Is Mandated Universal Coverage the Right Way to Achieve Health Reform? The Health Reform Debate We Haven’t Had Yet, by Jeff Goldsmith

I don’t know how many of you linked over to Lawrence Brown’s perspective piece “The Amazing, Non-Collapsing US Health Care System” in the January 24th issue of the New England Journal of  Medicine (buried in Mathew’s “Whisper it quietly. . .” post), but it’s the most useful piece of political analysis of the  health reform conundrum I’ve seen in a long time.   

What Brown argues, convincingly, is that we really have three healthcare systems: public and private health FINANCING systems (which operate in the lucrative fantasy land of “reimbursement”) and a public CARE system (the safety net urban hospitals, community health centers, public health clinics, the VA, etc.) that serve the rural and urban poor and uninsured. 

Other than a few isolated outposts like Kaiser, the third health system that Brown discusses is the only place in the United States where population health is actually practiced. And, most important, it is also is the mysterious resource that prevents the 47 million uninsured, including a very large number of our 12 million undocumented people, from dying in our streets, and causing a huge political crisis. It is invisible to much of the voting public, but thank God we have a safety net healthcare system.

This latter system has been a political stepchild of state and federal governments, and lurches from financial crisis to financial crisis, living off the land. But it has successfully propped up the other two, and, I think, helped prevent a revolution.  Precisely because it has succeeded in reaching its target populations and helping them, albeit “too late” in the disease process, it has drained both political urgency (and funding) from making the first two “reimbursement” systems universal.

It is also where most of the politically active health reformers, like Lawrence Brown (and Ron Anderson and my old friend, Quentin Young) work. They actually see and touch poor people. They go to their own meetings. They rage appropriately against the hypocrisy, rhetoric and waste they see in the rest of our so-called “healthcare system”. They have their own political networks, and also a very impressive case for continued funding. And they rarely communicate with their prosperous colleagues in the other two systems, or the Executive Branch and Congressional health policymakers who have their hands full feeding the alligators through Medicare and Medicaid.

Closing the 47 million person funding gap by making the first two systems “universal” has been the elusive Holy Grail of health reform. What Brown is basically saying to the Holy Grail folks is, “Don’t Hold Your Breath”. The left has historically advocated wiping out the private side of the health financing system, (making Kaiser, Blue Cross and United Healthcare disappear, basically) and controlling all payment centrally (and politically). The right has historically advocated making the public side disappear, by outsourcing it to private insurers. I think this debate is tiresome because neither side is going to disappear any time soon, and all the absolutist rhetoric does is make people feel  angry and hopeless, and turns off voters.

Both sides tend to behave as if this crucial third sector never existed, and some believe that you wouldn’t need it if “coverage” was universal (or perhaps that it would be paid more generously). There is an important flaw in this argument. We will continue to need that third sector because we will never make coverage universal. If, in our current intolerant political climate, the Democrats, historic defenders of the downtrodden, cannot give the 12 million undocumented folks we depend on every day drivers licenses, they sure as hell aren’t going to give them health insurance. And we aren’t going to send them all home either.

And, as the collapse of California’s health reform initiative demonstrates, if you cannot make “coverage” affordable, you cannot force people to purchase it. We’re all waiting for the Massachusetts experiment to play out, but my prediction is that, due precisely to the affordability problem, one third of the uninsured in Massachusetts will still be uninsured five years from now. It is reasonable to forecast that there are going to be a lot of clients of the “safety net” sector into the indefinite future.   

Moreover, millions of safety net “customers” are eligible for Medicaid/SCHIP do not enroll, for a variety of reasons related to privacy, dignity, paranoia, language or other cultural barriers, administrative cumbersomeness or fiscal reluctance of state sponsors. An estimated 25%  of the uninsured are already eligible for public programs and do not enroll.

Brown’s third sector also explains that mystery. They don’t have go through all the humiliating hassle of enrolling in Medicaid or SCHIP because they are getting free or nearly free care with at least some measure of dignity from public sector providers.  Though many of the facilities are old and overtaxed, and the caregivers overworked, their patients and the families they belong to feel at home in that public system. It is also accessible to them because it is located where they live.

There are complicated issues surrounding the social efficiency of having this third sector. They revolve around the untested belief that if everyone had health insurance, they would be healthier because they’d get care earlier. I am skeptical of this logic. True enough, the uninsured have greater health risks for the same conditions than the insured do, but how much of this is cultural and logistical, and how much relates to the fact that they are not “insured” is an open question. I’d like to see the data sorting out these multiple effects on health status before concluding that the lack of insurance itself was the cause of the large health disparities we presently see. 

“Reimbursing” hospitals and doctors through private or public health insurance to provide them care assumes not only that caregivers will do the right thing, rather than the lucrative thing, and that families will co-operate with them. To work, it also assumes that there is a care system to pay near where the poor and uninsured live.  It further assumes that there are not important non-financial (e.g. cultural) barriers to families getting care “earlier” even if people have coverage.   

Practicing population health, as the safety net system attempts to do, does not assume away those cultural barriers. I think we get way more health improvement mileage out of our community health centers than we do out of just about any other social investment. Do we fund them more effectively by “insuring” their patients, or simply through more generous grants or local government salary lines?

To simply assume that extending coverage to the 47 million uninsured somehow assures access and, therefore, better health, requires multiple leaps of faith. There are many physical, cultural and economic barriers separating “coverage” from “access”. Rather than focusing on unaffordable mandates and massive tax-based subsidies, extending coverage should focus on affordability (vitally important for the more than ten million younger uninsured) and ease of access to multiple insurance options, including earlier access to Medicare for the ten million uninsured boomers. If we could lower the number of uninsured by twenty-five or thirty million, it would be a huge victory. 

This is why any health reform legislation will contain one or more titles increasing funding for safety net care providers. More generous direct health funding for the safety net, with matching grants to states and localities encouraging them to ramp up their efforts, rather than continuing the elaborate system of largely hidden subsidies buried in the Medicare program, is a vitally important adjunct to health reform. Pragmatic health reform will incorporate reforming and strengthening our healthcare safety net, and extending population health initiatives that address the root causes of illness.