The Health Care Reform Expert-Industrial Complex


For over a decade Washington DC has been busy with fixing health care. For over a decade, the same government bureaucracy, the same advocacy (read lobbying) organizations, the same expert think tanks, the same academic centers, the same business associations, with the same people hopping around from one entity to the next, have been generating and applying the same “innovative solutions” differentiated solely by their aggrandizing names. The result? Health care is more expensive than ever. More people than ever can’t afford to seek medical care. More doctors are disheartened, to the point of committing suicide. All this while the illustrious transformers of health care are accumulating fame and riches, probably exceeding their own expectations, with no end in sight.

It is no secret that back in 2016 many of us voted for Donald Trump hoping that he will “drain the swamp” or at the very least blow it all up into a spectacular artesian fountain of filth. He didn’t and he won’t. The swamp won. Our special health care swamp is deeper and wider than most, and the Trump administration is making it deeper and wider than ever before.  The single payer lobby is simply proposing to move the existing health care swamp to a bigger and more noxious location, so it has plenty of room to expand in the future. The swampy strategy for fixing health care has always been, and by the looks of it will always be, a game of hot potato. The potatoes are us.

At the core of the guileful verbosity of health care transformation there is nothing more than an elaborate effort to shield corporations, and the governments that serve them, from financial risk. It’s really that simple. We pay our premiums and our payroll taxes, month after month, year after year, and when the time comes, if it comes, they’d much rather not pay the medical bills they are contractually or statutorily obligated to pay. Blame sick people for being sick. Blame the sick for not shopping the clearance aisle. Blame doctors for treating the sick. Blame hospitals for admitting too many sick people, too often and for too long. Punish them for the errors of their ways. Teach them a lesson or two. And most importantly, make them pay until it hurts.

Managing the Health Care Consumer

The most blatant attempt to throw people under the bus is the insanely brazen effort to remake medicine into a consumer industry. Patients, according to the narrative, are empowered when they spend their own money on health care. Increasing deductibles for health insurance, while also increasing premiums and limitting choice of service providers, is how we weaponize sick people in the war against rising health care prices. If enough diabetics choose to die rather than overpay for insulin, prices for the drug will surely go down eventually, because Southwest Airlines will come up with a disruptively innovative version of insulin that will not be as fancy, but it will be cheap enough to spur increased market participation and push Eli Lilly into bankruptcy. Any day now.

The return to pre-1965 days of consumerism in health care for the first $6,000 of medical expenditures was a good step forward, but the road to fully optimized profitability is long and full of terrors. Consumers are like goats. If left to their own devices, they will destroy your landscape in five short minutes. However, with proper guidance and supervision, they will clean and protect your property from the dangers of random wild fires. Managed Care insurance plans, coupled with high deductibles, ensure that consumers do not eat into your nice profits, while consuming enough garbage to keep your bottom line from going up in smoke.

From Volume to Value

Offloading risk to sick consumers is working relatively well by all accounts, but it is not working well enough, and it is not working for beneficiaries of public insurance where the consumer lever is rather short and limp. And so, we push the “provider” lever next. Once patients became consumers, their doctors, naturally, became providers. And just like empowered consumers, empowered providers should have some financial skin in this game. In the current system, you see, providers are just sitting there, placidly watching the register go cha-ching every ten, fifteen minutes like clockwork. If the consumer gets better, fine. If not, also fine. As long as there are no malpractice lawsuits, and the cash keeps flowing, providers are surely satisfied. How do policy makers and garden variety health care experts know this? Simple. It’s called projection.

Moving “from volume to value” does not mean moving from indiscriminate overconsumption to eclectic consumption of excellence. It means moving from lots of variably priced stuff to small amounts of cheap stuff. It means moving from assumed abundance to assumed scarcity. If you can find excellence at the Dollar Store, good for you. If you can’t, well, whatever. Saks Fifth Avenue is out of bounds. And your provider is supposed to enforce those boundaries, at his or her own risk. If you manage to sneak into Saks, your provider will be punished. If you stay where you belong, your provider will be rewarded. Simple. It’s called stewardship.

Global Budgets

This is not fair. Obviously. These very clever risk levers are based on wealth, and since we have massive wealth inequality, the levers are largely discriminatory. Wealthy providers couldn’t care less about adding or removing a dollar from each patient visit. Poorer providers can be driven out of business by a fifty cents difference in “reimbursement”.  Wealthy patients don’t have to become consumers at all. For patients who are not wealthy enough (or poor enough), even the Dollar Store is cost prohibitive. There is too much privilege at the top. The only fair solution is to shut down Saks Fifth Avenue completely. If everybody is forced into the Dollar Store, eventually the Dollar Store will get better. It will become as good as Saks, but at $1 prices, because the wealthy will demand it. Right. 

Shuttering the Saks Fifth Avenue of health care is hard. You can’t just show up at Bayonne Medical Center one morning with a wrecking ball and have at it. Fortunately, the Medicare For All aficionados have a solution: Global Budgets. Once the Federal government controls all health care dollars, they give Saks Fifth Avenue a fixed amount of money to service all their customers for the year. The amount of money is calculated based on Dollar Store costs, with a little markup perhaps, so we don’t appear overly vindictive. Within a few months, you won’t be able to tell the difference between a Saks store and a Dollar Store, except maybe the crumbling façade from a bygone era. That’s how we rid ourselves of inequality and excess privilege, of course.

