Why Black History Month Matters

January 30, 2020

I learned how subjective and distorted the historical record can be as a history major writing my thesis on the Spanish Revolution of the 1930s. “What Spanish Revolution?” you are probably asking. My point exactly. In high school I had learned about the Spanish Civil War, but never once heard about the major political and social revolution occurring throughout much of the country at the same time. In this case, it’s probably not that surprising; Franco and the Fascists won the war, and as the old adage goes, “history is written by the victors.”

Thinking more broadly, beyond wars and battles, history is written by those in power. This affects what gets reported and remembered – why, for instance, Virginia has 242 Confederate monuments and Massachusetts has none. Yet those in power not only determine how history is written, but how it unfolds. The first integrated high school in Massachusetts was in 1831; the first in Virginia was in 1959.

Black History Month is more than a celebration of the richness of African American history. It is a chance to correct the historical record. When we learn about the first black astronaut (Guy Bluford, 1978), or the first black Supreme Court justice (Thurgood Marshall, 1967), we can appreciate their achievements and contributions to America and the world. But we also need to reflect on why it took so long, why Bluford didn’t get named to the NASA program until 20 years after the first white astronaut was named, why it took 180 years before the first African American was nominated to the highest court. We need to reflect on the ways that racism and white supremacy kept people like Bluford and Marshall and millions of other people of color from even the possibility of those achievements. We need to understand how racism not only twists the retelling of history, but its very shape.

Black History Month is a time to raise our awareness, and to re-educate ourselves about our history, about the many ways in which African Americans have been left out of not only the narrative but the events. Yes, we should celebrate the many ways in which African Americans have enriched our nation. But we should also remind ourselves of how much more could have been possible.

Three Cheers for Children’s “Whistleblowers”

December 6, 2019

“Publicity is justly commended as a remedy for social and industrial diseases.  Sunlight is said to be the best disinfectant,” wrote future Supreme Court Justice Louis Brandeis in 1915, advocating for the concept of transparency as a cure for corruption.  Hidden problems can’t be fixed.  Whether due to malfeasance or ignorance, problems are not always surfaced.  Sometimes, someone needs to pull back the curtains to let the light shine on it.  Or to use a different analogy, someone needs to blow a whistle.

The idea of ferreting out problems and bringing them to light has a long tradition in America, with its legacy of free speech and free press.  The first legislation to protect federal whistleblowers, the False Claims Act, was passed in 1863.  And investigative writers such as Ida Tarbell and Upton Sinclair reveled in their reputation as “muckrakers,” digging up problems ranging from dangerous working conditions to tainted meat to market manipulation by trusts.

As I said, problems are not always due to ill intent – the vast majority are not.  In healthcare, we have moved away from considering errors as a sign of individual incompetence, and seeing them instead as a symptom of a system that is not optimally designed to promote the desired outcomes and prevent the wrong ones.  But in a system as large and complex as a hospital, many problems would go unrecognized by those who can help optimize that system.  Hence the need for “sunlight,” in the form of what we now call Safety Learning Reports (formerly known as incident reports).

We encourage clinicians and all staff to report issues, especially when it’s just a potential issue that never actually causes a problem for a patient – a near miss – that might otherwise be brushed off as “no harm, no foul.”  That allows us to analyze the issues, find the root causes, and make the necessary changes to prevent future problems.  We learn from them.  The issues that are reported in SLRs can take many forms: incorrect medications, equipment malfunction, communication failures, etc.  In order to address issues of equity, we have recently pioneered a new type of SLR, one around issues of dignity and respect.  We always have more to learn.

Knowing about problems is the first step toward improvement.  Yet admitting problems is hard.  Which is why I am so proud of the fact that Children’s Minnesota has over 5000 safety learning reports in 2019, an all-time high.  It’s not that I’m glad we have problems.  I am thrilled that our people are becoming more and more willing to bring them forward.

By one measure, it’s a hard time for whistleblowing.  In New Orleans, a construction worker who raised safety concerns before the fatal collapse in October of the Hard Rock Hotel being built there appears to have been reported to immigration officials in retaliation for his speaking up.  And the response to the whistleblower in the impeachment case shows the courage needed even to reveal problems anonymously.  While healthcare has made great strides in moving from a culture of blame to a culture of safety, I understand the emotions that make speaking up about problems difficult.  This is why while we do not encourage anonymity, we do allow SLRs to be submitted anonymously, something not all health systems embrace.  I am encouraged that only about 10% of all SLR’s are anonymous at Children’s, and that number is decreasing.

