Reforming U.S. Healthcare Costs
Craig Garthwaite, who leads the health care program at Northwestern University and has co-authored a new paper for the Aspen Economic Strategy Group, discusses potential reforms aimed at making health care cheaper and more efficient.
As the debate around extending Affordable Care Act subsidies heats up this week, millions are facing significant increases in insurance premiums. Garthwaite argues for a broader perspective on health care. His study, titled “Coverage Isn’t Care,” proposes a straightforward solution rather than merely addressing the surface-level issues of the current system.
Garthwaite expresses frustration over common misconceptions about health care costs, particularly the idea that costs fluctuate based on whether subsidies are available. He clarifies that the real issue isn’t who pays but rather how much the nation spends on health care overall and the level of care people receive for that expenditure.
Parks, the host, welcomes Garthwaite and highlights that his paper outlines a path for structural reform in America’s health care system to boost affordability. One of the key recommendations is to relax restrictions on foreign-trained doctors. Garthwaite explains that increasing the number of available health care providers can help improve access and potentially reduce costs for low-income Americans seeking treatment.
He proposes a program to allow qualified foreign medical graduates to work in the U.S. with a focus on treating low-income patients, especially those covered by Medicaid. However, Parks raises a concern about potential disparities in care quality between low-income and high-income patients. Garthwaite points out that such discrepancies already exist in the current system, with low-income individuals often receiving care in clinics designed for them. The goal, he argues, should be to recognize these disparities and find efficient ways to ensure care availability.
The discussion also touches on the idea of allowing nurse practitioners and physician assistants to operate independently, which Garthwaite believes could diversify the health care workforce. He notes that these mid-level providers receive extensive training and can often give high-quality care—often even spending more time with patients than traditional doctors.
Parks questions the feasibility and radical nature of these proposed changes. Garthwaite reassures him that many aspects of the suggestions are built on existing frameworks and experiences, focusing on expanding access for populations that need it most. While acknowledging the significant debates surrounding insurance coverage in Congress, he emphasizes the importance of shifting the conversation toward actual care delivery, not just financing.
On the topic of congressional action, Garthwaite expresses a certain skepticism. He feels that while large-scale reforms might be unlikely, many changes could happen at the state level. State governments have shown a willingness to innovate, especially since they have considerable flexibility in administering programs like Medicaid.
He reflects on the original vision of the U.S. as a place where states can serve as “laboratories of democracy,” experimenting with various approaches to improve health care access for low-income Americans.
Ultimately, the paper argues that addressing these broader systemic issues could lead to a reduction in overall health care costs, allowing for more efficient care delivery to a larger number of people. Garthwaite concludes by reiterating the need for society to ensure that everyone has access to the necessary health care while focusing on cost-effectiveness.
Thanks for listening to Craig Garthwaite from Northwestern University’s Kellogg School of Management.
