Analysis

Why fixing American health care is easy

Lessons from a feel-good story about health insurance

Kaitlyn Hood had to have surgery that cost $50,547. But unlike Matthew Stewart, a young man with liver disease who faces bankruptcy and perhaps death, Hood managed to stay safely within the (otherwise tattered) American safety net.

Like Stewart, Hood fell ill with an autoimmune disease that required serious and expensive surgery. But because her insurance actually worked, her condition was fixed without undue expense and she is continuing to live a productive life. It illustrates an undeniable fact: Despite the Byzantine complexity of the extant American health care system, its most critical problems are not remotely difficult to solve.

Hood's story began in 2012, during her second year of grad school at UCLA. She started having serious pains in her abdomen, which after much weight loss was eventually diagnosed as colitis (inflammation of the bowel) caused by Crohn's disease. She was prescribed steroids and Humira, a drug for Crohn's which helped a lot. However, she continued having pain, which dramatically worsened during a trip to Tennessee. She went to the ER, where they diagnosed appendicitis, and had emergency surgery which removed not just her appendix but also six inches of necrotic intestine.

She eventually recovered, but the immune problem later cropped up in the form of arthritis, requiring more expensive drugs, plus yet more to treat the side effects from the others.

While Hood's condition is probably not quite as severe as Stewart's, the broad strokes are very similar. She has a complicated, life-threatening illness requiring expensive treatment, including an invasive surgery that cost over $50,000, according to medical bills she provided to The Week. No non-rich person, much less a grad student, could possibly have paid for her drugs (Humira alone is some $5,000 per month) and surgery if she were on the hook for it all.

But that's not what happened. As her bills show, once Hood hit a $200 deductible, she was not charged one cent to fix her intestine. She was not just insured, but doubly insured, she says, being enrolled both on the school's plan and her parents' plan (she was young enough at the time to qualify for the ObamaCare rule about children under 26). Premiums were $300 per month, part of which UCLA paid for, drug copays summed to $110 per month, and her out-of-pocket maximum was a "mere" $2,000. Expensive, but easily within reach.

All this allowed her to live a normal life again. "Before I was diagnosed, I was in constant pain — I couldn't sleep, I couldn't eat, I lost like 30 pounds in three months," she says. "And when I was having this arthritis pain, I had a hard time just moving, I couldn't even get off the couch for a couple weeks. So having all this treatment makes a big difference in my life and in my work — in how much I can work, how productive I can be."

Without treatment that was provided to her essentially for free, Hood would have unquestionably been forced to drop out and might easily have died. Instead, she recovered, stayed in school, and eventually graduated with a Ph.D. in applied mathematics in 2016. She's now a postdoc at MIT, where she's working on cancer screening research, angling for a professorship, and mentoring young girls in math and science, she says.

The differences between Hood's and Stewart's case are a great lesson in designing the basic architecture of a health care system.

First, all but the very rich must have access to some sort of comprehensive insurance scheme if they are to avoid being bankrupted by serious illness, because modern medical treatment can be extremely expensive.

Second, as a necessary corollary, insurance pools should be made as large as possible, so as to spread the cost of treatment as widely as possible. Luckily for every Hood out there, there are dozens of people like me who virtually never go to the doctor, and so they must be brought into the risk pool.

Third, regulations should tamp down the price of care as much as practicable, so as to prevent the total cost of treatment outstripping the general economy's ability to pay.

The most simple method of attacking this problem is single-payer public insurance plus price control. A single government-operated risk pool for everyone, which all providers must accept, one and done. That's the approach in Canada, Australia, and Taiwan (which incidentally all call their systems "Medicare"). Others have single-payer and single-provider, where the government also owns and operates the hospitals, as in the U.K. Others, such as Switzerland, have an ObamaCare-style approach but are far more aggressive both with penalties for uninsurance and with subsidies, so no one is left out or unable to pay.

There are many complicated problems in the American health care system that will take more careful thought and regulation to fix. There are not enough doctors, the salary structure across medical sub-professions is completely bananas, providers routinely kill people with inept care, many providers have become monopolies, and on and on. Many countries have problems like this, and are constantly tinkering with their policies to patch things up here and there.

But none of those are the really big problems with American health care. We have problems of access and payment, the basic solutions for which were obvious in the early 20th century. There is a huge policy buffet we could choose from, developed by dozens of other countries that nailed this problem decades ago.

The political obstacles are considerable, of course. The reason ObamaCare is such a janky mess is that it was so compromised by capitulation to nearly every concerned interest group (and attack by the Supreme Court) that it didn't even get up to the standard of Europe in the 1940s.

But Hood's story shows that, if we could get the politics sorted, universal and affordable health care could be easily made to work. People who are well-insured get decent treatment. All that is needed is the political strength necessary to ram obviously good policy through our antiquated constitutional government.

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