Passion Struck with John R. Miles - Amy Finkelstein on a Bold Vision for American Healthcare Reform EP 323

Starting point is 00:00:00 coming up next on passion struck the first thing we emphasize in the book is that while a lot of attention focuses on the people who lack insurance at any given moment in time they uninsured that is a real problem we are missing out by not also focusing on the very real problems of the insured the risk that they may lose insurance at any moment in time, that perversely health insurance, which is about providing some semblance of security and certainty in a dangerous and uncertain world, is itself highly uncertain. And the other big issue with most people's health insurance is that it's highly incomplete. There are enormous gaps in coverage.

Starting point is 00:00:44 Welcome to PassionStruct. Hi, I'm your host, John Armeyles. And on the show, we decipher the secrets, tips and guidance of the world's most inspiring people and turn their wisdom into practical advice for you and those around you. Our mission is to help you unlock the power of intentionality so that you can become the best version of yourself.

Starting point is 00:01:06 If you're new to the show, I offer advice and answer listener questions on Fridays. We have long-form interviews the rest of the week with guest-ranging from astronauts to authors, CEOs, creators, innovators, scientists, military leaders, visionaries, and athletes. Now, let's go out there and become PassionStruck. Hello everyone and welcome back to episode 323 of PassionStruck. Consistently ranked by Apple is one of the top 10 most popular health podcasts and the number one

Starting point is 00:01:35 alternative health podcast. And thank you to all of you come back weekly to listen and learn how to live better, be better and impact the world. PassionStruck is now on syndicated radio on the AMFM 247 National Podcast. Patches every Monday and Friday from 5 to 6 p.m., links will be in the show notes.

Starting point is 00:01:50 If you're new to the show, thank you so much for being here, or you simply wanna introduce this, for a friend or family member, we now have episode sturder packs, which are collections of our fans favorite episodes that we organize in convenient topics. To give any new listener a great way to get acclimated to everything we do here on the show, just go to passionstruck.com slash starter packs to get started.

Starting point is 00:02:08 In case you missed it last week, I did three amazing interviews. The first was with renowned speech coach, Samarro Bay, who suggests that giving yourself permission to speak is the key to affecting change. Samarro's groundbreaking approach to public speaking offers a new definition of what it means to sound powerful, which is essentially sounding like yourself. I also interviewed Dr. Scott Schur, who's a board-certified internal medicine doctor, and an expert on how to boost cognitive functioning. We discuss all things neutropics and the limitless product that he developed for peak cognitive performance.

Starting point is 00:02:37 I also interviewed Julie Flushman, the CEO of the Pancreatic Cancer Action Network, otherwise known as Pancan. We do a deep dive on pancreatic cancer from new treatment advances, what to do if you were a loved one is diagnosed with the disease. Please check them all out and I also wanted to say thank you for your ratings and reviews. If you love today's episode or other of those other three that I mentioned, we would so appreciate you giving it a five star review and sharing it with your friends and families. I know we and our guests love to see comments from our listeners.

Starting point is 00:03:02 In today's episode, I have a special guest, Amy Finkelstein, professor of economics at MIT, and a leading expert in the field of health economics. Together, we delve into the pressing issue of health insurance in the United States. Did you know that 30 million Americans lack formal health insurance? And even those with coverage live in constant fear of losing it due to various life circumstances? The American health insurance system is in dire need of reform, but many existing proposals fall short. Enter Amy Finkelstein, and her co-author, Laren Enov, the brilliant lines behind the groundbreaking book we've got you covered,

Starting point is 00:03:33 rebooting American health care. In our interview, Amy challenges the conventional approach to reform, and offers a fresh perspective on what US health insurance policy should truly accomplish. Through meticulous research, historical insights insights and comparative analysis of global systems, Amy argues that we need to rebuild our health care system from the ground up, or provocative blueprint advocates for universal coverage for essentials while providing the option for supplemental insurance. In this episode, Amy will share her expertise discussing why the current approach to health care reform is bound to fail and how we can chart a new path forward.

Starting point is 00:04:04 Her insights, which are balanced and accessible accessible will reshape the conversation around health care and will offer a hope for patients, health care professionals and policymakers alike. Join us as we explore this revolutionary plan for a coherent evidence-based health care system, a campy ignored. Let's dive into the future of American health care together. Thank you for choosing PassionStruck and choosing me. Be your host and guide on your journey to creating an intentional life now. Let that journey begin.

Starting point is 00:04:27 I am so excited today to welcome Amy Finkelstein to PassionStark. Welcome, Amy. Thanks so much for having me, John. You're welcome. I'm excited to have this conversation with you. And it's a topic that we've never done on the podcast, so I'm excited to explore it in death. So can you tell me a little bit about your background and what ended up leading you to specialize in the field of economics, particularly in relation to health care and studying insurance of all things? Sure. As you said, I'm currently an economics professor at MIT.

