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What Makes American Healthcare (Un)affordable?

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A man sits at a table in front of a computer with a calculator, going through various bills.

RadioEd is a biweekly podcast created by the DU Newsroom that taps into the University of Denver’s deep pool of bright brains to explore new takes on today’s top stories. See below for a transcript of this episode.

Show Notes

University of Denver Sturm College of Law associate professor Govind Persad’s newest paper, “Defining Health Affordability,” looks into the phenomenon of how Americans avoid seeking healthcare because of the cost. The meat of his latest research, however, comes down to investigating why we don’t have a universal definition for the idea of healthcare affordability.

In this episode, Emma chats with Persad, who offers his own definition of health affordability and examines today’s American healthcare landscape.

DU Sturm Professor Govind Persad.
Govind Persad

Govind Persad’s research applies bioethical and distributive justice frameworks to law in order to address longstanding and new problems at the interface of health law and policy.

Persad’s current projects evaluate potential definitions of health affordability, consider how to integrate health justice and equity into frameworks for the allocation of scarce medical resources, and propose new frameworks for international pandemic response. His research has most recently been supported by a Greenwall Foundation Faculty Scholars Award. He is participating in the Colorado National Wastewater Surveillance System Center of Excellence at DU and serves on the Faculty Advisory Committee for the Scrivner Institute of Public Policy.

More Information:

"Defining Health Affordability" by Govind Persad

Sue Lowden Stands by Chicken Health Care Barter Plan” CBS News

Pricing Drugs Fairly” by Govind Persad

Americans’ Challenges with Health Care Costs” by Lunna Lopes, Marley Presiado and Liz Hamel

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Emma Atkinson: 

You're listening to RadioEd, the University of Denver podcast. I’m your host, Emma Atkinson. 

In the year 1918, a guy got bitten by a dog. This guy was George Chandler. 

At the time, it wasn’t clear to him if the dog had rabies or not. His doctor, wanting to play it safe, recommended that he receive anti-rabies serum, the treatment at the time. Chandler resisted—he didn’t have a lot of money.  

Govind Persad (00:30): 

Basically, [he] said, “Look, this is going to be too expensive for me to go, this dog probably doesn't have rabies.” 

Emma Atkinson(00:37): 

The dog did have rabies. Chandler died. Woof. 

Govind Persad (00:41): 

The anecdote, I think raises this question of if this person in the anecdote had had more affordable access to healthcare interventions, there's at least a better chance that he might have received some type of treatment that could have led to better outcomes for him. 

Emma Atkinson (1:00):  

That’s Govind Persad, an associate professor in the University of Denver’s Sturm College of Law. He uses Chandler’s story to set up his most recent paper, titled, “Defining Health Affordability.”  

Although what happened to Chandler was more than a century ago, the conundrum he faced is one that many Americans still grapple with.  

A 2020 article in The Guardian describes the story of 53-year-old Susan Finley, a Colorado woman who died after losing her health insurance due to layoffs. Before her death, she’d avoided going to see a doctor for flu-like symptoms.  

Finley’s story, while tragic, isn’t unique. A recent study, cited in Persad’s paper, found that just under half of U.S. adults find affording healthcare, quote, “very or somewhat difficult.”  

Govind Persad (01:42): 

The thing that I grapple with in the paper is: What would it mean for health insurance for instance to be affordable such that people aren't dissuaded from attaining it because of costs? 

Emma Atkinson (01:56): 

Persad’s paper does take on that problem, the fact that people will avoid seeking healthcare because of the cost. But the meat of this research comes down to investigating why we don’t have a universal definition for the idea of healthcare affordability.  

And Persad offers his own definition, centered around the concept of health insurance. Let’s dig into it.  

Govind Persad (02:14): 

When people ask, “what does it mean, for health insurance to be affordable?” I basically mean health insurance has to do these three things:  

First, you can’t have a situation where people face a choice between being insured and being able to buy stuff that they need as a basic matter to have a fulfilling life. You can't be picking between your insurance and being housed, having a house as opposed to being freezing out on the street.  

