It's great to welcome to the program today, Dr. Aaron Carroll, who's a professor,
pediatrics at Indiana university school of medicine and the Regan Streif Institute.
I hope I'm pronouncing that correctly, who writes about health research and policy at
the New York times and his blog, the incidental economist and has a YouTube show on these
topics called healthcare triage.
So great to have you on today.
Thanks for Ambien.
So let's start our conversation about evaluating different systems of health care and paying
for healthcare.
Maybe by establishing how we would measure how well a system functions, what are the
key things that we should be thinking about?
Are they a of care quality of care and outcomes?
The cost per capita, like how do we even establish the guidelines for figuring this out?
So we care about all of those things.
So whenever we talk about a healthcare system or any kind of healthcare forum, I always
like to, to frame it in terms of what some people refer to as the iron triangle, but
there are three aspects of a healthcare system.
You always need to think about how much does it cost, what's its access, like how is it,
is it cow, can you get the stuff that you want or need?
And then what is the quality that it produces?
What makes it an iron triangle is that you can make any one, maybe two of those things
better, but it often comes at the expense of the third.
I can make a system that's cheaper tomorrow, but then probably it's either going to be
less quality or there won't be as much of it.
I can make a system universal tomorrow, meaning everybody can have everything they want.
Again, that's going to cost more or probably quality of suffering and I can give you the
best system in the world, but then again that's going to cost money or you know, access is
going to suffer in some way.
So the problem is that we are always looking for a silver bullet that does all three of
those things at the same time.
It's just not going to happen.
So most healthcare form that we want to consider, we have to say, what are we trying to achieve
and what are we willing to give up in order to get there?
What are the trade offs?
We don't engage in that.
Now, within those three domains, there's lots of ways to measure a healthcare system with
respect to cost.
Is it public costs or private costs?
How much is out of pocket?
How much are premiums, how much, uh, would you still have to pay?
Even after that, how much would come out of taxes?
It gets very complicated, but the United States is an incredibly expensive system no matter
how you're breaking.
Yeah.
I want to get to that in a second.
I mean, one of the things that I recently read a UIE Reinhart's latest book where he,
when he talks about the cost, he says something which makes sense, but I think is often not
in the conversation that happens at least in the media about health healthcare, which
is that as you point out, there is some total cost and that can go up or down.
What is the total cost to treat the average person in a year?
And then oftentimes what we're really debating is actually how should that total cost be
divided from the population.
In other words, should we tax Richard people more in order to pay or, or so on and so forth.
Is that a part of the discussion that is maybe not spoken about in those clear terms?
Sometimes.
I think it's part of, but it's not even all of it.
Uh, you know, part of it is that we think we have a very, uh, private system and we
do compare it to some countries, but still about two thirds of healthcare spending in
the United States is what we would consider not private.
It's public, meaning that it's, it's Medicare, it's Medicaid, all of what your taxpayer were.
Some other way, you know, government run.
It's the VA, it's everyone that works for a public institution but has private insurance.
Like me, I work for Indiana university.
It's a state, you're all paying my salary and taxes.
You're all paying my health insurance.
Even though I have private health insurance.
It's public taxpayer money, which is paying for it.
And Charlie, when you add all that up, it's like two thirds of healthcare spending is
already publicly finance in the United States.
That's almost more per person than any other country pays total.
And then on top of that, we still feel like we're all privately paying way too much money
for premiums that our jobs and even on top of that, we feel like a pen, way too much
money out of pocket when it comes to copays and deductibles.
So no matter which way you want to measure how we're spending, what the cost of care
is in the United States, it's, it's just unbelievably high.
Especially, I mean, Uber would be the first person to tell you, um, you know, rest his
soul.
But, but it's the prices.
It's, it's not even just how much are we consuming, but it costs more per unit in the United States
than anywhere else you could possibly imagine.
And so our costs are just through the roof and as, and of course everybody wants that
to be less or lower, but you can't do that without sacrificing access or quality likely
in some way.
So let's get into this again, because it's so much of our economy and if the drastically
reduced healthcare spending tomorrow, we would instantly be in recession and or a depression.
Yeah.
So, so that's another really interesting thing from Reinhardt's book where he says, if you
actually read, you know, spending in healthcare is jobs in a very practical sense.