Starting point is 00:05:06 How I got there is a somewhat circuitous path. I grew up in New York City. Both of my parents are academics, are both biologists, actually. And I always loved school. So I always knew I'd be an academic. I also constitutionally elsuited to doing anything in the real world. But I was

Starting point is 00:05:25 much more interested in the social world around us than the natural world that my parents study. I didn't actually major in economics in college, but I gravitated eventually to economics because I was incredibly excited by the fact that both the economic frameworks that have been developed and the empirical tools that economists use seem really well suited to use science and rigor and data to improve people's lives through public policy. And so why healthcare? It's hard to imagine an area sector of the economy more in need of improvement in the US, and it's 20% of our economy. So it's a huge sector with incredibly important

Starting point is 00:06:12 implications, not only for the economy and government spending, but also for people's lives and well-being. I was naturally drawn to trying to understand it better. Well, I wanted to congratulate you on winning the MacArthur Prize, something that I think everyone in your profession desires, but I think it's a mystery at times how they end up picking their winners. Could you share with us? Especially when they pick me, it is indeed a total mystery. I was honored and thrilled and delighted, but it remains a total mystery to me. It is indeed a total mystery. I was honored and thrilled and delighted, but it remains a total

Starting point is 00:06:47 mystery to me. Well, how has that award impacted your work in career? That's a really great question. First of all, it's just a great honor and a huge validation. It also gives me in some sense a bit more It also gives me in some sense a bit more freedom to take on different types of projects. So this book that my co-author, LaRonne and Avon, I have just written, is not a traditional academic exercise. It's written hopefully in a conversational and accessible tone and it's really aimed at shaping the public discourse more than the academic literature, which is what we've normally focused on. Okay, and I was hoping you could provide an overview of your book, which is titled We've Got

Starting point is 00:07:38 You Covered, Rebooting American Healthcare. And specifically, the role your father-in-law played in motivating you and Luran to write it. Yes, great question. So related to what I just said, my co-author, Luran, and I have worked together now for about two decades on US health economics, US health policy, and while our work was always motivated in some sense by that big question that drew me into economics, how public policy can improve the sector and the lives of millions of people, as well as improve the government balance sheet, that was the big question. That's if someone asked me, what am I working on? That's what motivated us.

Starting point is 00:08:19 But our day-to-day work, or even our year-to-year work, was incredibly narrowly focused on very specific narrow, let's face it, sometimes somewhat esoteric questions that we felt we couldn't answer. And we hoped that those were making bit-by-bit progress and that someday someone would piece all of the work we're doing and other people are doing together to answer the big question that motivates us, which is how to radically improve and transform US healthcare policy. That's always in my approach. And I've consciously stayed out of any public

Starting point is 00:08:54 policy involvement. A lot of my colleagues very admirably have taken stints in Washington or advised heavily on various political campaigns. And our view was always, and let's just stick to the narrow science and let other people focus on the big picture. And then in the summer of 2019, Democratic primaries were underway. That was think-backed Bernie Sanders and Medicare for all. And my father-in-law asked me as people often will, oh, so what do you think of Medicare for all?

Starting point is 00:09:26 And what do you think should be done to fix the US health care system? And I responded as I always do. That's a really great and important question. And if I, but I don't know the answer, that's why I work on these problems. If I knew the answer, I'd work on, sounds like a research matter,

Starting point is 00:09:41 I'd research something I didn't know the answer to. And then a couple days later, my father-in-law contacted me again. And then a couple days later, my father and my contact had me again. He's a very sweet and kind man, but very thoughtful. And he said, Amy, you must be one of the world's leading experts on US health policy. He's also perhaps overly generous right to fly.

Starting point is 00:10:01 I might note parenthetically, his son has not carried it, but in any event. So he says, and I know that you like to stay in your sort of narrow academic comfort zone and not pontificate on things that you think are outside of the scope of other people's research. But come on, you've been working on this topic for two decades. Are you really telling me you don't have anything you can tell me about what might be a move in the right direction for US health policy? And he said it much more nicely than I'm saying it, but it's done. I was like, Ouch.

Starting point is 00:10:37 He's not got a point. And so Laurent and I talk almost every day. And so I mentioned this to him and Laurent, I would say is even more focused on what can we do as opposed to what would we like to do than I am. And I expected him to say, yeah, of course, we'd like to solve cancer or we'd like to invent cold fusion that none of those are what we're on track to do for the day. So let's get back to work. But it said Laurent was like, yeah, he's totally right. We should have something to say. And honestly, that's really how this book began. And when I've told people this story even after they've read the proofs of the book, because

Starting point is 00:11:12 it's in the prologue, they'll say, no, really? Like I read that in the prologue, but come on, I thought that was just my story. And no, it's really how it began. And it began at first, just as a conversation between the two of us in one of the luxuries as academics and researchers is that we have the time to just try to pursue something with no obvious objective at the end other than better understanding. And we thought maybe hopefully we'd figure something out. I could give my father and loss of answers.

Starting point is 00:11:39 I'd feel better about it too. But then as we got going and I really started talking about it over the course of months, we realized we actually thought we were onto something and it was something that most of the rest of the discussion had missed because they weren't asking the questions that we were asking. Well, that leads me directly into the question I wanted to ask you next.

