The Relationship of Health Insurance and Mortality: Is Lack of Insurance Deadly? Free

Michael R. Grey, MD, MPH

Saint Francis Hospital and Medical Center

July 10, 2017

Conflict of Interest: I was an intern in the same program with Dr. Woolhandler was a junior resident and Dr. Himmelstein a faculty member.

A Report from the Committee of Brutal Facts

“If you look for truth, you may find comfort in the end; if you look for comfort you will not get either comfort or truth only soft soap and wishful thinking to begin, and in the end, despair.” C.S. Lewis

Himmelstein and Woolhandler’s article (AIM June 27 2017) is as well-grounded in empirical evidence as we are likely to get and it clearly comes out in favor of what both authors have both long articulated with passion and reason: a single payer system.  Supporters of a single payer system have not been completely transparent about the simple truth: we cannot afford the system of health care that we would actually like to have unless we accept sacrifices that as yet we are unwilling to bear.  The purported savings by creating a national or state-based single payer system are almost certainly overstated and fraught with uncertainty.  As an example, in 1965 the government’s lead actuary predicted that Medicare Part A would reach $9 billion by 1990; yet the actual cost exceeded $66 billion.  To advocate that a single payer system can happen without substantial and long term tax-based subsidies and/or limiting choice and access to services that most Americans see as birthrights is disingenuous.    
The deeply difficult task of paring down the growth of entitlement programs like Medicare, and de facto entitlement programs like Medicaid—the primary drivers of the nation’s fiscal woes-- require limiting access to some services, restricting choice, and the political will and managerial skills to ensure fiscal accountability.   These realities are rarely addressed by reformers and critics regardless of political persuasion and the facts on the ground are not encouraging: exhibit A, the Veteran’s Administration.  Until we accept that we cannot afford the health care that we want without starving other areas of the economy in need of investment—infrastructure, education—we will remain stuck in a fruitless argument that is fired more by passion and politics than hard truths.  
Arguments that the root causes of our present dilemma comes down to self-serving doctors, hospitals, employers or private insurers—or to perfidious government for that matter—are simplistic.  In fact, it is hard to find credible and consistent villainy in this dilemma.   No one wants anyone to die for lack of medical care; accusations to the contrary are counterproductive. When our political and professional leaders start promoting honest discussions with the American people on health care, just maybe we will find the good will and self-sacrifice necessary to solve a dilemma nearly a century old.  The time is past for soft soap and wishful thinking in regards to health care. It is truth we need, not comfort.  

Steffie Woolhandler, M.D., M.P.H David U. Himmelstein, M.D.

City University of New York

November 7, 2017

Author's Response

Some health care reforms cost more than expected, others less. Dr. Grey cites the early underestimation of Medicare's costs, but omits cases where costs were overestimated. For instance, the Congressional Budget Office initially projected that the Affordable Care Act's coverage expansion provisions would cost $187 billion in 2017 , its latest estimate is $66 billion lower . Similarly, Medicare's drug benefit has cost 35% less than predicted .

Experience in nations with national health insurance (NHI) also indicates that universal, comprehensive coverage need not break the bank. All spend far less than we do, yet avoid the narrow networks and surprise bills that bedevil many patients. Almost all enjoy better health outcomes, and in the ten other countries included in recent surveys, even poor residents reported better access than the average American ; only Germany's primary care doctors were less satisfied than those in the U.S.

Nonetheless, Grey is correct that single-payer reform would require tradeoffs. We cannot afford private insurers, who add nothing of value while charging overhead four-fold greater than Medicare's, or the complex payment systems that impose $200 billion in unnecessary paperwork on hospitals and doctors. Nor can we sustain drug firms' exorbitant prices and profits.

Our current payment strategies also encourage providers to inflate their billings. Hospitals, HMOs and ACOs live or die based on their bottom line - their profit (or, for non-profits, "surplus"). Profitable institutions can expand and modernize, while unprofitable ones shrivel, even if they're providing excellent and much-needed care. The profit imperative - under both capitated and fee-for-service payment - drives providers to seek out lucrative patients and services, avoid unprofitable ones and portray all patients as sicker than they really are, boosting administrative and total costs..

Payment strategies that decouple care from the prospect of profit have proven far less inflationary, and better at matching resources to community need. For instance, Canada and Scotland pay hospitals global operating budgets - like schools or fire departments - obviating the need for per-patient billing. There's little incentive to upcode or cherry-pick, since hospitals can't keep surplus operating funds; new investments are instead funded through separate government grants.

Market-driven care is the root cause of America's health care dilemma. No law of nature decrees that costs must soar or patients must suffer; that MBAs should supervise MDs; or that the our nation can't match or exceed others' health care successes.

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Congressional Budget Office. Federal subsidies under the Affordable Care Act for health insurance coverage related to the expansion of Medicaid and nongroup health insurance: Tables from CBO's January 2017 baseline. Available at: https://www.cbo.gov/sites/default/files/recurringdata/51298-2017-01-healthinsurance.pdf (accessed 10/29/2017).
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