Everyone’s Mad at Health Insurers, But ‘There’s Plenty of Blame to Go Around’

Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode above!

Dan Gorenstein (DG): The murder of UnitedHealthcare CEO Brian Thompson has gripped the nation over the last week. Beyond the bold attack captured on video and the murder’s escape into Central Park, the incident has resonated, in large part, because of Thompson’s job. This case has put American’s insurance coverage on blast. 

Clip: We’re fighting with the insurance company over her dialysis to keep her alive?!
Clip: And they tried to charge me $400 for it.
Clip: They did not want to pay for my anesthesia.
Clip: They don’t want to cover anything. 

DG: A recent Gallup poll found that fewer than 3 in 10 Americans believe health care coverage in the U.S. is good. And while insurers are an obvious and often justified target of patient outrage, they’re just one piece of the puzzle.

Aaron Carroll (AC): It makes me sad to see how we just don’t understand the problem.

DG: Today, at a moment when anger at our health system is at a fever pitch, we try to untangle why our health care costs so much and why fixing it will require sacrifice from us all.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein, this is Tradeoffs.

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AC: My name is Aaron Carroll. I’m a pediatrician and health services researcher. I am currently the president and CEO of AcademyHealth, which is the professional home for health services and health policy researchers.

DG: Aaron Carroll has spent the last 20 years trying to figure out how to make health care in the U.S. work better and cost less. And he’s spent much of the last week feeling like the public response to the murder of Brian Thompson has missed the mark. So we called Aaron up and got him in his hotel room in Washington D.C. 

DG: As soon as news broke that Brian Thompson, the CEO of the insurance company UnitedHealthCare, had been gunned down in Manhattan, we started seeing people respond with real anger. Folks went online to share their stories of insurers denying to pay for their care, and some made comments like, “Unfortunately, my condolences are out of network.” What have you thought, Aaron, as you’ve seen, read and heard these sorts of comments?

AC: Well, first of all, there’s just no excuse for murder. And part of me was just horrified that we could have any justification for something so horrible. But I also was thinking that a lot of the anger, while real, is somewhat misplaced. Look, I’ve written multiple columns on my frustration with health insurance, but it’s not because any individuals are evil, or because people are mean, or because they want to make money while screwing others. When you get down to any individual who works in the health care system, you almost universally come upon people who are trying to do their best in a very, very, very broken world. Our health care system has a ton of problems. And at heart, it’s because health care costs so much in the United States. And that makes everything else so much more difficult.

DG: Before we talk about the system, before we talk about costs, though, I think it’s really important to spend some time talking about the insurers, because I think their role is sort of nuanced. We know why these insurers have the reputation that they do. There are the ubiquitous complaints about premiums and copays, the frustrations over whether insurers are going to cover the care with all these prior authorizations.

At the same time, Aaron, as you just said, it’s less that insurers are evil just looking to make our lives difficult out of spite or even just good old fashioned greed. They often play the role of “bad cop” because of how much health care costs. I’d really like you to break down for us what the role of the insurer is and how they fit into this larger puzzle.

AC: Yeah. I mean, it’s important to understand that insurance, whether it’s public, whether it’s private, whether it’s for profit, whether it’s nonprofit, they’re intermediaries, and their job is to collect a whole bunch of money from their beneficiaries, put it in a pool, and then figure out how to pay for everyone’s care in a way that’s as fair as possible. And in order to make sure that there’s enough money, they have to put some guardrails on what it can and can’t be used for. And so there are rules about what is covered and what is not. Now, in general, everybody in the United States wants almost everything to be covered. Well, if you want almost everything to be covered and you’re going to spend a lot of money, then you got to charge a lot for the insurance.

DG: Let me just let me just jump in here for a second. Can you give a nice classic example of the kind of spending the insurance companies want to guard against?

AC: Yeah. I mean, they want you to get the care, but they want it to cost less. So, for instance, they will charge you more to go to the emergency room — you personally out of your own pocket — because they want to drive you to go to the primary care physician. Now, we could get off on a tangent here, and I can spend a lot of time talking about how cost sharing doesn’t actually drive people into smarter care. It just drives them into less care, which is very dangerous for people who are very ill. But the general theory holds: If you charge people out of pocket costs, they will spend less money. But a lot of what I’ve described will take place in Medicare Advantage plans, they will take place in nonprofit insurance. They exist in for profit insurance. These are the general tools that insurance in general can use to try to get you to spend less money.

