to the high mortality numbers we saw in many NYC facilities and across the nation. There were also limited resources allocated to delivering outpatient care in our patients living in the community.  The rapid shift to telehealth was not feasible for many of our older patients, and even when it was possible, the delivery of diagnostic and therapeutic care was limited and suboptimal.

Data now shows that older adults and those with underlying chronic illnesses were disproportionately affected by the COVID-19 pandemic, experiencing higher hospitalization rates as well as higher death rates. Although adults 65 and older account for only 16% of the US population, they represent 80% of COVID-19 deaths. Residents of nursing homes, the frail homebound, and older people of color were the hit the hardest. Thirty-five percent of the deaths in the US from March-May 2020 occurred among nursing home residents and employees. Nationally, over 600,000 nursing home residents were infected with COVID-19 and over 100,000 died from the disease. These data are underestimates and the death toll is likely higher. We cannot explain why older Black Americans were 1.2 times more likely to die than white Americans nor why the odds of dying from COVID were nearly two times higher for persons living in South Dakota as compared to Wyoming or Nebraska. Often, the paid caregivers for these vulnerable patients were themselves vulnerable underpaid women of color who were at higher risk of contracting COVID.

Sadly, many of these deaths could have been prevented. The health system cracks that were already apparent to us before the pandemic now look like deep fissures.  The COVID-19 pandemic exposed long standing weaknesses in our health system that are rooted in its very foundation and are a direct cause of the health inequities we personally witnessed. This is the moment to restructure our system and to challenge federal and private insurance providers to better align funding to address the essential needs of the population.

Medical education, healthcare infrastructure, and payment models were created at a time when life expectancy was limited and living with chronic illness, multimorbidity, functional impairment, and dementia was rare.  Our current hospital-centric care was developed to cater to the then-population in need – i.e. middle aged adults and children with acute illness. Although health screening practices of the 1980’s and biomedical research have changed the length and experience of aging, our healthcare system remains stuck in the past century.  This is a call to action for major system-level change, both within our health system and within our society at large.

• Hospitals can no longer be the anchor of the medical infrastructure and that our patients are most in need of high-quality care in the community, whether in their home or in long-term care facilities. 
  • Innovative home-based primary care, hospital care, and palliative care programs are already doing some of this work and demonstrating an increase in the quality of care.
  • The “Green house project” model of nursing home care has shown us a vision of effective and compassionate long term care that we could feel comfortable with for our own family members.
• Transforming healthcare requires rethinking our medical training programs. 
  • Medical students spend more time on a required obstetrics’ rotation delivering babies than on an “elective” geriatrics or palliative care rotation, which is not reflective of the realities of modern medical practice.
  • Most medical residents have never set foot in a sub-acute rehab or nursing home when many of their patients come from and go to these facilities.
  • Most physicians, regardless of specialty, will be caring for older adults and those with serious illness, and exposure to basic principles of geriatrics and palliative care and out-of-hospital sites of care is crucial.
• We need to shift our focus from medical care to health care and recognize that psychosocial supports, practical care needs, and caregiver support are as important to longevity and health as medications and diagnostic tests.
  • Instead of spending health care dollars on expensive medications with limited efficacy such as the recently FDA approved aducanumab for Alzheimer’s dementia, we need to financially bolster caregiver support, home services, and alternative care delivery models that are proven to directly impact the health of our society’s most vulnerable. While community-based dementia care models have been rigorously studied and demonstrated high value, they are not supported in fee-for-service care models. 
  • We have to invest funds and support in programs whose values lie in improving quality of care rather billing potential. This is how our health system can better align with the needs of its patients.

We are proud to be specialists in geriatrics and palliative care. We see ourselves as experts in maintaining quality of life despite the inevitability of aging and illness. And this work is not depressing–it brings us boundless joy and personal fulfillment. With our skills in caring for complex populations, we are poised to lead the revolution in health care and the time is now, from medical education and program development to public health advocacy and national health policy. We see a bright future where our patients, our loved ones, and our future selves receive comprehensive health care, not just medical care. Why wouldn’t we choose geriatrics and palliative care?

