COVID-19, Health Care, Whose Duty?

Introduction: This topic has been on my mind for some time. In the United States, the Republicans have made healthcare an ideological issue. It is part of the chimera of big government. Progressively for more than 20 years, Republican lawmakers and presidents have sought to reduce the government’s already limited role in American healthcare. There is some irony here as it was President Nixon who was instrumental in establishing some of the existing healthcare safety net.

As a citizen, I often wonder with amazement that private equity firms buy parts of the healthcare value chain. I did not understand the impact until my aged parents had to rely on simple parts of the healthcare system. A fall, meant an ambulance ride to a hospital less than a mile from their nursing home. The bill USD 1,400. Too many falls, the insurance company would not pay.

And, then the high price of health insurance was a shocking personal experience. At 43, my insurance was USD 400+/month with a high deductible. This is for a healthy person with no pre-existing conditions. At, 53, it was pushing USD 600/month. Then, at 63, it passed USD 800/month.

The costs, the means of provision and the duties are issues that I would like to discuss.

Personal Duty: There is no doubt that every individual has a basic duty to try to be healthy. This personal duty has three parts: action — what do I eat, do I exercise; hygiene — do I wash, do I sneeze or cough correctly; and, financial — can and do I insure my health, do I save for contingencies? The financial is the biggest problem. There is a reason why we invented insurance. But, what does one do when insurance is not affordable?

A prudent insured person might arrange for surgery through the insurer’s network and still be billed out of network charges for out of network providers like surgical assistants and anesthesiologists, or mysterious consulting physicians. A surgery with a co-pay of a few hundred dollars may suddenly have uncovered costs exceeding ten thousand dollars. The recovered patient may not have the capacity to pay these, and certainly won’t be able to with compounding interest. Would it surprise anyone that private equity investors in physician practices are part of the increase in what the Atlantic calls “surprise bills.”

Somewhere between extreme corporate greed, a narrowly defined government policy, and poorly controlled costs, healthcare is largely unaffordable for many individuals. Healthcare costs are prospectively a crisis for more if a serious illness or accident strikes them. Therefore, the paying for healthcare in the United States is not simply a personal duty. Somebody else has to chip in. Businesses have a part to play, and government policy and leadership are needed.

Corporate Duty: In between the gig-economy and the structurally poor, business can only address a certain portion of society. Nonetheless, the concept of corporate duty expands well beyond company benefits into policies. The policies range from paid or subsidized sick leave to the pricing of medical products services.

One group of vulnerable workers are hourly wage workers. They may not have fixed hours, contractually they may not have sick leave. Most do not have labor unions to protect them. These at risk workers may have limited protection in the best of times. But, how can they be protected in the best of times. Consider food service workers, only 15% have paid sick leave. Some fear that they will lose their jobs if they take sick days. Others need the money and work anyway. Still others are asked to work despite being sick. The risk to our national health is too great not to change this situation. Surely franchise owners can afford some form of paid sick leave to protect both workers and the public?

Corporate America spent so much effort destroying unions that the resources of organized labor are available to far fewer people than ever before. Republican efforts to pack the courts are seeking to completely de-legitimize unions. Yet, as they succeed, how do workers speak up against well funded businesses? Who creates a balance between corporate greed and public well being? Today, nobody.

Remember those private equity firms? What exactly is the profit on a USD 1,400 nearly one mile ambulance ride? How does the public benefit from surprise bills? And, as we will discuss below, who benefits from a broken patent system? Martin Shkreli is the poster child of bad investor behavior. His behavior was so outrageous that most people can’t see the polite, well dressed vampires finding every drop of financial blood in the medical system.

It might be a corporate duty to care for workers, to deliver essential goods and services at a fair price. But, it’s not happening. That means government has to step-in. Typically, government steps in when there are market failures which can be addressed with executable policies and services.

