When it comes to health care, every country in the world is running their own version of the same experiment—and the results vary widely in terms of cost and patient outcomes. In the first episode of a two-part exploration of health care, author T. R. Reid takes Nick and Stephanie on a tour of medical systems around the world.
T. R. Reid is the author of the bestselling books ‘The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care’ and ‘A Fine Mess—A Global Quest for a Fairer, Simpler, and More Efficient Tax Code’. He has become one of the nation’s best-known reporters through his books and articles, his documentary films, his reporting for the Washington Post, and his frequent commentary on NPR’s Morning Edition.
TR Reid: Well, I have this radical notion that if one my neighbors is sick or living in pain, we had to provide him healthcare.
Speaker 1: The National Academy of Sciences says about 22,000 Americans die every year of treatable diseases because they can’t afford a doctor. No other country lets that happen.
Nick Hanauer: I like to think of it as the world’s largest price-fixing scheme.
Steph Ervin: From the offices of Civic Ventures in downtown Seattle, this is Pitchfork Economics with Nick Hanauer, in honest conversation about how to make capitalism work for everyone.
Nick Hanauer: I’m Nick Hanauer, founder of Civic Ventures.
Steph Ervin: I’m Stephanie Ervin. I run a lot of our advocacy and campaign work here at Civic Ventures.
So Nick, this is super exciting. We have so much great keratoid to cover with healthcare that we’re going to do two episodes on it.
Nick Hanauer: Yeah. Well, that’s because healthcare in America is such an ungodly mess, so there’s a lot to say.
Steph Ervin: That’s true. Can we set up like why it’s so important that we’re talking on economics podcast about the issue of healthcare?
Nick Hanauer: Well, because if you care about how ordinary people are doing in their lives economically, you can’t ignore one of the biggest costs, necessary costs, unavoidable costs that people face in their lives, and in the United States of America that is healthcare.
Steph Ervin: Yeah.
Nick Hanauer: Obviously, in the rest of the industrialized world, that is much, much, much less of a concern for folks because they have systems that both are much, much more efficient. They just deliver a lot better, a lot more healthcare to a lot more people for a lot less money, but also the plans usually don’t rely in individuals to take care of their, they’re taken care of by the state. Obviously, the United States is the outlier on that and so for most folks, healthcare is a huge pressing economic concern.
Steph Ervin: Right, and in the US, 700,000 people annually declare bankruptcy for healthcare-related expenses.
Nick Hanauer: Yeah.
Steph Ervin: All of the other countries, many of the countries we’re going to talk with TR Reid about and their models, Germany, France, Britain, Netherlands, Canada, Switzerland, zero.
Nick Hanauer: Zero.
Steph Ervin: Zero people are filing bankruptcy because of their healthcare expenses.
Nick Hanauer: Yeah.
Steph Ervin: So it’s a huge problem.
Nick Hanauer: Yeah, and later in the episode, I want to tell the story of my recent healthcare experience in Merry Old England, where I was with my family.
Steph Ervin: Yeah, but let’s talk to TR.
Nick Hanauer: Cool. We will find out if he likes to be called TR or not, which is another thing all together. In an earlier part of my life, I actually financed a healthcare company called Qliance that I was absolutely convinced would help solve the healthcare crisis in America and did a ton of research on healthcare reform and global healthcare models. TR’s book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care was I think among the best books I read in very simple format. He just went around the world looking at other healthcare systems and comparing them to ours. It was just so informative and made it so clearer why our current system is a disaster and how many good alternatives there are to it.
Hey, it’s Nick Hanauer. So-
TR Reid: Hi, Nick. Hi.
Nick Hanauer: … do we call you TR or Tom? How do you like to be-
TR Reid: Yeah, TR. TR Reid that’s the name on the book. My name is Tom, but you better use TR.
Nick Hanauer: Okay. Well, listen, thank you for joining us.
TR Reid: Sure.
Nick Hanauer: I’ve been a long-time fan of your writing. I’m joined by my colleague Stephanie Ervin. Say hi, Steph.
Steph Ervin: Hi, TR.
TR Reid: Hi, Stephanie. Hi.
Nick Hanauer: We wanted to talk to you about the debacle, which is the American healthcare system.
TR Reid: Fine, yeah.
Nick Hanauer: I realized, so you wrote this amazing book The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, deposes a very simple question, which is what do other people do? Why does it appear to work so much better than us?