Debora Afezolli, Carl-philippe Rousseau, Helen Fernandez, Elizabeth Lindenberger are all professors of geriatrics and palliative medicine at theIcahn School of Medicine at Mount Sinai.

They’d like to thank Suzanne L. Goldhirsch for reviewing this essay and providing invaluable feedback and suggestions.

By MIKE MAGEE

In this world of political theatrics, with Democratic legislators from Texas forced into exodus to preserve voters’ rights, and Tucker Carlson rantings about Rep. Eric Swalwell riding shirtless on a camel in Qatar streaming relentlessly, Americans can be excused if they missed a substantive and historic news event last week.

On Friday, July 9th, President Biden signed a far-reaching executive order intended to fuel social and economic reform, and in the process created a potential super-highway sized corridor for programs like universal healthcare. In the President’s view, the enemy of the common man in pursuit of a “fair deal” is not lack of competition but “favoritism.”

To understand the far-reaching implications of this subtle shift in emphasis, let’s review a bit of history. It is easy to forget that this nation was the byproduct of British induced tyranny and economic favoritism. In 1773, citizens of Boston decided they had had enough, and dumped a shipment of tea, owned by the British East India Company, into the Boston Harbor. This action was more an act of practical necessity than politics. The company was simply one of many “favorites” (organizations and individuals) that “got along by going along” with their British controllers.  In lacking a free hand to compete in a free market, the horizons for our budding patriots and their families were indefinitely curtailed.

Large power differentials not only threatened them as individuals but also the proper functioning of the new representative government that would emerge after the American Revolution. Let’s recall that only white male property owners over 21(excluding Catholics and Jews) had the right to vote at our nation’s inception.

Over the following two centuries, power imbalances have taken on a number of forms. For example, during the industrial revolution, corporate mega-powers earned the designation “trusts”, and the enmity of legislators like Senator John Sherman of Ohio, who as Chairman of the Senate Republican Conference, led the enactment of the Sherman Antitrust Act of 1890.

He defined a “trust” as a group of businesses that collude or merge to form a monopoly. To Sen. Sherman, J.D. Rockefeller, the head of Standard Oil, was no better than a monarch. “If we will not endure a king as political power, we should not endure a king over the production, transportation and sale of any of the necessities of life”, he said.   The law itself stated “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal.”

In the middle of the Great Depression, FDR also focused on financial favoritism as the source of the common man’s misery. Branding the powerful as “economic royalists”, he saw political corruption and worker exploitation as human foibles, and government regulation as an essential safeguard against our inborn tendencies toward greed and avarice.

Note the shift in emphasis. To FDR, the problem was not simply a structural lack of competition in our capitalist society, but also the absence of adequate regulation and oversight of humans who, in the pursuit of power and favoritism, levied harm and discrimination against each other.

By the time Ronald Reagan assumed the presidency, mass movement of people, data, and products had created a global marketplace. This new emphasis on “global competitiveness” provided moral cover for a twenty-year campaign of deregulation that spanned Republican and Democratic administrations. Now worldwide competition ruled the reign, ultimately descending to Trumpian reductionism where you were either a “winner” or a “loser.”

As corporate profits soared, wages and benefits for workers were slashed, and the gap between rich and poor soared. Over the past forty years, CEO pay increased by over 1000%, while the typical worker’s wage inched up by a meager 10%.  Our favored 1%, supported by an army of state and federal lobbyists, argued that the solution to a widening power differential was more unfettered capitalism. That was until the COVID 19 pandemic arrived on our shores.

Strangely enough, the pandemic became an equalizer, a truth-teller, and a social experiment on a grand scale. All Americans sheltered at home for 18 months, and to varying degrees reflected on their purpose and priorities.

As an equalizer, the virus was “democratic”, showing little preference. All were vulnerable. The poor and minorities were slightly more at risk. But so were the elderly, those with chronic disease, and those ignorant enough to politically posture and deliberately place themselves at risk.

As a truth teller, the pandemic exposed the lack of national health planning, a limited capacity to handle a national health emergency, vulnerable and exposed health care workers, and enormous geographic variability in the quality of our health services. Our inadequate health system lay naked and exposed.