Government Duty: Bernie Sanders is mocked for praising Cuba’s healthcare system. Cuba’s government may have many faults. Quality, affordable and accessible healthcare is not one. In fact, Cuba achieved similar medical outcomes to the US with a per capita expenditure of USD 558 compared to USD 8,845 in the US. So Bernie is not crazy. Even if the US rejects a nationalized or socialized medical system, there are rich lessons available from Cuba’s healthcare system. Are we learning any of them?

More on point are the following questions: Whenever threats arise like COVID-19, there is no resource if private medicine fails. How could this be addressed? How could the federal and state governments assure a well distributed healthcare safety net?

Probably the most important challenge is that the US lacks a true emergency command and control for either epidemics or healthcare. In a recent opinion piece, Robert Reich pointed out that the American financial system has the Federal Reserve to coordinate crises, but nothing of the sort for public health. And, this is part of a two pronged need: coordinate and systemic policies.

Imagine the CDC playing a role similar to the Federal Reserve Bank (FRB). As the FRB coordinates with the Treasury, FDIC and state financial regulators, so the the CDC could with the Department of Health & Human Services, the FDA, Medicare, Medicaid, the Veterans Administration and state health departments. Especially during a pandemic like COVID-19 or a localized disaster like Hurricane Katrina, such coordination could improve responses and assure that appropriate actions are taken at the right time. Intelligence agencies warned the executive branch about COVID-19 as early as January. But, the decisions to move from ignoring, to mitigating to suppressing the epidemic took up to seven weeks.

The second prong is the deep problem. In a pandemic, the nearly 28 million Americans without health insurance, the hourly workers without health benefits, and the workers without sick leave may create the butterfly effect, amplifying a controllable problem into a sickness tsunami. Congress, the President, and businesses alike have a duty create the policies that protect millions, and with them the nation and our neighbors. Instead of rolling back the Affordable Healthcare Act which reduced the uninsured from 46 million, the Congress and President should be examine how to close the gap so that this weak link in our national health doesn’t overwhelm the Republic in a health emergency like we are currently experiencing.

As discussed above, only policy can address the poorly performing insurance system. Federal policy can control surprise bills amongst other issues in healthcare. Policy can also address issues affecting healthcare which include supply, distribution, and cost.

A hands-off government creates more problems by leaving healthcare to market-pricing, and allowing the endless refinement of patents. These ideas are intertwined. The idea of a patent is simple. Let the inventor have time to profit from his or her R&D. But, individuals like Martin Shkreli who jacked up medical essentials over 600 times their prior price by making minor adjustments to the products and extending the patent or by declaring the drug a specialty drug. And, then there are patent trolls who buy patents, which Shkreli did indirectly by buying the company. They too jack-up prices, but with no operating business risk. Even drugs like insulin which was meant to be in a trust so that the price would always be affordable are subject to price gouging. And now, bankers appear to be pressuring medical suppliers to raise prices to profit from the COVID-19 pandemic. On the one hand, policy by limiting rates of price increase, especially for essential drugs and treatments, protects the national well being. On the other hand, rejecting patent tweaking and price gouging by patent trolls will assure an enduring protection of the Republic’s capacity to afford and deliver healthcare. The Republic is not the government, but the citizens.

Finally, there is the medical supply chain. The United States, once self sufficient in almost all medical supplies, now relies on China and India for most medicines, and China for many of our other supplies. As a result, the US can be cut off from key medicines in different types of emergencies. The greed of corporate capitalism has proven a danger to the nation by offshoring critical and essential supplies. It may be cheaper to make in China, but it may not be available in a conflict or other crisis.

Conclusion: The United States is now in a crisis of its own making. The stigmatization of government has is approaching its logical end. The lack of policy and tools has gradually put the United States in a position that it cannot easily address a pandemic, it must rely on global rivals for essential medicines, and it is failing its citizens. Each of the failures address in this essay may be addressed by policy, and policy can create coordination. The cost to business may be modestly more than it wishes to pay, but the benefits to the Republic of restoring the social compact and protecting the national interest in good health for all cannot be counted.


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