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Why work has failed us: Because you can have a job and still not afford the doctor

The insurance you get from your employer is supposed to pay for medical fees if you get sick. But they keep finding ways to shift those costs to workers instead.

Why work has failed us: Because you can have a job and still not afford the doctor
[Photo: dusanpetkovic/iStock]

Robin Berzin, a medical intern, remembers frantically printing out pages upon pages of prescriptions for one of her patients, each of which she needed to sign, while writing up doctor referrals. That’s when she realized: “Wow, this system is so broken.” She had just 15 minutes with her patients to check vital signs, talk to them about their problems, determine what was wrong with them, dole out prescriptions, and hand them off to specialists.

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“The things that mothers of young kids and elderly people and younger people, everyone I saw, needed just wasn’t another prescription,” she says. “They weren’t suffering from a deficiency in a high blood pressure medication, they just needed to change they way they ate, moved, and lived.”

Years later, in 2015, she founded a company called Parsley Health, a direct primary care company that tries to address patient health more holistically. For a flat monthly fee–$150-$250–the company will review a patient’s eating and exercise habits, their vitals, their weight, their mental health, their sleep, and other data to help them be their healthiest. The subscription includes a set number of visits per year, messaging with your doctor, coaching sessions, and discounts of a variety of services and merchandise. But it is not covered by insurance. Some insurance plans reimburse clients for Parsley as an out-of-network doctor, but it intentionally exists outside the traditional insurance-based healthcare system. Where the model succeeds is in flattening costs while providing data-informed, coordinated preventative care.


This story is part of our series Why Work Has Failed Us, looking at why employment no longer provides the economic security it used to. You can read more here.


“If you’re directly in contact with the person that you’re serving, you can iterate and innovate around the service and the technology in a way that you can’t when you’re really responsible to a third party like an insurer,” Berzin says.

For roughly a century, employers were supposed to ensure workers stayed healthy. Now, that relationship is unraveling. Preventative healthcare startups like Parsley Health, aimed at reducing the need of specialists and chronic illness, is one model vying for relevancy. Venture capitalists are also putting money behind health savings account and credit cards startups, which will help people pay for healthcare but doesn’t reduce the cost. Others, like insurer Oscar, believe a solid technological infrastructure that reduces overhead and encourages customers to monitor and track their personal health will reduce make healthcare more affordable. Meanwhile, progressive politicians and many public health experts are campaigning for an expanded Medicare, potentially obviating the need for insurance–employer provided  or otherwise–at all.

Though Obamacare connected the vast majority of Americans with health insurance, many struggle to pay for the services that insurance and Medicare won’t cover. In 2016, Americans paid $352.5 billion out of pocket to go to the doctor, according to data from the Centers for Medicaid and Medicare Services. And those costs are only expected to rise. “Many investors think a change is going to happen within the next 5 to 10 years,” says Nikhil Krishnan, a senior analyst at CB Insights. “I don’t know what the change is, obviously, but a shift to some other model.”

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[Source Photo: XiXinXing/iStock]

Quick Diagnoses, Quick Cash

For years now, doctors like Berzin have been lamenting the perversity of a healthcare system that incentivizes quick diagnoses and an over-prescription of medical services, and offers very little of anything that resembles the word “care.” In an essay adapted from his book Doctored: The Disillusionment of an American Physician, Sandeep Jauhar, excerpts a doctor’s account of his profession as posted to an online forum: “Working up patients in the ER these days involves shotguning multiple unnecessary tests (everybody gets a CT!) despite the fact that we know they don’t need them, and being aware of the wastefulness of it all really sucks the love out of what you do. I feel like a pawn in a money-making game for hospital administrators.”

Morale among doctors is correspondingly low. As few as 6% actually like working in medicine, and in the last few years doctor suicide rates have ticked upwards. A big part of what is contributing to this doctoral malaise is the complex nature of a private insurance system that financially rewards doctors and hospitals for rendering services–not care. Even patient histories collected within electronic medical records [EMRS] are more a tally of services than a portrait of a person’s biological condition. “EMRs are insurance claim billing software and then they have patient care tacked on to them,” says Berzin. “They’re not designed around patient care, they’re designed around episodically billing insurance. That’s their fundamental purpose.”

To play the insurance game, hospitals must squeeze money out of sick patients to stay solvent. And patients are paying. Per the Center for Medicare and Medicaid Services, U.S. households comprised 28.1% of national health spending in 2016, just below the government, at 28.3%. For contrast, businesses cover 19.9% of healthcare costs. Many Americans have turned to crowdfunding platforms, hoping they can tell a compelling story, go viral, and have their insane medical debts paid by the sympathetic masses. Earlier this summer, Gofundme revealed a third of their campaigns are healthcare related.

If more Americans are insured than ever before, why are they paying so much to stay well, you might ask. For the last five years, insurance has gone up in price between 5% and 7% annually. That’s in part because more people are going to the doctor (thanks to better access to medical care) and because doctors are increasingly ditching private practice to work in hospitals where insurers pay more, according to Pricewaterhouse Cooper’s Health Research Institute. As a result, employers, have been demanding lower-cost plans to contain their healthcare budgets. Insurers off-set these affordable premiums with high deductibles, shifting more of the cost burden to individuals.

[Source Photo: XiXinXing/iStock]

How Healthcare Came To Your Job

The nature of labor itself during the industrial revolution necessitated doctors be on hand at factories to stitch up workers injured on the job. Due to the often dangerous work, workers wanted employers to provide their families with insurance in case they died or got sick. In addition to negotiating time off for illness or funerary expenses, unions were also developing their own benefits.