Finally, as a social experiment, for the first time in recent memory, our government provided direct relief and resources to our citizens themselves rather than “trickling down” relief through the hands of powerful intermediaries. Citizens found themselves part of the “favored” class. Fears of inappropriate use proved ill founded. The relief sustained our economy. Every day citizens’ purchases were wise and restrained. Debt was paid down and savings expanded.

Biden’s executive order, including 72 initiatives that impact health care, technology, transportation, agriculture and the environment, seeks to expand economic equality, not so much by injecting competition that can be manipulated and compromised by those who wield the power in our society, but by interacting simply and directly with America’s 99%.

Take just one initiative – the direction to allow over-the-counter sale of hearing aids. Traditionally defined, this move injects competition. But combined with expansion of Medicare benefits, the move entrusts every day people with the power to care properly for family and loved ones.

Which brings me to Universal Health Care. As I document in my book, “Code Blue: Inside the Medical Industrial Complex” (Grove/2020), America threw all its’ eggs into a profiteering capitalist basket over 70 years ago, leaving behind huge swaths of our citizenry, progressively diminished as the Health Sector profiteers cornered rough 1/5 of our GDP.

With the aid of new information technologies, and coordinated lobbying in a largely deregulated society, the Medical Industrial Complex followed the Standard Oil playbook, creating virtual horizontal and vertical integrated networks that were both collusive and monopolistic. Pharmacy Benefit Management (PBM) programs were but one example, opaquely moving data, pills and money, as their lobbyists secured the right to share hidden kickbacks among themselves.

President Biden’s actions last week weaken the hold of “competition” as a cure all for this nation’s economic injustice and inequity. By stating that “Capitalism without competition isn’t capitalism. It’s exploitation.” our President is inching the debate forward.  Exploitation subtly suggests it is now our time to confront modern-day “economic royalists.”

What Biden needs to do now is double-down on the provision of direct benefits to our citizens themselves. As the pandemic has demonstrated, they can be trusted with this power to use our resources wisely without the help of powerful intermediaries. Extending a public health care option as a “favored” gesture to the 99%, would be a wise next step, and would send a message to “Health Care Royalists.”

Mike Magee, MD is a Medical Historian and Health Economist and author of “Code Blue: Inside the Medical Industrial Complex.“

By MIKE MAGEE

“In countries where there is great private wealth much may be effected by the voluntary contributions of patriotic individuals, but in a community situated like that of the United States, the public purse must supply the deficiency of private resource. In what can it be so useful as in prompting and improving the efforts of industry?”

Those were the words of Alexander Hamilton published on December 5, 1791 in his “Report on the Subject of Manufactures.” He was making the case for an activist federal government with the capacity to support a fledgling nation and its leaders long enough to allow economic independence from foreign competitors.

Today’s “foreign force” of course is not any one nation but rather a microbe, gearing up for a fourth attack on our shores with Delta and Lambda variants. This invader has already wreaked havoc with our economy, knocking off nearly 2% of our GDP, as the nation and the majority of its workers experienced a period of voluntary lockdown.

Our leaders followed Hamilton’s advice and threw the full economic weight of our federal government into a dramatic and direct response. Seeing the threat as akin to a national disaster, money was placed expansively and directly into the waiting hands of our citizens, debtors were temporarily forgiven, foreclosures and evictions were halted, and all but the most essential workers sheltered in place.

Millions of citizens were asked to work remotely or differently (including school children and their teachers) or to not work at all – made possible by the government temporarily serving as their paymaster and keeping them afloat.

As we awake from this economic coma, many of our citizens are reflecting on their previously out-of-balance lives, their hyper-competitiveness, their under-valued or dead-end jobs, and acknowledging their remarkable capacity to survive, and even thrive, in a very different social arrangement.

If our nation is experiencing a trauma-induced existential awakening, it is certainly understandable. America has lost over 600,000 of our own in the past 18 months, more people per capita than almost all comparator nations in Europe and Asia. This has included not just the frail elderly, but also those under 65. In the disastrous wake of this tragedy, 40% of our population reports new pandemic-related anxiety and depression.

A quarter of our citizens avoided needed medical care during this lockdown. For example, screening PAP smears dropped by 80%. And so, Americans’ chronic burden of disease, already twice that of most nations in the world, has expanded once again. There will be an additional price to be paid for that.

