What is the financial toll on those who get sick? And will the pandemic change our health-care system? Howard Forman, a Yale professor and practicing radiologist, joins James Hamblin and Katherine Wells on the Social Distance podcast to explain the costs of American medicine and what it would take to bring those costs down.

Listen to their conversation here:

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What follows is an edited and condensed transcript of their conversation.

James Hamblin: What’s the scene in the emergency room at Yale New Haven right now?

Howard Forman: The mood is actually pretty good. But the floors really need help.

Hamblin: Katherine, by floors he means, like, upstairs where the people go after they’ve been admitted.

Forman: We have 25 COVID floors.

Hamblin: Twenty-five?

Forman: Yeah. And I consult on them now for conflict issues and leadership and management issues. And it’s really touching to hear the stories and what people are dealing with. Aside from the patients, which is obviously the most devastating, but the nurses, the physicians, the relationships that the nurses form with patients. It’s very challenging. That is where the pain is, and where there’s going to be a lot of psychosocial stress to be dealt with for a long time.

Hamblin: So you’re describing a lot of sacrifice and risk taking and heroism on the part of health-care workers. And we’ve heard a lot about that and hope to keep hearing more. And something I’ve been thinking about as well, and heard I guess not quite as much about, is the cost to patients financially. How bad is this hitting people who may be underinsured and coming in and ending up with a lengthy hospital stay?

Forman: Yeah, so it’s not clear to any of us precisely how well the first, now almost four, COVID bills that have passed Congress are going to protect the average individual, who may or may not be underinsured or uninsured. We know that testing is covered in most cases, and even that, by the way, from the hospital point of view is not being reimbursed yet.

Hospitals are still sort of footing that bill at a time when their cash flows are significantly compromised. But I think that individuals are potentially being exposed to their full deductibles and I don’t think hospitals are in their best position to be able to forgo collecting those dollars.

And so we’re back to a situation where our very fragile health-care system that, you know, has never served everybody particularly well in an egalitarian way is probably putting people on the lower quarter—not even the lowest part of society, but the lowest quarter of society—at great risk. I mean, about one in four people in this country is either uninsured or underinsured. And those individuals are at greatest risk right now.

Hamblin: I’ve seen numbers reported from $20,000 into the $70s for hospital stays. And like you mentioned, there’s sometimes some room for hospitals to not collect or to lower the charges if people are unable to pay. But as you said, many don’t feel they’re in a position to do that right now, because elective procedures and other revenue streams are gone. Do you think that a number like that is influencing people’s willingness to come in and get tested and treated, when they see that this might set them back in ways that would bankrupt them?

Forman: I think that’s always present for this population. When somebody is under- or uninsured and they have any symptom, whether it’s of appendicitis or chest pain or a stroke, and they know they may be on the hook for a hospital bill, I think they always have this concern. And I think we’re just seeing it in a much more stark way, because as you point out, the average length of stay for a COVID-19 admission is 6.2 days. At least where I am, I think that’s the average length of stay right now.

And by the way, that’s the average length of stay including people who die. So it’s probably longer for people who live. And once you start factoring that in, the numbers you mentioned are perfectly reasonable, not affordable but reasonable, in the sense that I think $20,000 is sort of the lower limit of what probably a charge would be for a COVID admission and far higher than that for people that are in the ICU for several days. Far, far higher.

Hamblin: Say I have a three-week stay in the ICU. Could you ballpark how much you think something like that would cost?

Forman: Yeah, I think from a charge point of view, it’s probably—I’m going to guess a quarter million dollars or more.

Katherine Wells: Wow.

Forman: Even a negotiated discount rate at most hospitals with a major insurance company is probably getting charged out at $6,000 or $8,000 a day, particularly once you include all the associated expenses. So that would be $120,000 to $160,000, I would imagine.

Wells: I think a lot of people like me hear a number like a quarter million dollars for three weeks and just cannot fathom how that number could materialize. Like, how could it possibly cost that much? Could you give some sort of breakdown or some sort of sense of where those charges are coming from? And I know this isn’t unique to coronavirus.