TR Reid: Yeah.
Nick Hanauer: The interesting thing is that it seems like it’s gotten worst since you published the book in about 2010.
TR Reid: Yeah, that’s definitely true. When Obamacare took effect that was January 1st of 2014, it did expand the insurance coverage. Probably 20, 21 million Americans who didn’t have coverage before got that from Obamacare and number has now been dropping. Today we’re at about 32 million Americans with no health insurance. That’s worse than it was two years ago. Prices are higher, deductibles are higher. There’s really nothing better in the last two or three years. Things have gotten worst for Americans in terms of healthcare.
Nick Hanauer: Yeah. I was just looking at the latest numbers. In 2017, we spent $10,200 per citizen on healthcare in America versus the comparable country average of 5,300, but Canada is 4,800 or something like that. The numbers are just astonishing that we spend easily twice as much as per citizen for a system that covers fewer people with less efficacy.
TR Reid: Yes, that’s right. The other countries cover everybody. They have better results, longer life expectancy, better recovery rates from disease and injury, and spend on average half as much. When I say, “Come on, we’re decent people. Let’s create a system that will cover everybody at reasonable price.” People say, “It’s on American. You wanted socialism.” No, what’s on American is to pay twice as much as France and gets last. That’s on American I think.
Nick Hanauer: Exactly.
Steph Ervin: Exactly.
Nick Hanauer: The beauty of your book was the way in which you very sort of simply took people through the alternative systems. Would you mind kind of taking us through that? What are the alternatives to the American system?
TR Reid: So if you look at countries like us, I mean advanced, high-tech, free-market democracies, these are basically the members of the Organization for Economic Co-operation and Development, the OECD, that kind of the UN pro-rich countries; they’re 35 of them. All of the other advanced democracies provide healthcare for everybody. All of them have better health outcomes, better recovery rates than the US, and on average they spend half as much. The key point I think is that they all made a commitment to cover everybody. If you do that, if you have a system, a coherent system that covers everybody, it will always be more effective, and it will always be cheaper than this crazy quilt-fragmented system we have. So they all made that commitment, cover everybody. They agree on that destination, but they all found different roots to get there.
In my book, there are four models of healthcare. So one, it was kind of developed in Great Britain. In this model, taking care of people’s health is government’s job, like running the library, picking up the trash, putting out fires, pay them the streets. If you’re sick or need healthcare in Britain, you go to a government-owned hospital. The doctors, the nurses, the lab technicians are government employees and government pays the bill. 98% of the people in Britain never get a doctor bill in their whole life. When I was there, they said to me, “You Americans, you’re always paying doctor bills. Why would you want to do that?” Yeah, well, but I need to point out it’s not free. They do pay for healthcare. There’s no free healthcare. They pay for it through taxes and taxes are high. The sales tax and everything you buy in Britain is 20% that pays for this healthcare system, but it turns out to be a very efficient and cost-efficient way to run healthcare.
The Brits cover about 62 million Brits, maybe 15 million alien workers. They have better life expectancy, better health outcomes than the US and they spend about 44% as much per capita as we do and cover everybody. So they’re getting more and spending less, but it’s a government system. In fact, when people complain about socialized medicine, I would say, “Yeah, the British system where government provides the care and government pays for the care that sounds like socialized medicine to me.” So that’s one approach. You know what? It works and therefore it’s been copied in a lot of countries. Spain, Italy, all of Scandinavia, New Zealand, Cuba is the famous example of that kind of the British model socialized medicine.
I don’t want you to go away thinking the only way to cover everybody is some big government many state program because if we jump across to the mainland of Europe, in Germany, we find the mirror image of the British system. Germany covers everybody with private insurance, private doctors, private hospitals, private labs. Germany has much less government involvement than the US. When Americans turn 65, everybody goes on the government insurance plan, Medicare. In Germany, they stay with private insurance, quite look great. We have Medicade that’s a government insurance plan for people. In Germany, poor people are on private insurance and the government subsidizes the premium. So that’s a more private system than we have. Private insurance paying private doctors and that system works, too. Germany covers about 87 million people, much better health statistics than the US. They spend about 62% as much per capita as we do.
