Analysis: We Knew The Coronavirus Was Coming, Yet We Failed 5 Critical Tests

Lambert here: “Medicare for All” was always the compromise position for single payer advocates, the health care policy equivalent of “electability.” Perhaps we need to become full-throated advocates for a National Health Service. As Rosenthal points out: “‘Medicare for All’ would not by itself solve the above problems, since it’s mostly a payment system that largely relies on providers to come through with services when needed.”

By Elisabeth Rosenthal, Editor-in-Chief of Kaiser Health News. Originally published at Kaiser Health News.

The arrival of COVID-19 has provided a nuclear-level stress test to the American health care system, and our grade isn’t pretty: at least 73,000 dead, 1.2 million infected and 30 million unemployed; nursing homes, prisons and meatpacking plants that have become hotbeds of infection. The actual numbers are certainly far higher, since there still hasn’t been enough testing to identify all those who have died or have been infected.

By all accounts, a number of other countries have responded — and fared — far better.

In some ways, COVID-19 seemed the biological equivalent of 9/11 — unthinkable until it happened. Who would have thought individuals would fly jets filled with people into skyscrapers filled with workers? Likewise, who would have predicted the onslaught of a new virus that was stealthy, easily transmissible and also often perilous?

Actually, many public health specialists, including Dr. Anthony Fauci, did. And yet, our system failed in its response. Heroic health care providers were left to jury-rig last-minute solutions to ensure that the toll wasn’t even worse.

But the saddest part is that most of the failings and vulnerabilities that the pandemic has revealed were predictable — a direct outgrowth of the kind of market-based system that Americans generally rely on for health care.

Our system requires every player — from insurers to hospitals to the pharmaceutical industry to doctors — be financially self-sustaining, to have a profitable business model. As such, it excels at expensive specialty care. But there’s no return on investment in being primed and positioned for the possibility of a once-in-a-lifetime pandemic.

Combine that with an administration unwilling to intervene to force businesses to act en masse to resolve a public health crisis like this, and you get what we got: a messy, uncoordinated under-response, defined by shortages and finger-pointing.

No institutional players — not hospitals, not manufacturers of ventilators, masks, tests or drugs — saw it as their place to address the COVID-19 train coming down the tracks. Meanwhile, the Trump administration, loath to deploy the Defense Production Act, did so only sparingly and slowly, mostly relying on backchannel arm-twisting and “incentives” like forgiving liability to get business buy-in. That’s because, in the current iteration of American health care, tens of thousands of people dying is not incentive enough.

Let’s look at the failures.

1. Ventilators. As images of overwhelmed Italian hospitals flashed across screens, American hospitals projected they might not have enough ventilators for their mounting caseload. They turned to government, which didn’t have enough either. President Donald Trump castigated the states and hospitals for not being prepared.

But, operated as businesses, hospitals have zero incentive to stockpile. Like hotels, they aim to keep their beds full, or nearly so, with well-paying customers, such as those in need of artificial-joint or heart procedures. Supply-chain management dictates they stock for those needs. A vast storeroom in the basement filled with ventilators that might be needed once in a generation or never?

Long ago, before hospitals had lucrative revenue streams from billing and insurance, they relied on philanthropy to meet urgent health needs. The March of Dimes helped finance the treatment of polio victims and the development of improved iron lungs. Today, hospitals instead solicit donations for more glamorous projects — cancer centers, new wings, genomics research — with donors’ names affixed.

Indeed, in a 2017 paper, an official with the Centers for Disease Control and Prevention warned that the country needed a better strategy for stockpiling ventilators, highlighting a “practical problem”: “Hospitals must accept responsibility for the costs and resources needed to manage and maintain an excess of ventilators that are likely to be unused in the absence of pandemic-related surges in demand.”

They are unlikely to do so unless government requires them. We’ve long required ocean liners to have lifeboats and life preservers even though their operators hope to never hit an iceberg.

