Americans worry a lot about how to get and pay for good health care, but the 2020 presidential candidates are barely talking about what’s at the root of these problems: Almost every incentive in the U.S. health care system is broken.
Why it matters: President Trump and most of the Democratic field are minimizing the hard conversations with voters about why health care eats up so much of each paycheck and what it would really take to change things.
- Instead, the public debate focuses on ideas like how best to cover the uninsured and the relative virtue of health care “choice.”
The U.S. spent $3.6 trillion on health care last year, and almost every part of the system is pushing its costs up, not down.
Hospitals collect the biggest piece of the health care pie, at about $1 trillion per year.
- Their incentive is to fill beds — to send as many bills as possible, for as much as possible.
- Big hospital systems are buying up smaller ones, as well as physician practices, to reduce competition and charge higher prices.
- And hospitals have resisted efforts to shift toward a system that pays for quality, rather than volume.
Drug companies, meanwhile, are the most profitable part of the health care industry.
- Small biotech companies usually shoulder the risk of developing new drugs.
- Big Pharma companies then buy those products, market them aggressively and develop a fortress of patents to keep competition at bay as long as possible.
The money bonanza is enticing some nontraditional players into the health care world.
- Private equity has developed a voracious appetite for health care providers — mainly emergency rooms, ambulances and other areas where, if you need them, you’re in no position to shop for a better deal.
- You’ll pay whatever they charge, or else they’ll sue you.
- Tech companies are also edging into health care — not to disrupt the industry, but to get in on the $3.6 trillion action.
Insurers do want to keep costs down — but many of their methods are deeply unpopular.
- Making us pay more out of pocket and putting tighter restrictions on which doctors we can see create real and immediate headaches for patients.
- That makes insurers the most convenient punching bag for politicians.
The frustrating reality: Democrats’ plans are engaging in the debate about possible solutions more than the candidates themselves.
- It’s a tacit acknowledgment of two realities: That controlling the cost of care is imperative, and that talking about taking money away from doctors and hospitals is a big political risk.
What they’re saying: The top 2020 Democrats have actually released “insanely aggressive” cost control ideas, says Larry Levitt, executive vice president at the Kaiser Family Foundation. “But they don’t talk about that a lot.”
- Medicare for All, the plan endorsed by Sens. Bernie Sanders and Elizabeth Warren, would sharply reduce spending on doctors and hospitals by eliminating private insurance and paying rates closer to Medicare’s. Estimates range from about $380 billion to nearly $600 billion in savings each year.
- Joe Biden and Pete Buttigieg have proposed an optional Medicare-like insurance plan, which anyone could buy into. It would pay providers less than private insurance, with the hopes of putting competitive pressure on private plans’ rates.
- The savings there would be smaller than Medicare for All’s, but those plans are still significantly more ambitious than the Affordable Care Act or most of the proposals that came before it.
Yes, but: The health care industry has blanketed Iowa with ads, and is prepared to spend millions more, to defend the very profitable status quo.
- The argument is simple: Reframe the big-picture debate about costs as a threat to your doctor or your hospital. It’s an easy playbook that both parties, and the industry, know well. And it usually works.
The bottom line: “Voters want their health care costs reduced, but that doesn’t mean they would necessarily support what it would take to make that happen,” Levitt said.