So in capitalist countries that don’t want big government, a lot of them have copied this. So it’s used in Switzerland, Netherlands, Belgium, sort of into a degree in France, and Japan. Japan just copied the German private system the whole log. They cover everybody. They spend much less and have better outcomes. So Britain I told you that’s largely a government. That is a government system. This German model is private. It’s more private than the US.
Then another approach is kind of a marriage with the two where the insurance plan, the payment plan that pays the bills is a government plan. The doctors, hospitals, labs are private and that is called National Health Insurance; that’s what the economist call it, that was devised in Canada in the 1940s, and it works pretty well. It doesn’t work that well in Canada. Have you heard about the long waiting times in Canada? I think it’s true. I mean, the Canadian just don’t spend much on healthcare and therefore the system isn’t working throughout there. It’s used in South Korea. It’s used in Brazil. It’s used in Australia. This is a system that works pretty well. As a matter of fact, the Canadian model that is government insurance paying private doctors work so well that when we decided to give health insurance to our seniors, we created a system Medicare, which is the Canadian model of healthcare. It’s government insurance playing private providers.
So I’ve just given you three basic models. One, the government does everything; two, everything both the provider and the payer is private; and then the Canadian Medicare model. The providers are private, the hospitals are private, but the insurance is public. Then the fourth model, which is the most common in the world is no health insurance, no health plan. For the poor countries in the world where per capita income is like two hours a day, $700 a year, in those countries just food and clothing and shelter, tough enough healthcare is the luxury in African countries, most of India, lot of South Asia. Rich people get healthcare in those countries and the rest of the people are either stay sick or die. So those are kind of the four models. In the rich countries where they cover everybody, they do it in one of the first three.
You know, Nick, the interesting thing I found when I did this book is I went around the world for about two years looking at these plans to figure out how they worked. I made a movie about it for PBS. They sent me back around the world, pretty good deal, to see the same docs and everything, make a movie, and please don’t tell-
Nick Hanauer: What’s the documentary called?
TR Reid: It’s called the Sick Around the World. It’s terrible title. It’s pretty good movie and went a lot of words. Sick Around the World, it’s on pbs.org. You can stream it.
Steph Ervin: You can find it online.
TR Reid: Sometimes every once in a while it’s on Netflix. Here’s the thing. I don’t want you telling the accountants at PBS this, but guess what? I could have seen all the different models of healthcare and never left home. Because right here in the United States, the world’s richest country, we’ve got them all. We’ve got them all. If you’re a military veteran like me or active duty military, well, those people live in England for healthcare purposes. The hospitals are owned by the VA. The doctors work for the government you don’t get a bill. That’s the British model of healthcare. There are about 19 million Americans on that model. If you’re sharing the cost of private insurance with your employer, private health insurance, that’s the German model of healthcare. About 160 million Americans on that model. If you’re a senior on Medicare using government insurance to pay private doctors, as I said that’s the Canadian model. If you’re one of the 31 or 32 million Americans with no health insurance, they live in Afghanistan or in Angola for healthcare purposes.
We’ve got them all in the United States. That’s the fundamental reason Nick why we pay more because our system is so complicated and fragmented and it works across purposes. The other countries all do better because they all agreed that everybody are to be covered and everybody are to be covered in a single model. If you do that, then you can get good healthcare at decent prices.
Steph Ervin: TR, why do you think we, as Americans, struggle to get to the same conclusion that everyone should have healthcare?
TR Reid: You and I go back and forth on that to take in my book. At the beginning, I say we’ve made this choice. We’ve decided we don’t want to provide healthcare for everybody. At the end of the same book, I said, “Well, if Americans only knew how cruel our system was, we’d fix it.” I think a lot of Americans don’t know. I go around the country, giving talks, and I say, “You know, there are 32 million people with no health insurance.” According to the National Academy of Sciences, about 22,000 Americans die every year of treatable diseases because they couldn’t afford to see a doctor. This is true. People say, “No, no, no. We wouldn’t do that. That couldn’t happen. That won’t happen here.” Yeah, it happens in the United States every day, but Americans don’t believe it. We wouldn’t be that dumb. We wouldn’t be that cruel, but we are.
