What is the duty of the government to provide health care to those in need? How to fund it? Should everyone have access to this type of care? A new book entitled “We’ve Got You Covered: Rebooting American Health Care” puts forth a simple and financially appealing answer to the question. Marketplace’s David Brancaccio recently spoke to one of the book’s co-authors, Amy Finkelstein. She’s an economics professor at MIT and a MacArthur Genius Grant winner. Below is an edited transcript of their conversation.

David Brancaccio: I want to start with a pre-pandemic statistic that you’ve highlighted in the book, one of many, many. Of the $140 billion in unpaid medical bills in America held by collection agencies, three fifths were incurred by households with health insurance. What did that say to you when you stumbled across that?

Amy Finkelstein: It says that the problem of health insurance in America is not just the problem of the uninsured, that the people who have insurance don’t have good insurance. Because the point of health insurance is it’s an economic product. It’s not about your health, it’s terribly labelled. It’s about protecting you economically, financially in the case of poor health. And if even when you have insurance, you can rack up thousands of dollars in medical debt, it’s not doing what it’s supposed to.

Brancaccio: Gee whiz, we ended up with this health care system with these flaws, after such exquisite planning and careful identification of the objectives of America’s health care system, he said, ironically,

Finkelstein: Yeah, the American health care system was never deliberately designed or constructed. It’s been put together piecemeal, patchwork, as particular issues arose, or particular political opportunities presented themselves. And that’s part of the problem. Because whenever you have patches, you’re gonna have gaps at the seams. People who think they have coverage, but then lose it because they lose their job, or they get older, or they get healthier. Some health insurance is only there while you’re sick. And then you get a little healthier and it goes away, or they get a little higher income. That’s crazy. The purpose of health insurance is to provide security and when coverage itself is highly insecure and uncertain, something is wrong.

Brancaccio: So, what to do is the overall question here, but seeking answers you looked at what other countries do.

Finkelstein: We started, actually from just first principles of what’s the problem we’re trying to solve? And what’s the solution to that problem? But we were struck and a bit humbled when we did that sort of abstract exercise to realize that at the end of the day, we ended up where every other high-income country is, it turns out, the answer is really simple. You know, whenever you talk to non-experts in a field, they always want to give you a simple answer. Turns out, they’re all right. What every other high-income country does is have universal basic coverage with the ability to buy additional supplemental coverage for people who can afford and want more than that basic coverage. And that’s what we need to do.

Brancaccio: Wow, an expert just said that there was a simple solution to the health care Gordian Knot in America. So, I mean, you’re talking about like Medicare for all, but like, even more so?

Finkelstein: So, no, Medicare for All is a is a vacuous slogan that means different things to different people. We’re like Medicare for All in the sense of health insurance for all, but two differences, I’d say. One is Medicare is actually a pretty crummy insurance product. It leaves people exposed to unlimited out of pocket medical expenses. We’d get rid of that. We’d have patients paying nothing precisely because the point of insurance is to protect you economically. It’s crazy the way Medicare is designed, with unlimited out of pocket medical expenses. On the other hand, we’d be a lot more basic than the current Medicare program. The current Medicare program, one of the reasons costs are so out of control in it is that it puts no guardrails on what patients or physicians can do. They can order any tests they want any procedure; go to any doctor they want at any time. Our policy would be much more basic. There probably will be longer waiting times, a little less choice of, you know, which doctor. Prior authorization for some procedures and a lot more basic on the non-medical amenities in terms of you know, how many people to a room in a hospital and that sort of thing. Again, this is what a lot of other countries like Australia, Singapore, etc, do. So, it would be both, in many ways better than the current Medicare program but in some important ways worse, and that’s where the supplemental coverage would come in for those who can afford it.

Brancaccio: By the way, you mentioned we wouldn’t pay anything for a service. You know, I talked to all these health care experts, they’re always going on about the importance of copays, so we don’t overburden the medical system with our trivial ailments.

Finkelstein: Yeah, this is where we commit professional heresy or perhaps professional suicide. As economists, you know, one of the central tenants of economics that we’ve ourselves taught and lectured students on for junk for a generation, and before that before us others for many generations is that patients should pay something for their medical care. Otherwise, they’ll go to the doctor every time they sniffle. They’ll want a CT scan every time they have a headache. And the way to make you know, patients make sensible decisions about their medical care is to give them so called skin in the game. We, we take it back. We’ve made that argument ourselves in our own research and writing and we take it back not because the facts are wrong. We stand by the facts that we and generations of economists have produced. And it is true that when patients don’t have to pay anything for their medical care, they use a lot more medical care. The reason we take it back is based on practical reality, when we look at all the other high-income countries with which of course all have universal coverage already, and have followed the advice of generations of economists and introduced or increased those patient payments into their basic coverage plans, they’ve simultaneously introduced and layered on lots of exceptions, so that, you know, people don’t have to pay those copays if they’re sufficiently poor, or sufficiently old, or sufficiently young, or sufficiently sick, and the list goes on and on. So, at the end of the day, you know, they create so many exceptions that almost no one pays those copays. So, the squeeze is just not worth the juice. And the reason they have to create those exceptions is because there always will be people who can’t afford $5 for prescription drugs or $20 for a doctor visit, and there’s good evidence on that point. So, they end up creating all these kinds of patches and exceptions to deal with that problem. And that puts them right back in the mess that we’re trying to get out of, namely an overly complicated, too clever by half, Rube Goldberg machine that punches far below its weight.

Brancaccio: I see you’ve run this through some spreadsheets. How does it come out? I mean, can the country afford the system that you and your co-author envision?

