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Why Is U.S. healthcare system NOT Universal?

Updated: Apr 5, 2018

The hostile political atmosphere, the anti-entitlement culture, and the challenges of implementing changes in the highly-regulated healthcare industry are what hinder the proponents of the single-payer from working more effectively in the U.S.

Universal healthcare is still not happening in the U.S.
Universal healthcare is still not happening in the U.S.

I answered this question on Quora and would like to re-post the answer here, because the idea of a single-payer healthcare has been an interesting topic to many people these years. Bear in mind that the universal healthcare in this article means as the same as the single-payer healthcare when you continue reading.

Many have worked hard together on trying to implement the single-payer healthcare system in the U.S. and yet see minimal progress, primarily because:

  • GOP is Dominating Now and It Hates Obamacare

Frankly, it was incredible that Obama was able to convince enough members of Congress to pass the Affordable Care Act (ACA). It has been relatively difficult for both parties to reach any agreement these years and we know how much the Republicans dislike “the big government” that “helps people who won’t help themselves, won’t lift a finger and expect the federal government to do everything”, “socialism”, and “Obama”care. It was not surprising to see Trump’s administration has been obsessive on repealing Obamacare. It was just sad to see his tenacity on this issue (and we all know the administration has more important tasks to deal with), even though many people, including those whom opposed Obamacare in the beginning, have testified the positive impacts the ACA has brought to their lives.

Obamacare was initially drafted as a single-payer system in the beginning and yet was forced to include multiple payers (the reason was explained in the “Potential Victims Generated by the Healthcare Reform” section). Even though this hybrid act was not perfectly designed, it initiated one of the most important changes in the healthcare industry, which was transforming the medical reimbursement system from the Fee-For-Service method to Performance-Based one. Such an initiative made the whole healthcare system start to think about what medical procedures would be necessary to help the patient recover well, not how many more medical procedures the providers need to order in order to get paid more. Sadly, when people oppose the “Obama”care because the name of “Obama”, they eventually discard the positive impacts the ACA delivers but instead emphasize on the negative results. By stopping paying many unnecessary medical services, the U.S. could cap the exponentially increasing medical costs. Yet, the D.C. doesn’t care.

  • The Anti-Entitlement Culture

Twenty years ago, I moved to this country because my family’s Green Card application was finally approved (Yep, I was one of the children who did not know her parents were applying for the U.S. citizenship). It did not take me long to learn that being homeless or poor in this country meant you were lazy and stupid. I am grateful every day that I’ve got lots of support from many kind people and good health when I arrived in SFO with only two suitcases, so I would not have to use any safety net program and lose dignity (though some still laughed at me because I was living in an impoverish neighborhood and wore old clothes). Since the ACA is treated as another welfare program, no wonder many Americans are against to this new “free healthcare entitlement” these poor people do not deserve.

I grew up in Taiwan before moving to America. Like many countries, Taiwan has homeless people as well. Nevertheless, most Taiwanese people are sympathetic with the harms of poverty because of their beliefs in Buddhism and Taoism and therefore will try their best to help those who roam on the streets. Many believe bad luck causes unpleasant situations and most of people suffering in the poverty should be able to get out of the misery with some help. That was how Taiwanese government was able to institute the National Health Insurance system in 1995. The system has many problems, but luckily, many medical professionals and politicians in Taiwan are determined to find and implement solutions. They believe education and healthcare are the key elements to mitigate the socioeconomic inequity.

Back to the United States, Paul Ryan just announced to get back at entitlement reform as his primary political goal in 2018 and said “Medicare and Medicaid are the big drivers of debt.” It would be a shocking news if Ryan and his supporters did not squash any sprouting development of the Universal Healthcare in the near future.

The hostile political atmosphere, the anti-entitlement culture, and the challenges of implementing changes in the highly-regulated healthcare industry are what hinder the proponents of the single-payer from working more effectively in the U.S.”
  • Potential Victims Generated by the Healthcare Reform

Unfortunately, there would be victims if the universal healthcare were implemented: the private payers. Obamacare was initially drafted based on the principles of the HMO systems (e.g. Kaiser Permanente and Geisinger Health Plan) but eventually was forced to include the private payers after some lobbying. Hence, the Obamacare became the hybrid product of the single-payer system (i.e. CMS) and the private payers. The private payers created individual (or select) healthcare plans and introduced them to the market. Unfortunately, the private payers did not cater the individual healthcare plans to provide more preventative and chronic disease managements, which most of those whom did not have healthcare insurance need. Instead, they sold the same insurance products designed to serve their corporate clients, who are more affluent and seek for specialty cares (e.g. oncologists, dermatologists) and services from the Tier 3 or 4 hospital systems. Therefore, the private payers had to increase the premium and the deductible of their individual healthcare plans in the markets that have fewer specialists and top-tier hospital systems in order to cover their profit loss. After losing profits for years, fewer and fewer private payers wanted to stay in the individual healthcare markets. Whoever chooses to stay could increase its premium on its well, since there is almost zero competition. Therefore, the Obamacare started to collapse, especially after now the federal government threatens to remove its subsidization.