You also can't have a situation where, in order to buy insurance, maybe you're not on the street, but you have to spend all the money that you might otherwise have been able to spend on something like going to college or being able to start some kind of business or get training for yourself.  

Emma Atkinson(03:03): 

Those first two things are about what choices we shouldn’t have to face—tradeoffs we shouldn’t have to make—in order to afford healthcare, or health insurance more specifically.  

Govind Persad (03:13): 

Then the third thing is you also want insurance to be not just something people have on paper, but that helps their household to be healthy. So you want the insurance that you're getting to be something that is also helpful to the household that helps them to be healthier. So they're not facing these unacceptable tradeoffs and the insurance is actually helping them to be healthier. 

Emma Atkinson (03:35) 

So let’s sum it all up: In order for health insurance to be affordable, you can’t be forced to decide between spending on healthcare or basic human needs; you can’t be forced to decide between spending on healthcare or opportunities that would substantially improve your financial situation; and you need to be able to rely on your insurance to actually keep your family healthy.  

That’s according to Persad, at least. But here’s the thing: There isn’t one universally accepted definition of what makes healthcare affordable. There isn’t even a broadly accepted one used in the United States.  

Emma Atkinson (04:06): 

Let's get down to basics here, really baseline: Why is it important that we define health affordability? And why does it matter that we don't have a universal definition? 

Govind Persad (04:16): 

So a big reason why it matters, and I talked about this in the paper, is that you often have debates going on in courts and legislatures in sort of public discussion in the United States in particular because of what you mentioned... one way of thinking about it is the United States has quite a fragmented health insurance system, where really you have people insured through so many different plans, some people are insured through plans like the VA or Medicare that are operated primarily federally, some are insured through programs like Medicaid or a state kids insurance that are operated at the state level, some are insured through private insurance, and some of course are also uninsured, and part of that may be for reasons of lack of affordability.  

And in all these discussions, you can end up without definitions, where you have situations where people are talking past one another because there isn't a common definition being used. So one side of a debate will say, “Well, under this plan, health insurance will be affordable for people or this will help people to get affordable health insurance,” and other people will say, “No, health insurance is not affordable for people who are under the proposed plan, there’s not going to be affordability,” and having a shared definition or at least understanding the landscape of potential definitions can help reduce to some extent this problem of people just talking past one another as they debate these things.  

Emma Atkinson (05:49): 

Here’s an example of how the lack of a common definition of health affordability can really hinder discussions around healthcare: 

If one person defines insurance affordability as not consuming more than 10% of a household’s income, and another person defines it as being affordable if people’s access to basic needs aren’t being jeopardized, then you’ve got a problem. Everyone is using different metrics to measure affordability, and meanwhile, you’ve got people like Susan Finley dying because, for her, healthcare was just too expensive. It’s frustrating—and can have major consequences.  

A lot of this comes down to policy. And policy is decided by lawmakers. And lawmakers generally fall into two political parties. And those two political parties have never really agreed on what health affordability looks like. 

Most recently, Persad says, Democrats were concerned with access to healthcare—hence the Affordable Care Act—while Republicans were more focused on regulating private insurance companies to help keep costs low. Two different definitions of affordability, two different approaches. 

Persad acknowledges that he may be looking at the past through rose-colored glasses when he says this—but looking back at the healthcare debates of the ‘80s and ‘90s, he says, there seemed to be more arguments grounded in facts.  

I’ll let him tell this next story about healthcare and politics in the 2010s. 

Govind Persad (07:06): 

During the Affordable Care Act, you saw debates where people said, “Well, we should make it so that people could go to the doctor and trade a chicken to the doctor or sell household goods, to be able to get health insurance.  

Emma Atkinson (07:21): 

That was former Nevada State Senator Sue Lowden [LAOW-den], who was running for the U.S. Senate at the time. She did not win. 

