Speaker 1: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 1: Steneveek on Bloomberg Radio.
Speaker 2: All right, we've got you covered Rebooting American health care.
Speaker 2: It is a new book that's out and you know, Tim,
Speaker 2: you talk about it, We all talk about it. A
Speaker 2: few certainties in life, right, death taxes, and the American
Speaker 2: healthcare system is, for lack of a better word, it's
Speaker 2: a mess. Yeah, like disruption, innovation. Come on, come do something.
Speaker 1: So remember we have the Affordable Care Act Obamacare, right right,
Speaker 1: that's supposed to solve all of the problems for uninsured Americans. Well,
Speaker 1: guess what. In twenty twenty one, nearly thirty million people,
Speaker 1: more than eight percent of the US population, didn't have
Speaker 1: health insurance. That's according to the US Census Bureau. Now,
Speaker 1: don't get me wrong. This is a lot better than
Speaker 1: things were in the decade leading up to the Affordable
Speaker 1: Care Act, when more than fifteen percent of people did
Speaker 1: not have health insurance. But this is still millions of
Speaker 1: people who are at risk.
Speaker 2: It's a lot of people in a very rich or
Speaker 2: so we're told, wealthy country. So let's get to one
Speaker 2: of the co authors, Amy Finkelstein. She is a Professor
Speaker 2: of Economics at MIT, director of the Healthcare Program at
Speaker 2: the National Bureau of Economic Research, and among other things,
Speaker 2: a twenty eighteen MacArthur Fellow, and actually get a genius grant.
Speaker 3: Correct, Yeah, that's correct.
Speaker 1: I don't know if the geniuses are supposed to call
Speaker 1: them genius grants. That's for just us, lay people.
Speaker 2: Carol, we're going to call you a gen We've been
Speaker 2: calling it, teasing you up. She is on Zoom in
Speaker 2: Cambridge on the well.
Speaker 1: I got to tell you it's going to take a
Speaker 1: genius to figure out healthcare in this country. So we're
Speaker 1: lucky to have you help us.
Speaker 2: Help us because you know, Tim and I talk with
Speaker 2: a lot of folks and we talk about disruption, innovation,
Speaker 2: We've got the metaphorse coming, we've got generative AI, all
Speaker 2: these wonderful things coming at us, and yet it still
Speaker 2: feels like in some ways healthcare is way behind the times.
Speaker 2: How do you see it? How do you think about it? Yeah?
Speaker 3: Thanks a lot for having me on. I'd say, you know,
Speaker 3: we didn't my co author Lauren and IV and I
Speaker 3: didn't go into this thinking about disruption, but we concluded
Speaker 3: that it was the only solution and part of the
Speaker 3: reason is related to that fact that you started with
Speaker 3: that thirty million Americans or one in ten Americans under
Speaker 3: sixty five lack health insurance at any given moment. That
Speaker 3: gets talked about endlessly. But a really, really important statistic
Speaker 3: that gets very little coverage is the fact that more
Speaker 3: than twice as many Americans, in fact, one in four
Speaker 3: Americans under sixty five will have some period of time
Speaker 3: without health insurance coverage over a two year period. In
Speaker 3: other words, health insurance, whose very purpose is to be
Speaker 3: secure and certain, is in fact highly uncertain. We all
Speaker 3: live if we are lucky enough to have health insurance
Speaker 3: with the risk of losing that coverage is.
Speaker 1: That because it's tied to our jobs.
Speaker 3: For people with employer provided health insurance that you know
Speaker 3: about half of the population that haves that, Yes, for
Speaker 3: people with publicly provided health insurance, the risk is, you know,
Speaker 3: like Medicaid or Medicare for certain diseases, the risk is
Speaker 3: you can lose your coverage if your income changes, or
Speaker 3: you get older, or you have a disease specific coverage
Speaker 3: program and you get cured of that disease, or and
Speaker 3: this is kind of the most heartbreaking part, or you
Speaker 3: can simply lose your coverage because you fail to realize
Speaker 3: that you need it to file forms to demonstrate that
Speaker 3: you're still eligible under some income category. And that's why
Speaker 3: we realized further patches and incremental reform won't work. We
Speaker 3: have to tear this down and start over, because whenever
Speaker 3: you have different pathways to eligibility and coverage through a
Speaker 3: myriad of programs, you're going to have gaps at the themes.
Speaker 3: And that's where people are falling through.
Speaker 2: All right, So, Professor Finkelstein, if you could wave your
Speaker 2: magic wand and change one thing that you think would
Speaker 2: be a game changer in terms of improving healthcare in
Speaker 2: the United States, what would it be. I'm just curious
Speaker 2: who would you wave the magic wand over. Is it
Speaker 2: the health insurers, is it politicians? Is it what?