So keep those lights shining, keep those whistles blowing.  And kudos to every one of our 5000 whistleblowers – three cheers!

Value – Is It Inconceivable?

November 15, 2019

“Inconceivable,” says Vezzini repeatedly in the movie The Princess Bride.  “You keep using that word,” replies Iñigo Montoya.  “I don’t think it means what you think it means.”

I use this quote frequently when certain words are used.  Transparency is one of them.  And now I’m beginning to think value is another.

The concept of value is simple: it means you get what you pay for.  Both a burger at Culver’s and a steak at Manny’s can be high value, if the quality of the meal is commensurate with the cost.  We often define value as quality divided by cost.  One can maximize value by increasing quality, decreasing cost, or ideally both.

“Value-based care” is another simple concept.  Traditionally in healthcare, providers are paid according to the volume and complexity of services provided.  Payment is the same regardless of the quality or outcomes of care provided.  If I do a test I get paid the same regardless of whether that test led to a correct diagnosis.  In fact, if I do two tests and reach a wrong conclusion from them, I would be paid more than doing only one of those tests and coming to the right diagnosis.  That would strike most people as silly.  In distinction, value-based care refers to being paid for delivering higher value.  So for example, I would be rewarded for making the correct diagnosis with the fewest tests, because I maintained quality while decreasing cost.  Or I might be rewarded for doing a somewhat more expensive test if it not only led to the right diagnosis but did so more quickly and with fewer complications (since timeliness and safety are also elements of quality).

Value-based care takes numerous forms.  A simple one is “pay for performance,” where a provider gets paid more for achieving certain performance targets.  More complex are various risk-based payment models, where the provider has at least some of the financial risk for care, and therefore has an incentive to maximize value.  For example, “shared savings” means that if a provider can provide the same quality care at a lower cost, the savings are shared between the provider and the payer.

However, like many simple concepts, the execution is more challenging, at least in part because different people throw around the word value to mean different things.  To most insurance companies, “value” exclusively means “cheaper”.  They pay no attention to the numerator of the value equation.  Pay for performance targets, for instance, are rarely about quality, only about cost.  There is little appetite for paying a little more for better outcomes, much less better patient experience or timeliness.  Providers, on the other hand, often want to use the value equation to claim that their quality is better, in order to justify higher costs.  Part of this is cultural: people in the healing professions find it hard to accept that anyone would settle for anything less than the best, even when best is hard to define.  And of course part of it is self-preservation.  After all, to paraphrase the comic strip Pogo, “We have seen the cost, and he is us.”

Which is why I actually prefer a different formula for value, one that doesn’t divide quality by cost, but equates value with quality in all its dimensions.  It is not a trade-off, but rather additive.

Value = quality = effectiveness + safety + experience + equity + efficiency.

This shows that you can’t maximize value unless you have care that is as effective as possible, as safe as possible, as timely and patient-centered as possible, and also as efficient as possible.  We fight over which aspect is more important, but frankly patients and families think they are all important.

I’ve been trying for some time and have gotten nowhere pushing this equation, so I’ll work with the trade-off.  But until payers learn to focus on the quality aspect, and providers on the cost, we’ll keep talking past each other, waving our respective value flags.  And agreement on truly value-based care will remain, well, inconceivable.

Seek and Ye Shall Find

October 10, 2019

Picture a networking breakfast where several Children’s Minnesota executives had the opportunity to meet in an intimate setting with some of the top health care talent in the entire Twin Cities region, in an effort to fill approximately 150 professional vacancies in areas like nursing, pharmacy, information technology, and others.

Did you notice that those potential employees were all people of color?

I had the good fortune to attend the semi-annual Twin Cities People of Color Career Fair the other day.  This was the first time Children’s has participated; it won’t be the last.  The brainchild of Sharon Smith-Akinsanya, of the Rae Mackenzie Group, the POC Career Fairregularly attracts over 600 attendees seeking opportunities with major employers in the region.