And we have this idea that if we reduce spending but get rid of extraneous things like medical
billing and insurance fraud investigations, that it's all okay.
Some people will have to find new jobs, but there is a very direct link between total
healthcare spending and employment.
Oh, Oh, well.
Again, it's like we're not, when we say waste, it's not money that we put in a pile and burn.
Um, all of that waste is another person's income.
It's, it's, you know, it's paying for stuff and people and jobs and not even just, you
know, drugs.
But the people that work at the drug company, the people that clean the offices that the
drug company, the people that pave the lots outside of the drug, it's, it's 16, 17, 18%
of GDP in the United States.
Meaning about what one seventh, one eighth of our economy is healthcare.
If you say tomorrow, let's instead of spending 18%, let's spend 16%.
We just dropped GDP by two percentage points.
We ended up depression.
Those lines.
My, you know, I am, uh, I believe Medicare for all would be a much better system than
the one we have.
At the same time, I have looked into enough of the specific propo proposals that I see
what may be a problem with some of the plans for how to pay for it.
And I want to see if you agree with me or where maybe I'm getting this wrong.
It seems to me that most of these plans assume in order to make the numbers work a drastic
reduction reduction in healthcare spending per capita in the United States.
That would put us, depending on the plan that you look at in line with maybe Canada or Australia
and I have not seen a good defense of how that's going to happen.
Aside from whether it would be good or bad, we can debate that part.
I understand that if you eliminate some of the quote waste from the multi insurance billing
system in different things, you'll reduce cost a little bit, but I don't see how it
gets reduced so much.
Is that a fair critique of some of the plans for how to pay for it or am I maybe missing
something
of some of it?
Yes, but I would say it's even, it's even a little more complicated than that because
again, I would turn up, I've been in terms of trade offs like we were at the beginning.
So single payer healthcare, which is what Medicare for all is a perfectly viable way
to improve access.
That's what it would do.
It would get us to universal.
So at that point they'd say, well, what's the trade off?
Are we going to sacrifice quality or are we going to sacrifice?
We're going to spend more money and we could absolutely spend more money and then everything
would be fine.
But if we're not, then we have to say, well then what will the trade off be if we're going
to significantly reduce spending at the same time that we're massively increasing access
to imagine the quality has to suffer in some way.
But the broader picture is exactly what you said.
Like there's no magic to this single payer.
Healthcare systems are not inherently cheap.
They're cheap because they can use their single payer market power to force every provider
and purveyor of healthcare to accept lower reimbursement.
Um, and so that's where the magic comes in.
Medicare often reimburses less than private insurance because they just have all the patients
and they can turn to providers and say, we've got all these patients.
If you want to make a living, you have to accept the insurance the way that is.
Theoretically, if everyone was on Medicare, then the governor would have enormous power
to say, everyone's going to have to accept less reimbursement.
That's how it's all going to function.
Well there are trade offs to that, be it their innovation, be it through what people are
willing or able to provide.
The idea that everyone is going to continue to operate at peak performance for less money
is not realistic.
And again, we can say, Oh well we'll just take it out of fraud and waste.
That's still somebody's income.
That's still somebody working.
There's no magic solution.
So Medicare for all is a perfectly viable way to achieve universal coverage and theoretically
to put use market power to reduce overall healthcare spending.
But there's got to be trade offs.
So now a defender of the Medicare for all system would hear you talking about that and
say, well, there's a combination of things there that would go into this.
On the one hand, uh, there is a stimulative even though, yes, a reduction in total cost
is a reduction in jobs, the stimulative effect for all of the end users who no longer are
spending as much money out of pocket.
If you believe those estimates and also are not at risk of a bankruptcy because of unpredictable
healthcare spending, all of that money is going to have a much more stimulative effect
being spent at businesses, for example, that will increase government revenues and therefore
it's all sort of going to work out in the end in a way that is relatively neat and tidy.
Or what do you think about that?
I think it will work out at the end, but I think it's because Americans have no appetite
for cost control.
I think what would happen is that we'd Pat, if we pass a Medicare for all, what would
happen is the system would just cost much, much, much more money.
Um, because we could theoretically use this market power that we have in Medicare right
now to curtail or hold down Medicare spending and we don't.
Um, the government just keeps spending more and more on Medicare to where you have politicians
arguing Medicare is going to go bankrupt and spending too much and no one does anything.