Speaker 3: To fix our coverage problem? We need automatic universal basic
Speaker 3: coverage that's free for everyone, no patient payments, and then
Speaker 3: the option to buy supplemental coverage if you want more
Speaker 3: than the basic.
Speaker 1: Is this this sounds forgive me, I'm not sixty five,
Speaker 1: but my parents are over sixty five, and this sounds
Speaker 1: like medicare.
Speaker 3: It may sound like medicare. It's not. Here's one very
Speaker 3: important difference, and that I think a lot of the
Speaker 3: proponents of Medicare for all don't realize that Medicare for
Speaker 3: some is actually very very incomplete insurance. So, for example,
Speaker 3: for doctor visits, people have to pay twenty percent of
Speaker 3: the doctor bill out of their own pocket, with no limit,
Speaker 3: no cap. So you can if you're unfortunate enough to
Speaker 3: be quite ill, you have cancer, say, and you rack
Speaker 3: up lots of physician visits and bills, you can be
Speaker 3: on the hook for tens of thousands of dollars that
Speaker 3: you have to pay despite having coverage. A startling fact
Speaker 3: is not only that there's enormous amounts of medical debt
Speaker 3: in the United States, but that three fift of that
Speaker 3: is incurred by people who have health insurance. So in
Speaker 3: that sense, our plan would be much better than the
Speaker 3: current Medicare plan, and there'd be no risk of having
Speaker 3: to pay anything out of pocket. On the other hand,
Speaker 3: because we are realists at least in the economic in
Speaker 3: terms of the economics, we have that coverage be much
Speaker 3: more basic than the current Medicare coverage. People are so
Speaker 3: concerned about Medicare costs growing so fast and going through
Speaker 3: the roof. One reason they do that is because there's
Speaker 3: no budget constraint on the system. Patients want care, physicians
Speaker 3: are willing to provide it. There's no gatekeeper on the
Speaker 3: back end saying no, maybe we need to you know,
Speaker 3: check to make sure you really need that CT scam
Speaker 3: because you came in with a headache. So we would
Speaker 3: have much more constraints on the nature of the care
Speaker 3: that's provided, but anything that was provided would be completely free.
Speaker 2: So how do we help you know, you know where
Speaker 2: that gets to, like people making decisions about who gets what, like,
Speaker 2: how do we make sure that is done in a
Speaker 2: pure way?
Speaker 3: That's a good question. So the first thing I want
Speaker 3: to emphasize is that the whole point of a universal
Speaker 3: basic health insurance system is to fulfill the social commitment
Speaker 3: that we clearly have and it's revealed by all our
Speaker 3: patchwork policies to provide essential medical care when people are ill,
Speaker 3: regardless of their ability to pay for it. And so
Speaker 3: the basic coverage has to cover what's medically essential, but
Speaker 3: it doesn't have to cover things that we all might
Speaker 3: like but that aren't actually essential medical care, such as
Speaker 3: you know, so you can have longer wait times for
Speaker 3: non urgent care, you can have fewer amenities the non
Speaker 3: medical part, you know, like more people to a hospital
Speaker 3: room or and this is what other countries do. Countries
Speaker 3: like Singapore or Australia, they provide universal basic coverage, but
Speaker 3: if you want a private hospital room or good hospital food,
Speaker 3: that's what you pay extra for.
Speaker 2: There was one point my husband got ill over in
Speaker 2: the UK and we were initially in I guess their
Speaker 2: public system and.
Speaker 1: Yeah, and it.
Speaker 2: Was a ton of people in a room and you
Speaker 2: had to get up to get your own food. It
Speaker 2: wasn't great, I'm going to be quite honest. And he
Speaker 2: was with an employer who pulled him out and put
Speaker 2: him over to a hospital that is was like a
Speaker 2: nice hotel and you know, got a bunch of tests
Speaker 2: that they could do as soon as he walked in.
Speaker 2: Although we had to see the finance person. That was
Speaker 2: the first person we saw to make sure that it
Speaker 2: was going to be paid for. Like, it was just
Speaker 2: such a contrast, and I guess so I'm trying to understand,
Speaker 2: you know, how we move forward and get to something
Speaker 2: where more people are getting better care. And I'm wondering,
Speaker 2: how do we pay for all of this?
Speaker 3: So I think those are related questions. The example we
Speaker 3: give in the book is, you know, how do we
Speaker 3: fulfill our obligation obligations but without you know, all the
Speaker 3: extra stuff. So your your husband's example is a perfect one.
Speaker 3: It's I can totally understand why you liked going outside
Speaker 3: of the system more you had a private room, more convenience,
Speaker 3: et cetera. But I think our commitment as a society
Speaker 3: is not to provide everyone with luxury, high end medical care,
Speaker 3: such as your husband was fortunate to receive, but to
Speaker 3: provide essential medical care. And that's also how we keep
Speaker 3: the price down. So if you are fortunate enough to
Speaker 3: be able to afford it, and you want to buy
Speaker 3: those extra amenities, that's great, but that's not what we're
Speaker 3: committed to as a society. We're not committed to providing
Speaker 3: a luxury experience. We're committed to providing essential medical care.