Children’s Minnesota has made improving the diversity and inclusiveness of our workforce a priority.  There are several good reasons for this.  First, helping to counter centuries of systemic oppression is just the right thing to do.  In addition, there is a growing body of research showing that more diverse organizations are more effective and successful.  This is particularly important in health care.  A workforce that better reflects the patients and communities served leads to better outcomes and patient experience and is a key strategy for closing the enormous health disparities we have in our society.

Increasing the diversity of our people isn’t going to just happen, and it can’t rely on a passive approach.  One important element is ensuring that we identify the best and most diverse talent in the first place.  To do that, we need to go beyond our usual approaches to recruitment.  Word of mouth referrals, internal promotions, college job fairs, recruitment firms, job web sites – all of these carry a historical legacy of biases and barriers to people of color.  The resulting applicant pool is therefore incomplete and unrepresentative.  If we want to have the broadest possible pool of talent from which to choose, we need to reach out in different ways: recruiting at historically black colleges and universities, reaching out to professional organizations oriented to people of color (e.g., National Medical Association), and events such as the POC Career Fair.

A large number of leaders and volunteers from Children’s staffed our booth, which was a buzz of activity all day.  We left with over 250 resumes from many outstanding and accomplished professionals.  It was a great first step toward bringing the most talented – and diverse – people to our organization and engaging them in our mission to partner with every family in raising healthier children.

No Vacancy

September 6, 2019

We have a friend I’ll call Jose, who immigrated to this country from Nicaragua several years ago.  He immigrated legally: he was engaged to an American, a friend of our family.  While waiting on his application for legal permanent residence – i.e., his “green card” – he was not permitted to work, and the application costs upward of $1000, so they needed to save from his fiancée’s modest salary.  Fortunately, as a legal immigrant he was entitled to apply for non-cash assistance, such as Medicaid and

Supplemental Nutritional Assistance Program (SNAP, a.k.a., food stamps).  Fast forward a few years, Jose is now a proud American citizen himself, has worked and earned several promotions, and they are married with two children.  Earlier this summer he stood up in my own son’s wedding.  Sounds like the prototypical American Dream.

Which might not be possible now thanks to two recent decisions by the Trump Administration. Under the new “public charge rule,” Jose’s green card, the most important step to being able to work and ultimately become a citizen, could have been denied because of being on Medicaid or SNAP.  As a legal immigrant, he is legally able to receive those benefits, but doing so jeopardizes his ultimate goal of being able to remain in the US with the woman he loves, in a country he loves.   Such individuals face a difficult choice between their present health and well-being and their future dreams.  Moreover, another new ruling threatens to even take away that choice.  CMS recently determined that states must not only consider a legal immigrant’s income, but that of their sponsor, in determining their eligibility for Medicaid or CHIP.  Both of these policies raise the bar substantially in the ability of immigrants – legal immigrants – to obtain assistance they may desperately need.

It threatens children, too.  While the rule states that benefits received by family members would not be counted against them in the LRP process, many legal immigrants with children who may be eligible for Medicaid or SNAP will be reluctant to trust a system that has already turned against them and hold back on getting those benefits for their kids lest the rules change again.  Prior policy, in place through the prior three administrations since 1999, only considered cash benefits such as TANF in determining whether someone was likely to become a public charge and therefore denied a green card or entry into the US.  In fact, that earlier policy specifically wanted to clarify that Medicaid, CHIP, and SNAP were not grounds for being considered a public charge because that belief “deterred eligible aliens and their families, including U.S. citizen children, from seeking important health and nutrition benefits that they are legally entitled to receive. This reluctance to access benefits has an adverse impact not just on the potential recipients, but on public health and the general welfare.”

According to the Kaiser Family Foundation, there are over 13.5 million Medicaid and CHIP enrollees, including 7.6 million children, who live in a household with at least one noncitizen or are noncitizens themselves and may be at risk for decreased enrollment a result of the rule.

Let’s be clear –  this is not about combatting illegal immigration.  Both of the new policies specifically refer to individuals who have been legally allowed to enter the country and purse a pathway to LRP and eventually citizenship.  It can only be interpreted as being intended to discourage any immigrants – at least those who are not affluent – from coming to the US.  It’s a huge “No Vacancy” sign being hung up on America.