The Kaiser Family Foundation’s most recent Health System Dashboard lists COVID-19 as our third leading cause of death, inching out deaths from prescription opioid overdoses. Year-to-date spending on provider health services through 2020 dropped 2%, but pharmaceutical profits, driven by exorbitant pricing, actually increased, bringing health sector declines overall down by -.5% compared to overall GDP declines of -1.8%. The net effect? The percentage of our GDP devoted to health care in the U.S. actually grew during the pandemic – a startling fact since our citizens already pay roughly twice as much per capita as most comparator nations around the world for health care.

In the “pause”, other nations have been soul-searching as well. A common theme has been work. Two of the most popular discussions include remote work from home and the four-day workweek. These discussions were already well underway pre-pandemic in Germany, Spain, New Zealand, Iceland and beyond. But now, they are cropping up in U.S. corporations like PepsiCo and Verizon as Human Resource departments grapple with scarce or reluctant employees, and consider paid time off, flexible work schedules, and remote work arrangements.

In some ways, we remain the nation that Hamilton described in 1791. We have been unable to come fully to grip with our racist past, and have used both our state and federal governments – not to provide economic room for our citizens to survive foreign competitors – but rather to maintain the status-quo advantages of home-grown “haves” over “have-nots.”

On the surface, Red vs. Blue America seems ill-prepared to start anew, to learn from and progress off the back-end of this historic pandemic.

Americans have had a year and a half to reflect and think about work and life, priorities and the future. Our discomfort with the current arrangement is palpable. Is this the America we want?

What if we managed to spread our nation’s resources more equitably? What if we eliminated “non-real work” and allowed remote work as the rule rather than the exception. What if health care and early childcare programs were universal, and not tied to one’s job? What if technologic innovation was employed to advance equity and justice? What if we decided that making our lives better was the goal instead of just maximizing our GDP.

Wouldn’t that be a better way to live? A better America?

Mike Magee, MD is a Medical Historian and Health Economist and author of “Code Blue: Inside the Medical Industrial Complex.“

By CECI CONNOLLY

Equal treatment under the law. A foundational pillar of American life. Except when it comes to drug makers who benefit from favorable treatment by the federal government.

For far too long, prescription drug companies have profited immensely under a system that affords them monopolistic powers to set prices devoid of government or public scrutiny.

Even during the pandemic, while much of the economy took a beating, the pharmaceutical industry continued to benefit from the high prices they charge. In fact, 9 of the 10 biggest profit margins recorded last summer belonged to drug companies.

As the nation’s economy sputters back, Big Pharma continues to raise prices and block patient access to lower-cost alternatives. It is beyond time to tame the soaring prices of prescription drugs once and for all.

For years, health care players have skirted around concrete actions to truly impact drug prices. Efforts to cut costs for consumers have translated to higher costs for health plans, resulting in a cost shift instead of a cost reduction. We, as private, nonprofit insurers, believe in the ambition and innovation possible in a free market – but the  market has failed in this instance and it’s time for the government to take action.

That is why the Alliance of Community Health Plans (ACHP) is putting its support behind reforms that can make a real, lasting impact for consumers and the entire health system. For the first time, a national health care payer organization is stepping up and supporting pragmatic and progressive reforms that can truly begin to rein in the price of prescription drugs.

This includes backing the dramatic step to grant the Secretary of Health and Human Services the power to negotiate lower prices for the highest-priced medications for which there is no competition, in addition to other actions.

A new Kaiser Family Foundation study demonstrates why such a policy is sorely needed.

The 250 top-selling drugs, each with one manufacturer and no competitive products on the market, account for 60 percent of Medicare Part D spending. The top 50 selling drugs, also with one manufacturer each and no competitors, account for 80 percent of total Medicare Part B spending. This all amounts to increased costs to seniors and taxpayers.

Yet price negotiation alone will not solve the multi-faceted problem of exorbitant  drug costs.

Policymakers must also confront the lack of competition in the biopharmaceutical marketplace by aggressively pursuing bad actors who use our nation’s intellectual property laws to stifle competition. In what other industry would it be acceptable for big players to block the innovative upstarts from coming onto the market, even if it meant countless lives could be saved?

