The pandemic has laid bare the deadly dysfunctions of market competition compelling even centrist Democrats to rethink how health care is delivered and financed.
New York Governor Andrew Cuomo — a fierce opponent of progressive policies — has merged private and public hospitals into a single, de facto statewide public health system to coordinate patient capacity, equipment, and staff. All of the state’s hospitals are now required to act as a single “network” for admissions, meaning patients can go to any facility without regard to insurance coverage. In order to prevent any one hospital from being overwhelmed, patients are being transferred from New York City to Upstate New York, and doctors and nurses vice versa. In private hospitals, where beds are paid for by patients and insurance, these transfers defy the normal incentive to keep beds full.
When the crisis first hit New York there was no coordinated response, resulting in overcrowding and shortages of staff and equipment. Some hospitals were bursting at the seams with patients, while others had empty beds. Public hospitals were setting up outpatient testing centers, while private ones were not. Staff in some hospitals had plenty of personal protective equipment (PPE), while nurses elsewhere were wearing trash bags for gowns.
It wasn’t until the state forcefully intervened that hospitals started working together. An emergency executive order issued March 23 empowered the health commissioner, Howard Zucker, to take over hospitals with just twenty-four hours notice if they fail to comply with orders. Zucker has yet to do so, but the threat alone is powerful.
In addition to coordinating hospitals, Cuomo and the governors of six neighboring states (New Jersey, Pennsylvania, Delaware, Connecticut, Massachusetts, and Rhode Island) recently announced they’re forming a consortium to purchase and allocate PPE and medical supplies on a massive, regional scale. Again, intense competition and lack of coordination were the impetus. A frantic scramble had erupted early in the crisis between states, private hospitals, and the federal government, as each entity tried to outbid the other for PPE and ventilators.
The new regional supply chain will boost purchasing power so the states can bargain more effectively on the international market. Cooperation, rather than cutthroat competition, is the goal. The new regional bloc will also mandate that every hospital keep a stockpile of PPE that can last up to ninety days — a response to the industry practice of “just-in-time” production that cuts costs by minimizing inventories.
Like other states, New York entered the pandemic already in a crisis of sorts, after years of hospital closures and cost-cutting that had produced dangerous staffing ratios. With just twenty public hospitals (compared to 176 private), the state’s private-heavy system has been deepening racial and economic inequalities. The hospitals with the fewest resources are often those serving working-class neighborhoods, many of them communities of color. Queens, the Bronx, and Brooklyn have been hit the worst in this crisis but have the fewest beds. The hospitals with the most resources are the ones with the largest shares of privately insured patients, as opposed to uninsured patients or patients on Medicare and Medicaid. The latter tend to get offloaded onto the public health care system.
A Better System
Cuomo and company are taking these rapid steps out of desperation. They don’t support Medicare for All, much less a UK-style national system that would bring health care under a single, unified umbrella. Cuomo is even calling for cuts to Medicaid amid the crisis.
It’s also unclear if the New York’s Department of Health is getting private and public hospitals to truly coordinate in a single system. Despite promising press conferences in March, it was the national guard that expropriated ventilators last month.
What we really need is democratic control — not private coordination.
Federal relief is necessary to keep services going in this time of critical need, but as the pandemic progresses hospitals are becoming increasingly reliant on it. If federal relief dries up, many hospitals will go bankrupt. Who will buy these hospitals? Who will care for their costly patients? Public dollars have subsidized this collapsing system long enough. We should bring all private hospitals into public ownership.
Likewise, forming regional state pacts could reduce destructive competition, but it pales in comparison to the federal government could achieve for every state. The United States should centrally purchase supplies for hospitals and, where this falls short, use the Defense Production Act to scale up PPE production nationwide.
Just as emergency responses to the destruction of World War II were the basis for creating Britain’s National Health Service, COVID-19 responses could be the basis for building an American national health service. Cuomo apparently recognizes the failures of the market, but his deference to private property rights stops him shy of what we really need. To attack this pandemic, and future crises, we must reorganize our failing, fragmented health system into a truly integrated public health system that serves human needs — not profits.