Stop Blaming Trump—the U.S. Coronavirus Health Care Crisis Runs So Much Deeper
In the U.S. health care system, failure is institutionalized. Getting rid of Trump in November would not solve the problem.
One of the emblematic images left behind by the coronavirus in the United States will be that of the mass graves dug for many of the victims of COVID-19 in New York City. The visual shock of stacked low-cost coffins in the city that people the world over see as symbolic of the United States rippled across the global media.
Much of the commentary on the handling of the coronavirus pandemic in the United States and the train wreck hitting the U.S. economy over the months to come focuses on U.S. President Donald Trump, personally, and his handling of the crisis. But this focus on Trump is too limiting and ignores the fact that Trump’s policies play out within the U.S. institutional and cultural context—one that would be there under any other president as well. This is not to excuse Trump or his administration. Rather, the point is to recognize that if Trump were to lose in the November election, it would not at solve the most critical flaw in American’s growth model: its health care system.
The basic problem all governments face is how to enable their health care systems to cope with a prolonged pandemic without crushing all economic activity. But the nature of the U.S. health care system makes this problem much more pernicious than in other advanced economies.
Unlike other rich countries, the United States went into this crisis with 27.5 million uninsured adults. Across the labor market—around 164 million people in total—health coverage is tied to employment, but even within this pool some 34 million people have no paid sick leave. Now consider those who have lost, and are in the process of losing, their health insurance because of coronavirus-related unemployment, and you can easily get up to a third of the working population of the country losing insurance by midsummer, a figure that would be compensated only partially by other programs such as Medicaid or by people going on a working spouse’s insurance plan.
[Mapping the Coronavirus Outbreak: Get daily updates on the pandemic.]
Compounding this is that U.S. hospitals find themselves in the bizarre position of firing nurses and doctors in the middle of a pandemic. The U.S. hospital system as a whole faces a liquidity crisis of epic proportions; Boston Consulting Group estimates that almost two-thirds of all hospitals and health systems face material financial risk. Even with bailout money, many hospitals seem to be running on fumes, financially speaking, due to the cancellation of profitable elective procedures to prevent the spread of the coronavirus and prioritize medical resources. Other advanced economies also have private hospitals, but because their share of privately owned hospitals is usually much lower and labor laws often make it much more difficult to fire staff, they have not experienced such layoffs.
Furthermore, a mainly private health insurance system like the United States’ is premised upon insurers minimizing the risks that they cover while maximizing the revenues they receive from employers and employees. If one were to design a system that would collapse when the income streams from payees stop coming in, this would be it. But if insurers go bust, who will fund hospitals when possible subsequent waves of the virus hit and intensive testing is required? Meanwhile, the doctors and nurses who treated the first wave of COVID-19 patients are not just exhausted and often ill from their experiences. Many will also face long-term traumatic effects such as post-traumatic stress disorder, reducing the capacity of the system still further. And on top of all of this, a majority of U.S. states, which fund local health care, are required by law to balance their budgets. So with falling tax revenue, they are also cutting spending while trying to respond to a pandemic.
Within such a system, the lifting of lockdowns can only last until hospitals once again fill up with cases until their intensive care units are full, testing operations face drastic shortages, and there is no more cash for health facilities to operate. To get out of this mess, the United States needs to address three distinct challenges. If it does not, any return to normal will be fleeting, dangerous, and ultimately abandoned.
The first is for the federal government to commission a permanent expansion of intensive care and infectious disease treatment capacities on a scale resembling war economy planning. To reach Germany’s capacity to deal with the pandemic, for example, the United States should triple the number of intensive care beds, with federal funding covering the costs. Rather than relying on pre-coronavirus just-in-time supply chains, hospitals need to construct large storage facilities to prepare to deal with situations such as the current one. COVID-19 is not going to be a one-off event. All of this means a federally funded effort.
The second problem is how to come up with a vaccine and supply expanded hospitals with a ratio of ventilators per million people that, for example, Germany was able to marshal in order to contain mortality rates. This requires large volumes of low-tech and medium-tech supplies. The United States can and should do better.
Contrary to the free market legend, the United States has developed one of the world’s most capable entrepreneurial states, which needs to be retooled to substitute imported medical equipment while innovating a vaccine in a matter of months, not years. It’s a matter of political will, not a lack of skill. Doing so means forcing U.S.-based manufacturers of ventilators, drugs, and tracing apps to forget about technology profits, share their templates with downstream companies, and mass-manufacture these devices in the numbers needed. It means a reliance on centralized effort and federal-state coordination, instead of market competition, to come up with the goods.
It is a damning indictment of what U.S. capitalism has become when the same economy that was able to quickly convert its manufacturing sector to technologically dominate both Nazi Germany and Japan during World War II can’t make enough ventilators, testing swabs, reagents, and personal protective equipment for the medical staff on its front lines in the fight against the coronavirus. These should be the supply problems of a developing country, not of the world’s economic and military superpower.
The third problem is of course the big one: getting back to work. Given how little we know about infection and reinfection rates, getting the economy moving again requires effective nationwide mass testing. It is the prerequisite for lifting lockdowns and returning to some semblance of normal life. Here, the problems are not just supply-related. They expose how the capacity of the U.S. government to manage a crisis over the long term has been hollowed out over the past 40 years by successive administrations.
Even with the entire U.S. pharmaceuticals, biotech, and medical sectors in emergency mode, testing capacity still hasn’t caught up to the German level. Critically, this being a public health issue, the funding needs must be addressed by the government on a much larger scale. The Nobel Prize-winning economist Paul Romer estimated that the real cost of restarting the economy will be 22 million tests a day. In a worst-case scenario of poorly targeted testing, Harvard’s Edmond J. Safra Center for Ethics estimates the total cost of mass testing to reach $500 billion. That is expensive—but so is the GDP lost from lockdowns and social distancing. It would require a federal stimulus program for testing run by a federal agency, a program that could fight future pandemics as well. In short, effective mass testing will require fast decentralization, more competence at the federal level, and a “bazooka” option for funding the whole endeavor.
Finally, to generate usable results, mass testing should be accompanied by systematic contact tracing. This would entail Americans agreeing to use tracing apps of the type being developed by Google and Apple to geotrack all movements and warn Americans of exposure to infected individuals. While this approach has proved highly effective in South Korea and is being embraced by European agencies, in the United States and elsewhere this is considered by many to be an invasion of privacy and a violation of rights. A majority of those surveyed in an April poll, 70 percent of self-identified Republicans and 46 percent of Democrats, are firmly against it. The mandatory use of tracing apps may also not be constitutional. A way around both popular distrust and legal limits could be sunset clauses. That is, the apps could collect limited data that Google would promise to delete after a set period, as demonstrated by Germany’s development of a contact-tracing app designed to avoid both privacy breaches and the risk of having data used after the end of the pandemic. Other European countries have done the same, and the European Commission has provided common guidelines. But given the lack of trust in experts and technology surrounding COVID-19, such safeguards are likely to be insufficient.
Given the peculiar structure of the U.S. health care system, the coronavirus is on track to destroy more livelihoods and economic capacity in the United States than all the major economic crises of the 20th century. If Americans disagree over the details of health care reform, they should at least shore up what they already have so that it fits the purpose of fighting a pandemic. Neglecting to do that will ensure that any attempt to get back to work fails and fails again. Blaming it all on Trump might make some people feel better, but it will do nothing to fundamentally help the nation’s economy and public health.
Cornel Ban is an associate professor of international political economy at Copenhagen Business School.