2. Testing has proved the persistent Achilles’ heel in the U.S. response. Even in “hot zones,” because of a shortage of tests, they were often rationed to the very ill or essential workers. That makes it difficult to guide treatment and nearly impossible to reopen society. In January, fearing that the virus would hit the United States, researchers at university labs — notably the University of Washington — jumped in and developed a test. But the commercial and hospital labs that deal with the actual bloodwork and viral analysis in this country did not. Why would they? There was no market.

At that time, it wasn’t clear that the coronavirus would produce a pandemic, and there was no billing code for a test and no sense of the price it could garner. With requirements for Food and Drug Administration approval expensive and cumbersome, developing a test was a business non-starter. Indeed, months later, after the billing code was created and the Medicare price was set at $51, labs complained that it didn’t cover costs and wasn’t attractive enough to motivate adequate response. The price was doubled. (Even that most likely seemed somewhat paltry for labs that often charge $200 for basic blood tests.)

On March 16, the Trump administration set aside the FDA approval requirement, bringing a host of new players into the fray. But in our market-driven, decentralized system it’s every provider for himself, and there is no efficient way to connect the new supply with demand. Despite the fact that the administration appointed a national coordinator, by mid-April newly able labs were taking to Twitter to plead for business, like this one in Ann Arbor, Michigan: “We have restructured our lab to help with testing. The problem has become finding samples! Can’t get in touch w/ anyone who needs us.”

In contrast, South Korea, with its national health system, engaged its private test manufacturers with a plan in January, promising them quick approval for a coronavirus test and the widespread use of it in nationally organized and financed testing. With a guaranteed market, 10,000 tests a day were available within weeks, allowing the country to avert a shutdown. The federal government or the CDC might have played that role in the United States, but did not.

3. Testing components and PPE. The Trump administration insists that there are plenty of tests that states are not using. Governors say they can’t do nearly enough tests and need help. That’s partly because conducting tests involves access to a number of components — kits, chemical reagents, swabs, personal protective equipment, known as PPE, and sometimes custom cartridges for machines. Miss any one of those things and testing becomes impossible. It’s like trying to make bread with all the ingredients except yeast.

Just as we patients pay item by item — the blood test, the X-ray, the acetaminophen pill — hospitals and doctors’ offices also order item by item, with different sources for each component, as they search for the best deals. And medical manufacturers, which make dozens of products — some very profitable and some not — have no “incentive” to produce low-margin items in excess of usual needs. In recent years, this has increasingly led to intermittent shortages during which hospitals find themselves competing to procure IV fluids, cheap old anti-nausea meds and some cancer drugs. So it is no surprise that a similar phenomenon is handicapping a coronavirus response that has required a huge increase in simple accessories like masks.

“The private sector can directly purchase” personal protective equipment “from manufacturers and distributors, as they normally do,” a press officer for the Federal Emergency Management Agency said in late March, explaining why the president chose not to use the Defense Production Act even as states like New York were begging for help, facing over 5,000 new cases and nearly 100 deaths a day.

Initially they could not find enough of that equipment, and when they did, it came at a price — as market forces would dictate: When demand for the items exceeded supply, prices rose and bidding wars began. In our market, you get companies to ramp up production of low-margin items by offering ever higher prices. So $1 masks cost $6. Without a national system for such purchases in a crisis, we are essentially forcing hospitals and states to negotiate the price of water during a drought. (Alternatively, we could require all hospitals to have a 90-day supply of essential response items on hand, as Gov. Andrew Cuomo of New York has now done.)

4. Hospitals did not coordinate. Early on, New York’s elite hospitals — staring down a crisis themselves — did not jump in to set up outpatient testing centers. That task was left largely to the public hospitals, resulting in crowded lines, which may have risked more infection spread. The elite hospitals also generally did not share precious protective gear with those harder hit.