The social contract that once governed the trade-offs between the need for innovation and access to affordable medicines is fundamentally broken. A patent system meant to reward innovation has been weaponized to create insurmountable barriers that keep lower-cost therapies, such as biosimilars, out of the hands of consumers. Empowering the Federal Trade Commission to crack down on these efforts will give patients, doctors and health plans more therapeutic options to choose from that are safe, effective and cost less.

Congress must also require reporting when prices increase rapidly, a sensible  concept with wide bipartisan support. In addition, financial penalties on drug makers are necessary to deter the kind of unsustainable price hikes we have seen year after year, including amid a global pandemic.

Drug companies must also be prohibited from merely shifting costs to health plans, or from our public insurance programs to private health coverage.This is nothing but a shell game in the guise of consumer financial relief.

Finally, Medicare reforms, including an out-of-pocket cap for prescription drugs for seniors is an important and long-overdue consumer protection.

Some will argue that these reforms amount to an unprecedented intervention by the government in private health care markets. Not so.

For insurers and health care providers alike, the government not only regulates prices, but also mandates how dollars can be spent.

Health plans, for instance, must publicly justify rate increases and comply with strict federal requirements on how they allocate dollars between medical care and administrative costs.

The Affordable Care Act imposed these requirements on health plans to improve accountability and transparency; to ensure price increases were based on reasonable assumptions and solid evidence. The same rules should apply to drug companies. It’s just that simple.

Suggesting these reforms is not something we take lightly. We believe in the private sector’s ability to innovate and deliver high-value coverage and care. Government intervention shouldn’t be the first solution. It should be a last resort.

And that is where we find ourselves when it comes to inexplicably high drug prices. We as a country are desperate for change.

It’s time for our elected leaders to step in where the market has failed and exert some control over the runaway cost of prescription drugs. Failing to do so will cost all the rest of us dearly.

Ceci Connolly is the President and CEO Alliance of Community Health Plans 

By MIKE MAGEE

In the second half of the 19^th century, Emily Dickinson wrote a short poem that could easily have been a forward looking tribute to two American Presidents – one from the 20^th, the other the 21^st century.

Dickinson’s poem “A WORD is dead” is hardly longer than its title.

“A WORD is dead

When it is said,

  Some say.

I say it just

Begins to live

  That day.”

She certainly was on the mark when it came to President Franklin Delano Roosevelt’s signature legislation. FDR’s New Deal, extending from 1933 to 1939, ultimately came down to just three words – the 3R’s – Relief , Recovery, and Reform.

He promised “Action, and action now!”  This included a series of programs, infrastructure projects, financial reforms, a national health care program and industry regulations, protecting those he saw as particularly vulnerable including farmers, unemployed, children and the elderly.  And he wasn’t afraid to make enemies. Of Big Business, he said in a 1936 speech in Madison Square Garden, “They are unanimous in their hate for me – and I welcome their hatred.”

But he was also a political realist. And by his second term of office Justice Hughes and his Conservative dominated Supreme Court had begun to undermine his legislative successes and were threatening his signature bill- the Social Security Act. So FDR compromised, and in the face of withering criticism from the AMA, postponed his plans for national health care.

By June 11, 1944, a supremely popular 4^th term President had found his voice again, and knew the words to use as he promised a “Second Bill of Rights” stating that the original was now “inadequate to assure us equality in the pursuit of happiness.”

Turning a phrase that is as lasting as it is powerful, he said, “Necessitous men are not free men.” And in his list of economic rights that he pledged to pursue, these two appeared:

   •     The right to adequate medical care and the opportunity to achieve and enjoy good health;

   •     The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

Now, three quarters of a century later, a new President, pragmatic and opportunistic, is signaling once again that the time is right for change.

Following his recent address to Congress on April 29, 2021, President Joe Biden spent a good deal of time on the aisle in private conversation with Sen. Bernie Sanders. They’ve been talking a lot lately. In his speech he waded into health care with both feet, and found a way to link the ACA and Medicare.