Starting point is 00:12:01 As you and Lauren were examining the issues with the healthcare system, you both started to realize that no were examining the issues with the health care system, you both started to realize that no one was coming up with the right answer because as you said in the book, because no one was asking the right question, what is the question that we should be asking? I think the first question you have to ask, which is what our training as economists naturally led us to, is not what are all the problems with the current system, which are well documented and we discussed some additional ones in the book. But what is the problem that policy is trying to solve or should be trying to solve? To look at something and say, how can it work better?

Starting point is 00:12:41 You have to figure out what its purpose or function is. If you're looking at an airplane, its function is to transport passengers from one place to another by flying. What is the purpose of US health policy? And there are many potential purposes out there. It could be to improve population health, to fix problems with the healthcare marketplace

Starting point is 00:13:00 that Adam Smith, so-called invisible hand, isn't able to. Because some people say it's because health care is a right. But when we actually started looking into the history of US health policy, as well as that in other countries, somewhat to our surprise, none of these were actually the problem that policy was being designed to solve. It became clear to us that the purpose and goal of health policy is that we have a fundamental commitment as a society, a social contract, as you will, when people are sufficiently ill and lack resources to access essential medical care to step in and provide that care. Now, that may sound like a very strange thing to claim in a society that not only famously advocates, everyone should be pulling themselves up from their bootstrap, but is also the only high income country

Starting point is 00:13:53 not to have universal health insurance. But as we document in our book, that represents the failure of our commitment, not its absence. And if you go back to the very dawn of the Republic, and then we trace the history through modern times, and you look at our current healthcare, I wouldn't even call it a system, I'd say more like a mess,

Starting point is 00:14:14 it's been constructed through a series of attempts to basically fulfill that contract, to step in and create policies that provide healthcare to people or health insurance to people in key situations when they're quite ill and lack resources. Now, the most well-known is probably the fact that emergency rooms are not allowed to turn patients away. If they show up, they need to be stabilized

Starting point is 00:14:39 if they're in an emergency situation. But that's just the tip of the iceberg. There are policies for people with particular diseases that have sprung up at various times because it became politically salient and uncomfortable that people were dying from end-stage reneal disease when dialysis technology existed but was unaffordable. Or there's a separate health insurance program for low-income women with breast or cervical cancer or for people with Lou Gehrig's disease or HIV or tuberculosis and the list goes on and on.

Starting point is 00:15:10 And so it becomes pretty clear and we discuss as well some of the psychological underpinnings of this, and we're not psychologists or cells, but we've read the literature, that we have this contract as does every other country that when people become sufficiently ill, we're going to intervene. And once you realize that, then it becomes very clear that the current system is punching far below its weight on delivering on that, despite spending an enormous amount of money. And the only solution is to tear down this matchwork of policies that have been put together half-hazardly and actually just rebuild it correctly from the ground up. Well, as you rightly bring up, there's been no shortage

Starting point is 00:15:53 of proposals for healthcare reform. And as we're going into this next election cycle, we're hearing it come up again and again from both sides. And I wanted to just go into what you just said in a little bit more depth. Can you elaborate on why you think incremental reform is not sufficient and why you and Laurent both argue? As you just said, that tearing down the system and building a new one from scratch is the only way you can do this.

Starting point is 00:16:24 Yeah, I'm an empiricist and so my answer is going to be a empirical one, which is, it would be great if incremental reform could be the solution. It's certainly a heck of a lot easier as a political lift, which is not to say it's easy, but easier than tearing down and starting from scratch. We've had incremental reform, or a series of patches providing coverage to different groups over the last three years. And one thing it makes clear is that whenever you have patches,

Starting point is 00:16:54 you're going to have gaps in the scene. So it's not just a question of either number that everyone talks about, that 30 million Americans currently lack insurance. And it's, oh, well, let's just extend some of the existing programs or create a new program to cover those 30 million people, and then we'll be done. That sounds appealing, but it won't work.

Starting point is 00:17:14 And the reason it won't work is even if everyone was eligible for some program, everyone wouldn't be covered. And we've seen that even under the current system in which estimates suggest that maybe as many as six out of ten of the currently uninsured individuals unaware of the program for which they're eligible or they were unable to assemble and file on time the documentation required to demonstrate their eligibility because they were aware of the program, they assembled the documentation, they got on it, but then they failed to recertify their eligibility. Because again, if there's all these different pathways and patches by which you can get covered, we program administrators have to make sure you remain eligible for that.

