How Covid-19 is Unveiling US Healthcare Weaknesses

Three questions to Eric Schneider by Angèle Malatre-Lansac

Healthcare America

How Covid-19 is Unveiling US Healthcare Weaknesses

Angèle Malâtre-Lansac

Former Associate Director - Healthcare Policy

Eric Schneider

Senior Vice President for Policy and Research at The Commonwealth Fund

With 81,000 people infected with the coronavirus on March 27 and more than 1,000 deaths, the United States are now the new epicenter of the disease. According to Eric Schneider, senior vice president for policy and research at The Commonwealth Fund, a national philanthropy engaged in independent research on health and social policy issues, the very decentralized nature of the American Healthcare system where states set their own policies, the weaknesses of care delivery as well as a series of lost opportunities made the United States the country hardest hit by the pandemic.

The first known case of COVID-19 in the U.S. was confirmed on January 20, 2020 and cases have now been confirmed in all 50 US States. The coronavirus pandemic exposes any and all health care systems’ weaknesses. What are the biggest challenges for the American healthcare system?

The first challenge is the decentralization and weakness of our public health and disease surveillance systems. When facing a pandemic, a nation as large as the U.S. needs a central agency to collect and monitor data from abroad and from within the country to detect emerging disease threats early and coordinate a response. These functions are decentralized in the U.S. Each state funds and operates its own public health and disease surveillance system. As this pandemic started, the consequence of that decentralization was a failure to understand the magnitude of the problem and to pursue the kind of testing done that other countries did early to detect cases and start contact tracing. Despite several experts’ warning of the threat in January, our nation’s Center for Disease Control was very slow to ramp up testing and failed on some crucial decisions about which test kits to permit and how to distribute them. We lost many weeks in this process.

On the other hand, a strength of our decentralized system is that an independent team of researchers in Washington State, frustrated by the slow federal response, started testing on their own. At state level, public health agencies stepped in to fill the vacuum in leadership.
On the healthcare delivery side, one big challenge is that our system depends heavily on private companies, private practices and private hospitals. We tend to rely on the market to deliver primary care services and hospital services. Half of healthcare spending in the U.S. is private spending. Spending from our government is channeled through private delivery systems. Some weaknesses of that approach are that those private organizations operate with a high degree of independence. It is rare for the government to order them to change their procedures and coordinate except in a crisis.

A strength of our decentralized system is that an independent team of researchers in Washington State, frustrated by the slow federal response, started testing on their own.

They also rely on a fee-for-service revenue stream that depends on people coming in for face-to-face visits. What we are seeing now because of stay-at-home orders and the shut-down of much of our economy, is that those private practices are experiencing serious challenges to their revenue. We are hearing of a 30 to 50% decline in revenues because providers can’t bill for visits that don’t happen and because there is no payment for telephone consultations. That creates a weak spot in our primary care system.

A second major challenge in this pandemic is the capacity of hospitals: bed capacities are lower in the United States than in most other high-income nations. In part this is because we let market forces, who can pay the most, drive the availability of services. There is a misallocation of resources: we have too few intensive care units’ beds and too few ventilators for the crisis we are facing. Many of the hospitals in New York already report that they have reached their capacity and many are “safety-net” hospitals that serve poor patients. Another issue is staffing, we don’t have enough people trained and respiratory therapists to manage the ventilators. One of the reasons for this shortage is that respiratory therapists are traditionally paid less than many other health professionals.

Another third weakness is the lack of universal insurance coverage: we still have around 10% of the population lacking any health insurance and half of Americans reporting that they are underinsured. Those people face high deductibles and copays when they seek healthcare and their out of pocket spending can be very high. We have known for decades that people who lack financial means end up going without care. They avoid going to a doctor and going to hospitals until they are really sick. And in a pandemic like this one, we want people to identify that they have a problem early so that they can be dealt with. The spread of coronavirus may be accelerated by the lack of access to healthcare. Initially, people did not want to face the cost of testing because it wouldn’t be covered by insurance companies. Now insurance companies have agreed that they will cover testing without copay, but even that doesn’t solve the problem: once a person is sick and goes to the hospital, or if they need an ambulance to go to the hospital, they can face significant financial costs.

Another weak point is that Americans may be in worse health than their counterparts in other countries. On average Americans are a bit younger than people in Japan or in Europe. But a higher proportion of the population suffers from chronic diseases: high cholesterol, diabetes, heart problems, and respiratory conditions. The excess burden of chronic diseases is partly a result of inadequate insurance and access to care. We also have a large homeless population that carries its own set of health challenges. All of those individuals are in the high risk category if they get sick with Covid-19. We don’t have the hospital capacity, the ICU and medical capacity and ventilators. In New York City, now the epicenter of the US pandemic, tens of thousands of people are homeless, living in the streets, subways, and in shelters. The virus can be transmitted easily through those communities. Their risk of death is very high. We’ve seen in the last few days a tremendous surge in people, arriving at New York hospitals seriously ill with Covid-19.