Govind Persad (07:27): 

In the earlier debates, I think you saw a little bit more recognition that maybe there's this problem of excessive benefit mandates, that people might disagree about how much states should be able to mandate different benefits in insurance plan content. But there was not as much of a vision that it was realistic or plausible to have this idea that people were going to be able to insure themselves by selling chickens. 

Banjo barnyard music interlude 

Emma Atkinson (08:01): 

All chicken jokes aside, Persad says, one issue with the current American healthcare system is the immense fragmentation.  

Govind Persad (08:07): 

You have a lot of different points in which people are asked to pay various things for health care. So you pay for health insurance: sometimes you pay for that as a deduction from your paycheck if you're insured through your employer, sometimes you may pay for that directly if you're purchasing insurance through the exchange (although then you typically will also receive tax credits), sometimes you will pay for insurance as part of premiums for Medicare, but of course for Medicare, you also have quite a bit of tax subsidy flowing in as well for insurance through Medicare 

And then also at the point of service – and I think in some ways, this is more common in the US and bigger in the US than you see in countries like the UK or a lot of countries in Europe, or Canada. You're also asked to pay for health care at the point of receiving health care to some extent even if you have insurance, because there may be deductibles, there may be copayments, there may be interventions or drugs that are not covered by your plan. And so you have questions both about what is affordable health insurance, and what is affordable health care. And something I say in the paper is it wouldn't be very useful if health insurance was quite cheap and so didn't jeopardize your access to basic needs, but it didn't cover very much of the health care you expected that you might require. And so you ended up spending a lot of money to obtain health care because the health insurance package was not sufficiently comprehensive.  

Yeah, I think one way of thinking about it is that you have in the current US system, not just affordability of health insurance, which is important, but also does the health insurance that you have, the affordable health insurance, is that leading you to be able to obtain affordable health care? And even within healthcare, health care from doctors, are prescription drugs for you—are those affordable? Are hospital services if you become critically ill affordable, things like ambulance services? And each one of these providers, because of the way the US system works, is going to be its own private entity often, with its own way that it sets prices, and so on. So this, I think leads to greater complexity in the US system in particular. 

Emma Atkinson (interview audio, 10:24): 

Absolutely. And the way I'm hearing it is, and the way that most of us, I think experience it is that you either pay on the front end, or you pay on the back end, but either way you're gonna pay, right? 

Govind Persad (10:32): 

Yeah, or somebody is going to pay. One alternative is you could have a system where, and to some extent this is what you have in a system like the hospital part of Medicare, where you pay upfront for it through taxes or through payroll taxes, or you can pay for it through the general fund. And then on the backend, you don't necessarily pay as much in the way of premiums because you've already paid for that. But somebody is still paying. The question is to do you finance in advance through the taxes, or do you finance at the point of the paying services? 

Emma Atkinson (interview audio, 11:09): 

So, let's switch gears here a little bit. You brought this up earlier, quite briefly. But something that's really interesting to many people and is often talked about is the differences between healthcare in the US and healthcare abroad. And I think this also applies especially to health care affordability. Can you talk a little bit about that? 

Govind Persad (11:26): 

Yes. Something I said in the paper is that – there are discussions, I did a little bit of searching. I think you could have written a whole other article about this – when I presented this at a workshop, colleagues said, “You're doing so much here with the US system, it'd be hard to also talk about affordability in the UK, or Australia or Canada say.” But one theme I saw in these discussions is if you look at (I searched) health insurance affordability or health care affordability being talked about on the UK’s government websites, the question for them was generally not, “Is healthcare going to be affordable to the user of health services?” The question is going to be, “Is healthcare affordable to society?”  

So is society getting a good deal in terms of benefit from the taxpayer funds in the UK that they are using to pay for health care services? So, it's much more of a question of societal affordability in countries like the UK.  But it's really in the US where it's such a distinctive phenomenon of focusing on individual level health insurance, health care affordability. So, the extent to which that burden falls on the individual at the point of obtaining services is something that sort of stands out.  