Finkelstein: I mean, how can we afford not to would be my answer, but it’s a more practical question. Yes, I said, we committed professional heresy in repudiating patient copays and the basic plan. But we’re not so renegade as economists to ignore budgetary implications. The answer is, yes, we can afford it. And the reason is very simple. We’re already paying as taxpayers for universal coverage, we’re just not getting it. So, it’s true, that the U.S. has a much greater role for the private sector in health care than in other countries. But as I’m sure listeners know; we spend twice as much as other countries on our health care as a share of the economy. We spend twice as much as other countries on health care as a share of the economy. Only half of that is taxpayer funded. Whereas in other countries, almost all of it is taxpayer funded. So, if you can follow the math, half of twice as much is the same amount. In other words, the taxpayer portion of our health care spending is already as large as the public financing and other countries that’s paying for universal coverage. So, we might choose if we, if and when our plan gets implemented, to raise taxes if we want to make the basic plan more generous, but we can afford basic universal automatic coverage without raising taxes.

Brancaccio: What do you think about outcomes, you think we will be healthier?

Finkelstein: I think asking about health is the wrong question, actually, that health insurance as a term is a misnomer. Health insurance isn’t actually about our health. It’s about economic protection. So, and one way to see that is if you look at the huge and hugely disturbing disparities and health outcomes in the United States, by you know, across income groups, you know, the rich are much healthier than the poor, or across race, white Americans have much better health outcomes that Black Americans. There’s a compelling body of evidence that suggests that very little of that has to do with access to medical care, let alone health insurance, which provides that access. Instead, it’s about the differences in the air we breathe, the food we eat, the cigarettes we do or do not smoke. In other words, as crazy as it may sound for people who are interested in radically improving population health and reducing these disturbing disparities, health insurance policy is not the policy lever to lean on. One really striking way to drive this home is research that other economists have done that show that even in countries like Norway and Sweden, which have not only universal health insurance, but cradle to grave social safety net, the health disparities across the income group are as large as in the U.S.

Brancaccio: So, if this whole discussion of how do we rethink health care economics in America is not necessarily about health. What is it about not bankrupting families?

Finkelstein: Yes, it’s about economic security. The purpose of health insurance is the same as the purpose of any insurance, take flood insurance. We don’t buy flood insurance so that our houses won’t flood, we have it so that in the unfortunate event that they do, we don’t have to go homeless or forgo food and other necessities in order to repair our home. That’s the purpose of health insurance as well. Security, economic security, when we unfortunately have poor health, that we don’t have to also face economic ruin or be unable to get the essential care we need. Health insurance is an economic product, not a health product.

Brancaccio: Should we compare what you’re proposing to the idea of we have public schools for education in America, we don’t charge copays. And the assumption is it’s there if people want it?

Finkelstein: Yeah, I think, you know, health and education are often discussed in the same breath because they are very similar in terms of we’ve decided, as a society, we have a fundamental commitment to provide some basic essential level of service on each of those. And yes, I think the public school model is a sensible one. One place where we would diverge from that is that currently, if you choose to supplement public school with, say, private school, the parent has to go pay for the entire private school education, they don’t sort of get to take the taxes they paid towards their students public education, and use it to help pay for the private education. That’s also how the U.K. does its supplemental health insurance. If you’re in the U.K., and you want a cataract operation or need a cataract operation, but you want a special lens, the NHS, the National Health Service in Britain, will pay for a basic lens, if you want that special lens, you not only have to go to the private sector, but you have to pay for the surgeon and the entire cost of the special lens, as opposed to just the additional cost of putting in that slightly more expensive lens. That’s not how we think health insurance should be designed. We would do it the way that they do it and say Singapore, where you just pay for the incremental or supplemental cost of the additional care you’re getting.

Brancaccio: Yeah, and I was surprised to see the analogy with public education in the book, just because you can get a fabulous education at public schools in America, but you can also get an awful education.

Finkelstein: I mean, that’s a failure of implementation not of concept. It’s important that that a universal basic coverage system be funded adequately. And if it’s not, that we take steps to make sure it. We give the example in the book of other countries that were committed to universal basic coverage with the ability to supplement, like in Israel for example, and then started to find unacceptably long wait times in the basic program, and difficulties getting access to high quality doctors. And you know, this is not a sexy answer, but it’s the truth. You know, you need to be vigilant, what they did is they had a commission that studied it. And they realized they needed to increase the funding of the basic program. They had a large number of immigrants who were driving up costs. And they needed to put regulations in place to make sure that physicians had both incentives and requirements to make sure that they practiced in the basic system as well as the supplemental system. So yes, anything can be done badly. It can also be done well.

Brancaccio: Professor just before we go, just for a second. There was a sort of a catalyst for this odyssey that you’ve been on. When your dad asked you a question …

Finkelstein: It was my father-in-law, actually. He asked me what we should do when he was hearing about in 2019, the Democratic primaries and Medicare for All, and I told them the honest truth, which was I didn’t know and that’s why I do research on it. And my father-in-law said to me very nicely, but very pointedly “Come on, Amy, you’ve been studying this for 20 years. You must be the world’s expert on this topic.” He’s overly generous on that point. “You have nothing to say about how to fix our health care problems in the United States.” And that hit home. I mean, Liran (Einav) and I have both worked on narrow, specific technical topics and felt that we were making incremental progress on these big problems. But my father-in-law really challenged me to say,” come on, don’t you have anything to say about the big issues? And we decided to take up that challenge, and we’re very pleased with the result. We hope he has too.