Book examines ‘cost exposure’ and access to health care services

“Exposed: Why Our Health Insurance Is Incomplete and What Can Be Done about It’’ by Christopher T. Robertson. Harvard University Press, 248 pages, $39.95

Christopher T. Robertson


In 1968, in a seminal article, economist Mark Pauly argued that health insurance drives down prices for consumers in an artificial way. Insulated from the actual price, insured people will be motivated to use more and more health care services.

Universal coverage, Pauly implied, had perverse consequences; to prevent escalating costs for society as a whole health insurance should force patients to make cost-benefit trade-offs.

In the ensuing decades, Christopher Robertson demonstrates, “a cost exposure consensus” has emerged and insurance plans have included deductibles, copayments, and co-insurance as rationing mechanisms.

“In “Exposed,’’ Robertson, a professor of law at the University of Arizona and former student of Elizabeth Warren, makes a compelling case that “cost exposure” reduces access to otherwise unaffordable services and does not reduce costs or enhance decisions and outcomes.

His book is an important addition to a debate that is sure to be front and center in the 2020 elections.

Co-payments Study

More often than not, Robertson demonstrates, cost-sharing is counterproductive. Deductibles, and co-payments, for example, increase emergency room visits and hospital stays. Patients with chronic conditions often stop taking medications (or chemotherapy) prescribed for them.

A RAND Corporation study found that eliminating co-payments would reduce hospitalizations in the United States by 80,000-90,000 people each year, emergency department visits by 30,000-35,000, and generate savings of at least $1 billion.

Out-of-pocket exposure is also associated with anxiety, depression, higher diastolic blood pressure, and increased risk for suicide.

As cost-exposure reduces access to health care, it also adds substantially to financial crises. Sick people work less or lose their jobs; family members stay at home to care for them.

‘Financial Fragility’

As many as one-third of cancer survivors report that they themselves or a relative went into debt (on credit cards, home equity loans, or payday loans, where interest rates can be exorbitant) to pay for treatment.

A substantial percentage of Americans who declare bankruptcy have medical bills of at least $5,000, not including health care expenses charged to their credit cards.

Obviously, poor people are hardest hit by the escalating costs of health care services.

Policymakers, Robertson reveals, define “financial fragility” as a lack of liquid assets equal to three months of income or an inability to access $2,000 in 30 days, a condition impacting 39-46% of Americans.

While the median net worth of all Americans is $97,000, Robertson adds, the figure is about $17,000 for African Americans and $21,000 for Latinos. Because much of net worth is tied up in housing, sickness contributes significantly to the number of foreclosures.

Different Approach

Robertson applauds legislation prohibiting cost exposure for certain preventive services, including wellness visits with physicians in President Obama’s Affordable Care Act.

He supports “a broader strategy” that eliminates deductibles or copays for procedures or prescription drugs “known to provide good value to patients.”

In a tacit acknowledgement that it may be neither feasible or efficient to calculate the effectiveness of every procedure or medication, Robertson prefers an admittedly radical approach that “tailors cost exposure burdens to each beneficiary’s ability to pay.

Working Elsewhere

Scaling health insurance in this way, which would include “means testing Medicare,” he claims, will ensure access to every person who needs it, avoid “false negatives (where patients decline valuable care) and false positives (where patients consume wasteful care).”

Many other countries, including Canada and New Zealand, Robertson points out, have vastly reduced or eliminated cost exposure and spend much less of GDP on health care.

When surveyed, 19% of Americans, 35% of Canadians, and 41% of New Zealanders declare that their health care system works well.

Like other descendants from the British Empire, Robertson concludes, “we might well be happy with an altogether different path.”

Dr. Glenn C. Altschuler is the Thomas and Dorothy Litwin Professor of American Studies at Cornell University. He wrote this review for the Florida Courier.


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