What Would You Give Up to Make American Health Care Better?

It’s a question everyone—from executives to practitioners to consumers—needs to ask. But few seem willing to think about it.

(Photo Illustration by The Bulwark / Photos: Shutterstock)

“WHAT ARE YOU WILLING TO SACRIFICE for a much better—if not the best—American health care system?”

That was the question I posed to a large group of CEOs and other C-suite executives from hospitals, physician groups, health care companies, and other organizations at a recent meeting. My question was partially prompted by the fact that it was then the season of sacrifice for the Abrahamic religions, with Christians celebrating Lent, Muslims Ramadan, and Jews beginning reading Leviticus, a book suffused with sacrifices.

Despite the season of sacrifice, the response of the health care CEOs was a prolonged silence.

As the hush stretched on and started to feel embarrassing, one smart aleck murmured “smoking”—puncturing the tension, but demonstrating that no one in this particular group was ready to offer a genuine, thoughtful answer.

But it’s a question they should have serious thoughts about—and moreover, one that we all should ponder. What people are willing to give up is the fundamental question of the U.S. health care system.

American health care is totally dysfunctional. And everyone knows it. It is too expensive. Quality is uneven and declining. It is confusing, time consuming, frustrating. Indeed, at this meeting, one senior health care executive said, “the status quo no longer works.” Another—Steve Hemsley, the chairman and CEO of UnitedHealth Group, the seventh-largest company in the world—said the system needs to be “disrupted.”

I am never sure what executives really mean by disruption; it’s possible they don’t know, either. But at a minimum, to say some industry or sector of the economy needs disrupting means that its problems run too deep to be touched by any feasible modification or reform. And that is true of health care. Reducing patient copays for drugs, making it easier to find a doctor, or using more AI, as worthy and valuable as each of these changes may be, are not enough to make the system noticeably better. To say a problem cries out for disruption is to say that the dysfunction is too pervasive and structural, and that reforms will only highlight other serious problems.

Ironically, it seems that every discussion about fixing health care ends up focusing on money—and getting more and more and more. Indeed, just before I posed my ballroom-silencing question, the moderator for the panel asked a pharmaceutical executive and a medical laboratory CEO, “What is the one thing you need . . . ?” Medicare Advantage insurers want higher rate increases from the government and their quality bonuses. Hospitals and physicians want higher rates from private insurers. Pharmaceutical companies want to continue their stratospheric monopoly pricing. In a sector where prices have already skyrocketed in recent decades, everyone seems to want . . . more money.

We have to flip our thinking on its head. Instead of asking what people want or think they need, we need to ask people: What are you willing to give up?

More money is not the answer. The United States already overspends on health care—to the tune of about 18 percent of our GDP, more than $5.3 trillion. If our health care sector were its own freestanding economy, it would be the third-largest economy in the world—bigger than the national economies of Germany, Japan, India, and every other country but China. Indeed, if the United States were to spend 12.5 percent of GDP on health care—a bit more than what Germany and Switzerland do today—we would have to cut our spending by at least $1.75 trillion per year. That comes to a reduction of over $4,500 per American. Imagine what we could do with all that money.

To make the best health care system, everyone needs to give up something.

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WHICH BRINGS US BACK TO THE QUESTION: What are you willing to sacrifice for a much better American health care system?

An important proviso is that everyone knows that every other participant in the health care system will also give up something. It is only with collective, coordinated sacrifice that we can create a system that will ultimately benefit all Americans—not just torpedo every new reform idea.

Let’s start with the health care providers, the pharma sector, and the insurance companies. It is not that hard to think of many things that need to be given up to improve the system. Here are just a few suggestions:

• Oncologists need to give up being paid more for prescribing more expensive drugs—which also increases their patients’ copays. Today they get a percentage of the price of the chemotherapy they prescribe. Oncologists should be paid a flat fee for administering chemotherapies.

• Pharmaceutical companies need to give up monopoly pricing of new drugs and accept that their new drugs should be priced based on how much they improve people’s health.

• Pharmaceutical companies should also give up direct-to-consumer advertising.

• Pharmacy benefit managers need to give up rebates, spread pricing, and other hidden charges and accept a fixed administrative fee as part of a transparent pass-through pricing system.

• Hospitals need to give up their high, monopoly prices for private insurers—prices that average 246 percent of Medicare prices. They need to accept a maximum price of 200 percent of Medicare for any service.

• Hospitals also need to forgo the gimmicks with 340B pricing for drugs they administer or sell. This obscure program allows hospitals to purchase brand-name drugs at low, discounted prices from pharmaceutical companies and then turn around and charge high, market prices to patients with private insurance.

• Hospitals also need to give up charging more for the exact same MRI, surgical operations, and other interventions that are paid much less if done out of the hospital. That is, the need to accept that the cost will be the same regardless of where as specific medical service is provided—so-called “site-neutral” payment.

• Insurers need to give up their habit of offering numerous plans with confusing benefits, networks, and sui generis billing arrangements. They need to offer simplified, standardized benefits and billing system.

• And insurers need to accept caps on out-of-pocket costs for patients, so that health insurance is actually “insurance” and no American goes bankrupt for going to an emergency room. Americans should not spend more than $1,500 per family in deductibles, 2 percent of the median household income.

This is part of what the major players in health care need to give up. But truth is everyone needs to sacrifice something, including those of us who are “consumers” of health care. Here is how I would answer the question of what I am willing to give up:

• Ritz-Carlton-like hospitals with exquisite art in public spaces, luxurious reception areas, and fancy, wood-paneled patient rooms. Instead, I would accept old couches, plastic chairs, and kids’ scribbles on display.

• I’d be fine with 10 percent fewer new drugs coming to market over the next twenty years if all new brand-named drugs were priced based on their health benefits.

• And I’d accept wait times of, say, ten weeks longer than today for elective hip and knee replacements, spinal fusions or disc repairs, cataract surgery, MRI scans, colonoscopies, and similar elective procedures.

• Finally, I’d be willing to give up today’s super-low generic drug prices, so long as the higher generic drug prices came with the requirement that the generics are produced in the United States and there won’t be shortages.

If we did the things listed here, we would likely save at least $1,000 per American. That certainly seems worth these sacrifices.

What about you? Each American is a participant in the health care system, so each of us needs to think through what we are willing to give up for a better system. So what would you give up to make American health care better? Drop your suggestions in the comments below.