Remember when Paul Ryan and his evil acolytes proposed replacing the open-ended Medicaid financing model with block grants to States (i.e. fixed amount of Federal money to service all their Medicaid beneficiaries)? There is a one hundred percent overlap between the people who screamed about millions dying in the streets if Medicaid moves to block grants, and the people now climbing the Medicare For All barricades in support of global budgets. Rationing medical care for the poor, or “by ability to pay”, is immoral. Rationing medical care for everybody, regardless of ability to pay, is righteous. Simple. It’s called justice.

A Permanent Solution

It is not surprising that health insurance companies would look out for their bottom line at customers’ expense. After all, these are insurance companies, like home insurance or car insurance, which are notorious for continuously devising innovative ways to minimize current and future payouts. Perhaps it is also not too much of a shocker to see that government is at its best when working to eschew commitments made to its citizens. What should however give you pause is that both government and health insurers seem to have finally found a good way to coopt physicians into doing their bidding. Not all physicians, of course, but more than enough to make a permanent difference in the practice of medicine. Either due to misplaced fear or newfound conviction, your doctor’s prime directive now is to do no harm to the United States Treasury and the corporations for which it shills. 

4 thoughts on “The Health Care Reform Expert-Industrial Complex

  1. OMG, Margarite! This is so right on, particularly the part about blaming doctors and patients. Just finished the following parable that I am getting ready to post on another site. It is remarkably similar in thrust to the above essay. Please forgive this Reagan-esque anecdote:

    I decided to lower my carbon footprint last week and take Amtrak instead of American Airlines up to Wharton for my annual lecture on health policy and economics. We left Washington DC’s Union Station two hours late, ran twenty minutes up the line and pulled over on a siding. The crew announced that it had timed out, and we sat for another hour waiting for a new crew to come down from Baltimore to relieve them. My fellow passengers and I marveled that our crew timing problem was not foreseen at Union Station twenty minutes earlier and a new crew provided there.

    There is no disputing that our health system is an inequitable and wasteful mess. But it requires an Olympic-qualifying leap of faith to believe that an Amtrak solution-nationalizing it-e.g., Medicare for All- would materially improve it. The last Administration, stacked with talent, gave itself four years to organize the ACA coverage expansion, and couldn’t even stand up a freaking website to enroll folks. The previous Administration bollixed up the Medicare drug benefit rollout. Lord, please save us from the next wave of well meaning technocrats that want to make our health system better.

  2. Thanks for this, Margalit. Though Canadian, I’ve long advocated that the US can’t simply import Canada’s model but needs a bespoke solution that actually addresses issues with America’s delivery of health care.
    You’re absolutely right to suspect that launching global budgets without addressing the “Saks Fifth Avenue” domination of health care is as much of a folly as launching mandatory coverage without controlling costs.

    However, I’m curious. Do you really believe the swamp beat Donald Trump? Because looking at the legislative history around his health care efforts, he had no intention of draining the swamp – he just used empty rhetoric to do what Republicans have excelled at… doubling down on an existing system that is failing the most vulnerable Americans.

    Also, is there a model by which you believe that Medicare-for-all could work?

    1. Yes, Jason, I do believe the swamp is beating our current President, just like it beat all other Presidents before him. It’s easy to assume that “orange man bad” or that “Republicans are evil”, and I think the presses are working overtime to inculcate those notions in all of us. The problem here is that Mr. Trump is not really a “Republican”. Not sure if you recall his early gaffes in 2015, when he supported single payer health care, planned parenthood, transgender rights, taxing hedge funds, and such. These things keep coming up periodically, like amnesty for DACA, expressing support for gun control, pulling out of foreign wars and refusing to start new ones (I for one am grateful to have a President who refuses to authorize the customary “proportional response” to downing some drone, because a handful of Iranian civilians might get hurt).

      They stepped in and made him correct those “gaffes” early on, because he was after all running as a Republican (he grumbled publicly, by the way). I was hoping that after the election (and my bet was on him the day before the Iowa caucus), Democrats will have a field day and pass legislation after legislation to solve real problems for real people, while ignoring the optics of Twitter. It was a huge opportunity. Nobody was interested.

      Instead, everybody embarked on a clearly swamp-led total BS Russia story, complete with impeachment and indictment threats. This made it impossible for him to tell Paul Ryan to take a hike. The only way he could avoid falling pray to this brilliant coup attempt was to seek refuge and protection on the right, because the left (and center and the Koch/Corporate wing of the swamp) was out with pitchforks and would give no quarter.

      Nobody with real power in DC wants to change the status quo, and in case you haven’t noticed, very little has changed in the last 3 years… or the last 30 years. I am still hopeful though against all odds, that maybe inadvertently, by chance, due to the constant commotion perhaps…. something will break and kick the system off this poisonous path we’ve been following for decades.

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