So I think it’s partly because we have this complicated system that just developed and Americans don’t know how cruel it is. The other thing is we believe very strongly that the private sector, the private markets are the best way to do almost everything. As it turns out in paying for healthcare, paying for healthcare is an area where governments do better. If look at these systems with government payment plans, they’re all much more efficient than the US system with multi-players, and the insurance companies or private insurance companies have the highest administrative cost in the world. So we think, oh gee, we want the private sector reduce stuff. I agree with this, I mean, I don’t want the government designing my cell phone. I think Apple is doing a pretty good job on that. It turns out in healthcare finance, government systems are significantly more efficient. So it’s hard for Americans to face up to that except those Americans who are on Medicare. That’s a government insurance plan. Americans on Medicare by huge margin 70, 75% say it’s the best insurance they ever had.
You may remember two, three years ago, the Republicans in Congress are talking about replacing Medicare with private insurance for seniors and That plan lasted about two months. All the senior groups said, “No way, no way. We’re sticking with Medicare.” So we tend to think that private sectors are going to do a better job. In many areas, it does. In terms of high healthcare finance, it’s been proven around the world this government systems are more efficient.
Nick Hanauer: So in my role as an entrepreneur did a stint trying to build a business that sought to basically disintermediate health insurance companies from 90% of healthcare transactions that aren’t traumatic, right, [crosstalk 00:18:24].
TR Reid: Yeah, yeah, yeah.
Nick Hanauer: Eventually, we couldn’t get the business scale because the insurance business, insurance industry just had a stranglehold on… They have a stranglehold on the healthcare system and there’s just no way to do it, at least we couldn’t. It certainly taught me a lot about how the system works, which by the way is how we ended up reading your book, and which struck me about our system is it’s basically the world’s largest price-fixing scheme.
TR Reid: Yeah, that’s a very good way to describe it.
Nick Hanauer: Yeah, like if we thought a blood test through an insurance company, that blood test might cost $100. If we paid cash money, it was $12. Colonoscopy in one place costs $5,000. The same procedures in other place would cost $600, which is incredible how much craziness there is in our system.
TR Reid: One of the smartest investments the insurance companies have made is they bought congressmen. They have enormous clout in the US Congress and every state legislature, and I’ll give you an example. When Obamacare was being debated, the original plan of the bill tried to cut the administrative cost than insurance companies can add to every doctor bill. Their lobbies went it and wrote into the wall that they can add 20% administrative cost to every doctor bill. They wrote that into the wall. That’s one of the key reasons we’re the most expensive. I told you Germany has private insurance. Their private insurance companies have administrative cost of 5.5%. That’s the most they’re allowed. Our guys have four times as high cost and yet the CEOs of our insurance companies make 50 times what the Germans make. So they can get away with that because they have political clout in every legislature.
Nick Hanauer: So said in other way, of the $10,200 that Americans are spending on health insurance per year per citizen, an additional $1,500 simply goes to the bottom lines of private insurance companies. Above and beyond what the German companies would charge, it’s 15%.
TR Reid: Yeah, exactly. Well, I mean, if you take Medicare, which is government insurance plan run by government bureaucrat, their administrative costs are 2.8%. So you could pay for health insurance much more efficiently than our private insurers do. Since they have the legal right, which they wrote into the bill to add 20% to every bill for their cost, they really don’t have much interest in keeping bills down. The bills goes up, they get more. So the whole incentive structure of American health insurance is upside down, as you pointed out the reason why we pay more.
Nick Hanauer: The bigger aha for me when working on this problem was that if you’re a private insurer, you have a massive economic incentive to try to turn molehills into mountains. In other words, why in the world would you want to send somebody to a primary care doctor to burn a wart off for 50 cents when you can send them to a specialist and charge $2,000? Because if your vig is 20% on whatever it is, the bigger the better.
TR Reid: Yes. In addition to that, they cut deals. They have their own networks and they cut deals with those particular doctors for special rates. This really bugs me. The insurance companies dictate which doctors you can see. They call this narrow networks. There’s no country in the world that has narrow networks. In all the other countries, people, patients get to choose the doctor. In America, your insurance company tells you what doctor you could see.
Nick Hanauer: Yeah, it’s totally nuts. So if it was you, what do you think we should do as a nation?