Most of us have needed help at one point or another.  Many of us have been in a position to obtain that help from a family member or friend: a spare room to stay in for a while, an informal loan to get a car repaired, gift cards to a grocery store for Christmas.  But others don’t have those connections and may require a boost from the government.  We shouldn’t be holding that against anyone, including those hoping to pursue the American Dream – or their kids.

Science Loses to Ideology – And So Do Kids

August 9, 2019

In 2010, the Healthy, Hunger-Free Kids Act was passed, calling for the government to establish improved nutritional standards for school lunches.  These standards, enacted in 2012, set limits on sodium, added-sugar, and calorie content of lunches, and required more whole grains and fruits and vegetables.  The goal, of course, was to address the growing problem of obesity.

Some of you will recall the pundits on cable news decrying the efforts of the “nanny state” to tell us how to feed our kids.  These investigative reporters discovered mountains of inedible food piling up in the trash cans of school cafeterias after the disgustingly nutritious meals were soundly rejected by students across the nation, who instead were demanding that ketchup once again be considered a vegetable.  Remember that?  It turns out it was untrue.

A recent study of the effect of the new lunch standards found the following:

  • The nutritional value of school meals increased substantially, from an average score of 57.9 out of 100 prior to the standards, to 81.5
  • Sodium, refined sugar, and calorie content of meals decreased, while adequacy of whole grains and vegetables increased
  • Participants in the lunch program ate healthier meals (average score 80.5) than their matched peers who did not participate, presumably bringing lunch from home (average score 65.1).
  • The amount of food tossed away was significant; it was higher among elementary than among high school students, and higher when lunch was served earlier, but was similar to the amount tossed away before the standards were set
  • School varied in their compliance with the standards, but among those with the most nutritious lunches, the participation rate of students buying those lunches was higher
  • Also among schools, there was no association between the mean cost of preparing lunch and the nutritional value of the lunches served

In other words, the lunches were healthier, students seemed to like them as much, and they were no more expensive to prepare.  Sounds like what most of us would consider a smashing success.  So of course, in 2017, the US Department of Agriculture announced that it was revising the standards to weaken the requirements.  This might make sense if the source of this data were a potentially biased advocacy organization of some kind, with a hidden nanny state agenda.

The study was actually done and published by – wait for it – the US Department of Agriculture itself.

Yes, the USDA is going against the findings of its own data to reverse what would appear to be a major public health accomplishment.  Secretary of Agriculture Sonny Perdue, in announcing the rollback, said “I wouldn’t be as big as I am today with chocolate milk.”  No doubt.

Earlier this year, a lawsuit was filed by several states (including Minnesota, I am happy to say) to overturn the revised, more lax standards, saying the changes were capricious and not supported by evidence.  Let’s hope that this time science and reason can prevail.  Our kids could do with a little less ideology – and a little less chocolate milk.

Racism and Health

July 31, 2019

If you have any interest in the health of children, the new policy from the American Academy of Pediatrics entitled The Impact of Racism on Child and Adolescent Health is worth reading.  The statement reviews evidence for the effect of racism on children’s health and on health disparities, and makes recommendations on how health professionals can address and ameliorate the adverse health impacts of racism.

One “aha” for me is the notion that racism is, in fact, a social determinant of health.  While I had always considered that disparities in health can arise from disparities in housing, education, etc., and that many of these are mediated by racism, I hadn’t made the connection that racism itself is a social determinant. Not only does racism drive the kind of disparities in these other social determinants, but the internalized experience of racism creates a toxic stress response with adverse health effects as well.

As noted in the AAP Policy Statement, racism is a “system of structuring opportunity and assigning value based on the social interpretation of how one looks (which is what we call ‘race’) that unfairly disadvantages some individuals and communities, [and] unfairly advantages other individuals and communities.”  It further goes on to state that racism can operate through different mechanisms: institutionalized (or structural), and personally mediated.  The latter includes not only the kind of overt, willful, and ugly race hatred of the Bull Connor variety that involves violent threats and racial epithets, but also the subtler, unconscious forms of implicit bias we all carry.  As the National Association of Educators of Young Children puts it, “racism is a system of oppression that results from a combination of prejudice and power.”

