Gov. Cuomo says New York may need more than 87,000 additional hospital beds to accommodate the surge in COVID-19 patients. It’s easy to forget that, just 15 years ago, a commission led by investment banker Stephen Berger slashed 20,000 beds statewide in the name of “right-sizing” and cutting costs. The COVID-19 pandemic lays bare the problems with a profit-driven system that chronically disincentivizes public health and preparedness. Accessibility and system capacity in the U.S. are determined by a set of financial constraints and incentives, all created by legislators and regulators under the influence of self-interested lobbyists.
Hospitals and clinics make more money when they increase the number of pricey diagnostic services they deliver. MRI machines and luxurious concierge floors for high-paying patients are profitable investments. Maintaining an adequate supply of safety masks and ventilators, or sufficient bed capacity to meet the challenge of a pandemic, have often been viewed as unnecessary costs — at least until the crisis hit.
Investments in public health and employee safety tend to be competitive disadvantages in the U.S. healthcare marketplace. The twisted incentives baked into the system also help to explain many of the hospital closures we’ve seen across the country in recent years. Corporate owners are suffocating in their quest for profits, and patients and health-care workers are paying the price. Insufficient Medicaid reimbursement rates are problematic, worsened in some states by Republicans’ refusal to expand Medicaid. Hundreds of hospitals could not afford to stay open and ended up shutting down. The resulting health-care deserts, especially in rural areas, make it impossible to test and treat COVID-19 patients or accurately determine the true extent of the pandemic today.
In the midst of the crisis, hospitals are cutting the pay and benefits of doctors and nurses who are fighting on the frontlines. The private equity investors who have pounced on healthcare as a lucrative investment opportunity are cutting costs, and silencing professionals who call out the desperate conditions in their hospitals and clinics.
So, who’s pulling the strings? Though policymakers and others have some role, our health-care system is largely controlled by a patchwork of private interests, from the big-spending lobbyists of the American Medical Association (which represents only about a quarter of practicing physicians) to AHIP, the health insurers’ trade association, to the investors motivated by profit rather than public health. It was AHIP that ghoulishly declared, though insurers would waive copays for COVID-19 testing, they would make no such promise for the actual treatment of the disease. When some insurers relented, and promised to cover COVID-19-related copays, they put their patients in the bizarre position of hoping for a positive test; if the ailment turns out to be flu or something else, they’ll be back on the hook for these out-of-pocket costs.
These interest groups are undoubtedly emboldened by the Trump administration’s longstanding attacks on the Affordable Care Act and deference to healthcare profiteers. But they do a grave disservice to patients, and now we are seeing the results. Imagine if you called 911 to report a fire, and the dispatcher refused to send anyone because you hadn’t bought the right insurance and opted into premiere, elective fire protection services. Or perhaps your local fire station had gone out of business due to lack of revenue. Our fire departments don’t work on the basis of a constructed notion of financial viability.
Why should our hospitals? There is no such thing as a health-care system without tradeoffs or rationing. The question is how, as a society or a government, we make these difficult decisions. Should we prioritize public health and access to care as a right? Or should we prioritize the narrow interests of insurers and profit-seeking hospital associations? As New York scrambles to re-open shuttered hospitals, and the nation grapples with this pandemic, perhaps it’s time to acknowledge that profit-driven healthcare just doesn’t work.
Givan is an associate professor in the School of Management and Labor Relations at the Rutgers, the State University of New Jersey. She is the author of “The Challenge to Change: Reforming Health Care on the Frontline in the United States and the United Kingdom.”