TR Reid: Well, when I started on this work, as I said, I went to Germany. I saw everybody is in private insurance. You split the cost of insurance with your employer. The docs are private. The hospitals are private. I thought, boy, that’s the way to go. Let’s get everybody cover in the German style system. I’ve noticed that it won’t work in the United States and the reason is I think the private insurers just have too much power. They won’t accept the kind of rules the German insurance companies live with. For example, in Germany, they’re not allowed to dictate a network of doctors. You can go to any doctor, any hospital, any lab in whole country and insurance has to pay. They’re not allowed to deny claims. About 30% of medical claims in America are denied at least the first time. In Germany, if the doctor certifies a claim, they have to pay and get this. In Germany, the insurance company has to pay both the doctor and the patient within three days. Anybody in America-
Nick Hanauer: Wow.
TR Reid: … has that deal? Nobody has that deal. Our insurers don’t want to do that even they make a lot of money. They take 40 to 60 days to pay a bill. They make on the float and they have the political clout to resist. So I don’t think putting everybody on private insurance will work in the United States. I used to, but I don’t think it will now. So I think we’ll most likely going to end up with some kind of government run plan, which covers just about everybody.
There are various ways you could do this. One way is sort of vertical. You could expand Medicare downward. Expand Medicare to 60 and then 55 and then 50. I think we might get that passed the insurance industry because those companies make good money selling supplemental insurance on basic Medicare. Another way to do it would be what some people call expand horizontally, that is take the government programs that exist already, the TRICARE for military members, the VA and the ML service, and expand them out to cover police, teachers, et cetera and then cover everybody. What I’m saying is gradually expand the existing government programs to cover more people.
I think is the most likely way we’re going to do it I’ve noticed several of the Democratic candidates have proposed the kind of buy in where people can buy in to Medicare at any age without waiting until they’re 65. I think that system would work. Most people are not terribly satisfied with the private insurance they have now. Medicare would be cheaper and would give you a broader choice of doctors. So I think maybe the public option, or the buy in in some government program may be the course we take. The insurance companies hate that idea because they know they can’t compete with the government plan.
Nick Hanauer: Right.
Steph Ervin: So wouldn’t it be better for business, American businesses if we had a universal model or expanded Medicare for all like to take the burden of trying to provide employee, employer-provided healthcare? Wouldn’t that make us more competitive with nations who have that?
TR Reid: Yes. Many businesses and large business organizations say that and the reason is, October and November when they go to their health insurance provider for the coverage for their employees, they don’t know. It’s one of their biggest costs and they don’t know what it’s going to cost next year. Over the last six years or so, health insurance premiums have gone up about five times the rate of inflation every year and companies get stuck with that and so here’s what they do. They pay a little more. They stick their employees with a higher deductible or a higher share of the premium. Nobody is happy with this. I keep asking Chambers of Commerce why do you want to do this, why do you want to do this. I think a reason is in most Chambers of Commerce, the local insurance industry has very powerful voice and therefore they’ve been fighting upon. Many employer groups that have looked at this have said, “Yeah, let’s get out of paying for health insurance and let somebody else take this over,” like for example maybe the government.
Steph Ervin: Right. Wouldn’t it be better for business if people were healthier also.
TR Reid: Yes, exactly. Yeah, you don’t lose your employees to sick leave. Exactly right, it would be better to have a healthy workforce. You knew that your employees and their families could get reliable care at a decent price. It would be much better for the employer. They’d rather not worry about this. Plus for the employee, if we went to a government health insurance system, it would almost certainly be cheaper than private insurance and therefore that money that your employer is paying for the premium presumably would now go into your salary.
Nick Hanauer: Right.
TR Reid: By many estimates-
Steph Ervin: Right.
TR Reid: … salaries would go up between 10 and 15% for everybody if employers didn’t have to pay the health insurance premium. Here’s the thing, Medicare, it only covers people over 65 and people with disability.
Nick Hanauer: It has to cost a lot.
TR Reid: So it’s expensive.
Nick Hanauer: Yeah, yeah.
TR Reid: They’re covering… It’s like you sold auto insurance only to the blind. You have the most expensive tool. This is one of the reasons why-
Steph Ervin: For only young men.
TR Reid: … Yes, right. Yeah.
Nick Hanauer: Teenage boys.
TR Reid: Yeah, teenage boys was exactly right. This is one of the reasons why expanding Medicare to younger populations would be great. If we had a bunch of 20-year-olds paying the monthly premium and not going to the doctor, Medicare would divide the extendable operation. So that’s why auto insurance works because most people pay the premium and don’t have wrecks, and that’s what Medicare needs too.
