Featuring Dr. Thomas Rice, health economist and Distinguished Professor at University of California, Los Angeles’ Fielding School of Public Health, and host Brenda Gazzar, discussing why the U.S. healthcare system performs poorly in equity and efficiency compared to other wealthy nations.
This is part one of a two-part series.
Shareholders Before Patients – America’s Healthcare Dilemma
—– TRANSCRIPT —–
Welcome to Code WACK!, your podcast on America’s broken healthcare system and how Medicare for All could help. I’m your host, Brenda Gazzar.
What aggravates racial inequities in America’s healthcare system? How does America’s healthcare system stack up when it comes to cost and efficiency in comparison to other wealthy nations? To find out, we spoke to Dr. Thomas Rice, a health economist and a Distinguished Professor in UCLA’s Department of Health Policy and Management.
Welcome to Code WACK! Dr. Rice.
Rice: Thank you very much. I’m delighted to be given this opportunity.
Q: You just published a new book “Health Insurance Systems: An International Comparison.” Why do you think such a comparison is so important today?
Rice: Well, there’s several reasons that I think it’s so important today. One is that we now have a wealth of data available comparing the U.S. to other countries in terms of its performance with regard to spending and access and outcomes, and all of the comparisons show that the U.S. lags behind other countries so we know this now for a fact. We spend more. We have poor access and our health outcomes lag as well. And so I think just the fact that there’s data available that prove that our system is wanting is really critical. I think in addition to that we now have a better understanding that there are multiple ways to build a better mousetrap. There isn’t one size fits all, and I’ll discuss how different countries organize their healthcare system. There are lots of ways in which we can produce a much more effective healthcare system, just by looking at the many models that are out there that have been working much better than the U.S.
And finally, I would say that the Affordable Care Act or Obamacare has been very successful in reducing the number of uninsured people. It was never really designed to do much about healthcare spending. It’s not that we use more services in our country. It’s that we pay far more for each service that we use — and other countries provide very good lessons about how we can pay less for the care that we get.
Q: There’s so many different ways, as we know, to measure the performance of health insurance systems like cost. That’s important, for sure, but so is health equity. The U.S. has dramatic inequities in infant mortality rates depending on race, for example. How might your work inform or promote health policies that center around racial equity?
Rice: Well, Brenda, as you know there are severe racial inequities in health outcomes in the United States, but there are many factors causing this and I would say that the main ones are a much broader set of societal-related factors that go beyond the healthcare system. But the healthcare system is absolutely a culprit here. And I think I would just focus on one thing that aggravates the problem of racial inequities in the U.S. and that is unique in the U.S and that’s our reliance on making price a barrier for people receiving care.
In the U.S. even if you have insurance and about a tenth of the population doesn’t, you still face really large cost barriers, and in fact, half of Americans say each year that cost is a barrier in keeping them from getting services that they would like to be getting. The biggest barrier I think is deductibles. Deductibles are huge in the U.S., much higher than in other countries. If you’re fortunate enough to have employer-sponsored coverage, the average deductible for an individual is almost $2,000. If you’re getting your coverage through the Obamacare marketplaces, the most popular plan is the silver, the deductible is $4,000. People don’t have that sort of money.
Now, other countries do use what we call patient-cost sharing, but it’s much lower and even in a country that has fairly high rates like Switzerland, what they do is they establish a maximum that you can pay out of pocket. In Switzerland, it’s about $1,000 a year and that’s the most of any of the countries that I studied. In the U.S., the maximums are crazy high. In the Obamacare marketplaces for an individual’s coverage, you have to spend over $8,000 a year before you’re fully covered. A family has to spend over $17,000 a year.
Again, few people have this on hand and because average incomes are lower for racial minorities, for blacks and Latinos, these present huge barriers. So other countries don’t put price in as a main rationing method, but we do in the U.S. and this leads to greater racial and ethnic disparities.
Q: Does commercial health insurance play a role in that or what is the reason?
Rice: Well, I think commercial health insurance is part of this. I mean it’s built into the entire healthcare system. I think commercial health insurance is potentially problematic, because they are not necessarily viewing their clients as the patients. Their clients are shareholders and shareholders need to have profits so what you see insurance companies and other countries do is basically the nonprofit insurers, the role is to pay bills. In the United States I think the role was somewhat muddied for the health insurers because again, ultimately, the client is the shareholder, and so they can do things like cause trouble in paying bills, and I think what you find is many people who are economically disadvantaged have the fewest tools available to try to counter some of the strategies that commercial insurers are using and again insurers exist in many, many countries — not in the single payer countries but in countries that I’ve studied like France, Japan, Germany but again, they almost always are nonprofit insurers and they don’t have the same sort of incentives that commercial insurers do.
Q: Wow, very interesting, and the outcomes in these countries, with not-for-profit insurance companies, would you say are better?
Rice: Well, I think that afterwards the whole U.S. healthcare system as a whole and it’s a little bit hard to lay everything on the for-profit insurance industry. It’s one aspect of our healthcare system. Other aspects of our system are different but in terms of performance, what you see is that in these other countries, everybody’s insured. Fewer people say they have access barriers due to costs and on a lot of measures of quality or outcomes are better. So, outcomes are caused by many different things, many beyond the healthcare system, but one that many analysts use is something called amenable mortality or more formally “mortality amenable to health care.” And the idea here is, are people dying from things that they should have been saved from if the medical care system were working well, and of the 10 countries I’ve studied the U.S. has by far the highest amenable mortality rates.
And so we’re spending the most money, but we have the highest mortality rates for things that our healthcare system should be preventing — the deaths. So I would say if you view efficiency as I do as what you get for what you spend, the U.S. is by far the least efficient country. Up till now, we’ve been talking more about equity but it’s less efficient as well.
Q: What countries are the strongest performers when it comes to healthcare access and equity?
Rice: I think there are four things that are essential for ensuring access and equity. The first, we’ve already discussed is universal coverage which everybody has but us. The second though is comprehensive benefits –– you know covering things that are very important, including dental care which is only covered in some countries. It’s something that I’d very much like to see our Medicare program begin covering, that is dental care.
The third thing you need is relatively low cost sharing requirements and I’ve talked about that before. They’re very high in the U.S. The fourth one is a little bit more subtle. And that’s that countries that have national healthcare systems allow the sale of private supplemental coverage, and it’s often by for-profit insurers to cover remaining gaps and the problem is that wealthier people tend to be the ones who own the supplemental insurance and in some countries, and Australia is a good example, it allows you to jump the queue, to have a shorter wait to receive services.
I think the countries that have more equitable systems are the ones that don’t rely so much on the supplemental insurance, and they don’t have to rely on it because they have comprehensive benefits and their cost-sharing requirements are low so people don’t need it. So when you put all this together, there are four of the countries that I’ve studied that I think performed the best. They are Germany, France, Japan, and the Netherlands. They all have universal comprehensive coverage with low cost sharing requirements, and not many people have supplemental insurance.
Thank you, Dr. Thomas Rice.
Find more Code WACK! episodes on ProgressiveVoices.com and on the PV App. You can also subscribe to Code WACK! wherever you find your podcasts. This podcast is powered by HEAL California, uplifting the voices of those fighting for health care reform around the country. I’m Brenda Gazzar.
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