Starting point is 00:18:10 One, I think somewhat startling, at least to us, fact that we talk about in the book is that although the statistic that something like about one in ten Americans under 65 are uninsured at a moment in time is fairly well known. We actually document that a much, much higher share of Americans, one in four Americans under 65, will have some period without insurance coverage over a two-year period. And those periods can be quite long, many are more than five or six months. And that's precisely because either they have private insurance and

Starting point is 00:18:45 they lose their job and therefore lose their coverage or they have public coverage provided, for example, through the Medicaid program, which shows one in five Americans, predominantly low income Americans, but they fail to recertify their eligibility at the end of a cycle and therefore loss their coverage. So it's not that we sat there in our ivory tower at our blackboard and derived some theoretical reason why you couldn't put a few more patches on the system and make it work. It's that both our history of failed attempts and the current reality on the ground make it clear that patching will never work. We quote the line from Oscar Wilde that it's a patching

Starting point is 00:19:25 is like a second marriage. It represents the triumph of hope over experience. It unfortunately, just will never get us to where we need to be. I was hoping we could go a little bit more into this issue of the uninsured through the lens of Nobel Prize winner James Becanon who you said it in the book and he coined something called the Samaritans dilemma. How does that Samaritans dilemma relate to healthcare reform? That's a great question. So the parable of the good Samaritan in the Bible is a parable in which a traveler is beaten up by some thugs left for dead by the side of the road. And after being passed over by several people, a Good Samaritan, as it were, takes pity on him, sees him, takes him to an end in which he tends to his wounds and nurses him back to health. And it's a parable, I believe, about the importance

Starting point is 00:20:26 of altruism and charity towards others. I think the idea behind it is very much related to the social contract that I mentioned that we argue the US and most other societies has as well to intervene when people are in dire straits in terms of their physical health. In this case, it was done through an individual, but more generally through the state.

Starting point is 00:20:48 Now, as you mentioned, the economist James Buchanan coined the term the Samaritans dilemma. Leave it to an economist to find a dilemma and a parable about altruism and charity. The dilemma that Buchanan spoke of is that once people know that there's always someone who's going to step in and help them, they may take less good care of themselves. So they may in the case of the traveler travel along more dangerous roads or at night because if they get beaten up, someone will make sure they're okay. In the case of health care, the idea would be that because effectively we do always as a society step in to provide some kind of essential medical care when people are in

Starting point is 00:21:33 dire straits and can't afford it, that people will not necessarily be so excited or incentivized to make sure they have health insurance. And whether or not that's the case, and I must say I'm not sure I've seen any great empirical evidence on the idea that people don't buy health insurance because the government will step in if they don't have it. May or may not be true.

Starting point is 00:21:55 I just haven't seen any evidence for it. It is very clear that the idea that we have this commitment and therefore we might as well formalize it up front is something that is an idea that's been espoused across the political spectrum. So it might sound like a typical liberal academic idea to say universal basic automatic coverage for everyone. But if you look, for example, at Republican governor Mitt Romney's Massachusetts health care reform in 2006, which was the first state to establish universal health insurance. It was also very much motivated by this notion of the Samaritan's dilemma. And Romney was very clear that the uninsured were not literally

Starting point is 00:22:37 uninsured. They were going to ultimately get an enormous amount of medical care if they fell sick, most of which they don't end up paying for. We've estimated that the uninsured get about four or fifths as much medical care as the insured and pay only about 20 cents on the dollar for it and the taxpayers are paying the rest. So, Romney's idea, as well as others, was let's just formalize that upfront by, in his case, mandating that everyone have insurance and paying for it out of taxes or premiums. We've seen in the US at least that the mandate isn't sufficient because we don't enforce

Starting point is 00:23:13 it. And so we're just saying, given that it's clear this is what we're attempting to do, let's just do it automatically without the mandate per se. Just let's put it there on the books, as it were. So what you're advocating for then is fully free, automatic universal coverage with the option to buy supplemental insurance. Exactly.

Starting point is 00:23:38 So this idea of eliminating patient copays and deductibles if I have this right, goes against conventional economic thinking. Can you explain why you advocate for patients not paying any part of the cost of medical care covered through this basic universal coverage? Yeah, it's hard to overstate what professional heresy we're conducting. I have to turn in my economist, Carrying Card, as it were. It's not just conventional wisdom in economics. I'd say it's something that I've written about and lecture generations of students on.

Starting point is 00:24:13 The idea is that when people have to pay something for their medical care, when they have so-called skin in the game, that makes them think twice before just getting every possible test under the sun when they have a bump on their arm or asking for an MRI every time they have a headache. The idea that actually when people have to pay for their medical care, they use less of it, used to be incredibly controversial. Many people, including even in the originally now I'm talking about the 60s, some economists,

Starting point is 00:24:41 thought that sounded not easy. Nobody wants to go to the doctor. You don't check yourself in for a colonoscopy for kicks, even if it's free. There was an idea that only price has nothing to do with medical care. You go to the doctor only if you have to, and if you have to go, you have to go. And it won't matter what the price is.

Starting point is 00:24:56 And there's been over a half century of incredibly compelling, rigorous research demonstrating that is categorically false. We've done some of that work ourselves as allegiance of other researchers, randomized experiments have shown compellingly that in fact, like everything else, when medical care becomes more expensive to the patient, they use less of it. So that is completely true. We stand by that work. What we retract or what we feel where we went wrong and perhaps our profession as a whole went wrong is the implications of that work.

