Coronavirus Shows Why We Need To Rethink Health Care, with Katherine Baicker (Ep. 43)

Show Notes

The coronavirus outbreak has devastated many sectors of our society, and brought many of the issues we were facing before the pandemic to the forefront. This is especially true of health care.

Prof. Katherine Baicker is a leading scholar in the economic analysis of health policy and dean of the Harris School of Public Policy. On this episode, she explains how the coronavirus is revealing how our public and private health systems need to change today—and in the future—to address this pandemic and those to come.

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(Episode published April 3, 2020)

Related:

• Big Brains podcast: Myths of U.S. health care
• Coronavirus puts Wall Street on notice—Bloomberg
• As New York faces coronavirus 'bullet train,' experts warn of challenges ahead—NBC News

Transcript:

Paul Rand: From the University of Chicago, this is Big Brains—a podcast about pioneering research and pivotal breakthroughs reshaping our world. And this is our special COVID-19 series about how this pandemic is affecting our world today and into the future. I’m your host, Paul Rand.

On a personal note I hope all of you are doing well. I wanted to take a minute to share my utmost gratitude to the amazing health care workers at UChicago Medicine and around the world who are on the frontline of this pandemic. If you want to help support them, please visit uchicagomedicine.org/thousandsofdifferences.

Paul Rand: On today’s episode: a conversation about how the global pandemic is laying bare the fault lines of our health care system. Katherine Baicker is the dean of the Harris School of Public Policy. She studies health insurance, its effectiveness and the outcome of reforms. One of the key things we talked about is the idea that health care systems need to reflect both individual care and collective well-being. 

Kate Baicker: We are all better off if everyone gets treated promptly for any symptoms of COVID. If people are covered with health insurance plans that allow them access to care early, we’re all going to have better health in the long run.

Paul Rand: So. does that mean our systems need to change? And if so, how? I started by asking Baicker what kind of weakness she sees in health care today. 

Kate Baicker: We have an incredibly patchwork health insurance and health care system in the U.S. and we’ve seen it in public debates about how to expand insurance coverage through Medicaid, through health insurance exchanges, through Medicare for all at the state level, at the federal level. That patchwork generates a lot of inefficiency in health care delivery in normal times. These are not normal times and it is becoming painfully clear that we’re not able to allocate health care resources across different areas and different populations in the way that we would like. We need a lot more ventilators than we have right now, but we don’t need them at the same time everywhere.

Kate Baicker: The way the disease is rolling out, there’s the opportunity to move resources to where they’re going to do the most good, and then move them to the next place. We don’t have a coordinated mechanism for doing that, so it’s revealing some of the real costs of our patchwork system. On the other hand, it’s also highlighting the innovative potential of our dedicated health care providers of our scientists, of our inventors that we wish we had those resources now, but it is remarkable how quickly people are creatively coming up with potentially new medical treatments, with new ways to stretch resources that we have with new manufacturing potential. That doesn’t mean that we’re in a good position right now, but it does highlight how far dedication and ingenuity can go, and they could go even further in a coordinated system.

Paul Rand: Well, I think along the lines of what you’re talking about, President Trump has announced the public-private partnership to increase testing and and also using the Defense Production Act to help push companies like General Motors to create ventilators and so forth. But it seems like that’s at least right now for some limited success. Is the incentive structure, is that the right way to be addressing some of these challenges?

Kate Baicker: Part of the reason that the challenges are so daunting right now is that we’re starting off behind. We didn’t have the kind of depth of public health infrastructure that would let us react systemically. Of course, we need local freedom to tailor policies to conditions on the ground. The disease burden looks very different in different parts of the country. The economic infrastructure looks very different. The resources available, both within the health care sector and outside the health care sector, are different in different parts of the country, so a concerted policy would still have different manifestations and implementations in different areas. A combination of incentives for ingenuity, invention, production with coordination of allocation of resources can go a long way—and having producers of things like ventilators and vaccines know that those things are going to get purchased and put to good use. Those incentives are really important, but uncoordinated individual incentives don’t result in the best use of the resources that we have. We don’t really want individual people trying to buy ventilators. We don’t want individual hospitals competing against each other for the same set of ventilators. We need an infrastructure to ramp up production, and the incentives have to be there to ramp up production, but then we need a way to send those things to the place where they’re going to save the most lives.

Paul Rand: Well, I think that it’s certainly clear that there’s a lot of change that is happening and will continue to happen here. And as you sit back and look forward a little bit, how do you think all of this changes our health care system for the future and what are we going to look like in a year or five or 10 years based on the experiences we’re gaining out of this?