He said, “The Affordable Care Act has been a lifeline for millions of Americans …And the money we save, which is billions of dollars, can go to strengthening the Affordable Care Act and expand Medicare benefits without costing taxpayers an additional penny. It is within our power to do it. Let’s do it now…We’ve talked about it long enough, Democrats and Republicans. Let’s get it done this year. This is all about a simple premise: Health care should be a right, not a privilege in America.”

Those last words, as Emily Dickinson would remind, “began to live” in 2009, when first delivered by the man on the aisle, Bernie Sanders.

Earlier in his speech, Biden reflects on an image he recently observed in Florida. “One of the defining images, at least from my perspective, in this crisis has been cars lined up, cars lined up for miles (in food lines)…I don’t know about you, but I didn’t ever think I would see that in America. And all of this is through no fault of their own. No fault of their own, these people are in this position. That’s why the rescue plan is delivering food and nutrition assistance to millions of Americans facing hunger.”

Those words also  “began to live” many years earlier. On June 11, 1944, FDR said, “We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. ‘Necessitous men are not free men.’ People who are hungry and out of a job are the stuff of which dictatorships are made.”

Roughly two decades later in 1966, Rev. Martin Luther King, Jr. mirrored the same words and linked poverty and health care, at the Poor People’s Campaign when he said, “of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

Those words continued to live a half century later, appearing in a 2017 New Yorker piece penned by celebrity physician author, Atul Gawande. The words were uttered by two former neighbors of his still living in Athens, Ohio, the hardscrabble town where he grew up in the Appalachian foothills.

The first said, “basic rights include physical security, water, shelter, and health care. Meeting these basics is, he maintained, among government’s highest purposes and priorities.”

A second voice added, “I think the goal should be security – knowing that, no matter how bad things get, health shouldn’t be what you worry about.”

Mike Magee, MD is a Medical Historian and Health Economist and author of “Code Blue: Inside the Medical Industrial Complex.“

By  JEFF GOLDSMITH

The Trump administration’s health care journey began with a trillion dollar near miss–the failed Repeal and Replacement of ObamaCare- and ended with a full-on train wreck, the catastrophically mismanaged COVID epidemic that will have claimed 300,000 lives by the time he leaves office. After four years of posturing and lethal incompetence, it will be a relief to see caring and professionalism return to the White House health policy under President-Elect Joe Biden.   

Like Inheriting a Badly Managed World War

Like Barack Obama, Joe Biden will be saddled at the beginning of his regime with a damaged national economy. He will also walk in the door to the immediate need to manage the greatest public health catastrophe in a century as well as its economic consequences–a deep and enduring recession. Biden will be inheriting the equivalent of a badly managed World War we are presently losing.

Public health professionals who were marginalized by Trump will be challenged not only to craft coherent policy to contain and extinguish COVID  but also to sell it to a frightened and polarized general public, many of whom reject the need for basic public safety measures.    

Controlling COVID and rebuilding the critical public health agencies–CDC and FDA–that have damaged by political meddling will consume the lion’s share of the administration’s health policy bandwidth in its first year. It will be pressed to address a huge readiness gap–from critical PPE supplies to the development and deployment of testing and tracing capability to public health co-ordination and messaging–for the next pandemic. Increasing the presently inadequate level of public health funding (less than $100 billion a year in a $21 trillion economy) seems inevitable.

The inability of Congress to produce a fall round of COVID relief will create pressure on Biden to take immediate action to help struggling sectors of the economy, like airlines, restaurants and hospitals, as well as further help for the long term unemployed. Only a little more than half of the 22 million jobs lost in the spring have returned by November. Twenty million Americans were stranded by the July expiration of supplemental unemployment benefits as well as countless millions more “free agents” and contractors not eligible for traditional unemployment that are losing coverage at the end of the year. Mortgage, credit card and consumer loan forbearance are ending, and unless Congress acts, acres of rotten credit will turn rapidly into a banking and bond market crisis which the Federal Reserve cannot fix by itself.   

State governments face FY21 deficits equaling $500 billion over the next two years , against a current annual spending base of about $900 billion.  Further assistance to state and local governments will almost certainly include an additional increase in the federal match for Medicaid (FMAP), beyond the 6.2% temporary increase passed in March). Medicaid enrollment will likely top 80 million by mid 2021, almost one-quarter of the US population. Some states will have upwards of 40% of their population on Medicaid by mid-2021.