Implementing the single-payer system could cap the increasing medical spending, and yet, doing so means the cities that have been the centers of the U.S. healthcare insurance industry would potentially decline like Detroit, which has been devastated by the dwindling auto industry. It would be unpleasant to see the local business ecosystems in the cities collapse like the ones with dying companies. Layoff and high unemployment rates would be inevitable.

  • Implementing Changes Is Not Popular and Easy in the Highly Regulated Healthcare Industry

Because the healthcare industry is a highly regulated business sector, it is relatively difficult to implement any innovation. The majority workforce in the healthcare sectors are trained to follow the rules, not implement changes to improve the operational efficiency.

Can we implementing a new database system in the claim process? Sure, it would be doable only if you could evaluate its security, ensure its compliance with the HIPPA and other medical record privacy laws (that means years of work dealing with the bureaucracy), and convince the workforces to accept the new tool that might potentially break the laws if not operated carefully. My blood pressure was high several times because I could not convince some managers to learn and use a new database to automatically process the medical claims. Instead, I had to help them build SOPs so they could manually process the claims. They easily denied any innovative proposal with the excuse of “it is against HIPPA!” It really hurt many colleagues and I who were eager to use technology to decrease human errors and increase the productivity, especially after we had doggedly tasted to ensure the new system complied with the existing rules.

  • Are We Capable and Ready to Implement the Healthcare Reform?

Even if we could remove many unnecessary regulations and restriction in the healthcare sector, it would takes lots of efforts to convince the majority of workforce to learn new skills. Our public education system has failed to teach the general public basic mathematics and scientific skills to adopt today’s rapidly changing technology. In order to process such a high value of medical claims and notes, implementing solid database systems is a must and yet we could not guarantee enough workforce who would be interested in learning new programming languages to operate new databases, because programming/coding and basic math to understand operational concepts was not taught in many public schools.

  • The Medical Professionals, Public Health Experts, and Financial Specialists Should Have the Equal Final Say

Implementing a single-payer system would not automatically start to save the medical costs, if we continuously allowed the system to be driven by financial incentives rather than how well the patient recovers. The biggest problem in Taiwan’s National Health Insurance System is that the system lets the government officers, not the medical professionals, determine how much all medical procedures should be reimbursed for. It is no longer a joke that conducing a CPR in the ER is much cheaper than getting a foot massage.

Some argue that allowing non-medical professionals to oversee the medical spending and quality is critical because medical professionals are overly paid. Well, who is going to compensate the time and money these medical doctors and staff invest before saving people? Many spent years on getting the degrees and paid over $220,000 (the average yearly medical school tuition is $54,862) to become medical doctors. Furthermore, most medical doctors chose their careers not because they wanted to make a lot of money but because they wanted to save lives. It is unfair to expect most doctors would commit frauds in order to be rich. Many public health experts devote their lives in guarding the health of the general public because they believe in the humanity and the importance and effectiveness of preventing pandemics, even though they do not get paid much.

In short, the medical professionals, public health experts, and financial specialists should build the reimbursement rules and finalize the regulation together. Yet, the fact that the private payers have been the entities that have final say on the medical necessity and reimbursement in the past has made the financial professionals’ opinions supersede the medical staff’s. After all, private payers are finance institutions that are responsible for their share holders.

We would repeat the same mistakes in today’s healthcare system, if we continue to focus on how much money the single payer is saving, not on how well the patients are recovered. Studies have shown it is cheaper to pay for the preventative care up front to manage the diseases than the expensive urgent care to cure the progressed diseases later. We should balance the effects of medical care and public health initiatives with the saving on the cost when we design and implement a single-payer system.

  • Conclusion

With today’s AI and machine learning technology, the U.S. is capable of designing and implementing solid database systems to operate any new healthcare system (e.g. the single payer system) and evaluate the results. The single-payer system could deliver good results if it were carefully designed by the medical professionals, public health experts, and financial professionals with equal authority and operated by today’s technology.

However, like the electric cars and the e-commerce, it would probably take the general public years to appreciate the positive impacts the single-payer system delivers (Amazon was losing money for years before more people shop online). Furthermore, the current hostile political atmosphere and the resistance from the inert culture in the healthcare industry are what make many proponents frustrated. It is expected to take years hammering on implementing changes before seeing the successful results the healthcare reform delivers. Patience, time, and the spirit of “never, ever give up!” are what implementing the single-payer system requires.

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