And so to me that paper, when you when you compare different national systems, that it really was much more so in the US that people were facing those costs. And the discussions around affordability were about household affordability, can the household afford to buy insurance, or can a household afford health care, as opposed to the question: Can the United Kingdom afford to purchase this specific health care intervention? Is it a good value for money for the country, which is the way that it tends to get framed there? 

Emma Atkinson (interview audio, 13:19): 

That is so interesting. I think that's incredibly interesting, that it's framed more as a societal transaction, rather than an individual transaction, so to speak. Does that mean it's more of a philosophical approach almost in your experience? 

Govind Persad (13:34): 

Well, I mean, so in the UK, I think they have more of a discussion around, for a given health service: Is this service, would it be something that is subsidized fully through the National universal care health insurance system? Or is the service going to be something that is... you can purchase it if you go private, which means you pay for it yourself, but it's not going to be something covered in the National system at all? 

Here in the US to some extent – and this is not the main topic of this paper, this is more about affordability, I've written about this in other papers – I think here in the US, we tend to be more uncomfortable with these discussions about, for instance, when Medicare can say no to a treatment. Even for government plans we’re uncomfortable with that. In the paper I'm writing right now, something I kept repeatedly saying, seeing, this is a paper that talks about some debates over getting value for money that came up around the Affordable Care Act. You saw prominent politicians like Mitch McConnell, for instance, saying the government shouldn't have the authority to decide considering cost at all – and maybe even considering effectiveness at all – the government shouldn't have the authority to decide what is covered by Medicare, a government insurance program. Instead, the decision of what Medicare covers and pays for should be purely between a patient and a doctor.  

And there was a congressional hearing where they had a very well-known health economist from Princeton, Professor Reinhardt was in the Senate hearing. And he said this is just bizarre. In the US, we have this idea that a government program is not allowed to look at whether you're getting value for money and spending, the taxpayers dime to obtain health care services. In no other area, not in subsidized access to housing, for instance, are you allowed to say, “Well, it's just between me and my home builder, whether the government should pay to subsidize this type of housing.” You don't see that idea at all. And so what stood out to Professor Reinhardt was this idea that in the US, we're so uncomfortable with the idea of having a national discussion around which interventions are covered through different governmental insurance programs. 

And you saw that even around the debate over whether Medicare should or shouldn't cover an Alzheimer's drug that recently was approved by FDA, but where there's a lot of dissent about the benefits and risks of this drug – whether those benefits and risks even justified approving it– and certainly whether the costs, which are pretty high, justified providing it through the program. There was a lot of debate over whether and how Medicare should be allowed to think about these questions when setting this coverage determination decision. 

Emma Atkinson (interview audio, 16:35): 

Given your research and the conclusions that you draw in the paper about health affordability in the US. What's next? 

Govind Persad (16:42): 

One question that I've become interested in is this question of, what is the fair price for a drug? How can we incorporate metrics of value that are used in a lot of other countries into drug pricing in a way that's consistent with health equity? Because people have worried that if you, despite the fact that pretty much every other country does this, people in the US have worried that if we have processes where the government tries to get value for money when deciding what Medicare will pay for, that this might end up being somehow bad for people who maybe are less likely to get value from a drug because they have a pre-existing condition that means that the drugs that they're going to take are less effective for them or something.  

And there have been really great innovations in health economics that have helped deal with this problem of these concerns about health equity that can build in more of a lens that addresses that, that I talked about in in some of this work. 

Emma Atkinson (17:53): 

A big thanks to our guest, University of Denver Sturm College of Law associate professor Govind Persad, for sharing his expertise with us on this week’s episode. More information on his work is available in the show notes. If you enjoyed this episode, I encourage you to subscribe to the podcast on Apple Music or Spotify—and if you really liked it, leave us a review and rate our work. It really helps us reach a larger audience and grow the pod. Joy Hamilton is our managing editor, Madeleine Lebovic is our production assistant and James Swearingen arranged our theme. I'm Emma Atkinson, and this is RadioEd. 

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