American lawmakers showed their constituents the ugliest side of health care policy during this record-setting government shutdown. But if there’s one thing to learn, it’s this: our health care system isn’t about treating patients.
Instead, the most advanced health care system on the planet has been engineered by politicians to transfer dollars from taxpayers to corporations and bloated government programs. President Trump called it out himself: Democrats were arguing to send more money to third parties, such as ineffective Medicaid programs or insurance companies.
In America, actual health care becomes an afterthought to maintaining a steady stream of government subsidies.
The US healthcare system massively redistributes taxpayer money. Yet, unlike other benefits, these subsidies aren’t directly given to beneficiaries. These funds go to a variety of intermediaries, failing to empower patients to obtain the care they want.
This misalignment has predictable effects, such as an explosion in the number of hospital administrators, compared to physicians – ten administrative and management staff to every one doctor. Hospital executives know it’s not patients who generate revenue, it’s the government. Patient care becomes a secondary concern to maximizing reimbursement from complex federal payment streams.
The Centers for Medicare and Medicaid Services (CMS) decides what each diagnosis and procedure is worth, and which arbitrary quality metrics they will reward. Hospitals respond by hiring armies of coders, compliance officers, and billing specialists to maximize revenue through gaming those CMS rules. For example, having an administrator present with doctors while they see patients improves hospital revenue by 40%.
Large systems can afford to play these games while independent practices and community hospitals cannot. Many federal subsidies are either inaccessible to smaller providers or explicitly structured to benefit large institutions. The result has been a wave of consolidation, with community hospitals and private practices steadily absorbed into sprawling health systems.
When patients controlled their own dollars, they were free to take their business to any doctor, at any hospital; to shop for treatment plans that fit their individual needs and priorities. But as passive consumers, they are restricted to seeing certain doctors, in certain health systems, who recommend certain tests or certain procedures, which are then performed at certain facilities. Patients become afterthoughts in a transaction between large, faceless institutions.
Insurers inflate premiums to meet these increased prices charged by consolidated health systems. Workers pay thousands of dollars a year for coverage they can barely use, leaving them with little flexibility to seek care outside their network. Doctors are barred by regulation from offering simple cash prices to Medicare patients, which has made price transparency an exception not the rule. The entire system is built to serve the payer, not the patient.
Instead of funding corporations, send the money to the people. For example, much of the spending can be directed to individual health savings accounts (HSA) managed and controlled by individual patients, or directly given as premium support to purchase an insurance plan that works for them in a market that allows more customization for beneficiaries. For individuals too poor to have an account funded by themselves or their employer, government funds could be used to give them a cash-equivalent benefit. It’s like food stamps, but for healthcare, and importantly, the benefit carries over and grows into an asset.
These accounts would contain funds earmarked for health-related spending, which patients could then use at their discretion for direct primary care, to purchase insurance coverage, elective cash pay services, or any other medical expense. Patients could decide what is right for their own needs and priorities, from comprehensive coverage plans to catastrophic-only coverage.
Most healthcare needs are shoppable and ultimately amenable to free market forces. Annually, Americans undergo 15 billion lab tests, 800 million elective imaging studies, 800 million office visits, and 19 million elective outpatient surgeries. The true emergencies represent less than 1% of all healthcare transactions.
Evidence suggests that no-cost preventative care has no impact on actual clinical outcomes; yet we mandate insurance coverage for everything from the $10 lab test to the million dollar cancer diagnosis. There will always be a role for insurance and a social safety net in treating high-cost events and chronic conditions, but for everything else, we need to empower patients to find what works for them.
Allowing patients to manage their own healthcare dollars, growing each year in a tax-free HSA, is a better incentive to stay healthy than spending tax dollars on an annual checkup and bloodwork that most young healthy people don’t even consume.
If we care about Americans’ health, independence, and pocketbooks, we need to change the game. By re-establishing patients as the customers and consumers, we can simultaneously maximize patient autonomy, re-invigorate independent healthcare practices, and reduce our overall medical spending.
We should fund the patients, not systems.
Anthony DiGiorgio is an assistant professor of neurological surgery at the University of California, San Francisco. John Paul Kolcun is a chief resident in Neurosurgery at Rush University Medical Center in Chicago Illinois.