States laboring under severe revenue shortfalls will be unable to afford the expanded Medicaid program that was part of ObamaCare without a further increase in the FMAP rate.  President Trump and Senate Republicans blamed the state and local government fiscal crisis on profligate Democratic mismanagement, and blocked aid to them during 2020. But Texas, Florida, Georgia and other red states have the same problems New York and California do. 

Serious Fiscal Limitations Push the Health Policy Agenda Away from Coverage Expansion

Barack Obama entered office with a FY08 federal deficit of $420 billion. Joe Biden enters with a FY20 deficit of $3.1 trillion and a baseline FY21 deficit of $1.8 trillion, before adding the cost of the likely additional trillion dollar-plus stimulus package early next year. It will be passed over the dead bodies of Republican Congressional leadership suddenly recommitted to deficit reduction after racking up $8 trillion in deficit spending during the four years they controlled the federal government.

Coverage Expansion via Medicare and Public Option Unlikely

That deficit will significantly constrain a further expansion of health coverage. Not only will “Medicare for All” be off the table. Severe fiscal pressures will cause the new administration to “slow walk” a public option (which would require federal subsidies to implement) and Medicare expansion to people over age 60. These expansions were going to be  controversial and politically costly because they would be fiercely contested by hospitals and other care providers concerned about the erosion of their commercial insured customer base (the source of perhaps 130% of their bottom lines) as well as the use of Medicare as a de facto price control lever. 

By the time Biden addresses the first two problems–COVID and the economic crisis–he will probably have expended his limited stock of political capital and be weakened enough to be unable to take on the large messy issues of health coverage expansion and cost control. The Affordable Care Act exhausted Obama’s store of political capital, by early 2010. His administration’s failure to turn the economy cost the Democrats control of the House of Representatives and 20 (!) state legislatures in 2010.

What Can Biden Do in Health that Does Not Require Federal Spending?

Thus, the focus of Biden health policy is likely to be on items not requiring fresh spending.

Two major candidates for Biden policy activism: facilitating unionization of health care workers and antitrust enforcement. Labor unions were major Democratic supporters in this election cycle. Moreover, they were extremely active this spring and summer as advocates for the safety of health workers. They ran a very effective orchestrated press campaign to pressure large health systems such as HCA and Providence Health. Union leaders were prominent in health policy working groups for the Biden campaign after the conclusion of the primary season. Aggressively pro-union appointments to the National Labor Relations Board and legislation to facilitate union elections are almost certain to be early Biden initiatives.

Antitrust action to slow down or unwind hospital and health insurance mergers are also likely. The California Attorney General Xavier Becerra’s settlement of his aggressive anti-trust action against Sutter Health not only resulted in a huge financial payment (useful for reducing California’s budget deficit) but also forbade Sutter from “all or nothing” rate negotiations with health insurers. Spreading this approach nationally would significantly damage the financial position of large multi-hospital systems and complicate the forthcoming rate negotiation cycle with health insurers.  

It is also likely that the Biden administration will continue the push begun during Trump for price transparency and disclosure of patient financial responsibility prior to service, further complicating rate negotiations with health insurers. Resolution of the deadlock over surprise billing is also likely.

Finally, Biden is likely to attack the 5% margins generated by Medicare Advantage carriers who now control 37% of all Medicare lives, and are getting a 50% share of each year’s worth of baby boomers enrolling in the program. Only half of boomers are yet enrolled in Medicare, and cutting Medicare Advantage cap rates will be a juicy target for Biden’s OMB in attempting to control the exploding federal deficit. Cutting health insurer profits is not the same as “cutting Medicare”.

Health care’s corporate sector is presently basking in record valuations and a largely favorable regulatory climate from the outgoing Trump administration, even as the care system has reeled from COVID.  Financial pressures from the COVID health economy and continued slack demand for care will certainly challenge the care system, as it faces renewed regulatory and political pressures from the new administration. 

