Are we in a health care crisis?

Marcia Angell, MD
New England Journal of Medicine

We certainly are in a health care crisis. If we had set out to design the worst system that we could imagine, we couldn't have imagined on as bad as we have. Here's a system in which we spend over twice what the next most expensive country spends on health care -- that's Switzerland. We spend roughly $4500 for every American, whether they have insurance or not. Switzerland spends maybe $2500 for every citizen. Canada spends maybe $2,000. Great Britain, poor little Great Britain, spends about $1,000 for every British citizen. And what do we get for it? What do we get for that $4500? Well, we certainly don't get our money's worth. We have roughly 43 million people with no insurance whatsoever, and among the rest of us, many of us are underinsured. That is, we have shrinking packages. This might be covered, but that won't be covered.

Our life expectancy is shorter. Our infant mortality is higher. Our childhood immunization rate is lower. And look at how often we get to see the doctor, how long we get to stay in the hospital. Canadians see their doctors far more often than we do. Americans really can't afford to go see their doctor. There's always some co-payment, some deductible, or they have to pay out of pocket, or something isn't covered. But in Canada, where everybody is covered for everything, they go to the doctor much more often. When they are hospitalized, their hospital stays are longer. If they're having a baby, they get to stay four or five days. Japan has very long hospital stays. Ah, it's almost a rest cure. People in Japan who are hospitalized might lie around the hospital for a week or two just to take a rest. So we're really not getting our money's worth. It's going to all sorts of things, but not to doctors and patients.

What are the dangers that we're facing right now?

Well, the danger is that our health care outcomes will start to drop. As I said, they're not all that good in the developed world. We're of the 25 richest countries in the world, we're somewhere around 22-23 in terms of our health. That could get worse, but the greatest danger is that spending so much money on health care risks the feeling that we somehow have to cut back on access, we have to cut back on availability, we have to cut back on quality because it costs too much. Right now the economy is doing well. We're rolling in money. So we feel, yes, we can have it all. We can put all this money into health care and we can also have patients' rights bills and maybe a pharmaceutical benefit for Medicare patients. But that's going to increase the cost in this system. The only way to both reduce cost and increase access and quality is to change the system, to scrap it and start over.

Toss it out and start over?

Yes, because it's based on a false premise. Our health care system is based on the premise that health care is a commodity like VCRs or computers and that it should be distributed according to the ability to pay in the same way that consumer goods are. That's not what health care should be. Health care is a need; it's not a commodity, and it should be distributed according to need. If you're very sick, you should have a lot of it. If you're not sick, you shouldn't have a lot of it. But this should be seen as a personal, individual need, not as a commodity to be distributed like other marketplace commodities. That is a fundamental mistake in the way this country, and only this country, looks at health care. And that market ideology is what has made the health care system so dreadful, so bad at what it does. Yes, it does do what markets are supposed to do. It expands. That's what markets are supposed to do. And it distributes a good according to the ability to pay. But that sure is not what we want of health care.

What led us to this situation?

It's very American. This is a very capitalistic country with relatively few safety nets as compared with Europe and Canada. It's a cowboy country. It's always been a cowboy country, and health care, as I said, has been seen as just one more commodity and the genius of the marketplace will take care of it. People don't think, "Well, how will that play out? Suppose you're poor and you're sick, what will the marketplace do for you," because if you want a VCR, for example, and you're poor, you don't get it. So you do without a VCR. Are you really going to say that to someone that has a brain tumor? So you do without your brain surgery. And also what markets do is they put out a lot of goods. The consumer pays out of pocket. He or she looks around, looks for a bargain, decides maybe he can't afford a VCR this year, he'll get one next year. Well, imagine you have a brain tumor. You're gonna shop for a bargain? You're gonna say, "Well, I don't want an excellent brain surgeon. I want a mediocre brain surgeon. I want a cheap piece of brain surgery." No. And you can't say, "And I'll wait until next year," either. This is a life and death thing and we ought to treat it that way. We ought to treat it the same way we treat education. You don't personally buy education insurance or your employer doesn't buy you education insurance. It's something that a decent society supplies to everyone.

How would you pay for health care as a social obligation?

I would pay for health care in a single payer system, and what goes into that pot can vary. In Germany, employers have to contribute to that pot. I don't think that's a good idea. Ah, I would rather see it come straight out of tax revenues, out of general revenues. Now a lot of people bridle at that. They say, "What? Our taxes would go up." First of all, I'm not at all sure they would. Ah, I think if we got out all of the inefficiencies that the private sector introduces in the health care market, oddly enough -- it's very inefficient system. If we got out those inefficiencies, I'm not so sure that we would spend that much more from taxes than we now spend on Medicare and the other tax supported parts of our health care system. But be that as it may, people bridle at the "T" word. "My gosh, we don't want anymore income taxes." And yet we pay for health care now. We pay for it out of our paychecks, out of the cost of goods and services, out of deductibles, co-payments, out of pocket for much of what we get now. It would be much more efficient and cheaper to pay for it out of taxes. We might get down to where the Swiss are. They have a very good system at 2500 a person. If we paid for it in an efficient way, out of taxes, we might get down to 2500 a person.

Do ethical concerns play a role in the debate about health care policy?