In our market-based system, hospitals are primed to compete, not coordinate. They compete for patients who need lucrative procedures and for ratings in magazines like U.S. News & World Report. While legally they have to treat anyone who turns up in the emergency room, they are not eager to treat infectious diseases like COVID-19, which disproportionately hits people with poor insurance and carries a stigma. “No. 1 in COVID-19 Treatment!” is bad for the brand. The lack of coordination likewise meant that in California, one hospital had the beds and protective equipment to continue doing elective procedures, while another — 75 miles away — was overwhelmed by COVID-19. In a national or nationally coordinated health system they would have been obligated to help each other.

5. The hospital rescue. Hospitals will receive tens of billions of dollars as part of coronavirus relief packages passed since late March. This is partly because they have delivered extraordinary treatment of COVID-19 (which doesn’t pay well) but also because they’ve had to cancel high-profit procedures like joint replacements and sophisticated scans to make room for this low-profit-margin illness.

In the past quarter-century, we have evolved a reimbursement system that showers cash on elective and specialty care and discourages hospitals from serving the health needs of society. That is true even though two-thirds of our hospitals are tax-exempt because they — in theory — perform community benefit. In a functioning health system, pandemic preparedness and response would be part of the expected job. In the 1980s when HIV/AIDS was overwhelming hospitals in New York, treating those patients was simply part of each system’s obligation — though some did so far better than others.

All this doesn’t necessarily mean that we need a government-run health system or should eliminate all market influence in health care. In fact, “Medicare for All” would not by itself solve the above problems, since it’s mostly a payment system that largely relies on providers to come through with services when needed.

But the COVID-19 stress test has laid bare a market that is broken, lacking the ability to attend to the public health at a time of desperate need and with a government unwilling — in some ways unable — to force it to do so. This time around, thousands of medical professionals have stoically answered the call to treat the ill, doing their best to plug the long-standing holes and vulnerabilities that the pandemic has revealed.

Whether regulated or run by the government, or motivated by new incentives, we need a system that responds more to illness and less to profits.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

Print Friendly, PDF & Email
This entry was posted in Guest Post, Health care, Pandemic on by .

About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Louis Fyne

    in my opinion, the media panic over ventilators (which amounted to a nothing burger as the US has enough ventilators…a d ventilators were not a magic bullet that could save critical patients) distracted from more salient questions like—-

    why isn’t the US making more PPE domestically (versus scrambling on Alibaba to find some) or

    why are passenger planes still in there air? (IMO there should have been a ground stop a la post’9/11)

    1. Louis Fyne

      in my neck of the woods, according to the latest daily health briefing, 66% of ventilators are open, 25% of ICU beds are open.

      the panic narrative over ventilators was media-driven, not evidence-based

    2. Comboman

      The reason fewer ventilators were required than the early predictions is because patients are dying too quickly. Instead of lingering for weeks or months on a ventilator as expected, they die within days of being hooked up, freeing up the ventilator for the next patient.

      1. dagan68

        Physician here – I would really like your source of evidence for that assertion. That has not been my experience at all.
        In fact over the past month, there has been a marked push away from the use of ventilators as they were being shown to be more of a problem than actually helping.

        1. Yves Smith

          Reader Bsoder, who has treated Covid-19 cases and has NIH connections, disagrees. He says those hooked up to ventilators had such severe lung damage that they were goners. So I would put this more in the category of “not proven”. But I do agree that the article’s emphasis on ventilators since they were at most only selectively scarce is pretty weird.

  2. Synoia

    These number misrepresent:

    our grade isn’t pretty: at least 73,000 dead, 1.2 million infected and 30 million unemployed

    They need to be normalized, and reported as a percentage of total country population. There is no meaningful way to compare Denmark with the US, or Chine with Germany or Italy, without considering the differing sizes of population.

    The author of this piece either has a axe to grind, or is innumerate, or both..