Starting point is 00:25:30 In particular, when it comes to universal coverage, the problem with copays goes back to again, what is the purpose of having that coverage? It's precisely because, as I said, we have this demonstrated social commitment to provide essential care when people can't afford it. And so once you have that, there will always be people who can't afford the $5 prescription copay or the $20 doctor visit copay.

Starting point is 00:26:01 And we will find ourselves back in that uncomfortable and ineffective patchwork system of cobbling together exceptions for people who are sufficiently poor or sufficiently sick or in one category or another. Once again, this is not a theoretical argument. This is our conclusion from having looked at what has happened in all of the other high-income countries around the world that have universal coverage and that have over the last decades followed the advice of economists and introduced or increased their copays and deductibles.

Starting point is 00:26:34 What we've seen and it's stunning is that time and time again, they introduced the copays and re-increased them with one hand and put in the exceptions with the other hand. Exceptions for people who are very young or very old or very poor or have specific diseases. It's the U.S. patchwork system in a microcosm. And once again, it ends up not working well. So for example, in the United Kingdom, which has introduced cost sharing for prescription drugs and dental and vision and a few other small things. In part, I think based on economist's advice as well as budgetary pressures, they've also introduced all these exceptions.

Starting point is 00:27:13 And so the end result is that 90% of prescriptions are in fact exempted from the copay. So you just end up recreating the patchwork of exemptions or special coverage and not really accomplishing anything. So once again, it's an argument rooted in reality, not in rhetoric or pure theory. One of the things I witnessed, I now get most of my healthcare benefits from the VA, but throughout most of my life, I went to private doctors on the outside. And I always noticed, especially when I went to my primary care physician, how little time they actually spent with you. As compared to now when I'm with the VA, when you go for an appointment, it doesn't feel like they're rushed when they're seeing you.

Starting point is 00:28:04 And it's interesting because my fiance is a nurse practitioner who does primary care. And she said, we're forced to do it because they give us so little money per patient. That's why we need to see 20 to 30 patients a day, which means that when you look at charting and everything else, you're only allocating at the most, maybe 10 to 15 minutes to actually spending time with a patient.

Starting point is 00:28:28 How in this system that you're proposing would it solve issues like this? That is a terrific question to which I have a carefully thought out, but I fear perhaps very unsatisfactory answer, which is what was our a moment for realizing the solution was simpler. Was it part of it? Was it people weren't asking the right question? Which I described what we need to start with. What is the problem we're trying to solve? I'd say the other key insight, if you will, that made the problem tractable on the solution clear, was defining the scope of the problem.

Starting point is 00:29:06 So we're focused on coverage and how in a economically realistic and fiscally responsible way, we can achieve universal coverage, the problem of healthcare delivery and how to get either more bang for our healthcare buck, or the same bang for less buck, is a very hard problem to which it's not just that we don't have the answer, we're pretty sure no one currently has the answer. We discuss it lengthened the book why all the seemingly fast-ciil solutions there do not actually work.

Starting point is 00:29:40 But what is fortunate is that we don't have to solve the problem of health care delivery of which the example you raised of how to make sure that primary care practitioners such as your fiance can spend the time they feel they need with a patient. Those are real problems to which there aren't easy solutions but we don't have to solve those to solve the coverage problem. We should solve it, don't get me wrong. And Laurent and I met many others continue to work on it. If we ever figure it out, we'll write another book, but it's not on the near term horizon. Okay. Well, in your research, you highlight something that I don't think a lot of

Starting point is 00:30:17 people think about. And that is even if you've got medical coverage, you are at a risk of losing that coverage. If you have large medical bills, you are at a risk of losing that coverage if you have large medical bills, etc. How does your proposed system address that issue and provide security for both insured and the uninsured? That's a great question. So just to be clear, the first thing we emphasize in the book is that while a lot of attention focuses on the people who lack insurance at any given moment in time, they uninsured, well, that is a real problem. We are missing out by not also focusing on the very real problems of the insured, one of which we've already discussed that the risk that

Starting point is 00:30:58 they may lose insurance at any moment in time, that perversely, in health insurance, which is about providing some semblance of security and certainty in a dangerous and uncertain world, is itself highly uncertain. And the other big issue with most people's health insurance is that it's highly incomplete. There are enormous gaps in coverage. Take Medicare, for example, the health insurance program for the elderly and the disabled in the United States, the portion that covers physician bills has a built-in 20% that the patient always has to pay. And that's completely uncapped. So if our unfortunate enough

Starting point is 00:31:40 to have a grave illness such as some form of cancer that requires hundreds of thousands of dollars of medical treatment, you can be on the hook. You will be on the hook for 20% of that one in five dollars uncapped. That's not what insurance is supposed to do. Insurance is supposed to protect you against very large medical expenses. To give you an idea of the scope of this problem. One estimate from right before the COVID pandemic, so pre-pandemic, was that we have 140 billion dollars in unpaid medical bills held by collection agencies. That's more than the amount held by collection agencies for all other consumer debt from non-medical sources combined, and three-fifths of that enormous medical debt was incurred by households with health insurance.