Now, the topic of racism has been much in the news recently.  The term itself is seen as partisan and divisive.  Part of the problem is that the term “racism” refers to a concept that is multidimensional and complex, hardly amenable to Twitter-based discourse.  And this, I think, is where much of the rancor comes from.  For many people, “racism” connotes solely the personally-mediated variety, and more specifically, the willful, angry variety.  For them it is only about the prejudice, and not about the power.  Thus they feel that calling out racism equates to questioning their integrity and character, and that of the majority of the population.  Moreover, the fact is that there is fortunately less of that kind of viciously-expressed race hatred than there once was (if still a disturbing amount).  It is thus tempting to think of racism as a thing of the past, rather than an ongoing legacy of centuries.

So how do we get past the sticking point we seem to be at, where the urgency seems clear to some, and the problem seems non-existent to others?  It won’t happen via Twitter, where the complexity of a seemingly simple 6 letter word cannot be explored.  Antiracists must understand that the opposite of antiracism isn’t necessarily pro-racism.  We need to recognize that many people have a narrower view of the same word, and when they hear an attack on racism they hear an attack on them personally.  We need to educate ourselves and each other on the many forms of racism – both prejudice and power – and how racism “saps the strength of the whole society through the waste of human resources.”  Especially our children.

What’s in a Slogan – “Medicare For All.”  Part 3: What Do We Do?

June 3, 2019

As I shared in part 2, “Medicare for All” is really a slogan that encompasses several different approaches to increasing the role of government in the financing of health care, and would represent steps toward universal coverage.  Lots of people, including nearly all folks running for the 2020 Democratic presidential nomination, claim to support MFA, though they differ on which version (and some have endorsed more than one).

A few thoughts all this:

  1. All versions would dramatically increase the government’s role in funding health care. The first option would likely increase the government share of health spending higher even than in Canada or the UK.  But keep in mind that government spending is already more than half of all health spending in the US.  None of the current recipients of this spending (seniors, veterans, etc.) are clamoring to do away with it, it has broad public support, and even those politicians who claim to want to move toward a more market-based system are only tinkering around the edges.  The genie of government role in health care is not going back in the bottle.

Moreover, none of these plans, even the most far-reaching, would mandate any significant change in the US provider system, which is and would remain primarily private.  Like most of the countries who have achieved universal coverage, this is not actually a socialized system like the National Health Service in the UK or the VA and Department of Defense here in the US.  Medicare for All is not the first mile on the road to becoming Venezuela.

  1. The success of any of these needs to recognize that Medicare (and even more so Medicaid) currently fails to cover the cost of providing care. We have managed this for years by shifting costs to the private sector.  The less private insurance there is, the less opportunity for shifting, and the more the government will need to adjust their payment rates in any of these MFA variations.  Any calculations of the cost of any MFA plan that does not account for this and assumes we can simply extend current Medicare or Medicaid rates is underestimating the total cost by at least 10-15%.

I fear that part of the popularity of these plans is the belief that we can achieve universal coverage without any hard choices.  We underfund schools, roads, and other government services and then complain about the quality.  By and large, you get what you pay for.  There is some waste in the current system – overutilization driven by financial incentives and (to a much lesser extent) defensive medicine, high overhead due to the complexity on the payment side, excessive marketing and profit – and some fraud and abuse (though far less than many think).  But the overall cost of achieving high-quality, universal health care will be high, no matter how we go about it.

  1. Every single one of these variations will have entrenched opposition. No matter how popular with the public, the battle to enact any expansion of government-sponsored coverage will make passing the Affordable Care Act look like a walk in the park.  And while the ACA did not solve all our problems, it was a good start.  My advice to those who want to improve health care is don’t let the perfect get in the way of the possible.  And don’t use Medicare for All as a purity test or weapon in partisan warfare.  The 2020 presidential candidates generally support some variation on a path to the goal of fairer, more affordable, more accessible health care.  Look at specifics, test assertions and assumptions, ask if a plan represents progress.  A journey of a thousand miles begins with one step, and the road to universal health care is a long one.  Slogans aren’t policy, and no nation’s health system fits easily on a bumper sticker.

What’s in a Slogan – “Medicare For All.”  Part 2: What Does It Mean For The Future?

May 31, 2019

In part 1, we explored the current US healthcare “system” in all its Byzantine complexity and unsustainability.  “Medicare For All” has become the standard by which nearly all potential 2020 presidential candidates (at least the Democrats) are being judged.  But what exactly does it mean?