Forman: Yeah. Our health-care system is a very expensive system, and we’ve created all the incentives to make it that way. And let me just say, I teach health-care finance at a major university, and I don’t think I even understood the full scope of this until I had a health-care catastrophe in 2010–2011 that put me in the hospital for 38 days over five different admissions, three surgeries, including one day in the ICU. So I got to see exactly what the charges were in 2010–2011 and what an insurance company reimburses. So I’m not saying these numbers, you know, just making them up. I’m saying them because I know what they exactly were 10 years ago. And I have a pretty good idea that they haven’t gone down.

Where do they come from? We have created incentives for health institutions to have the highest level of care everywhere. So it’s not acceptable for us to have, you know, hospitals that have the bare minimum of essential features. Every hospital has to have everything. And so our hospitals have the latest technology. Hospitals that have a 10-year-old CT scan are looked at as though there must be something wrong with them. Hospitals that don’t have robotic surgery are looked at it as though they’ve made some strategic mistake. Features in our hospital—where, when we built the newest wing, we made sure there were negative-pressure floors in order to prepare for a potential pandemic infectious disease—to some people would look insane. Like, Why would you spend the extra money to have negative pressure on three floors? What are you worried about?

And yet right now we’re using those floors for exactly that purpose. We may be using them now, but the public has been paying for them ever since we built that wing, which was 13 years ago. And that’s sort of how our system is. We keep investing in the best and most novel and most exciting technology, some of which has very high value and some of which probably doesn’t. And we hope that we’re improving care and giving people a better chance at better health.

Hamblin: Does it seem to you like, so far with COVID-19, that is materializing? We pay a ton. Are we seeing a similar level of improvement in care or outcomes?

Forman: I doubt we do. Obviously, one thing that I emphasize when I teach is that I do think we probably have the best health care in the world overall—and certainly for rich people. But if you go down the line, and you look at the [inequities] that exist and the fact that, like I said, one in four people is either uninsured or underinsured, all of those things show that there’s such enormous variation that we underperformed by almost any measure because of that facet.

So do we have the best technology and does it deliver for those people who can have access to it? I think the answer for the most part is yes. But when you complicate that with the fact that such a large tranche of society does not gain access to the newest technologies, we look much worse.

Wells: Are there any proposals to actually increase access or coverage of coronavirus-treatment costs?

Forman: Well, certainly there are many people advocating for this. And one of the first steps that would go a long way, in my opinion, is that there are still more than a dozen states in the country that have not expanded Medicaid under the ACA. And some of those states are rather enormous: Texas, Florida, Alabama, North Carolina, South Carolina, and so on. Just expanding Medicaid in those populations will provide insurance to millions of people.

So at the very least—and even if it was done temporarily, even if the governor of Texas decided that this is a public-health emergency for which expanding Medicaid is one of the remedies—that would have an enormous positive impact.

Hamblin: I know this is a complicated question, but why don’t they just go ahead and do that? I mean, Trump is president now. We could say it was Trump’s initiative. Everybody would be happy because people like these programs once they’re actually rolled out.

Forman: And by the way, the hospitals in these states are so fragile right now. Many of them are going to go bankrupt one way or the other. Now, Medicaid expansion at least preserves them a little bit longer and prevents them from going bankrupt. So there are really important reasons why you would want to do that. Ninety percent of the cost of the expansion would still be borne by the federal government. It just strikes me as a no-brainer. And the politics of it do seem to have passed.

Hamblin: Yeah. These are the same states where you’re seeing protests about shutting things down, because people are ostensibly concerned about the economy. And yet the same people in charge of those states are declining to take huge sums of money from the federal government that would help cover the costs of caring for sick people and giving them a place to be and get cared for, rather than being out and spreading the disease and making the whole thing go on longer.

Wells: You mentioned that a bunch of hospitals are going to go bankrupt. What are the consequences of that going to be?

