One important lesson we should draw from the tragic loss of life during the coronavirus pandemic is undeniable – socioeconomic differences correlate to health outcomes. This point seems obvious, because disparities in outcomes have been documented for decades. For COVID, the Centers for Disease Control calculates the risk of hospitalization for African Americans and Hispanics as triple that of whites and Asians; the risk of death is double. Beyond this illness, many disease outcomes and health measures are worse for certain minorities in the United States. Infant mortality by race of the mother for African Americans and Native Americans is about double that of infants born to whites and Hispanics. Black Americans have a life expectancy of seven fewer years than Hispanic Americans, who live three years longer than whites. Undoubtedly, several factors contribute.
That health outcomes are worse for America’s minorities and the poor has been put forth as a key motivation for expanding government coverage. A fundamental flaw in that argument is that this problem is not unique to the health system of United States. The very same health disparities for minorities are seen in countries with the longest history of using single-payer care. For instance, in Canada, Inuit and First Nation infant mortality is two to four times that of non-indigenous Canadians and Quebecois. The same goes for the United Kingdom, where Black Caribbean and Black African infant mortality rates are two to three times those of whites.
President Biden’s American Rescue Plan pays for remaining states to expand Medicaid. That removes some fiscal considerations by states, but is no one concerned about Medicaid’s performance compared to alternatives before expanding it?
Medicaid, our single-payer system for the poor, is the main outlier to the uniquely private U.S. health care system. Low-income Americans are the only U.S. citizens who have no choice other than pure government coverage. It is typically unacknowledged that more than 70% of seniors on Medicare exercise their choice for private insurance to supplement or replace the traditional single-payer plan with Medicare Advantage, Medigap, and employer-sponsored coverage; millions more depend on private drug coverage.
One thing is strikingly clear – the quality of Medicaid falls squarely on the shoulders of minorities. Medicaid now covers more than 70 million people and costs over $600 billion per year, but Medicaid users are heavily skewed to minorities: 21% are Black, 25% are Hispanic, and 40% are white. Yet, of the 250 million adults in the U.S., only 12% are Black and 16% are Hispanic, whereas 64% are white. Likewise, Medicaid covers almost 30 million of America’s children; most Black children (57.1%) and most Hispanic children (54.7) use Medicaid, while less than one-third (32.8%) of white children do.
What’s wrong with expanding Medicaid? First, half of doctors don’t even accept it. Worse, 51% of those doctors with contractual agreements to accept new Medicaid patients in practice do not, according to the Department of Health and Human Services. This is especially true of family practice doctors, pediatricians, and psychiatrists, all of whom accept Medicaid patients at far lower rates than they accept private insurance patients. Why don’t doctors accept more Medicaid patients? Because Medicaid pays below the cost of administering the care. Doctors cannot be expected to lose money per patient.
Far more troubling is the data on disease outcomes. Medicaid patients fare worse than those using private insurance – even after standardizing for medical differences among patients. And that’s the relevant comparison to make – to private insurance. Those bad outcomes include more frequent complications and lower survival rates from cancers (e.g., head and neck, pediatric, liver, lung, colon), heart procedures, transplants, and major surgeries. Should we keep ignoring this poor performance and continue to expand Medicaid for disadvantaged Americans, just as long as “something” is done?
There is an alternative. The contrarian idea that has never been seriously entertained is to equalize everyone upward with private insurance. That would mean converting the poor to similar coverage choices as the rich, the proven pathway to broader access and higher quality care.
The obvious reason for Congress’s non-interest is the anticipated cost. Single-payer systems have significantly lower health expenditures. But all single-payer systems hold down costs using one unacknowledged strategy – by limiting availability of doctors, treatments, medications, and technology. That is also true in the U.S. for Medicaid, and that promises to persist. That is precisely why approval of an innovative drug for hepatitis C, a disease concentrated in low-income minority patients, was delayed by Medicaid while patients died from liver cancer. That is precisely why there are massive waiting lists in single-payer countries. In England alone, a record-setting 4.4 million patients were on NHS waiting lists as of late 2019. According to the NHS statistics, in the fourth quarter of 2019, more than 22% of patients referred for “urgent treatment” of cancer waited more than two months for their first treatment. Likewise, in Canada’s single-payer system, the 2019 median wait from general practitioner appointment to specialist was 10 weeks; the total median wait to begin treatment was a stunning five months. Waits are so long that many countries, including Finland, Ireland, Italy, the U.K., the Netherlands, Norway, Spain, Sweden, and Denmark, have needed to pay for private care. In Denmark, patients can even choose a private hospital outside the country if their wait time exceeds 30 days.
Holding down costs is precisely why single-payer offers far fewer new cancer drugs, limited technology like MRI and CT scanners, long delays to see surgeons and other specialists, and fewer high-tech ICU beds per capita than in the U.S. Let’s also not deny what no one admits -- single-payer waiting lists will eventually explode, given the incalculable medical care skipped during the lockdowns.
America has world-class, privately insured medical care – why don’t we use it for everyone? The goal of health care reform should be to ensure that everyone has access to excellent medical care, not to label someone as “insured.”
If conservatives believe their talking points about competition, then they should commit to this. Price transparency reduces prices – it could be generated. Let’s break supply monopolies by eliminating state‐based licensure, limits on specialists and medical school graduates, certificates‐of‐need for technology, unnecessary restrictions on physician assistants and nurse practitioners, and over-regulated drug development pathways. For those who want it, allow cheaper insurance less burdened by mandates, and expand health savings accounts. And finally have the courage to limit the tax exclusion –it drives up health care costs for everyone, and it incentivizes the affluent to spend more on their own care.
If politicians are truly concerned about the health care of the poor, then it’s time for a radical change of thinking about Medicaid. It seems indefensible to expand a substandard program that is proven to have worse outcomes than private insurance, costs hundreds of billions of dollars per year, is not accepted by most doctors, and provides coverage that no one in Congress (the very lawmakers who expanded it) would choose for their own families. The exact opposite should be done, if the data matters. Considering the hidden costs -- including pain, suffering, death, permanent disability, and forgone wages -- we are on the verge of creating a trillion-dollar Medicaid program that is undeniably second class. It’s unconscionable.