That's what I think would happen in the whole system
when I read the analysis.
It seems as though the access piece may well be as it's expected to be.
The quality of care piece, if managed correctly, may well be.
It seems that it's just going to cost more than most of the plans are accounting for.
And maybe now, maybe that's okay as, as a decision that a country can make.
And that's, that's where it's like if somebody said to me like, well, then what would you,
it's like, I believe we have a plenty of appetite to spend a fortune on healthcare given that
there are better ways to do this that would provide higher quality and better access for
the enormous amount of money we seem willing to spend.
Um, I think deep in people's hearts, that's where Medicare for all would wind up if it
was passed, is that it would achieve universal access.
Um, in order to avoid real problems in quality, we would just keep spending more and more
and more money because we have no appetite to say no.
It would just not hit the budget projections that people think.
And then how would we pay for that?
I think likely if, if someone actually had the political power to get Medicare for all
through, it would be on the backs of things like wealth taxes, um, and trying to to squeeze
more money out of the, the people at the very high end
part of it.
There's also this, this political reality where there's never a question of how do we
pay for this war or those weapons, but it's a debate here and I think that that's a reasonable
critique.
Yeah.
And I think that that's, I think that's why if Medicare for all was to pass, that's how
it would work.
It would be, it would just be very, very expensive.
I don't think we have much of an appetite for saying no to individuals for healthcare
stuff that they have, no matter if it works or not.
I don't think we have much of an appetite for, for really impinging people's ability
to get what they want in terms of access as quickly as they want.
Um, nor are we going to suffer much in terms of quality decline.
So we'll just spend a lot and we've been doing it for a long time and that's what we would
do.
And I think the arguments would be if it were to pass exactly what you said, that we don't
seem to worry about how much the war cost or, or how much the tax cut costs.
Why are you all screaming about how much the healthcare costs?
Everyone's getting it, they're feeling better about it.
Let's just spend a ton of money
now.
If, if it were just up to you, because you've looked at so many systems, you've looked at
European systems, there's the system in Singapore, which we've talked about before, which is
very interesting.
Do you find that there is some other system that might be better suited for the United
States specifically?
So this is what we're about.
Two and a half years ago, we did this thing at the New York times where we actually, uh,
we picked eight countries, healthcare systems, and we had a tournament, like did a bracket
and let both experts and the public vote.
Um, and in the end it came down to a, uh, a battle between France and Switzerland and
Switzerland won.
And I think that's a reasonable call.
Switzerland has a healthcare system which is universal, um, and it is entirely private.
There is no Medicare or Medicaid ish kind of thing.
It's entirely private, well-regulated, mostly nonprofit, uh, health insurance not coupled
to jobs from birth to death, from with a sliding scale subsidy for those of the low end of
socioeconomic spectrum.
So subsidies to help people buy it, they achieve remarkable outcomes.
They have pretty high levels of cost sharing, which we seem to believe in.
Um, and their costs are high compared to most of the world, but not to us.
Um, and, and it's great and it's again, it's entirely private.
Um, there was a plan not that long ago, perhaps a little more than a decade ago.
It's called widen Bennett.
Um, it was Ron Wyden who's a Democrat from Oregon and it was a bill Bennett, uh, who
was a Republican from Utah.
So it was a totally bipartisan plan and they had co-signers from both sides of the aisle.
And it was this, it was birth to death exchange, like insurance, totally private with subsidies
or tax credits, uncouple it from jobs, very Switzerland.
Like there was a time in the United States when now would, would've been the good compromise
solution.
Um, but in the heat of the ACA and all the political ramifications and partisanship,
it got crushed.
Bennett got run out of office.
Um, no one will touch that.
But I personally think that there's probably more of an appetite for that kind of tightly
regulated private insurance that could be marketed as a compromise ish type solution
for America that would still allow for, you know, still not government running it as much
as say a Medicare for all would be an a perfectly viable way to, to to achieve universal acts.
That's actually both.
Both the French and Swiss systems are ones that, ones that we've talked about extensively.
Interesting.
Interesting to hear that.
We've been speaking with Dr. Aaron Carroll, who's a professor of pediatrics at Indiana
university school of medicine.
Make sure to check out his YouTube program on these topics called health care triage.
Thank you so much for your time.
I really appreciate it.
Anytime