DG: And spending less money, I think people sort of generally get that concept and in some ways are willing to give insurers some latitude there. At the same time, though, we’ve seen insurers arguably abuse some of these tools, as you say. Like, for example, our friends at STAT News published an investigation that United, the company that employed Brian Thompson, cut off rehab for people on Medicare. A ProPublica investigation recently found that United illegally was restricting access to mental health care. I mean, there are these abuses that insurers are taking.

AC: Yes. And there are bad actors in every facet of American health care. And no one should be excusing that. People should suffer the very real consequences of that, whether it be fines or prison time or whatever the appropriate punishment is for breaking the law or abusing their privileges. None of that, of course, would justify murder. 

DG: Of course not.

AC: I just think it’s important for people to understand, at the end of the day, bad acting, good acting, it’s all because they’re trying to find a way not to spend as much money on health care. We spend something like $4.5 trillion a year in the United States on health care, and while that number sounds horrific, without guardrails in place, it would be more. And when people don’t want to pay more in taxes, when they are really tired of increases in premiums, and they’re already absolutely angry about how much they have to pay out of pocket, then insurance, or the system, has to find a way to try to get some people to spend less so that there’s enough money left to pay for all the health care that people think they need.

DG: When we come back, the many factors beyond insurance that drive up our health care costs, and why bringing them down is so hard to do. 

Break

DG: Welcome back. We’re talking with pediatrician and health care researcher Aaron Carroll, who heads the nonprofit research organization AcademyHealth, about the complex role insurance plays in our expensive and frustrating health care system.

And Aaron, I think it’s very easy, for people to look at some of these abuses that the insurers have taken and some of the frustrations that people have directly with their insurers, and point the finger at the insurer and say the villain is there, aha, I see them. At the same time, the root of the problem, it seems like from the work that you’ve done over the years, the reporting I’ve done, the actual villain here is really more the high price of health care in the U.S. And what I want us to really talk about now here is what is driving that high price, because obviously it is more than the insurers.

AC: I mean, it sounds circular, but the problem is the prices. The problem is that we charge more for everything in the United States, because it has become an incredible cornerstone of our economy. Seventeen to 18% of GDP is health care. It’s a major economic engine. It’s the way that enormous numbers of Americans make their living. It’s just an enormous beast. And it wants to keep growing. And because everything costs more, everything is to blame. We pay more for drugs. We pay more for doctors. We pay more to go to the hospital. We pay more for nurses. We pay more in administration because all of the paperwork waste an enormous amount of time. And all of this together winds up costing us way more than it would if we were in any other country. And it’s not because we’re consuming more, although we could be. It’s not because it’s better. That’s certainly not the case. It’s that the price for the services, for the stuff is so much higher in America than in any other country.

DG: And those prices are higher because why?

AC: Because we’re willing to spend it, and we are not willing to say no. And we are not willing to put either negotiations or policies in place that limit anyone’s ability to make as much money as they can.

DG: And really, it is the insurers who are in fact the ones usually saying no the most. 

AC: Yep. And that’s because if we’re unwilling to do policy or unwilling to do regulation or unwilling to negotiate, if all of those other actors keep demanding more and more money, who is going to say, no? It’s insurance.

DG: Certainly our role as consumers — our demand for the MRI, the next test, the new latest drug — that is contributing to why our health care in this country is so expensive. Is there a case study you like to refer to that really puts a point on this?

AC: Well, I mean, you could pick any example of when they try to limit what they might pay for services, we go crazy. I mean, just even last week the whole announcement with Anthem.

News clip: Anthem Blue Cross Blue Shield will soon cap coverage of anesthesia to a certain time limit. 

AC: It was being portrayed as they’re going to cut off your anesthesia mid-procedure. 

News clip: How did they think they could get away with this?
News clip: It was a firestorm over anesthesia.

AC: But if you really looked at it, what they were saying was like, we’re going to start to follow Medicare’s guidelines because Medicare is paying so much less for anesthesia than private insurance. And the anesthesiologists lost their mind and the public lost their mind because in their mind, you’re being told no for something that we deem essential. But who’s deeming it essential? The anesthesiologists are saying we need to be paid this much for the anesthesia. The hospitals are probably saying the same kind of thing. Patients trust their doctors. So patients are like, this is what’s said. And so all the blame gets directed towards the insurance company when there’s plenty of blame to go around. All of this costs too much. The drugs cost a ton. The time costs a ton, the hospitals cost a ton. Everything costs a ton. The insurance company is trying to figure out a way to make that work. I know I keep sounding like I’m defending insurance, I promise you, I get as angry at the arbitrary hoops that insurance makes me jump through all the time. I have written columns on this. It is not that I am a insurance defender, but at its heart, insurance is just pushing paper around. They’re trying, and especially when you’re talking about a nonprofit or a government entity like a Medicare or Medicaid, which also have to do all of these kinds of things, they’re just trying to make it work in an incredibly broken system. It’s easier to get angrier at private insurance because of course, they have profit and they have executive compensation. But getting angry at insurance and insurance alone, if they did everything we want them to do, it would cost even more for health care in the United States. And then very even fewer people could afford it.

