Healthcare is a defining issue. It is not just about quality of life or economic security, it is about how we see ourselves as a society.
I discovered this years ago when I became pregnant with my first child. At the time, I was commuting between New York and London, and some routine blood tests had revealed a slightly higher than average risk of various foetal health issues. My American gynaecologist immediately recommended expensive tests in order to rule out every possible negative externality. My British midwife, on the other hand, explained to me that I had a “99.8 per cent chance” of having a healthy baby and that she would play those odds.
Being an anxious and relatively affluent American with private insurance, I had the tests (everything was fine). But since then, I’ve thought about what the American approach to healthcare says about us as a people.
Clearly, it says that the US views healthcare as a privilege rather than a right — why else would we tolerate a system in which over-the-top concierge care is normal, but so is a lack of health insurance, the chief cause of personal bankruptcy. Our system also indicates that we don’t understand the basics of economic growth — if we did, we’d surely underwrite prenatal care and pregnancy because national gross domestic product is basically the number of people in a given country plus their productivity level.
But perhaps most importantly, America’s bifurcated healthcare system is reflective of the priority we give to the individual over the collective in all things. The attitude seems to be: so what if the number of uninsured people is once again on the rise, or that healthcare inflation is three times the level of the Consumer Price Index, or that total annual healthcare premium costs have gone up 50 per cent in the last decade, according to Deutsche Bank research? In America, so long as we have “choice”, we cling to the idea that our system is superior.
But it’s a myth. Whether or not you like Elizabeth Warren’s proposed “Medicare for all” programme, which would see the Democratic presidential hopeful get rid of private insurance entirely and create a European-style national system, there is intellectual coherence between that idea and the core message of Ms Warren’s campaign — that America can’t survive on its current levels of inequality and individualism.
In this, our healthcare problems chime with America’s larger economic troubles. We’ve been in a so-called recovery for over a decade now, with $4tn in central bank money dumps, and yet there is very little inflation in goods, or wages. Where you see plenty of inflation, however, is in the three things that allow for a middle-class life — healthcare, property and education.
Indeed, there is a connection between healthcare inflation and lack of wage inflation. Runaway healthcare prices — a result of fragmented, inefficient, and completely opaque and asymmetric markets (is there anything else one must pay for before knowing its cost?) — mean that health benefits now make up about 20 per cent of total worker compensation (up from 7 per cent in the 1950s) in our employer-led system.
It follows that as healthcare prices go up, wages will go down, and inequality will rise, especially since healthcare costs are a much lower percentage of a top earner’s salary than a lower income worker’s. According to research by the Kaiser Family Foundation, that is exactly what has happened since 1999. In a 70 per cent consumer economy, this is big news. If individuals and companies alike have to spend more on healthcare, they’ll have less for iPhones, new cars and paying down student debt.
No wonder polls reveal healthcare to be the most important voting issue for 2020. I think the presidential fight will also be a proxy referendum on what sort of country we want to be in the future. Everyone agrees that healthcare reform is needed. And while Democrats and Republicans disagree about how to fix the system, I’m interested in the fact that all the solutions being floated involve collectivism of some kind or another.
Employers, for example, have realised that they cannot create any pressure on hospitals, insurers and drug companies by going it alone. Hence the growth of corporate healthcare coalitions, in which large companies are pooling resources and leveraging economies of scale.
Such coalitions could be a step towards a national medical database. When I returned to the US with my children in 2007, one of the things that stunned me was that there is no easy data sharing across the public and private sector about the basics — individual blood types, for example, or whether your child might be allergic to penicillin. Every time you shift jobs, you are required to fill out fresh reams of paperwork with basic medical information — this is shadow work that depresses US productivity.
Of course, such a system would be best run at the federal government level — as would care itself, according to the OECD (in 2018, Americans spent over $3,000 more per head than the next most expensive country, Switzerland, while managing to achieve worse outcomes).
And that is how this challenge became not just economic or technocratic, but existential. Is America a “go it alone” society? Or are we in this together? It’s a question I suspect we’ll struggle with in the 2020 election, and beyond.