      1. dagan68

        I would also add that you really need to break up the USA by states.
        The disparities are shocking. The difference between New York State – and many of the states in flyover country is truly eye popping – even places like Texas have a very low mortality rate – on the order of 4 or 5/100000.
        One thing is for certain about this virus – it really likes SOME dense urban cores while leaving others largely unscathed. We still have no idea why this is….. There is going to be a lot of interesting reading once we know more about this virus.

        1. vlade

          It is because flyover is a flyover. While NYC is a large airtravel hub, especially towards Europe, and it appears that the Italian mutation is more dangerous than the original Chinese one (that was on west coast).

          So a lot of travellers + high pop density = trouble.

          1. PlutoniumKun

            I think the core question is whether travellers + high pop density = trouble, or whether it just means they get trouble a few weeks/months before everyone else. There is so much about the spread of the virus that I find really confusing, and I get the impression that the modellers are equally at sea. There are all sorts of variables at work that we don’t seem to understand.

  3. L

    The reality was we didn’t just fail a test, we failed an open book test.

    The game now among the guardians of the status quo has been to make us move on in anger (Trump), refuse to acknowledge that any other world is possible (Pelosi & McConnell) and make us applaud their heroism in appearing on TV (Cuomo). With a dash of disaster capitalism riding in to “disrupt” society (see today’s NYMag, and of course Cuomo).

  4. Winston Smith

    The first failure was to recognize that this was going to be a major problem and the US had to act quickly and decisively. The warnings of a clear and present danger were ignored in favor of a “it will disappear” denialism…

  5. Pat

    For the record one thing I have recommended all along for M4A was that medical licensing and various government certifications all require participation in Medicare. As in you will be part of the system or you will not exist.

    OTOH that probably would not have lessened most of these fails.

    1. flora

      Yes. My 2 cents is that ‘we’ still require a competent government organized for governing instead of playing a secondary role to ‘the market’; the market was never made to manage large events, only to profit however it can. A strong public sector is as necessary as a strong private sector; the neoliberals in both parties have spent 40 years weakening the public sector for ideological (if not self enrichment) reasons. I’m quoting this interesting para from a new Stoller essay for it’s description of where we are with government, how to restructure it so it is less feeble, and therefore more able to respond to crises.

      It’s in a conservative magazine. At this point, for me at least, left-right or Dem/GOP is less important than this question: is it a good idea or a not good idea for the country?

      All of these ideas point to the basic need for a competent state that can govern and enforce rules over private concentrations of power, as well as prohibit foreign influence over Americans. What is so far missing is a vision of how to structure such a state without succumbing to corruption. That’s how libertarians will attack the ideas underpinning these new conservative ideas, they will note that a strong state is simply impossible to organize because such a concentration of power will inevitably be misused for self-serving ends. That’s the point of ‘Public Choice’ theory, to make public governance seem incoherent by its very nature.

      The last line again:

      That’s the point of ‘Public Choice’ theory, to make public governance seem incoherent by its very nature.

      1. anon in so cal

        Stoller might enjoy reading Max Weber’s “Economy and Society,” and “Bureaucracy and Growth: A Cross-National Analysis of the Effects of “Weberian” State Structures on Economic Growth,” by Peter Evans and James E. Rauch. Sounds as if he is arguing along those lines.

      2. PlutoniumKun

        Thanks, that’s a great article. Stoller is getting a lot of flack on twitter for his anti-China views, that article goes a little bit to explaining his perspective a little better.

        1. vlade

          But he’s incoherent. He puts Xi and Bezos on one side, when Xi is (paraphrasing his own words “strategically oriented state actor”).

          And China is far from virtuous (even if we define virtuous as “corruption-free”), despite undeniable Xi’s efforts.

          His point is valid, but his problem is that he offers no real solution. Because Hobbesians are right in something – people will always strive. We are hierarchical herd animals, and we cannot drop our ancestry on a top of the hat.

