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Medicare for All and the Problem of Health Care on Demand

By Kevin MD

Categories: Featured News
March 10, 2019

The evolving politics of single-payer health care conflate the concepts of universal coverage, health care on demand and free health care. To the indiscriminate progressive mind, all three are part of the holy grail. The fly in the ointment is that highly attractive and altruistic politics runs into the brick wall of reality. As Thomas Sowell — a noted Stanford economist — wrote: “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it.”

This is true with health care on demand.

He went on to state: “The first lesson of politics is to disregard the first lesson of economics. Politics deals with the same problem by making promises that cannot be kept, or which can be kept only by creating other problems that cannot be acknowledged when the promises are made.”

The current promises by idealistic if not ideological presidential candidates disregard this first lesson of economics. The scarcity of assets precluding health care on demand to all those that want it is undeniable.

Starting with the workers who are crucial to health care, doctors are scarce relative to population needs. It takes 10 to 15 or more years of post-high school education to produce a board-certified physician, depending on the specialty. The cost of that education leaves many under burdensome debt, averaging in the hundreds of thousands of dollars. The highly competitive path, the relatively limited U.S. medical school positions and the discouraging runway contribute to a growing documented shortage of physicians, despite the importing of foreign medical graduates now representing over 25 percent of the workforce. The AAMC estimates a shortage of approximately 100,000 physicians in the U.S. by 2025.

Given the expense, intensity of long training and subsequent stresses of work where lives are literally on the line, physicians understandably expect compensation reflecting those sacrifices and the acquired expertise that is in high demand. Seeking that compensation in advantageous locations produces unequal distribution. Geographical mobility, the mantle of cultural authority derived from the societal needs and hierarchy bestowed upon physicians and relatively high compensation levels previously partly made up for the long road.

Recent market forces including the incursion of health insurer’s utilization management, inexorably increasing governmental regulatory oversight and legal tort climate have all combined to greatly erode the relative value of professional authority as well as the financial compensation benefit of being a physician. Employment, rather than independent practice has become the norm. Commoditization of the profession is here, and physician burnout is a hot topic. Scarcity of expertise will grow.

Nurses, physician assistants, and other paraprofessional caregivers are willing to fill the gap, but similar limitations impact their deployment (at nearly the salary levels of a primary care doctor), and their capabilities only go so far. “Quality health care” is being re-defined, and expertise may be sacrificed at the altar of access, and cost reduction.

Facilities and advanced technology dedicated to health care were abundant in the halcyon days of robust reimbursement built on the back of generous employer and the government insurance plans. It’s where the bulk of health care expenses resides, not on payment to physicians. Such prior investments have created the most advanced health care capabilities in the world for treating complex conditions like cancer and heart disease, attracting patients from around the world (despite data that American health care lags some developing countries — an apples and oranges discussion beyond the scope of this essay).

However, inflating capital and operational costs, a growing senior Medicare population which devours resources threefold per capita, and expanding underinsured and uninsured populations – fueled in some states by significant numbers of undocumented aliens – has made cost shifting by providers from employer plans and government for care of those under- or uninsured untenable going forward. Enter the Affordable Care Act with its illusory promises of universal coverage, ignoring scarcity of access.

As an example, one of three Californians (over 13 million people) are now insured by Medi-Cal which reimburses approximately 30-40 percent of the Medicare dollar. Many private physicians refuse to contract with Medi-Cal, most that do limit the available slots in their practice for such patients, as do their management services organizations. Not surprisingly, our first responders tell us that 911 calls have dramatically increased for non-critical conditions such as headaches and abdominal pain, bringing patients to the emergency department where access is mandated despite inappropriate acuity. Hospitals are now tasked to address the socio-economic determinants of health.

The spike in the utilization of emergency departments since the expansion of Medicaid is well-documented, and new legislation in California mandates free services be provided by hospitals to the homeless — the legislative definition of which includes those living in commercially operated sober living homes. Overcrowding emergency departments leads to periodic shutdown or bypass status. The mental health tsunami exacerbates its limited capacity. Whereas access for emergency conditions such as heart attack and stroke must be a right, scarcity gets in the way.

Expanding insurance coverage to all does not increase access, when scarcity is inevitably built into the system, and accentuated by unbridled, inappropriate demand. Health care may be a human right but could be coupled to some individual accountability for a healthy lifestyle and appropriate utilization, or acceptance of — heaven forbid — rationing.

This is where an individual’s perception of their right meets societal boundaries. The utilitarian notion of the greatest good for the greatest number should not be conflated with the promise of health care on demand for everyone. Health care is not free. Someone must pay, and billionaires and even multi-millionaires cannot subsidize tens of trillions in costs. Eventually, as Margaret Thatcher once observed, we run out of other people’s money. Tax revenue needs prioritization at someone’s expense. Value-added taxes support many European health systems, but are labeled as regressive, thus made unappealing here.

Our politicians must resist the ideological or blind ambition’s siren call for voter appeal through promises that ignore Sowell’s first law of economics.

Michael Brant-Zawadzki is senior physician executive, and endowed chair, Pickup Family Neurosciences Institute, Hoag.

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