Nick Hanauer: Interesting, interesting. So are you… Do you substantially agree with the sort of Medicare for all or Medicare for whoever wants it sort of policy prescriptions that are emerging?
TR Reid: Yeah, I think that’s where we’re going to end up. I don’t think… I’ll tell you a few things about it. The opponents of Medicare for I’ll say, well, this would be the end of private insurance. No, as I said, the insurance companies they all sell Medicare supplement plans. They make good money on it and that’d be fine. Medicare can provide a basic floor of coverage for everybody. Then if you need more, if you need Botox, I you need breast enlargement, hair replacement, there are lot of things that health insurance could still, private insurance could pay for. So we could still have private insurance.
You heard the argument, o God, Medicare for all it would bust the bank. It’s too expensive. One famous estimate done at George Madison University said that it would cost $32 trillion over 10 years. That’s kind of a staggering number, right? Well, this year, we’re paying $3.4 trillion for healthcare. That’s 34 trillion-
Nick Hanauer: Yeah, right.
TR Reid: … over 10 years. It’s more. We’re paying more now than we would pay for Medicare for all. Taxes would go up and your health insurance premium would go down more than your tax bill went up. So I think and… When people realize this, they’ll see it. People don’t like the government… Americans don’t like the idea the government getting between me and my doctor. The answer to that is what the moment the insurance agent is between you and your doctor. Every doctor in America has a story about calling Minnetonka Minnesota; that’s United Healthcare, to argue for why they won’t cover such and such a procedure that’s needed. So somebody is going to be there and I think I’d rather have the government that I can control rather than the board of some health insurance company in Minnesota.
Nick Hanauer: Do you think that there’s hope for state-based plans to lead the way in disrupting these old models?
TR Reid: Well, I thought so. If you look at American history, a lot of really important ideas in our history has started-
Steph Ervin: We agree.
TR Reid: … in one state. Yeah, female suffrage-
Nick Hanauer: Everything.
TR Reid: … minimum wage-
Nick Hanauer: Everything.
TR Reid: … child labor, interracial marriage. Marijuana, of course, started in my state of Colorado. I always say we’re the highest state in the country in more ways than one. So that is a good way and as a matter of fact, in 2016, we in Colorado put a measure on the ballot to create a state-run health insurance plan to cover everybody, and there were two problems. One is they made TRE the chairman of the campaign, which was a terrible idea politically. The second was the insurance companies ganged up on us. They spent $8 million to defeat us and so we lost. I think this could be done if eight or 10 states set out to do it in the same year and that would dissipate the insurance companies money and some states would get it done. In which case, the other states would see that it works just like gay marriage and female suffrage and they’d adopt it, too.
So I think state by state may be the way, but we may not have to do it that way because the Democrats in 2020 are definitely going to run on some form of universal healthcare. If they win, maybe that will be the lever to get us moving.
Nick Hanauer: So in Washington State, we did pass this year a public option.
TR Reid: I saw that. It’s great.
Nick Hanauer: So this may be the beginnings of an experiment that can prove some of the… They can prove to people that there’s a better way than being jacked around by private insurance companies for the rest of [crosstalk 00:300:33:13].
TR Reid: I think you make it work and then if Washington does it or then we’ll to have to do it. They never what you’ve been on anything and then we’ll do it, too. Here’s what I say. I say I’m pretty sure whoever is the Democratic nominee for president in 2020 will come out for-
Nick Hanauer: Oh, for sure.
TR Reid: … some kind of healthcare for all. If the Democrat arguing the Medicare for all is ahead by 20 points in July, then Donald Trump will come out for Medicare for all. I don’t think there’s any question about it. So there’s a good chance we’re going to get there in the next few elections.
Nick Hanauer: Yeah, cool.
Steph Ervin: I appreciate that you seem to really think the way we do, TR. We’re fellow travelers.
TR Reid: Well, I have this radical notion that if one my neighbors is sick or living in pain, we had to provide him healthcare in the world’s richest country. That would be a nut [crosstalk 00:34:04].
Nick Hanauer: Communist, you know? Communist.
TR Reid: Yeah, yeah, yeah, exactly. Exactly, yeah. That’s what I believe.
Steph Ervin: Is that why you started doing this research and this kind of analysis? Why do you do this work in the healthcare space in particular?