Starting point is 00:32:32 So health insurance can be highly incomplete, even for those who are fortunate enough to both have it and maintain it when they get ill. And the way our proposal covers that is very simple. The universal coverage will be basic, both in terms of the healthcare amenities provided. What is covered, it'll be limited to essential medical care, but that care will be provided completely free. No premiums, no copays, no deductibles, no patient cost sharing. So for the essential medical services, the ones that we have patient cost sharing. So for the essential medical services, the ones that we have revealed ourselves committed to providing as a society, there will be nothing the patient has to pay. And so that would not be for things like cosmetic surgery for elective surgeries, things like that. I think there's three main things that our basic coverage would omit, and therefore, why people might want to buy supplemental coverage.

Starting point is 00:33:29 So, you gave the example of cosmetic surgery. Another example I just came across recently, I was at the eye doctor. I don't know if your listeners have been to the eye doctor recently, and they often want to dilate your eyes to check for important signs of early disease, but anyone who's had their eyes dilated knows it for the next three to five hours, your function less, you can't go back to work or sometimes even get yourself home. And they offered a new technology for $40

Starting point is 00:33:55 that can see what they need to see in your eye without dilation, but insurance didn't cover it. That's a convenience factor, it saved me three to five hours, but it's not essential to the medical care I was receiving. One thing that would be omitted from basic is that type of perhaps desirable and valuable, but not essential health care services. Another would be the amenities that come with health care that are embodied in it, such as when the case of a hospital stay, how many people to a room and how nice that room is.

Starting point is 00:34:28 Well, for example, in Singapore, a notoriously humid and hot climate in their universal basic program, there's access to hospital care and the rooms are 10 people to a room and they have what they euphemistically refer to as quote unquote natural ventilation. If you purchase supplemental insurance, you get the same surgery in the same hospital, but your recovery may take place in a semi-private or private room with a private bath and air conditioning. We give the analogy of an airplane, right?

Starting point is 00:35:02 The essential function of an airplane is to get you safely from point A to point B. So if we had a social contract to do that, we would need safe and reliable airplanes that did that. But all kinds of things that one might like, good Wi-Fi, unlimited bags, and extra leg room. Those are all amenities that one would have to purchase for a supplemental fee. And then the third element, which is in some sense, a combination of the first two, is restrictions on so-called gatekeeping

Starting point is 00:35:32 on which doctors you can see when, something that we have in most private health insurance, but not, for example, in Medicare, where a doctor and a patient can together decide on any tests and procedures they want, whereas when many private health insurance and in many other countries, there's often some prior authorization that's needed or review before you can just order any test. So those are all real limits.

Starting point is 00:35:56 Everyone would like private hospital rooms, access to whatever doctor you want, whenever you want without a long wait time and coverage of all the latest and greatest technology is. But we can exclude that and still fulfill our commitment to providing essential medical care regardless of access to PEA. One way to look at it is we ask at the end of the book, so who do we think would buy this supplemental coverage? And what's in it for me?

Starting point is 00:36:24 We ask for different groups of current people in the population. So for the uninsured, they're unambiguously going to be better off with basic coverage. For the fifth of the population with Medicaid, we think the universal basic coverage is pretty similar to what they're currently getting. For people who currently have private insurance or Medicare, which is about 70% of the

Starting point is 00:36:47 population, we think they would buy this supplemental coverage to get shorter weight times access to things like plastic surgery and also a choice of doctor and procedure without as much oversight. But I want to emphasize that even though that's our best guess that most of those people would buy this supplemental coverage, even if the basic coverage while in those ways worse than their current coverage is in two important respects going to be much better than the current coverage that even say privately insured individuals currently have one, there's no risk of losing it. We've talked about that already. There's no insurance uncertainty and two, there's no risk of losing it. We've talked about that already. There's no insurance uncertainty. And two, there's no risk of these large medical payments for essential medical care that can result in really crushing medical debt. And I thank you for that. I was hoping you could go just into a little bit more of the insights

Starting point is 00:37:42 from American history and comparative analysis of healthcare systems from around the world you did. And what were some of the key lessons for examples that informed the blueprint that you're recommending? That's a great question. Let me talk first about American history and then about some of the international comparisons.

Starting point is 00:38:04 One of the most extraordinary moments I had in researching the book was to realize that this notion, not only that we have a commitment as society to come to the aid of people when they are sick and can't take care of themselves, but that the solution to it is to have mandated coverage with formal health insurance. That idea goes back to the very dawn of the Republic. When I say the very dawn of the Republic, I mean that there was a time when the US led rather than lagged the world in creating an excellent health insurance system. And I refer to the fact that we created the world's first compulsory automatic health insurance