Recall that Medicare is the current federal insurance program primarily for the elderly.  All Americans over 65 are eligible, and costs are paid primarily from Medicare payroll taxes and premiums paid by enrollees.  Payments for hospital services, doctor fees, and prescription drugs are made according to a set fee schedule (with adjustments for local factors), with some cost sharing to enrollees.  It is, essentially, a single-payer system for older Americans.  However, private insurance has a role.  First of all, enrollees can choose either traditional Medicare, where payments are made directly by the government, or Medicare Advantage, in which private insurance companies are contracted by the government to provide the benefit.  (In this arrangement, the private insurer can offer additional benefits, typically by negotiating lower payments to providers in exchange for narrowing the provider choice for enrollees.)  Also, traditional Medicare beneficiaries can purchase supplemental private insurance known as Medigap to pay for services not covered by Medicaid, or to offset some of the cost sharing.

So, what is Medicare For All (MFA)?  There are at least five different basic variations on this theme, and people supporting any of these have claimed to be in favor of MFA.  Here is my (admittedly simplified) synopsis, along with my alternate name to help distinguish them:

  1. Medicare for All. This is the bill officially introduced by Bernie Sanders in the Senate and Pramila Jayapal in the House under the name “Medicare for All,” and truly represents, well, Medicare for all.  Literally.  It would in large part extend the current Medicare program to all US residents except veterans and Native Americans (see below).  It would be financed and administered at the federal level, paid completely by taxes.  It would not only replace Medicaid (the federal-state program for the poor and disabled), it would replace all employer-provided and ACA exchange private insurance.  While the government would be the sole payer, providers would be independent rather than government owned.  This makes it most similar to the Canadian system, as opposed to the British National Health Service where hospitals and physicians are government-run.  (These bills would, however, retain the Veterans Affairs and Indian Health Services, which are fully nationalized as it is.)  It actually goes quite a bit further than the current US Medicare system in that there would be no premiums, no cost sharing by individuals, and no role for private insurance or managed care organizations.
  2. Medicare for Many, Opt-Out version (officially, Medicare for America). In many respects similar to number one, but employers could continue to offer private insurance, and people receiving this could opt out of the Medicare system.  The version that has been introduced also retains the Medicare Advantage options, thus preserving a role for private insurance companies.
  3. Medicare for Many, Opt-In version (there are several similar competing bills, such as Choose Medicare). In these flavors of MFA, Medicare would be a federal public plan available to anyone on the healthcare marketplace (“the exchange”).  Anyone could purchase this instead of a private plan, with the same subsidies though the cost to purchase would presumably be lower than for commercial insurance and therefore this would attract many people, including a large number who currently receive insurance from their employer.
  4. Medicare for More (known officially as Medicare at 50). Keeps the system more or less as is, but lowers the eligibility age to 50.
  5. Medicaid for More. This is similar to #3 above, but uses the federal-state Medicaid program to provide a public option rather than the purely federal Medicare.

Got all that?  Good.  In my third and final installment, I’ll share some thoughts on where we might go with all this.

What’s in a Slogan – “Medicare For All.”  Part 1: The Current System

May 28, 2019

My son Evan, when he worked on political campaigns, liked to say “yard signs don’t vote.”  You need to actually convince voters to support your candidate and get them to cast a ballot.  In a similar, though less catchy, way, one might say “slogans don’t create policy.”  Access and affordability of health care remains one of the top issues on the minds of Americans, and it is likely to have a marquee role in the 2020 elections.  The phrase “Medicare For All” has attracted a lot of attention from candidates and media, but what exactly does it mean, and how would it play out as policy?

