(4thQtr contributor)
Let’s talk health care. That is where I have spent my career, so I have seen our health care system, such as it is, up close and personal for the past 40 years. Before COVID, it had been held together by bailing wire and tape. Now it is totally broken. Recognizing this would be one of the real positives to come out of the pandemic. We don’t want this to become a missed opportunity.
I think the majority of providers (hospitals, physicians, medical professionals and their administrative support) have already sorted out how to deploy their employees. Their work continues normally just as it does at other essential businesses. Those who can work virtually already do, or they moved to that mode in the past month. That part was easy.
But let’s first understand how providers of care make (or lose) money. (We could discuss how they can be more efficient. But that is for a later discussion.) It is all about payer mix (commercial insurance companies versus government and self-pay). Generally, health care providers lose money on Medicaid and Medicare patients and they make it up with those who have commercial insurance (along with the amount they can collect from the patient). If you are a hospital/health system and serve a disproportionate share of those who can’t pay, the government helps out. Elective surgeries are huge sources of profit (offsetting the other loses) as their rates aren’t set by the payers. Got it? So, all of us buying commercial insurance are subsidizing the health care system (and those with little or no insurance) with our premiums and we are keeping it afloat. However flawed Obamacare was, and it was for many reasons, it was the best attempt so far to level that playing field for those who were paying for insurance either individually or through their employers. They key was the requirement that everyone had to have insurance (individual mandate). Especially if you wanted to maintain the preexisting condition mandate. Otherwise, people would only buy insurance when they were sick, which is like buying car insurance after you have had an accident.
With that as background, let’s look at what COVID has done to this fragile system. Many hospitals are now COVID facilities. No elective surgeries. No procedures that aren’t urgent. Would you go to an Emergency Room now? I don’t even want to go to see my physician unless I’m sure I’ll die if I don’t. So, our hospital and physician revenue has been cut by 50%, hospitals and physician multispecialty practices are laying off employees by the hundreds of thousands. It is estimated that 35% of the health system in this country will go out of business in the next 12 months unless the government steps in. Moody’s said yesterday that the $100 billion stimulus that was earmarked isn’t near enough. (The Republicans appear to be pushing back on this.) COVID will hasten the demise of these 35% of our health care system, but they were dying slowly anyway. Many of these are sole providers in rural settings. On top of that, all we have heard over the past 2 months is how our health care system was ill prepared to deal with this crisis. One can only imagine how much worse it will be next time unless we fix it now.
Will we take this opportunity to do that? I’m skeptical but ask yourself how you would design a health care system today starting from scratch with the full knowledge that this pandemic is only the first pandemic. There will be more. I would propose the following steps as the rules of the road.
1. Everyone has insurance and pays for it based on their ability to pay. I have news for you, we do this now and all of us pay for those without insurance. Or the government offers a public option that is administered by the commercial insurance companies, much as Medicare Advantage and Medicaid Managed Care are today.
2. Patients that are suspected of having this virus (or the next one) must go to designated facilities to be triaged and tested. If they test positive, they must go to a designated quarantine center (Q center), away from their family to recover. All their contacts are then tracked and tested.
3. Those who need hospitalization from the Q Center go to a designated hospital for COVID treatment. This will keep the virus away from other health care facilities so that they can provide all the other medical treatments we require, and that the health care system counts on to remain solvent.
4. Move the commercial health insurance process away from employers and to the government (and their commercial insurance intermediaries). Businesses pay the employee the amount of the insurance premium that they previously paid. Citizens pay for their insurance individually or through a tax. If you look at the amount we spend on health insurance you’d see that individuals would be spending close to the same amount for a government sponsored plan, like Medicare. Cry socialism all you want; do we really think that people who cannot afford insurance should go untreated? Of course not.
5. Obviously, prepare for and stockpile the medical supplies required for the next pandemic. It’s coming. Designate those facilities that will be the first line of defense and know that testing is the key to controlling it. Never again should we be as unprepared as we were for this one.
The government must fund the research teams necessary to develop treatments proactively, and not react when it is too late. (The Bill Gates model of preparedness.)
The pandemic has exposed how fragile is our health care system and how necessary it is to develop a comprehensive plan to strengthen this system or it might break beyond repair as a result of COVID.