          I oft pointed that the problem is not so much money, as the fact that money became more or less the ONLY signifier of societal “worth” (cf the “influencers”, who put it the furthest, fully monetising their fame, and often willing to do much to get or increase it in the race).

          Until we figure out how to rebuild a non-monetary societal worth (which used to be there – say teachers and clergy for centuries), so that people can reasonably build it w/o resulting to pure money as the measure, we won’t move much. That to me is the damage done in the last 50+ years, reducing all societal worth to measurable money.

          1. PlutoniumKun

            Thanks yes – I’m not saying I agree with Stoller, he overstates his case, but its not helpful either to just say he’s arguing from a neocon or ‘yellow peril’ perspective (which I’ve seen thrown at him).

            As Flora expresses very well, he is simply recognising that China, along with the likes of Amazon, are acting in their own strategic interests, something which the neoliberals can never understand as they see everything through the lens of perfect markets and profit/pleasure optimisation. Actually, now that I think of it, Flora’s comparison of Bezos and Xi are very apt. If I’m to paraphrase Stoller, he is saying that a libertarian incoherent nation state such as the US is easy meat for anyone who thinks long term and strategically, whether it is by an internal corporation or an external competitor.

  6. DHG

    Since nothing is made in the USA anymore its impossible for the world power to respond… A pack of fools have destroyed this country over the last 4 decades. Its not going to get any better either anywhere in the world.

    1. CanCyn

      Hmm… a very wealthy pack of fools are they. If they manage to keep the stock market afloat through all of this then they won’t have failed at all. As is often heard in the hallways of NC – everything is going according to plan.

      1. DHG

        They never win, they lose all throughout human history. They are as deluded today as they have been in the past.

        1. rob

          They don’t have to “win”… they just” keep the table” for generations at a time.
          “you can’t win, but you can try to keep the table”.
          And really…. many have done just fine for centuries. The ones who have the money and the power but choose to avoid the fame.Their kids, grand kids,great grand kids, names… old money… sheltered…… may lose one day.. but still not working and riding high…

          1. Jesper

            The smart/wise ones in winnings position play the game not to lose, a draw is leaves the status quo in place and they are quite happy with that. So for them the strategy is to slow down any impetus for change until the momentum driving change is gone.
            The bailout bills appear to be more about pushing for a win than about playing for a draw and keeping the status quo, maybe that behaviour is arrogant and greedy – possibly hubris. If it is somehow punished then I suppose it is hubris, if all goes according to plan then I suppose it might simply be called competent confidence.

  7. xkeyscored

    I find the distinction between ‘2. Testing’ and ‘3. Testing components and PPE’ rather artificial. It has been claimed that after some initial snafus the US has had enough tests, but unfortunately not enough reagents to allow the tests to be carried out. I think that’s garbage, as tests that cannot be used are simply no use, and Rosenthal agrees that tests without the necessary reagents, swabs, PPE etc are like trying to make bread with all the ingredients except yeast. But having these as two categories instead of one seems almost designed to allow Trump and co to claim there’s nothing wrong with the tests. From a public health point of view, surely testing must include all the wherewithal to carry it out.

      1. Math is Your Friend

        Testing is a complex mulltiplayer process, which either results in the appropriate people being tested, or not.

        If people are not being tested, the completed task – a test – is not happening, thus there is a shortabge of tests.

        Bottlenecks can occur anywhere in the complete end to end process. These can include test development, test validation, legal approvals, materials manufacturing, distribution, PPE, lab equipment, compatability of lab machines with available materials, medical staff, lab staff, testing rules, referral systems, geographic distribution of resources, and probably several other things,

        Failure to test is not, and will likely never be, a single factor phenomena.

  8. LowellHIghlander

    I believe that Ms. Rosenthal makes a powerful point about [health] economics, but only implicitly. And, certainly, because of the prevalence of the plague of neo-classical economics in U.S. universities today, she is not to be faulted.

