The health policy lesson our government keeps forgetting

Two weeks ago, White House Press Secretary Jen Psaki got in an argument with a reporter who asked about giving the American people free coronavirus tests. "Should we just send one to every American?" she scoffed. "How much does that cost?"

Now President Biden has abruptly reversed course. On Tuesday, the White House announced it would make 500 million rapid tests available for free to Americans who request them online, will open federal testing centers around the country, and will send 1,000 military medical personnel to assist overburdened hospitals.

As Omicron variant cases surge, this is welcome news. But it's also discouraging that the Biden administration had to again relearn the value of specifically public health policy — that is, health care delivered directly by the government. Nearly two years into the pandemic, we shouldn't still be retreading this ground.

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I got my first two COVID vaccine shots at a big, government-run clinic in Philadelphia. As I wrote at the time, it was the best experience I've ever had with American health care — no insurance card, no co-pays, almost no waiting, no balance bills. I was in and out in minutes. To be fair, that was also the experience at a lot of private locations, but that was greatly helped by the government footing the bill and forbidding providers from charging (though some did anyway).

Beyond the ease of the experience, though (other mass vaccination facilities had some problems), the real value of this kind of public facility, particularly during a pandemic, is capacity. It wasn't just me in there. The site handled thousands of visits every single day and was able to reach that scale almost overnight by bringing in National Guard medics to maximize throughput.

Once the initial vaccination push ended, of course, the administration shut down most of those clinics. Ordinary pharmacies could handle the demand, it was assumed, and things could get back to normal. The government could step back and let the market, particularly corporate chain pharmacies, take its place.

This turned out to be a catastrophic miscalculation. Pharmacies do handle annual flu vaccine demand fairly well, but they couldn't handle flu shots plus the sudden surge of demand for COVID boosters in November and December. In cities across the country, vaccination appointments have been scarce for weeks. Many cities have opened pop-up clinics in response, but it's already too late for millions to get the best possible protection against Omicron.

Even in the best of times, America's chain pharmacies, which make up something like 40 percent of the pharmacy market, are a dysfunctional mess. As Mike Elk writes at The American Prospect, despite massive profits from all the vaccines, their pharmacists are still underpaid — just $45,000 as a starting salary in many cases — and overworked, which has fueled a union drive and a recent short-term walkout.

Relying on private companies with bare-bones, low-paid staff isn't how you vaccinate as many people as possible as fast as possible, as the Biden administration should have known. And it's not like the need for another vaccine push would have been hard to predict — scientists have been warning of variant risk and the likelihood of boosters being needed since before the vaccines were even approved. Now we're behind the curve, again.

The story with COVID-19 testing is even more illustrative. For months there has been a chronic shortage of over-the-counter rapid tests, badly hampering people's ability to know when they've been exposed and should be quarantining.

The government is partly to blame for this problem. As Lydia DePillis and Eric Umansky write at ProPublica, the FDA has been slow to approve several rapid tests that have long been available in Europe, thanks in part to Kafkaesque red tape and incompetent, indecisive officials. But simply letting anyone sell a rapid test without FDA due diligence is no solution here — the only way forward is for the agency to do its job faster.

Meanwhile, Abbott Laboratories, which made one FDA-approved test, is an object lesson in the downsides of market incentives. Early last year, Abbott accounted for about three quarters of the rapid test market. But in June and July, it destroyed millions of tests, closed up an entire test factory, and fired 2,000 skilled employees because demand for tests was low. "The numbers are going down," an Abbott manager told employees, according to The New York Times. "This is all about money."

Now Abbott is scrambling to reverse course (ironically, missing out on tons of profits), and rapid tests are either very expensive or impossible to find in much of the country. Whoops!

The Biden administration could have done many things to preserve wide test availability regardless of short-term demand. It could have paid Abbott and, ideally, other companies to keep producing tests or at least keep production facilities on ice, then required reasonable test prices in return. Or it could have bought all the tests, made them available to citizens for free, and kept prices down with its bargaining leverage. Or it could have just nationalized the entire company or industry.

Most European countries have opted for some version of these policies, in addition to approving rapid tests in a timely fashion. Tests are abundant and cheap in France, Germany, and Belgium, where they cost the equivalent of just a few dollars (including the same Abbott test that costs $15 to $30 here). They're free in the U.K., where the National Health Service will mail them to your house on request.

For the last several decades, the Democratic Party has been dedicated to the proposition that the best way to achieve social goals is to rig up policies to encourage private business to profit through the market in a certain way. That's the theory behind the ObamaCare marketplace, the Earned Income Tax Credit, various odd job creation schemes (remember President Obama's "tax incentive to encourage small businesses to add and keep employees"?), and the Biden administration's decision to rely on private companies for COVID vaccination and testing.

It's a bad theory, but it seems old habits die hard. Even after it became clear Big Government did mass vaccination very well, the administration was itching and sweating to get "back to normal" — a normal where nothing can happen unless someone makes a buck.

Maybe this time, the Biden will learn permanently that, in the pinch, there's no substitute for the state.