Starting point is 00:38:54 program with taxpayer financing. And that was, I kid you not in 1798. So really, the dawn of the Republic. A key proponent of this system was none other than Alexander Hamilton, recently of Broadway musical fame and the program that he proposed in 1792 that was enacted in 1798 was a requirement on everyone, all the cement, everyone in the merchant marine that every time a ship came in from overseas to a domestic port, that every time a ship came in from overseas to a domestic port, the sailors would have six cents per sailor per month at sea deducted from their wages automatically. The captain had to hand it over to the customs official who in turn remitted it to the local authority who used it to provide hospital to fund hospitals, which at the time were nothing more than really just charitable institutions, not really medical institutions. There was nothing like modern medicine then for Semen, why Semen, because at that time before modern medicine, what medical care consisted of was basic nursing and cleanliness, hopefully, typically provided by family members, so the so-called family practice,

Starting point is 00:40:04 and its original form. And the SEMA, though, is leading this parapetetic lifestyle, where he's rarely at home. And so when they fell ill, they became a burden on the local community and whatever port town they happened to end up in. And Hamilton's point was, given that ultimately there are going to be a burden on that community, we should pre-finance that can't air by deducting it from their wages and use the money to support the care that they will ultimately get when those of whom fall ill.

Starting point is 00:40:33 And so that's what was done. And that system lasted for about 75 years. So that, I think, was the instinct from American history, and we chart many more in the examples, there really is both the commitment to providing essential care and the solution, the way to do it, is something that in some sense has been staring us in the face for well over 200 years. In terms of international comparisons, I think they were useful, both as a reality check, that what we were proposing was feasible and not crazy, something that crazy academics had dreamed up in their laboratory.

Starting point is 00:41:08 But also, I think it was very important to us in pointing out, I think what is the key potential peril both in our proposal and in many systems around the world, which is the concern that allowing for a supplemental system could erode the adequacy of the basic system. And I think that is a very real and very legitimate concern that people, including ourselves, could have with our proposal. There's both a political argument, right, that if, in my example, I'm regestimating maybe 70% of people would be in the supplemental system, that if many people are in the supplemental system, that could erode the political support for the basic floor that everyone automatically gets.

Starting point is 00:41:55 Or there's an economic argument that there's a limited supply and any given moment in time of talented healthcare practitioners and maybe the people who can buy the supplemental coverage will just attract the best and the basic system will be under supplied as well as underfunded. That's a very real concern. It came up actually in a famous court case in Quebec because actually originally many provinces,

Starting point is 00:42:21 including Quebec, felt it was unconstitutional and not allowed for people to buy supplemental coverage to provide the same surfaces that the universal basic coverage was going to provide. So the practical matter is that currently, the only places in the world that we could find that don't allow this type of supplemental coverage are a few Canadian provinces, Cuba and North Korea. So everyone else is doing it for aunts, Germany, England, Australia, Singapore, do name it, Israel. And second, looking at their experiences gives us some ideas, both that these pearls do exist, but also what the solution is. And we give the example of the Israeli system.

Starting point is 00:43:01 Universal coverage is relatively new there, started in 1995. Shortly after it started, there was the early 21st century real concerns arose of exactly the kind that I'm describing that many people were going to the supplemental system and that quality of care and the basic system was eroding. And so they formed a commission and they looked into it and they did a combination of two things to fix the problem. First, healthcare costs had gone up a lot and also with an influx of refugees into Israel,

Starting point is 00:43:33 the population had become older and sicker and they realized the system was underfunded. So part of it, and they increased funding for it. So part of it is just maintaining vigilance and maintaining the adequate funding of the system. And the other is they introduced a bunch of programs and policies to heavily encourage physicians to practice in the basic system as well as the supplemental system. And that also worked very well. So that's not a either a quick and easy or sexy as it were answered, but except to say that with vigilance and attention, we think this very real problem is one that countries can and have avoided.

Starting point is 00:44:13 Well, I like that you brought up that Israeli example because the idea of rebuilding the healthcare system, let's face it, doing this from scratch can seem really daunting. How do you envision maybe looking at that example from Israel of how we would transition from our current system to the new one that you propose? So we don't engage with that in the book directly because I think there are many different transition paths and which one, if any, we were to get done, I think depends a lot on politics, something we are not experts on. But let me just suggest that one thing that we have a rich history of, that would be a natural way to do this, would be for one state to try it, right?

Starting point is 00:45:05 So we have a federal system, so that's one potential transition path. There are other ones where the time-honored tradition of introducing a major reform with a ten-year, that's going to take place in ten years, and then letting people establish a glide path to that. So I think there are many different paths to success as it were. Okay. And given that we're right now in the middle of political season here in the United States, universal coverage is often perceived as a partisan issue. However, you both argue that it is historically garnered support from both conservatives and liberals. Can you provide some examples of some conservatives who have supported expanding coverage

Starting point is 00:45:53 and why universal coverage, automatic universal coverage for the reason we argue, namely the fact that we have this social commitment to help people when they are in dire medical straits and unable to afford essential medical care, has been embraced by conservative intellectuals and politicians. Let me just give you three quick examples. One, I think we already talked about Republican governor, Mitt Romney, who attempted to enact universal coverage in Massachusetts. In 2006, the first state to do this and the intellectual predecessor,