    Economics 101 banishes the concept, and the very language, of “need” from economics. Even though no fewer than 3 Ph.D. Economists – Professors John Kenneth Galbraith, Mark Lutz, and Robert E. Prasch – have provided compelling and, I daresay, adequately analytical definitions for this concept within economics. [Full disclosure: I studied under the latter two scholars in my graduate studies at the University of Maine back in the mid-1990s.] My point is that introducing the concept could provide the logical foundation for a fundamental re-ordering of the health care system in our country, from requiring stockpiling of vital equipment needed only in rare events to requiring close co-ordination amongst all hospitals, public and private, in such dire emergencies. Moreover, the whole concept of medical care as a good to be bought and sold in markets would lose any nexus to rationality.

    Readers can consult the book Humanistic Economics by Mark Lutz and Kenneth Lux, or the appendix to Robert Prasch’s article “Towards a General Theory of Market Exchange”, JEI. [Forgive me for not recalling the full references; most of my life is currently spread out in 3 locations, mostly in boxes.]

  9. John Steinbach

    Gray Panthers were historically advocating for NHS. Lambert is correct that “Single Payer” was a compromise. National Health Service is best alternative. Suspect many Docs would support it if they understood that they could become physicians again.

    1. Arizona Slim

      Back the day, I had the privilege of visiting Gray Panthers founder Maggie Kuhn at her house in Philadelphia.

      In addition to being in the presence of a true visionary, I noticed something very interesting about her house. And that is that she didn’t live there by herself. Instead, she turned it into a community of people living with her.

      I’m sure the community members paid rent for their rooms, and I don’t know how much it was, but the sense of “We’re All In This Together” was obvious.

      1. John Steinbach

        They didn’t pay rent. They helped Maggie maintain her house. It was a conscious inter-generational experiment.

  10. HotFlash

    Analysis: We Knew The Coronavirus Was Coming, Yet We Failed 5 Critical Tests

    We knew 9/11 was coming, yet we failed (any number of) critical tests.

    We knew the 2008 crash was coming, yet we failed (any number of) critical tests.

    We knew Hurricane Katrina was coming, yet we failed (any number of) critical tests.

    Most of these ‘failures’ have resulted in massive upward concentrations of wealth and/or power and the impoverishment and/or immiseration of the 99%.

    Do I detect a pattern here?

  11. VietnamVet

    This is probably the best summary of the pandemic that can be done by the professional managerial class. Admitting mistakes but missing the big picture. Managers are assisting in the exploitation of humans and the environment for profit. The system is fatally out of whack due to corruption and no enforcement of the law.

    Globalization neutered the national governments of the United States, United Kingdom, Canada and Sweden. These nations are unable to cope with a once in a century pandemic. Climate change guarantees that plagues will be more frequent along with rising seas and hurricanes. The elite are quite willing to allow tens of thousands to die but the virus has a 15% to 20% hospitalization rate. Hospital systems were overwhelmed. Saving profit centers, by lowering admissions, not lives, was the reason for instituting the lockdowns. That didn’t work out. Only the dying are willing to risk a hospital visit.

    The managers will try to keep the old system going. Making a profit over all else. At some point, the system maintainers will realize that the mangers are trying to kill them. Then it is over.

  12. vlade

    I’d like to point out that the UK has NHS, and is still unable to cope well (for example, within-hospital infections are apparently a major contributor to spread) – and that’s with the NHS having near sacred cow status in the UK.

    Which IMO is the problem. The NHS didn’t manage to resist the managerial change (i.e. run the hospital as businesses) but managed to resist the changes that other systems went through (like changing the antiquated GP system. No, a GP in today’s world can’t be a competent pediatrician, gerontologist, psychologist, gyneacologist and physio and I mention only the main stuff they are expected to deal with. Which is why a lot of health systems round the world have first-line specialists who are not be gated by people who know less than them). So it got worst from both worlds.