Jeff Goldsmith is the President of Health Futures, Inc

(This is the eighth and final installment in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Medical technologies include drugs, devices, tests, and procedures. Considered as a whole, these technologies are the key driver of growth in health costs, according to Georgetown University professor Gregg Bloche and his associates.

Bloche, et al., view insurance coverage as the chief enabler of these technological innovations. In a 2017 Health Affairs Blog post, they said, “Drug and device developers, clinical researchers, and their financial backers anticipate coverage for new tests and treatments with little concern for whether they add substantial therapeutic value, and they make research and development decisions accordingly.”

In an interview, Bloche further explained, “If you’re a technology developer, you can reasonably anticipate that if your product achieves a low but significant health gain, insurers are going to be under pressure to pay for it.”

Insurers do cover most new drugs, although they may make it difficult for patients to access the ones that they deem to be low-value, notes Peter Neumann, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center in Boston.

“It’s hard to find a payer who says we’re not paying for that thing because it’s not cost-effective,” he says. “Instead, they put restrictions on products based on the strength of the evidence, probably influenced by the cost-effectiveness and certainly by the clinical effectiveness. You can get that expensive new drug for multiple sclerosis or rheumatoid arthritis, but you have to fail all the cheap drugs first.”

Despite these cost control efforts, the proliferation of new technologies is a bigger cost driver than all the waste and fraud in the system, says Amitabh Chandra, a professor of public policy and business administration at the Harvard Kennedy School. “The number one reason why insurance premiums increase is these medical technologies that have dubious or small medical effectiveness,” he says.

Technology and Prices

Health policy experts assign different weights to the role of prices and technology in cost growth. In the famous article “It’s the Prices, Stupid,” by the late health economist Uwe Reinhardt and his colleagues, and a 2019 follow-up piece by the surviving coauthors, the health economists argued that high U.S. prices explain most of why our health costs are so much higher than those in other advanced countries.

The other major contributor to cost growth, they acknowledged, is “service intensity,” which includes technology. However, they said, it’s hard to define service intensity or separate it from price.

Bloche agreed that other countries have lower health costs than the U.S. does principally because their national health systems can negotiate lower prices with providers. But, even if the U.S. had a single-payer system, he noted, it would only be able to get a one-time cost-reduction by bargaining with providers. After that, he said, cost growth would resume at about the same rate as in other advanced countries because of new technology.

However, it’s difficult to distinguish the impact of technological advances from price growth. As the availability of technology increases, so do the prices charged for care. In 2015, for example, the United States had 39 MRI units per one million people, compared to the Organisation for Economic Co-operation and Development (OECD) median of 12.6. Similarly, the United States had 41 CT scanners per million in 2015, compared to the OECD median of 17.8. American providers use those machines routinely, ordering expensive imaging tests far more often than do their peers in other OECD countries.  And as it happens, our overall health costs are much higher than in those other nations.

New procedures also increase costs, partly because they don’t always replace older procedures. After angioplasties and stents came along, for example, millions of people had those procedures, but there was no decrease in the number of coronary artery bypass graft procedures. Other minimally invasive procedures have replaced open surgeries, but have resulted in more people getting the laparoscopic operations.

[Terry K. Rx for Health Care Reform. Nashville: Vanderbilt University Press;2007:283]

Changing practice patterns have also increased spending on some drugs. For example, statin drugs have benefited many people at risk for heart disease, but over time, changes in clinical guidelines have expanded the eligibility of patients for these cholesterol-lowering drugs. A recent analysis suggested that statin use in low-risk patients has little value and wastes healthcare resources.

It has also been suggested—usually by drug companies—that some new technologies save money because they prevent hospitalization or detect disease at an early stage, when it can be treated more cheaply. This is frequently true in individual cases. But when experts analyze the impact of technology on population health costs over time, they find that it increases costs more often than it saves money.

“New technologies tend to increase overall costs,” says Neumann. For example, he notes, genomic tests are being developed to determine which medications a particular patient will respond to best. Such tests might reduce the amount of wasteful drug spending, but any savings that accrued from the use of this technology, Neumann says, would be overwhelmed by the number of people having their genomes sequenced and getting those tests.

Ken Terry is a journalist and author who has covered health care for more than 25 years. He tweets @kenjterry.