Speaker 3: And as we discuss in the book, that's also how
Speaker 3: we keep the price tag deck great.
Speaker 2: And I certainly wasn't arguing in favor of the other
Speaker 2: because he wasn't fixed. He was basically just fixed enough
Speaker 2: to get on a plane and come back home to
Speaker 2: the United States. But it was just such a contrast,
Speaker 2: and I was trying to get my head around, like,
Speaker 2: how do we figure this out? Professor Finkelstein, don't go anywhere.
Speaker 2: We want to continue this conversation. We are talking with
Speaker 2: Amy fink Stein. She is a co author of a
Speaker 2: new book. It's called We've Got You Covered, Rebooting American Healthcare,
Speaker 2: professor of economics at MIT and director of Healthcare Program
Speaker 2: at the National Bureau of Economic Research. I mean, really
Speaker 2: is coming at this from just checking all the boxes
Speaker 2: of someone I think who needs to understand how to
Speaker 2: fix this.
Speaker 1: She's at the NBER. I wonder if she can tell
Speaker 1: us if there's a recession.
Speaker 2: That's our next question. Carol Masser along with Tim Stenovik
Speaker 2: here on Bloomberg Business Week, and we want to get
Speaker 2: back to Amy Finkelstein. She's co author We've Got You Covered,
Speaker 2: Rebooting American Healthcare, Professor of economics at MIT, director of
Speaker 2: the Healthcare Program at the National Bureau of Economic Research,
Speaker 2: And as we mentioned earlier at twenty eighteen, MacArthur Fellow
Speaker 2: on Zoom in Cambridge, So do you know is it
Speaker 2: a recession? Is a recession coming?
Speaker 1: We had a great Bloomberg story a few months ago,
Speaker 1: Amy and the group of folks at the NBER were
Speaker 1: described as eggheads, who are the ones who decide whether
Speaker 1: or not we're in a recession. Yes, we'll have to
Speaker 1: go to you for how we fix American healthcare.
Speaker 3: What just the egghead on health Hey.
Speaker 1: That's good enough for us. We appreciate that. What is
Speaker 1: the one country that is doing this the best?
Speaker 3: Every high income country but the US is doing it
Speaker 3: much better than we are. None of them do or
Speaker 3: doing it exactly as we propose.
Speaker 1: Which one is closest.
Speaker 3: It's not a fair question. We're like some of them
Speaker 3: in some dimensions and like others on others. What I
Speaker 3: can say that every other high income country is doing,
Speaker 3: which is what we propose, is automatic universal basic coverage
Speaker 3: and the option to supplement or top it up if
Speaker 3: you want more. And the third element, which is really key,
Speaker 3: a budget that is enforced in terms of how much
Speaker 3: can be spent by the taxpayer on healthcare. One thing
Speaker 3: that's shocking about the US system is there is no
Speaker 3: healthcare budget in the sense of what a budget really means,
Speaker 3: a budget constraint, an amount that you can't suspend beyond.
Speaker 3: When people talk about the Medicare budget. They mean how
Speaker 3: much Medicare has spent or will spend, not the cap
Speaker 3: on how much it can spend. So we need to
Speaker 3: enforce a budget and use that taxpayer money that we've
Speaker 3: allocated to provide universal basic coverage. Now you ask which
Speaker 3: country we're like, Well, in one dimension, we're very much
Speaker 3: like the UK and Canada in having absolutely no patient
Speaker 3: copays in the basic coverage. No patients don't have to
Speaker 3: pay anything out of pocket. On the other hand, in
Speaker 3: terms of the design of the supplemental coverage, we very
Speaker 3: much don't want to do it the way the UK
Speaker 3: does it, but we want to do it the way
Speaker 3: say Singapore or Australia do it, where you can just
Speaker 3: pay the extra cost to top up, like upgrading to
Speaker 3: business class, you don't have to repurchase the entire ticket
Speaker 3: to get a little extra library and just pay for
Speaker 3: the additional cost.
Speaker 2: But doesn't that create again inequities because obviously not everybody
Speaker 2: can can upspend if you.
