Healthcare finance through the class divide

If you want the ethos of the ivory tower's upper floors laid bare, Robert Pear's recent ironic New York Times article does the trick.

A significant swath of the Harvard University faculty is displeased because they have to pay more for their healthcare coverage, according to Pear's report. That's the result of the Affordable Care Act (ACA), which was in part the brainchild of some Harvard economists.

I was particularly amused by the comments of a professor whose specialty is modern French history. She bemoaned it as a "pay cut...timed to come at precisely the moment when you are sick, stressed or facing the challenges of being a new parent." She must have been too stressed to call for the universal healthcare France and every other modern society on earth has--save ours. Another faculty member called Harvard's bump up in co-payments and deductibles "taxing the sick" even though they are still a fraction of what many millions of Americans pay out of pocket for their care.

As absurd as this grousing is, it illustrates the fundamental disconnect regarding how healthcare finance is often viewed in this country. This schism is primarily between the middle class and the upper-middle class (which I suspect includes pretty much any tenured Ivy League faculty member) and beyond.

Inadvertently or not, Steven Brill provides a fascinating lens onto this divide. His new book, "America's Bitter Pill," is a quasi-extrapolation of his remarkable 2013 Time magazine article "Bitter Pill." But whereas his Time piece so deftly demonstrated how opaque hospital billing practices are often the financial undoing of their middle class and working class patients, Brill's latest book, which he said is 85 percent new reporting, examines the movers and shakers behind the ACA.

Brill is a rarity, a journalist who is also a successful entrepreneur. He's reaped tens of millions of dollars over the years from his sale of the American Lawyer magazine, Court TV and more recently a business that provides paywalls for journalism websites.

The focus of his book is on policymaking, but it is not a stretch to say that it is rendered through the prism of Brill's social status. The compelling roster of strong-armed patients and stonewalling hospital execs from his Time reporting are all but crowded out by rareified overachievers such as Peter Orszag, Jonathan Gruber, Larry Summers, the Emmanuel brothers, a passel of U.S. Senators, President Obama and his consigliere, Valerie Jarrett.

If anyone, including his editorial assistants, had a stopover at the Ivy League, MIT, Stanford University or the London School of Economics, Yale alumnus Brill recounts them with the same certainty as their first and last names (the academic credentials of Kentucky Gov. Steve Beshear, one of the text's few unsullied heroes--and a product of the Bluegrass State's public university system--go unmentioned).

Few ordinary patients--the true bearers of change in healthcare policy--appear in this book, and virtually all of them came from the Time article. Even after the attention and sympathy generated by that piece, they are still sometimes referred to by Kafka-style pseudonyms ("a patient I'll call Steven D.") or by first name only. This may be their choice, but within the context of this book it helps render them as oddly shrunken--as if Brill turned his literary binoculars around after he was finished with the big shots and peered at them through the wrong end.

The one new patient is Brill himself, who discussed his own harrowing experience undergoing surgery for an aortic aneurysm. He was stunned that New York-Presbyterian Hospital was able to leverage nearly 90 percent of its bloated chargemaster prices from his insurer due to its reputation and market share (although its outcomes for major cardiac procedures are not much better than any other hospital in the region, that is mostly left unexamined). Instead, Brill rhapsodized about his individual surgeon's mortality stats, New York-Presbyterian's attentive staff and its atrium underwritten by multi-billionaire Ronald Perelman and asked, "would I ever let some insurance company steer me to another hospital...?" He suggested that someone compelled to seek treatment by a cardiac surgeon even moderately less skilled than his would face a tragic choice.

What is the middle class healthcare experience? I suspect it hews close to my household's.

Since my wife and I both became self-employed a decade ago, we've had to procure our own insurance. The premiums have steadily risen, and during the bleak years of the Great Recession, they were mostly paid for by credit card.

The ACA cut our premiums in half. But as our incomes have rebounded closer to pre-recession levels, I've had to keep a close eye on how changes in our subsidy impacts our premiums. We lost about half of our subsidy for 2015, causing our premiums to rise about 30 percent. That has to be balanced with the need to make larger quarterly tax payments while putting aside money for our daughter's college tuition, our retirement and servicing our ongoing debt overhang--all items that have recently prompted me to create a carefully vetted spreadsheet of household expenses.

Would this have been any different had we decided to stay in the corporate workforce? Probably not. The law of averages and the demographic trends in this country strongly suggest one of us would have been laid off for a significant period in the past few years, creating the same, if not worse, income crunch than we experienced between 2009 and 2013. But if either of us had tenure at a high-flying academic job or political post, I doubt it would be the same pressing concern.

Meanwhile, our premiums will only go up as we continue to get older, and it's still another 15-plus years to Medicare--assuming it's still there when we qualify for coverage. Brill noted the struggles of one (unnamed) lower middle-class household in Kentucky to pay subsidized premiums, but also suggested that a specific patient with Medicare coverage (the only socioeconomic description is that he's "a comfortable member of the middle class") should shoulder more of his bill in order to control over-utilization. This was yet another Time holdover, but there was no additional discussion about this patient's prior financial history or his ability to handle such increased payments if he needed nursing home or other long-term care. That isn't covered by a government payer unless you're broke enough to qualify for Medicaid.

Are such questions posed in Europe or Scandinavia?

Brill's book opens with Hillary Clinton being outmaneuvered by Barack Obama on healthcare issues during the 2008 presidential campaign. There's an excellent chance Sen. Elizabeth Warren, D-MA, could reprise that action next year. Why? She has consistently spoken up for the middle class. After decades of being squeezed on healthcare and pretty much every other pocketbook issue, they're all ears. - Ron (@FierceHealth)

UPDATE: Brill took issue with my assessment of his book.

"I think your critique that I ignored the middle class in the book is unfair. Much of my conclusions at the end about unaffordability focuses on the middle class (and not Harvard faculty)," Brill wrote to me last week.

In support, Brill forwarded a 1,774-word excerpt from his book that dwelled on the potential financial travails of a hypothetical middle-class couple in their sixties who lived in Florida with a household income of $62,000. If they were even one dollar over 400 percent of the poverty level, they would lose their subsidy to purchase insurance. Even with the subsidy, they could still be on the hook for medical costs approaching 27 percent of their income if they maxed out their deductibles and co-payments.

A salient point. However, I stand by my observation that the optics of Brill's book are imbalanced compared to those in his 2013 Time article. That was one of the best, if not the best, examinations of how the U.S. healthcare system functions and impacts ordinary Americans. And it worked precisely because it contained so many of their stories.

The intent of Brill's book was to navigate the corridors of power where the ACA was created. However, the narrative power of such a law lies with the workaday people who have to live with its consequences. The addition of more middle class and working class healthcare horror stories-- a lot more--I believe would have made a bigger difference in the book's impact.

The publication of "America's Bitter Pill" came on the 50th anniversary of Medicare and Medicaid becoming law. It was an event President Lyndon B. Johnson hailed as a rescue for "those fearing the terrible darkness of despairing poverty--despite their long years of labor and expectation--who will now look up to see the light of hope and realization." I fear it missed an opportunity to nudge the needle back in that direction.--Ron (@FierceHealth)

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