TR Reid: I was a foreign correspondent. I worked for the Washington Post. I worked around the world. Our family of six Americans was living in Tokyo. We were Americans. We know America does everything best, so we were kind of scared taking our kids to foreign doctor. One of my daughters gets earaches all the time. My son broke his clavicle. We had to go to the doctor and here’s what I found in Japan initially and then in the other rich countries. The facilities were fine. We didn’t have to wait very long. The care was just as good in the United States, absolutely American standard, and the bills were minute. The bills were one-tenth or one-twentieth, which we would pay. In fact, when we live in Tokyo, quite often I didn’t bother to send the medical bill back to the insurance company in Washington because the postage was more than the medical bill.
So that’s how I got started, how can they provide excellent care in good facilities to everybody at these low prices, and so I went around the world and wrote this book The Healing of America. That’s really I get started from our own experience. In the course of that, I discovered the most important thing, which is the first thing I told is, a country has to commit to cover everybody. If you make that moral commitment, dog gone into somebody sick, we’re going to get him care, then you can come up with a system to achieve it.
Nick Hanauer: I think what the experience of all these other country shows is that once you make that commitment to assist them that will do that, the scale economies and the efficiencies follow then you wind up with a system, but those-
TR Reid: Exactly right. That’s a very good way to put it, yes.
Nick Hanauer: The commitment addressing everybody’s problems forces you to organize a system, which is both fairer but also more effective and efficient. I think that’s where we have to get if we’re going to get our economy back on track and make people feel like the system works for them.
TR Reid: Well, I gotta tip my hat to you. That’s a very good way to put it. It’s exactly right, I think.
Nick Hanauer: So we’re excited to talk to you also for a few minutes about your new book on taxes. Can you tell us a little bit about that?
TR Reid: We have the most complicated, most inefficient and a highly unfair tax code in the United States and other countries do it better. So I did it again. I went around the world and looked at tax codes around the world to see if we could have a fairer, simpler and more efficient code, and the answer is yes. Many countries have done it better than we have. I’ll just give you one example. Just filling out the form. According to the IRS, an average family at the median income of about $59,000 spends 18 to 20 hours gathering the data and filling out the forms. The average price for a person with median income is about $260 to have your tax return done.
In the Netherlands, same process takes about 15 minutes and zero dollars. In Britain and Japan, it takes one minute because in those countries, the government fills out the form for you. They know all the numbers and they send you a completed form. If you don’t like it, you can reject it and fill out your own. If it looks right and it’s always right, you click a button and you’re done. When I was doing this book, I was with my reporter in Japan. Togo is the reporter I hired in Japan. I said, “Chika, I want to see you file your tax return,” and he says, “What do you mean file my tax return? I got this postcard from the IRS and it says here’s what you owe and they’re always right.” I said, “Gee, that’s funny. In America, people have to keep shoe boxes full of documents and spend hours filling out forms.” Togo says to me, “Why would anybody want to do that?”
Steph Ervin: [inaudible 00:38:19]
TR Reid: Exactly. So what I found was there are many ways that we could improve our tax code. Many countries have found this in a more intelligent way and we could learn from them.
Nick Hanauer: I love it. I love it.
TR Reid: Anyway, I threw every tax joke I ever heard into this book [crosstalk 00:38:40]-
Nick Hanauer: Oh, good.
TR Reid: … alleviate the pain.
Steph Ervin: Not easy.
TR Reid: Yeah, yeah.
Nick Hanauer: Okay, well, this has been perfect and fascinating. I really appreciate you taking the time to chat with us today.
TR Reid: Thank you so much. Thanks for having me on.
Nick Hanauer: Okay, take care.
TR Reid: Yeah, sure. Bye.
Steph Ervin: So I loved our conversation with TR. I really feel like I got a good overview of the different models that exist out there and what he thinks is possible here in the US. You had a recent experience with international healthcare system.
Nick Hanauer: I did. I did with this crazy thing. So I was in London with my family. We had this really interesting experience, which is my wife and I were going to bed in our hotel room. At 12:30 AM in the night, our daughter knocked on the door and said that we had to come to the door. We came there and she was holding her hand and a puddle of blood in her palm. She and her buddy had been out and about. Probably she had been to bed but they’ve been out and about and she had fallen and her hand really quite badly hurt the palm of her hand on some glass. So we called the hotel and the little medic dude came up and said, “You need to go to the hospital.”
