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COVID-19 and Health Financing: Perils and Possibilities

June 10, 2020

Topics: Quote of the Day

By Adam Gaffney, David U. Himmelstein, Steffie Woolhandler
International Journal of Health Services, June 9, 2020


While the COVID-19 pandemic presents every nation with challenges, the United States’ underfunded public health infrastructure, fragmented medical care system, and inadequate social protections impose particular impediments to mitigating and managing the outbreak. Years of inadequate funding of the nation’s federal, state, and local public health agencies, together with mismanagement by the Trump administration, hampered the early response to the epidemic. Meanwhile, barriers to care faced by uninsured and underinsured individuals in the United States could deter COVID-19 care and hamper containment efforts, and lead to adverse medical and financial outcomes for infected individuals and their families, particularly those from disadvantaged groups. While the United States has a relatively generous supply of Intensive Care Unit beds and most other health care infrastructure, such medical resources are often unevenly distributed or deployed, leaving some areas ill-prepared for a severe respiratory epidemic. These deficiencies and shortfalls have stimulated a debate about policy solutions. Recent legislation, for instance, expanded coverage for testing for COVID-19 for the uninsured and underinsured, and additional reforms have been proposed. However comprehensive health care reform – for example, via national health insurance – is needed to provide full protection to American families during the COVID-19 outbreak and in its aftermath.

From “Potential Policy Solutions”

(At the link below, there is a convenient table that can be converted into a high-resolution PDF that lists various legislative proposals, their policy mechanisms, current status, and potential advantages and disadvantages.)

While many of these proposals, especially the emergency Medicare expansions, could provide some aid to those affected by COVID-19, full protection, in the long-term, would require systemic reform. Addressing financing dysfunctions on a disease-by-disease basis, after all, is neither efficient nor fair. The COVID-19 outbreak hence serves as a reminder of the benefits of a unified, national health program. A Medicare for All reform, much discussed in Democratic presidential primary debates, would achieve universal coverage and address the problem of underinsurance. Such a reform might have additional advantages specific to an outbreak of an infectious disease. For instance, it could provide public health authorities with novel tools to combat epidemics, such as Taiwan’s use of its national health insurance database for case finding early in the epidemic. A well-structured national health insurance reform would also facilitate moving to a more rational and equitable allocation of ICUs and other healthcare resources through health planning and the public-financing of hospital capital expansion. This could help ensure an adequate supply and distribution of resources in the face of future epidemics. At the same time, the nation needs to dramatically increase funding of its public health agencies. A doubling of funding — from around 2.5% of national health expenditures to 5.0% — will not end the current epidemic, but it could help ensure readiness for the next one.

The outbreak has already exposed the multifold inadequacies of the US’ uniquely unequal, privatized and fragmented health financing system. It also illuminates other inequities — including exclusionary policies that deter immigrants from using social assistance programs, lack of universal paid sick leave, and inadequate protections for workers — that weaken our social fabric and endanger the public’s health. As of this writing, it is unclear how severe the COVID-19 outbreak will ultimately prove to be in the US, although the rapidly climbing death toll is already a tragedy. Whatever the future holds, however, the transformation of the nation’s healthcare system and social safety-net is urgently needed.



By Don McCanne, M.D.

Although we have the most expensive health care system in the world, the COVID-19 pandemic provides stark evidence that our health care financing system is highly dysfunctional, wasting tremendous resources while impairing health care access for far too many individuals and families and failing to prevent the financial hardship that should never occur with a high performance system.

Temporary patches have been proposed, but comprehensive reform is absolutely essential. We would be much better off starting with that right now.

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About the Commentator, Don McCanne

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Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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