Kate Baicker: There was a real tension in our discussion about expanding insurance before the coronavirus, about whether covering people with health insurance policies was just about the health and well-being of those newly insured populations or whether it affected all of us. Do we want to expand insurance because it’s a social responsibility or because somehow my health care, my health is better because you’re covered by insurance. Now for most health care, the beneficiary of that care is the person him or herself. When you treat someone’s diabetes, when you treat their cancer, that’s vitally important for that person’s health and wellbeing. But in truth, it has pretty limited effect on other people beyond that person’s family. Contagious disease is another story. That is one of the strongest cases of one person’s health care affecting the health of another person. Going forward, I wouldn’t want us to lose the lesson that people need lots of care that doesn’t affect anyone else.

Kate Baicker: This doesn’t mean that it’s not really important to get people coverage for cancer and diabetes and high blood pressure and car accidents and all of the things that affect their health, but we need to think about that in an ecosystem where there are also these spillover effects, particularly for care for things like the flu and measles and rubella and coronavirus. So thinking about different insurance structures for things that have these population-level effects, making sure that there aren’t co-payments or deductibles for vaccinations, for care for contagious disease. We need to be sure insurance coverage of those things in particular is incredibly comprehensive, both in terms of the coverage for individuals who are insured and the breadth of insurance coverage.

Paul Rand: You know, we’ve all seen stories of people saying, “I didn’t want to go for testing or get care because I’m not insured.” If you look at where we are today and if indeed there was something resembling universal health care coverage, where do you think we might end up being different than we are right now?

Kate Baicker: We need smarter design of our health insurance, so we need everybody to have health insurance, and we need that insurance to be designed in a way that dedicates health care resources where they do the most good. If we cover everything with no co-payments and no discernment between care that has high value and care that is of questionable health benefit, we won’t have enough resources to cover coronavirus care for everyone and diabetes treatment for everyone and all of the things that are of a vital health importance. We need to make sure our insurance covers those things incredibly comprehensively. And that may mean that particularly for higher income people, we don’t cover care that is of questionable health benefit nearly as generously, that with a limited amount of GDP to go around, we have to make sure that vital health care is covered for everyone and that means being a little more nuanced in how we design our health insurance plans to help steer health care resources towards where they do the most good.

Paul Rand: Let me ask you, I think we certainly can intellectualize a lot of the types of things that we’re talking about, and you’ve thought through the science and the policy aspects of this. As you watch all of this unfolding, what emotions do you end up having? Do you end up having frustration? Do you have anger? What’s going through your head?

Kate Baicker: You know you’re in trouble when you’re asking an economist to express an emotion.

Paul Rand: That’s why it might be an interesting question.

Kate Baicker: Yeah. Let me try to answer that in a bloodless kind of way. No, but one of the ways that I think this will change our debate about health care and health insurance going forward is we can’t distance ourselves emotionally as easily as maybe we could have in the past, when so many people are affected by this horrible disease and when we are all scared for our own health and for that of our families. I think it brings home to a lot of people how important access to health care is, but also how important other social insurance programs are. I think we all know someone who’s sick. We probably all know someone who’s struggling to pay bills because of the shared crisis that we’re facing. So this may help instill a sense of shared responsibility and shared mission.

Paul Rand: So that could be somewhat hopeful as an outside that comes out of this.

Kate Baicker: It’s tragic that it takes a pandemic with such a high human toll to bring that sense of shared mission and shared responsibility. But I certainly hope that on the other side of this, we have a sense of the shared responsibility that we have to care for our neighbor’s health and our neighbor’s well-being.

Paul Rand: Right, right. It’s interesting, and the headlines continue to this day. And then you see medical professionals without supplies are wrapped in trash bags trying to protect themselves and you really wonder how in the world did we get to the point where medical supplies and resources just are so disconnected from the need right now. And I wonder if you can talk about that and how did we get to that place and what is it that we will look to do in the future that we hopefully could avoid such a thing happening again?

Kate Baicker: So I fear that this is not our last pandemic. So thinking about lessons for preparedness is going to be crucially important, even as of course people are appropriately focused on today’s pandemic first. I don’t think we know exactly what the health care needs are going to look like for the next pandemic, so we need to think about how to be prepared to spool things up much more quickly. And it starts with early detection and early reaction. So having better infrastructure in place to monitor when disease is starting to take hold and early spread opens up a whole new set of policy reactions where you can start with real individual isolation and containment versus moving into a world where there’s so much community spread that we’re just in reaction and mitigation mode. So that early detection, I think, would be really important going forward and then having the expertise and infrastructure in place to say, “Here is what we are going to need in two weeks or a month.” Forecasting that and spooling up production really quickly would keep us from getting quite as far behind as we are right now.

Paul Rand: That was Katherine Baicker, dean of the Harris School of Public Policy. I'm your host, Paul Rand.