Reinhardt’s Final Work

As someone who followed the late Uwe Reinhardt’s writings and lectures for thirty-five years, I was not the least bit surprised that the final image in Priced Out, his final tome on US health policy, was of a motorcycle accident. Reinhardt had a propensity to shock, and there are numerous moments in this book that will remind readers like myself how much we will miss both his colorful imagery and his brutal candor.

Priced Out is an unsparing and sobering analysis of the United States’ unfinished health policy agenda. After reflecting on a key flaw in Obamacare—the lack of a robust individual mandate—Reinhardt offers both a solution and an object lesson to a hypothetical twenty-six-year-old contemplating declining health coverage: either bear some of the cost of your fellow citizens’ health coverage by becoming insured through a community-rated policy, or be required to reimburse the government the cost of any publicly subsidized health coverage you receive for life.

The motorcycle accident photo showed the “rugged individualist” who presumably declined coverage and will pay the price. We will never know for certain whether Reinhardt’s solution was a serious proposal or a heuristic device to help teach us something about subsidy flows and the price of citizenship, but they were Reinhardt’s last published words before his death in November 2017.

Uwe Reinhardt was an unreconstructed European-style social democrat. In a social democratic system, social solidarity flows from treating each citizen fairly. The pivotal question in Priced Out is: “Should the child of a poor American family have the same chance of avoiding preventable illness or of being cured from a given illness as does the child of a rich American family?” After seniors, US children have the highest rate of health coverage of any population group (97 percent are insured due in major part to the Children’s Health Insurance Program), and yet the US flunks Reinhardt’s test.

Priced Out applies social democratic principles of distributional equity to the present-day US health care system and finds failure everywhere: higher costs, incredible complexity and opacity, and unresolved disparities in both access and health. As he did in his sparkling public lectures, Reinhardt offers an accessible “masterclass” in how US health care is paid for and where the money goes. Indeed, the book, including a beautifully written epilogue by Reinhardt’s wife and partner in international health policy, Tsung-Mei Cheng, reprises many of those lectures. The book also provides a critique of the 2010 Affordable Care Act (ACA) and the ill-fated attempt by President Donald Trump and congressional Republicans to “repeal and replace” the ACA in 2017.

This book offers a bracing civic education. Though it contains many object lessons, by far the most compelling is the merely six-page chapter devoted to the question: Who pays the $3.7 trillion we spend on health care every year? The answer, obvious to economists but almost nobody else, is: The individual citizen pays every penny—not only through a big chunk of their free household cash flow but also through their taxes and, crucially, income that no longer flows to their paycheck but rather is diverted into employer-sponsored insurance, the costliest brand of coverage in the world. The fact that so much of the huge health care bill is hidden from the consumer is one reason why it is so hard to sustain voters’ attention on this topic.

While it is painful to see how poorly we measure up to Reinhardt’s social democratic standard of equity, it is not hard to understand how this came to be. The United States is not now and has never been a social democracy. Even during the New Deal and Great Society periods that gave us so much of our present social safety net, the United States was and remains an interest-group democracy.

We came by our present not-universal system of health coverage by fits and starts over a century of political improvisation. Think of our system as a ramshackle house with a leaky roof, built in wings and floors over a century as money became available. From 1920 to 2010 we covered, seriatim, veterans and active duty military, then workers (the unionized first), Native Americans, the elderly and categorically needy, the disabled and those suffering from kidney failure, non-needy children, and finally at least some of the working poor.

The focus on creating special entitlements for all of these favored groups had a political cost: It progressively diffused the urgency for a true universal system by removing politically compelling constituencies from the ranks of the uninsured, thereby making it more difficult to hew to the social democratic ideal that Reinhardt prized, where all citizens are treated equally.

These covered groups constitute what Paul Starr has called “the protected public,” whose main interest is in not seeing their group’s entitlement impaired or diluted by efforts to cover others. President Barack Obama discovered this during the 2014 kerfuffle over his broken campaign promise: “If you like your health plan, you can keep it.”

Those who remain out in the cold are a diverse bunch, united only by their marginality or invisibility and lacking organized advocacy in Congress. Racial and ethnic minorities still account for almost half of the uninsured. More than a quarter of the uninsured are people ages 45–64, who have fallen through the cracks of employer-based coverage and Medicare. Another large chunk is the four million-plus undocumented folks who enrage the American right. The divorced, separated, or never married also are far more likely to be uninsured than married people.

Yet, a surprising percentage of the presently uncovered—more than one-third—have incomes over $75,000 a year. And according to a January 2019 Kaiser Family Foundation analysis, nearly 19 million of the roughly 27.4 million nonelderly uninsured are eligible for either Medicaid, subsidized exchange coverage, or employer-based coverage but decline it for a host of reasons—including stigma, high cost, lack of awareness of eligibility, or competing priorities—which brings us full circle to Reinhardt’s image of the motorcycle accident.

For all his idealism, Reinhardt was a denizen of the real world. As we approach the 2020 election cycle, with proposals for “Medicare for All” in the air, Cheng offers evidence in her epilogue that Reinhardt did not favor single-payer health care for the US. The reason: Because the US political system has been so captured by special interests, it cannot manage a single-payer system responsibly. How we get from where we are today to Reinhardt’s vision of an equitable society is not obvious.

One wonders after reading it how to ensure that the book achieves the broad distribution it deserves, especially among the young people and newly minted legislators and members of Congress who will not get a chance to hear Reinhardt in person. For his insistence on high ethical standards and for teaching us all how the US health care “wonderland,” as he calls it, really works, we owe Uwe Reinhardt a large debt of gratitude. Buy and read his last book. Then give it to a younger friend.