    Health system is a complex problem. Medicare-for-all is a good slogan to start with – because it’s vague enough to get enough supporters to get moving. But precisely for the same reason, it’s actually a non-trivial thing to implement well without a massive focus and likely total restructuring of the existing system (sort of like Brexit).

  13. Grayce

    Utilization review is a real thing and staffed and paid for as such. Another market sensitive thing is billing codes, not because doctors can’t discern distinctions, but because insurers need finer splits to decide to assume or deny payment. Most insurers pay for diagnostics but don’t pay for routine care. This means a simple disease code needs modifiers all over the place to describe the conditions of exam and treat. When a test returns negative (no disease) then its payment can be denied. Some costs enter into the deductible; some don’t. Some enter into the max out of pocket; some don’t (like mental health). Some affect lifetime maximum benefit. It is a wonder doctors have time to see patients.
    Insurers acting as ASO, Administrative Services Only for a self-insuring employer, are becoming extremely creative at delay then deny, and the appeal trail ends with the ministerial reply from the ASO. The employer remains insulated. So “health care” and the trappings of “health care industry” deserve separate scrutiny when brainstorming how to make it better.

  14. vlade

    Expecting Bezos to have any focus on “what is good for the US” is way different from expecting Xi to care about it at all.

    Amazon could be dropped by the US anytime the US wanted (in a zillion ways). China is a sovereign state.

    My main point on this was that China does exactly (even if not that well) what Soller claims the US should, but Stoller throws it in the same bag as Amazon. He’s taking his “virtue” point and applying it both domestically (where it can control what is happening) and internationally, wilfully ignoring that other international players may be far from considering “what’s good for the US” good for them. So is it virtue for the US, but Hobbesian fight with the others?

    And I do not buy the argument that “But China is organising the US commerce”. Yes, because the US gave it the power to do so, and of course it’s in China’s interest. China is organising the US commerce because it’s in strategic interest of the Chinese state to do so, and the US foolishly allowed it. A different category from Bezos, because if we assume virtue on China’s side, it’s doing it because it’s the best thing for Chinese citizens (to make sure that the US is not the only superpower that can dictate to China). Even if I put in a wide range of Amazon stakeholders, it’s not clear it’s in all of their strategic interest for Amazon to become a total monopoly organising the US retail, in fact, it’s almost certainly not the case.

      1. PlutoniumKun

        Yes, the links went astray for me as well.

        I can’t speak for Stoller, but I think the core of his argument is that in the real world, separate from the free market fantasies of the neoliberals or libertarians, or the ‘we should all live in peace and harmony’ arguments of some of the left, all individuals and organisations act in their own interests, and those that think strategically will win over those who somehow just hope things work out all right. In this viewpoint, the key societal unit that can operate strategically on behalf of ordinary people is the nation state. It is the nation state, in other words, which can protect the ordinary individual from the likes of Bezos. But the logical extension of this is that nation states are competitors, either friendly ones, or unfriendly ones, and should be treated as such.

        1. vlade

          I buy the argument you made above, but IMO he’s mixing things – because the “all individuals and organisations act in their own interests” is essentially a Hobessian argument. So he’s on one side saying that governent can and should act with a virtue, while at the same time blaming other governments who (as they see it towards their citizens) act with a virtue. Can’t have it coming and going.

          Xi will never have the US good at foremost, and more importantly, never _should_, as that would be a gross dereliction of his duties to the Chinese citizens. At best, they can run in parallel, or provide some short-term advantage, but medium/long term he cannot prefer the US to China, ever. To expect otherwise is naive.

          I get he’s saying that Bezos and Xi have both too much influence in the US. But the difference is their stakeholders, and why/how they operate. The virtue he keeps talking about may operate, at best, in domestic instutions, and even there it’s pretty conditional. On the international scene, there’s no international policeman.

          If he dropped the whole “virtue vs Hobbes” stuff, then I could agree with him.

Comments are closed.