Well, our health care system creates ethical dilemmas that no health care system should create. In managed care, doctors are paid for doing less. The employers pay the HMO a certain amount, as little as they can get away with, and then HMO often pass along that risk to the doctors themselves in the sense that the HMO gets a set premium and if they spend more than that premium taking care of their enrollees, then they're in the red. If the spend less than the premiums on their enrollees, then they get to keep what's left over. And some HMOs pass those incentives along to doctors, to individual doctors and say to the doctor, "Your salary depends on doing less, and you will have something deducted from your salary if you do more. If you do more than, say, ten chest X-rays in a month, we'll deduct something from your salary. But if you do fewer than five, we'll give you a bonus at the end of the year." So there are financial incentives directly affecting doctors now that put them at odds with the best interest of their patients. Now, to me, this is an unethical system, and it puts ethical doctors in a terrific quandary.

I think doctors are really suffering now. They're suffering in the sense that they feel torn between serving their patients in the best way they can and dealing with all of requirements of the insurance companies and the HMOs and the hassles and the paper work and the increasing pressures to do less and less for their patients. And the loss of autonomy. In a nut shell, their loss of autonomy. If you go back to the old days, doctors were paid fee-for-service, the insurance companies reimbursed whatever the doctors charged, and whatever the insurance companies asked for in premiums, the employers gave. In those days the doctors and the patients were kings. The bargain was entirely between the doctor and the patient. Doctors were often paternalistic and arrogant, but still the transaction was between the doctor and the patient. Doctors who were paid fee-for-service and whose fees tended to be skewed preferentially to reward high technology procedures, tended to do more of these things, more high technology procedures, more tests in general, more visits in general. No questions were asked and so they began to do too much and that gave rise to the incredible health care inflation that we began to see in the '60s and the '70s. That was not a good system, and yet it had one good element, and that is that the essential transaction was between the patient, the sick person, and the doctor who was going to take care of him or her. Now the patients and the doctors are both more or less helpless.

Why are we maintaining the status quo?

I think there are a lot of reasons we've stayed here, and I think one reason is that the economy has been so terrific in the past decade. It can't go on forever, this wonderful economy. We can see that Harry and Louise are back, that this will be an important issue in the election in 2000. It's been the third rail for the last several elections. Since the demise of the Clinton plan in 1993-94, nobody wanted to go near health care reform after that. But it's back on the front burner. And I think people will start to feel pain soon. People are already annoyed as all get-out with their HMOs. People don't like being told that "This is covered, this isn't covered." They don't like not being able to collect and having to pay out of pocket. They're not happy with their health care system. I think they've been afraid, so far, to go for any big changes, partly because of the propaganda about the government. I mean Harry and Louise was a very effective ad campaign during the Clinton Health Care Reform attempt, and they're back on television with the same dark hints that if government takes over, we're all going to go to hell in a bucket. But I don't think that's going to wash this time because doctors and patients both know that after enduring the tender mercies of the managed care industry, they might like a little bit of government regulation. In fact, the most successful part of the American health care system is Medicare. And Medicare, which is a single payer, government financed health care system -- what Canada has essentially is Medicare for everyone -- but this is a government financed, single payer system for people over 65 and it's the most popular part of our health care system now. I think people are going to wake up to this and Harry and Louise are not going to have as much effect this time.

Where do you see us going down the road?

What happens could go in one of two completely different directions, depending on whether we do the right thing as a society or not. We could be a decent society that looks at all of our citizens as part of the same country, the way that Canada does, and say, "Look, a decent society provides certain things for its citizens and health care is one of those things." Some people get sick expensively and some people are well all their lives and then drop dead one day and they cost the system nothing. But we share it all and we say we're all in this together. We could do in that direction. And probably begin by, while we still are in the time of prosperity, extending Medicare decade by decade. Instead of over-65, going over 55. And maybe working up from children toward the middle. Ah, and then we would have a single payer system. Now naturally the insurance industry will fight this like crazy. In Canada they just said overnight, "You're out of business. No more health insurance here. You're out of business," to the private insurance companies. I'm not sure we could do that, but there may be some way to encourage them to go back into fire and floods or something.

If you look at Medicare, people say, "Government is inefficient." That's not true. The overhead of Medicare is one percent. The overhead of the private insurance industry is roughly 20 percent. That's profits and administrative costs. So Medicare is extremely efficient, even given the fact that they have to use private carriers, which they do. But we could go in that direction to a single payer system, Medicare for everyone. Or we could, instead of being one country, we could decide that we're going to be like a Third World country , like India. And the rich do fine and the almost rich do okay, and the poor, who cares about them?

It's sometimes said the Canadian system works only because it's next to the United States, that if you need something and you can't wait whatever the period of time the wait is, you can go to the United States and be treated.

Some Canadians do come to the United States to get treatment. But it is greatly exaggerated, the number who do. Yes, on the border, in Cleveland, Buffalo, hospitals will cater to rich Canadians who come across the border for things that they want in a hurry. To me, that underscores how terrible our system is because there are plenty of citizens of Buffalo and Cleveland, United States citizens, who can not get health care, but these hospitals and doctors will sell the health care like a commodity to rich Canadians who can come down and buy it.

If you have an elective procedure in Canada, let's say a knee replacement, you're not going to wait that long. Yes, you might have to wait four months. That's probably roughly the average for a knee replacement. If you're an American with private insurance that covers a knee replacement, you might have to wait two days. If you don't have insurance, you'll wait forever. So which is better, four months or two days or never for your knee replacement?