So 12:45 or whatever it was in the evening, my daughter and I got in a cab and off we went to a local hospital and to the emergency room. Our timing was horrible because it was, I don’t know what night it was, but the waiting room is packed.
Steph Ervin: That there are other several people who had maybe gotten too much trouble [crosstalk 00:40:23].
Nick Hanauer: Yeah, exactly. It was packed. We went up to the window and we filled out a very short form that, our name, our address, a phone number where we were staying, but notably no credit card information, no health card, number information, nothing else. It was a very simple form. 30 minutes later, we went in to see a triage nurse who took a look at my daughter’s hand and wrote up something and said we had to wait, and then we did wait indeed. We waited for another four hours or something like that as the rest of the people in the waiting room [crosstalk 00:41:06].
Steph Ervin: Probably more serious.
Nick Hanauer: Yeah, some of them, but they may not have been more serious. My daughter was not in any grave danger and everybody else had gotten there before us. It was really annoying that almost no one came in after us, but everyone was in bed. At about 5:00 in the morning, it was finally our turn. They took her away. They X-rayed her to make sure there was no glass in the cut. She came back then we went in to see this very nice doctor who took a look and cleaned it out again and then made sure it was okay and then glued with wound shut and gave us some bandages and gave us some more bandages, and thanks us and shook our hands. Then I was like, “Okay, so where do we pay?” She’s like, “No, no, no, you don’t have to pay.” Then I’m like, “Where’s the paperwork? Isn’t there something I sign?” She’s like, “No.”
That was the most shocking thing about it. I mean, the thing is that, I mean, not only didn’t we pay for anything and we’re foreigners, right? You would have thought they have been asked for something.
Steph Ervin: Happy to guide you [crosstalk 00:42:20].
Nick Hanauer: Something, something. Yeah, exactly. Something, some amount of money, but it wasn’t just that they didn’t want money. It was that that interaction with their healthcare system didn’t generate any paperwork. There was no bureaucracy that got involved as a consequence of noted bilaterally daughter’s cut on her hand, which is like, “Hey, you came in. We knew how old your daughter was and we knew that she didn’t have any health problems and we kind of got a phone number. I think we’re good now and we’ll see on down the road,” and that was it. The shocking simplicity of it was really arresting. It explains why their healthcare outcomes are better than ours, right? Because if you wanted to take money and if you wanted to track it in an insurance system, the amount of paperwork and computers and people and crop that it would take to do that, would have been 10X would it actually cost to just take care of the problem. It was a really vivid example of why our healthcare system is so screwed up and why we need to reform it.
Steph Ervin: You also didn’t have to deal with any of the bureaucracy or concerns of insurance on the front end, right?.
Nick Hanauer: No.
Steph Ervin: Many people called the hospital-
Nick Hanauer: Oh, my God.
Steph Ervin: … in advance to make sure it’s within their network and the doctors that are providing the care once that their insurance will cover-
Nick Hanauer: All this bullshit.
Steph Ervin: … or the potential expenses one that they’re willing to take on.
Nick Hanauer: Exactly. All this bullshit makes the actual doctoring, which is quite simple and cheap, really expensive. She’s got rid of it all just took care of people. Healthcare costs go down dramatically. I think it was a shocking and vivid example of how you can just do it better.
Steph Ervin: Right. Well, that’s a super interesting story. It was great to hear from TR’s personal experience throughout international travel [crosstalk 00:44:31] he’s on investigating this issue. It will be exciting on our next episode on part two to talk more in-depth with Nina Turner who is the co-chair of Bernie Sanders’ presidential campaign, and we’re going to talk exclusively about Medicare for all.
Pitchfork Economics is produced by Civic Ventures, the magic happens in Seattle in partnership with Larj Media, that’s L-A-R-J Media, and The Young Turks Network. Find us on Twitter and Facebook at Civic Action. Follow our writing on Medium at Civic Skunk Works and peek behind the podcastings on Instagram at Pitchfork Economics. One more, you should definitely follow Nick on Twitter @NickHanauer.
As always, a big thank you to our guests and thanks to you for listening from our team at Civic Ventures, Nick Hanauer, Zach Silk, Jasmine Weaver, Jessyn Farrel, Stephanie Ervin, David Goldstein, Paul Constant, Stephen Paolini, and Annie Fadely. See you then.