We see that every country has a different response to the outbreak. What can be done in the U.S. to contain and mitigate coronavirus?

I’m in New York city, and the State of New York has become the epicenter of the epidemic in the United States within the last two weeks. It’s likely due to a combination of New York being a place with a lot of travelers, and because of the city’s high population density: New York City has two times the population density of Los Angeles.

What we are seeing in the State of New York is a very dramatic response. The first response was a physical distancing strategy (some people call it a social distancing). The state moved quickly to close schools and non-essential businesses, and issue stay-at-home orders: those changes can slow the progression of the disease (as they did very successfully in China). New York started this lockdown a week and a half ago. Hopefully that will reduce the number of people demanding hospital care in the coming weeks.

The second response was to increase the hospital capacity to answer the needs of the population. New York is beginning to mobilize the equipment that is needed: ventilators, opening new hospital beds, building new facilities such as temporary field hospitals. That’s all beginning to happen. Another response is testing. We’ve been flying blind for the last several weeks in terms of knowing the magnitude of the demand for care. Other countries such as South Korea have tested hundreds of thousands of people and have set up drive-through testing centers. Testing has now expanded dramatically in New York. We started late but the production of tests finally ramped up to allow testing tens of thousands of people. Other states like Texas and Florida have been much further behind in terms of testing.

We are going to need a federal coordinated response. States right now are actually competing against one another to acquire ventilators and protective equipment for healthcare workers.

We also need a federal response. A lot of people fled New York for other states and cities over the past several weeks going to other cities. Now the first cases are surging in those other cities. We see New Orleans becoming another epicenter in the U.S. It is speculated that the Mardi Gras festival in February may have drawn a lot of people to New Orleans, some of whom were carrying the infection. In March, Spring break brings lots of students to Florida. The number of infected people is still low in Florida but they are not testing actively. The point is that the pandemic is unfolding differently in different parts of the country. We are going to need a federal coordinated response. States right now are actually competing against one another to acquire ventilators and protective equipment for healthcare workers. And companies that are selling that equipment are raising prices. That’s not a great way to allocate resources in a crisis. Our federal government really needs to step in to prevent misallocation and price gouging and to allocate resources to where the needs are greatest. And the needs are going to change and spread throughout the country at different times. A federal coordinating response could really help.

Last but not least, we also need a centralized monitoring system. One of the strengths we see in the United States is the high level of telecommunication and computerization of daily life that enables the sharing of data despite much of the economy being locked down. Healthcare professionals are able to share ideas and information on the nature of the disease and how to manage it. But we still don’t have the monitoring and measurement system we want that would help us understand where the disease outbreak is at its worst, and where supplies are needed. We have a very weak federal central capacity that is hurting the states that need the most help, such as New York City, Seattle, and California. These places are experiencing major epidemic outbreaks and have to face them without sufficient federal help right now.

With 33 remaining primaries and caucuses and the presidential elections in November, the Coronavirus crisis has put politics in an entirely new light and the impact of the situation on campaigns and elections is becoming increasingly evident. How is Covid-19 reshaping politics?

We are already beginning to see a small shift in the balance of political power because of the absence of quarantined Senators.

This is unprecedented of course, and we are in an election year. One of the very urgent worries is whether our government can maintain its functioning capacity. Members of our Congress have to vote in-person at the Capitol in Washington D.C. Several members of Congress have already tested positive for the disease. We are already beginning to see a small shift in the balance of political power because of the absence of quarantined Senators.

There is also a level of uncertainty about whether our elections can be conducted. Several primary elections in states across the country have been postponed. There are even concerns about whether the November presidential election can be held. But there is still time to sort that out. Certainly, what we see is that the ability of politicians to campaign to the public is threatened.

In a pandemic, the need for strong leadership is clear. We’ve seen very gratifying leadership among our state governors: governor Cuomo in New York, governor Newsom in California or governor Inslee in Washington State have really stepped up by making hard decisions to shut down schools and business activity to control the pandemic. Other state leaders have been less active: Florida is still not willing to shut down businesses for example. We don’t see cooperation. On the contrary, some states are starting to talk about restricting travelers from other states and sealing their borders, something we have not seen since the US Civil War in the 1860s.

Copyright: Johannes EISELE / AFP