DG: What I’m hearing from you is that, as you said earlier, this problem is circular. Everybody has a hand in the problem. That includes hospitals, doctors, insurers, the drugmakers, employers, patients, ourselves as consumers. We all are complicit in this price problem we have in the country.

AC: Everybody is, and it’s hard to grasp. It’s not popular. But if we wanted to fix this, everyone would feel the pain.

DG: That’s what I want to get to. In order to move forward, it will require sacrifice from all of those parties involved. And this horrific murder has brought the pain and the frustration, the contempt for our health care system, to the fore. And this conversation with you is our attempt at trying to take advantage of this terrible situation to talk a little bit more clearly about what is going on. And I’m curious from your perspective, what you hope comes out of this moment?

AC: I mean, in an ideal world, I would hope that we could channel the intense feelings towards a real structured discussion about what do we want to reform about the health care system? And what are we willing to trade off — not to steal your podcast name — but what are we willing to trade off to get it? Like, what are we willing to sacrifice in order to have a better health care system? But we don’t have any of those conversations. We just usually pick a boogeyman, we point at them, we say it’s their fault, and we rotate. Sometimes it’s the hospital system and all of their executives and how much money they make. Sometimes it’s the pharmaceutical companies and how much they make and how much are their profits. Sometimes it’s even the physicians, how much money doctors make, and it’s highway robbery. And I can’t get in to see the doctor, and when I do, he spends two minutes with me. We get angry at the individual components one on one instead of recognizing the whole thing is broken. And we have to find some way to change the incentives and how we structure it. If we want to have a system with better access or better quality or significant reductions in spending and how much it costs, we can have those things. But we have to be willing to figure out what we’re willing to trade off to get that.

DG: In all of these years of all of this work, what have you learned about why we are so reluctant to compromise?

AC: The one thing that makes me sad and that I think is killing us, it’s that our debate of health care reform in America seems to be confined to a binary choice: status quo or single payer. And I’m not opposed, but single payer is not the panacea that everyone thinks it is. We have a single payer system in the United States. It’s Medicare, and it costs a fortune. And we’re constantly complaining about how expensive it is. But Switzerland is an entirely private insurance based system. It’s cheaper. Singapore — massive individual investment and private insurance — also cheaper. Everyone is cheaper than us. The problem is not that we’re public or private. The problem is the entire system is set up badly, and it has so many moving parts, and it is so complicated that we can’t pull levers to say, hey, we need to reduce costs, what are we willing to give up for it? It’s almost too complicated to change. And our only discussion is this binary choice that’s false. Going to a single payer system would not magically make everything cheaper unless we started to put the squeeze on everybody once we had a single payer system. And people would get just as angry and just as irate at that system as they likely would at a private insurance system.

DG: Final question: What’s one thing that has happened since the murder of Brian Thompson that has left you feeling optimistic that we will one day find our way towards a more just, sensible, affordable system?

AC: God, I don’t know, because to be honest with you, this has really, really upset me. It is the glee with which I think people are attacking the people, as if this is the true devil of the health care system, and that if we could just tackle this devil, everything else would be fine. And I see politicians almost grabbing onto the same ideas, as if there is a simple solution to this. So it’s hard. It’s hard because of course if such a solution existed, we’d do it. I mean, if there was an easy solution that really wouldn’t hurt people, we’d do it. I know you want the optimism. I don’t know what the optimism would be. I’m not feeling terribly optimistic. In fact, I’m thrilled we’re having this conversation because when I’ve tried to have it with others, I’ve felt shut down. I mean, I know everyone’s angry. I get that. But we’re not focused on solutions. And that makes me sad. So I don’t know that I’ve really seen yet — now if they take this and the Congress or policymakers were to move to try to say, well, what can we do about this problem, I’d feel better, but I’m not optimistic that’s going to happen at all.

DG: Aaron, thanks for taking the time to talk to us on Tradeoffs.

AC: Anytime.

DG: I’m Dan Gorenstein, this is Tradeoffs.