Speaker 3: Will absolutely we know we see the key mission of
Speaker 3: health care policy to make sure that everyone has access
Speaker 3: to essential medical care, regardless of resources. And beyond that
Speaker 3: we tolerate inequality in you know, the supplemental and the
Speaker 3: same way we tolerate inequality in other aspects of our society,
Speaker 3: you know, housing, food, et cetera. Our proposals about a
Speaker 3: floor not a ceiling. And one thing that's really important
Speaker 3: to understand because I know that makes a lot of
Speaker 3: people uncomfortable, because however we feel about inequality in say clothing,
Speaker 3: you know, many people feel rightly that that health is different,
Speaker 3: that it occupies, you know, a sort of special place
Speaker 3: in our moral firmament. One of the things we make
Speaker 3: very clear in the book is that there's an enormous
Speaker 3: body of research that makes it clear that, as counterintuitive
Speaker 3: as it may seem, if you're concerned, and you should be,
Speaker 3: about the shocking health disparities it exists in the United
Speaker 3: States between high end low income, between black and white,
Speaker 3: health insurance policy is simply not the lever to lean
Speaker 3: on health insurance would make reform would have little effect
Speaker 3: on those health disparities. And probably the clearest way to
Speaker 3: see that is from work that some economists have done
Speaker 3: ichen Chen Maria Poliakova and Petra Parson, who shows it
Speaker 3: in a country like Sweden, and there's other work showing
Speaker 3: this in Norway. Despite universal health insurance and cradle to
Speaker 3: the grave social safety net. The health inequality across the
Speaker 3: income distribution is as large in say, Sweden, as.
Speaker 1: It is in the United Wow, that's surprising to hear.
Speaker 1: So yeah, if you look, I have two questions for you,
Speaker 1: one yes or no. But you can also tell me
Speaker 1: it's not a fair question. Do doctors in the US
Speaker 1: make too much money?
Speaker 3: It's not relevant to our proposal.
Speaker 1: So that's my next question. When you look at the
Speaker 1: when you look at the value chain across patient access,
Speaker 1: and you know you hear the stat thrown around all
Speaker 1: the time that you know a fifth of our GDP
Speaker 1: goes to health care costs. Where is that money going?
Speaker 1: Who is getting that money? Who doesn't deserve it?
Speaker 3: One of the key things about our proposal is to
Speaker 3: realize that you can separate the question of how do
Speaker 3: we make sure that everyone has access to es central
Speaker 3: medical care regardless of resources, from the very hard questions
Speaker 3: that you're raising about how to fix healthcare spending, how
Speaker 3: to make sure that we can spend less and still
Speaker 3: achieve good outcomes. The coverage problem turns out to be
Speaker 3: a really easy one. As I said, basically every other
Speaker 3: high income country has done it. The question you're asking,
Speaker 3: which is a good question, is one that no one
Speaker 3: knows the answer to, and I don't care what they're claiming.
Speaker 3: It's a very very hard problem. But the way we
Speaker 3: can afford it is to realize that, yes, that statistic
Speaker 3: you said is right. We spend twice as much as
Speaker 3: any other country on healthcare fifth of our economy as
Speaker 3: a share of the economy, but only half of that
Speaker 3: is publicly funded. So taxpare dollars in the US are
Speaker 3: not more than in other countries. We're already paying for
Speaker 3: universal coverage through the tax system. We're just not getting
Speaker 3: it all.
Speaker 2: Right, So, just got about a minute left here, so
Speaker 2: forgive me, and I'm just maybe a little brain day,
Speaker 2: But I mean, so, what's the step one towards what
Speaker 2: you are talking about? What do what would we have
Speaker 2: to change?
Speaker 3: What is it? We'd have to completely tear down the
Speaker 3: current system and build system in quotations, the current patchwork
Speaker 3: of policies we have in place, and actually design and
Speaker 3: build a coherent, automatic universal.
Speaker 2: Basically, how does that start? Is it politics? Is it politicians?
Speaker 2: Is it the private sector? How do we start?
Speaker 3: It's it's public policy? So yes, we need it. We
Speaker 3: need to wait. We're waiting for the first you know,
Speaker 3: would be presidential candidate to sign on board for our plan.
Speaker 3: The book just came out today, so you know, I'm
Speaker 3: willing to give it a week or two.
Speaker 2: I guess what you know and listen. I wish we
Speaker 2: had more time because this is a really, I think
Speaker 2: difficult I always feel like healthcare and education these are
Speaker 2: the two things that really need some disruption to happen
Speaker 2: in But healthcare, I feel like there's so much money
Speaker 2: in it. You know that it complicates it?
Speaker 3: Is that fair?
Speaker 2: I just got about fifteen seconds. It complicates it, right.
Speaker 3: It does. But once we agree on the solution, then
Speaker 3: we can start trying to figure out how to achieve it.
Speaker 2: I gotta say, I love a book that says more
Speaker 2: than fifty shades of gray. But it has to do
Speaker 2: with what's going to be considered. You know, kind of
Speaker 2: basic coverage, right, what things go? Fertility treatments?
Speaker 1: Is it basic?
Speaker 2: I don't know physical therapy anyway. Amy Finkelstein, incredible. Check
Speaker 2: out the book.
Speaker 3: Everybody