Forman: They’re going to be huge, and it’s going to happen over probably an 18-month period. It won’t happen all at once. But I think it’s going to be huge. Health systems may have to rely on state bailout funds in order to avoid bankruptcy. Other hospitals are going to be forced into mergers with larger health systems. And as we’ve seen over the last 10 years, these mergers result in higher costs to consumers in many cases. And even if quality goes up, cost seems to go more.

So what we’re doing is further enabling a process that makes our health care more expensive in this country. Almost certainly, certain rural areas and areas that have smaller hospitals will see those closed down. So I think you’re going to see an impact on our health-care system that is going to reverberate for a long time after the pandemic fades.

Hamblin: Our hospitals charge a ton and medical bills are one of the leading causes of bankruptcy. So we’re paying a ton to our hospitals, and yet those hospitals are risking going out of business.

Forman: It varies considerably. There are some hospitals that make hundreds of millions of dollars a year. There are some hospitals that live on a razor-thin margin. And then there are hospitals that, year after year, lose money and they get shored up by either their municipality or state, who make sure that they can sustain themselves, at least continue on for another year. Those are the ones that are most fragile now because, as you know, the states are running out of money quickly as well.

Hamblin: Has witnessing all of this changed your thinking on how our whole system should be orchestrated?

Forman: For me personally, I went from being extremely pro-market 25 years ago, where I really believe that if you just left it to the private sector, most things could be fixed. Then, 15 years ago, I came around to realizing that it just doesn’t work. There’s just too many problems. And so you need more government involvement to help it along. But the problem is that we’ve had more government, but we’ve also not changed the culture of providers for our consumers—our patients, our citizens. And that’s a bigger challenge.

We have a culture in the United States that believes that more health care is always better. We have a culture that believes that shiny buildings are better than old buildings. And we have a sense of sort of entitlement to every single possible technology without any consideration for value. And that’s a culture change.

And when I talk to my colleagues in the United Kingdom, and England in particular, who tell me how their system works—and I think it’s a fantastic system— they have a hugely different culture. They are able to have conversations with patients and their families to say,Look, we’ve exhausted all reasonable things that we can do and now it’s important to get comfort for grandma,” or something like that.

We’re just not at that point in this country. We still believe in doing everything we can. And quite frankly, the COVID-19 pandemic is highlighting that because physicians, families, and patients are struggling with the decision of how far do we go with patients that probably have no chance of coming off the ventilator. What do we do at that point? And we’re not in a position to make those decisions yet.

Wells: Do you think those changes in attitude need to come mostly from the three-quarters of people who are insured? What’s the thing that they need to understand?

Forman: Yeah, that’s precisely the challenge. That’s what I’ve been telling people when I talk about the political challenge of moving to a Medicare for All point of view. We have a two-tiered system right now. We have arguably, if you include Medicare, we probably have about 210 million people with “good insurance.” They have either private, employer-based insurance or Medicare. And those people have access to pretty much the best hospitals, the best physicians—and by best, I mean their choice of those physicians.

And then you have a large swath of America that is either uninsured, underinsured, or has Medicaid. And that group of individuals very often has to go to city hospitals or community health centers for their care. They don’t get to choose wherever they want to go to. Ultimately, I think they get very good care, by the way, but they just don’t have the choices that a reasonable majority of America does have. And in order to move to a system that’s more egalitarian, you have to get this majority to move to a point of view that says, Yeah, it’s okay if I give up my claim to going to Langone Medical Center in New York and I’m willing to go to Bellevue Medical Center in New York.

Hamblin: You and I have talked about this before, but when you ask people who are used to having their choice of going anywhere, when you narrow that choice and tell them, “You need to go to a specific place” that may not be their first choice, people cry “Rationing!” They say we don’t ration care in the United States. But we do. We’re rationing it all the time, just based on who can pay.

Forman: All the time. Absolutely all the time. We’ve been doing this forever. This is the challenge. How do you change the culture of people to say, I’m willing to sacrifice something that I may have explicitly built into my decision making. I took a union job because my union job provided me with a level of health care that my friends that are not in a union job don’t have. And I get paid less, but I have this health care. This is sort of a culture issue for us and people value it tremendously. How do you change that culture? That’s a challenge for us.

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