Starting point is 00:46:40 as it were, to the Affordable Care Act, espoused exactly this rationale. The Libertarian thinker, Charles Murray, a famous libertarian at the, I believe, the Heritage Foundation, perhaps American Enterprise Institute, who advocates strongly in the libertarian tradition for getting rid of all government programs and tax and transfer programs and bureaucracies and replacing it with a universal basic income of $13,000 a year as a way of giving people back their money and not having government intervened makes one very and noteworthy exception to the getting rid of all government programs and that's of that

Starting point is 00:47:18 $13,000 basic income to take $3,000 of it for mandatory health insurance coverage. Once again, even a libertarian who wants to get the government as much as possible out of people's lives, acknowledge is the need for mandatory coverage precisely because absent that if someone took their universal basic income and spent it on other things they needed and then fell ill, it's very clear that we would feel as a society compelled to step in and we'd be right back

Starting point is 00:47:50 in the current mess that we're in. A third example going back even further in time is the conservative Austrian economist who wrote a scathing attack on what was then the relatively new British National Health Service that started in 1948, arguing that system which involves basically a government-owned hospitals and government salaried physicians, argued that it was a naffma to what was a free market economist he supported. Even while doing that and railing on the British National Health System as a system of state medicine, he embraced this Alexander Hamilton's rationale for compulsory health insurance, noting that again it's the recognized duty of the

Starting point is 00:48:36 public to provide for extreme needs of sickness and therefore we might as well implement that through compulsory health insurance. So those are just three examples of conservative intellectuals and policymakers who have embraced universal coverage. And I could go on and give other examples if you'd like. No, I think that's good. I just wanted to get the case out there that this really should be a bipartisan issue because ultimately it would benefit to all of us. Not only should it not be a partisan issue, I think those examples prove that it doesn't have to be at all.

Starting point is 00:49:14 And I mean, my last question for you would be, what do you hope the readers of your book and listeners to this podcast today take away from your book, Our our discussion, and what impact do you envision it having on the future of American health care? I think if there's one thing to take away, it's that the instant things that many lay people have, and that I get all the time when I tell people I work on US health policy that every other high income country has managed to get universal coverage considerably less expense than what we have now. Why can't we? Not all facile and simple analogies are correct or solutions are correct, but it turns out this one is that actually,

Starting point is 00:50:06 as someone who's worked on this issue for two decades, who before my father and law really forced me to think hard and in a different way that I used to about the problem, would have told you that this was an incredibly complicated problem and had to be attacked from many angles and would pretty many possible solution would run hundreds of thousands of pages of new contraptions and new institutions every once in a while turns out that the simplest solution is right. There's that old saying that just because your paranoia doesn't mean everyone isn't out to get you just because everyone out there is saying all other countries do it why can't we? Doesn't mean they're wrong. And in this case, I think it turns out the solution

Starting point is 00:50:49 is actually really simple. If we focus on what is the problem we're trying to solve, there is a very simple solution, universal, automatic basic coverage with the option to buy additional supplemental coverage, almost conf considered on a bumper sticker. It's what every other high-income country does. The book goes into a lot of details of the exact way we think we should do it, but at a high level or at a low level, it's not that simple. Amy, thank you so much for joining us today and congratulations on the launch of this new book. Thank you so much. Thanks for having me, John.

Starting point is 00:51:25 I thoroughly enjoyed that interview with Amy Finkelstein, and I wanted to thank Amy and Penguin Random House for the honor of having her appear on the show today. Links to all things Amy will be in the show notes at passionstruck.com. Please use our website links if you purchase any of the books from the guests that we feature here on the show.

Starting point is 00:51:39 All proceeds go to supporting the show. Avertiser deals and discount codes are in one convenient place at passionstruck.com slash deals. You can catch us on syndicated radio on the AMFM247 national broadcast every Monday and Friday from five to six PM Eastern time. Links will be in the show notes. Videos are on YouTube at both passionstruck clips

Starting point is 00:51:59 and John R. Miles. You can also find me on LinkedIn where you can sign up for my newsletter or you can catch me on any of the other social platforms at John our Miles where I post daily. You're about to hear a preview of the Passion Struck Podcast interview I did with Andre Solo, co-founder of Sensitive Refuge, who is working to change the negative stigma surrounding sensitivity. In our interview, we discuss his brand new book, Sensitive, where he reveals the hidden power of highly sensitive people in a world that can often seem overwhelming and chaotic. What happens is that everything in your environment, whether it's emotions, sensory stuff, new ideas and concepts, all of it affects you more. And you have the capacity to do far more with it, but not if you are getting overloaded by it.

Starting point is 00:52:40 So you have to take control of your environment. Most other people are not going to do this for you. You have to do it yourself. Remember, we rise by lifting others. So share the show with those that you love and care about. And if you found today's episode useful, then definitely share it with somebody you could use to advise at Amy Finkelstein gave today. In the meantime, be your best to apply what you hear on the show

Starting point is 00:52:59 so that you can live what you listen. And until next time, go out there and become Passion Struck.

Passion Struck with John R. Miles - Amy Finkelstein on a Bold Vision for American Healthcare Reform EP 323

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