Toward a Just Healthcare System in the United States: The Problem of Cost

 How Has Capitalism Run Amuck in Healthcare?

The shooting of Brian Thompson has focused our country’s attention yet again on the injustices of our healthcare system.  We are seeing a revival of proposals for Medicare for All as a way to provide a more just healthcare system, but if we are going to do that, we are going to have to find a way to control the high cost of healthcare in the United States. Otherwise, Medicare for All will break us financially.

The high cost of healthcare in our country is an example of what last week’s post called “capitalism run amuck,” but that statement is too general to be useful as a guide for action. In order to fix our healthcare system, we will need something much more specific. How has capitalism run amuck in healthcare, and what can we do about it? Several years ago, I wrote a blog post on this topic, and rather than repeat what I wrote then, I refer you to “Why Does Healthcare Cost So Much in the United States?” Here is another view.

These sources deal with systemic problems, not with instances - like that reported in today's New York Times - where greed induces companies to act in ways that are obviously immoral. Greed and immoral behavior have existed throughout human history. They are not unique to capitalism, and we should not focus on them as the causes of our healthcare system's problems. Instead, we should focus on structural features of our system that cause it to be expensive and unjust even when everyone acts in good faith. My blog post referred to above lists a number of such features in our healthcare system.

Thinking About Solutions

How can we solve the problem of the ever-increasing cost of healthcare? How can we create a system that provides care for all of us at a cost we can afford to pay?  I will not attempt to offer a detailed prescription for a solution, although a modified and improved Medicare for All could provide one answer to the question. However, I can suggest some principles that can form the basis of a solution.

First, we must accept the need for non-market methods to control costs. That is, we cannot rely on market competition to control costs in our healthcare system. We will not be able to provide care for all citizens without using non-market methods to control costs. Every country with a successful system of universal healthcare has had to use non-market methods for controlling costs, and there is no reason to believe that we can be an exception. 

Medicare's cost control mechanism is very imperfect. Medicare can set the price it will pay for any specific service, but its fee-for-service model offers no protection against the proliferation of unnecessary services or against the continual invention of new "services." 

Second, our system must encourage hospitals and doctors to strive for high quality care rather than for maximum revenue and market share.  Some incentives of this kind are already included in the Affordable Care Act. For example, a hospital may be penalized if it has too high a readmission rate. However, much more will need to be done.

Third, we need a system that encourages people to make good use of primary care. Good primary care reduces the need for emergency care and for hospitalization, which are the most expensive parts of our healthcare system.  Some encouragement for people to use primary care is already included in the Affordable Care Act. For example, the act requires that certain kinds of screening tests – like colonoscopies - be offered free to patients.  We might also reduce costs by requiring primary care physicians to act as gatekeepers to the rest of the healthcare system as is done today in the United Kingdom.

Fourth, we need a system that encourages people to live in ways that promote health.  Much of the cost of healthcare in the United States is due to the cost of caring for people with chronic conditions like diabetes or obesity, and the frequency of such conditions can be reduced by encouraging people to adopt healthy lifestyles.  Ways to do this are not hard to find. For example, Medicare could pay for membership at a gym on the theory that regular exercise will make people less likely to need expensive medical care.

Finally, the system must provide patients and doctors with accurate information about prices in order to enable them to make decisions based on costs. Often, a medical condition may be treated effectively in various ways that have widely differing costs. 

If we can find ways to control the cost of healthcare, we will be able to provide healthcare for all of our people. As we work toward that goal, we must not forget that our resources are not infinite. Other countries have found ways to control costs, and we can do it, too.