To explore this question, I want to start with an overview of our current “system.”  I put that word in quotes because in reality we don’t have a health care system, we have a health care hot dish, a patchwork of various private and public methods of payment and delivery.  Let’s start with payment.  The annual spend on health care in the US is about $3,500,000,000,000 ($3.5 trillion – but it looks more impressive with all those zeroes, doesn’t it.)  Although the largest individual slice of that is from private insurance, cumulatively, public spending is almost half.  In fact, surprisingly, as a percent of GDP, government spending on health care in the US is almost the same as in other industrialized countries; the difference is we also spend far, far more from private sources.  Here is the breakdown (numbers may not add to 100% due to rounding):

  1. Private insurance (35% of total spending). As I said, this is the largest single source.  Most of this is provided by employers, with the cost of the premiums split between the employer and the employee.  It also includes private insurance obtained by individuals on the so-called Affordable Care Act-created exchanges or marketplaces.  Of the 167 million Americans covered by private insurance, roughly half are in for-profit plans (e.g., United HealthCare, Aetna) and half in not-for-profit plans (Kaiser, many Blue Cross/Blue Shield).
  2. Government insurance (41%). While the total here is higher than for private, it actually includes multiple different programs:
  3. Medicare (20%). This is a government insurance plan for elderly and certain disabled individuals; essentially all people 65 and older are eligible for Medicare, which covers some 62 million people. It is akin to the Canadian single-payer system (which is also called Medicare): government pays for the care, but is not the provider.  Medicare is paid for and administered entirely by the federal government, which pays for medical services either directly to providers, or indirectly through various private insurance companies which act as a sort of middleman (via “Medicare Advantage” plans).  The government share of the funding comes from a dedicated Medicare payroll tax, and individuals also pay a monthly premium based on their income.  Payment rates to providers are established nationally.  Importantly, while the figures are different for hospitals and physicians, overall the total reimbursement from Medicare tends to be less than the actual cost of providing the care, by 8-10%.
  4. Medicaid (17%). Like Medicare, this is a government insurance plan, but with some key differences. Eligibility is determined by income, rather than age; this is a plan primarily to cover the poor and some others with disabilities, totaling approximately 68 million people.  More importantly, this is a joint federal-state program.  Funding comes from a combination of federal and state sources, and the program is administered by the states, so while there are common standards set by the federal government, states have a good deal of flexibility to set eligibility criteria, benefits, and reimbursement rates to providers.  On average, the gap between Medicaid payments and the actual cost of care is larger than for Medicare, about 12-15% less, though in some states like Minnesota it is as much as 30% less than the cost. (The tradeoff is that Minnesota covers more people; we have very few uninsured.)  As with Medicare, payments may be made directly to providers, or indirectly via insurance companies who contract with the state to provide Medicaid managed care.
  5. Veterans and military (4%). The Department of Veterans Affairs and Department of Defense run systems more like the British National Health Service where government is not only the payer but the provider for some 15 million people.
  6. Individuals (10%). This includes out-of-pocket cost sharing (copayments, deductibles, coinsurance) for those people with one or more of the forms of private or public insurance above, as well as the cost of care for the 27 million people who remain uninsured.
  7. Other (14%). This includes a host of things including public health programs, Indian Health Service, school health, worker’s compensation, liability insurance, etc.

A few key observations (and I will want to get back to these in part 2 of this blog):

  1. The system is very complicated, even in this ridiculously oversimplified rendition. (I don’t even get into the issue of people who qualify for more than one, such as the elderly poor who may be on both Medicare and Medicaid, or kids with disabilities who may have both Medicaid and private insurance.)  And while most other countries have managed to figure out how to provide universal coverage at a lower cost than the US, their systems are also relatively complicated.  None of them is easily described by a simple slogan.
  2. It is incorrect to say we do not have a government health system in the US. As you can see, government spending is as high as private.  Moreover, when you account for tax deductions for employer-provided insurance and health savings accounts, subsidies for exchange-based plans, etc., the government’s indirect spending (tax expenditures) is another $280 billion on top of the direct spending of $1.1 trillion.
  3. On the other hand, while health spending in the US is predominantly by the government, providers are primarily private: roughly 54% of hospitals are private not-for-profit, 24% private for-profit, and 22% public.
  4. Government sources of insurance do not cover the cost of providing care; doctors and, to a greater extent, hospitals tend to lose money when treating patients under Medicare or Medicaid. This has worked thanks to cost shifting.  For decades, private insurance has paid higher reimbursement to make up for the difference.  This has been a sort of social compact, stabilizing the system.  As the shortfalls from government programs grow, and costs of private insurance outpace inflation, this social compact is unraveling.


I’ll let you digest that for a couple of days and then consider “Medicare For All.”  Spoiler alert – it’s not as simple as it sounds.

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