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