During the 19th and early 20th centuries, unions called for and won medical care for injuries in factories. Some, like the International Ladies Garment Workers Union—a group of largely immigrant women— created its own network of healthcare clinics to support members. But it was during World War II, when the benefits package truly took root as part of American employment. With workers in such high demand, employers were in stiff competition to hire. The competition was so fierce that President Franklin Delano Roosevelt froze wages. The best thing employers could use to entice workers was a more generous benefits package. In 1943, the IRS made healthcare benefits tax exempt for businesses.

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But tethering work to healthcare has always been problematic. As writer Mary O’Connell noted in American Progress, “Benefits tied to jobs are only as secure as the jobs they are tied to, and new benefits may not be immediately forthcoming, even if a new job is.” It’s not just that new jobs might not come with insurance, changing insurance can mean changing doctors, which at a minimum is annoying and at a maximum is hugely disruptive to person’s medical care. Moreover, it’s expensive. The government has passed a few pieces of legislation to make up for gaps like these (COBRA as an example), but they fail to comprehensively solve the issue. There are new efforts to fill in these potholes. Virginia Senator Mark Warner has garnered bipartisan support for a bill that would set aside $20 million in grant funding for companies and nonprofit organizations experimenting with models that allow employees to take their benefits with them when they leave. Under such an arrangement employers wouldn’t be responsible for supplying benefits to workers, though they may have to contribute financially to a benefits fund.

Companies are keen to create so-called portable benefits as they increasingly reconsider the role of the worker. In addition to gig platforms like Task Rabbit, Handy, and Uber, big companies are turning to subcontractors and staffing agencies to fulfill their worker needs rather than hiring directly. These jobs can be full-time, but often lack benefits and the wage growth that comes with working for a large company. “It’s this domestic outsourcing that is the big change in why wages don’t rise and why workers feel so insecure,” codirector of the Center for Economic and Policy Research, Eileen Appelbaum, told the New York Times.  Many of the companies that are embracing a contract workforce, do so under the veneer of flexible work. A portable benefits framework could allow them to bypass a virulent debate over worker classification, which largely exists because contractors are not afforded the same rights as employees.

In limited circumstances, companies have started providing contract workers with more support. In 2015, Facebook created minimums around contractor pay, paid time off, and financial stipend for those without parental leave. SurveyMonkey recently created a set of standards for its third-party vendors requiring them to provide a certain level of benefits to workers on its campus. Unfortunately, these instances are minority cases. The reality is that unless a business is competing for hot-in-demand talent, it doesn’t have a lot of incentive to sink money into affordable healthcare for employees or contractors.

But even that conversation is becoming moot, as the Trump administration offers businesses even more opportunities to buy into skimpy insurance. The administration is pushing new “association” insurance plans for small and medium businesses, which will begin to phase in soon. These plans allow employers to band together to buy cheaper and less comprehensive coverage than is typically required by the ACA. On healthcare.gov, the marketplace for individual plans, Trump is rolling out the red carpet for short-term health plans with low premiums, light benefits, and high deductibles. These plans can also turn away applicants with preexisting conditions.

These plans effectively pass the cost of insurance from business to employee through extremely high deductibles, a cost savings tactic that’s been growing. In 2016, nearly a fourth of workers faced deductibles so high and insurance plans so limited they were deemed “underinsured,” according to a report from the Commonwealth Fund report. This group consisted of workers spending more than 10% of their income, or more than 5% if they qualified as low income, on healthcare costs outside of their monthly premiums. The number of “underinsured” have grown more than two-fold since 2003, the report says. What it can mean is that people are paying thousands of dollars before their insurance kicks in. With employer-provided insurance like this, some people may be inclined to figure out their own healthcare plan.

[Source Photo: XiXinXing/iStock]

Can preventative care lower costs?

When I was 12, my mother lost her job. When it came time to make the annual visit to the doctor or the dentist, she would stand at the tall front desk and scribble out a check, paying out a price she had negotiated herself.

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In college, I concocted my own system of doctors and brokered my own fees. Planned Parenthood became my primary care. I had gone in for contraception, but came out with blood taken, blood pressure checked, weight noted, lumps felt for, cervix screened, and a conversation about whether I was smoking (sometimes) and how much I was drinking every week (depended on the year). When I thought my birth control was giving me depression, my doctor said my dose was so low, she’d be surprised if it was the medication and instead suggested therapy.

My network looked like this: annual exams with Planned Parenthood; oral care through a university dental school; a low negotiated fee with a therapist, who ran her own private practice; and after being plagued with congestion and persistent brain fog for three months, a sliding-scale clinic where I was told there was probably mold in my apartment. That last visit cost a nauseating $130.

For people like me, who want to stay healthy as a way of avoiding the doctor and thus huge medical expenses, direct primary care options like Parsley Health are pretty compelling. It’s no surprise that the company is seeing people use the service to lower their overall healthcare spend. “What we are seeing is people tailor which plan their on: ‘Well I’m going to do Parsley, I might do a higher-deductible plan, because I know that I’m going to be so proactive about my health,” says Berzin.

But there are problems with these cobbled-together arrangements. While a direct primary operation like Parsley Health can potentially reduce the need for specialists, it can’t possibly obviate them, because, well, shit happens. The human body is deeply complex. If a person is saddled with a high deductible, they will have to pay thousands of dollars if they need to see a specialist or go to the hospital. Parsley Health, like Planned Parenthood, represents a pocket of salvation rather than a full medical care solution. It is also only available to those who can afford a monthly fee on top of monthly insurance premiums.

Some public health academics are further concerned that direct primary care may pull physicians out of an already stressed system, leaving fewer doctors for a less well-resourced population. Berzin waves this idea away. “That’s like saying, we should just stay stuck in a broken system forever and not try anything new ever, because on day one it’s not perfect for absolutely everyone,” says Berzin. “Otherwise what you’re saying is let’s hope and pray that some academic institution somewhere that’s dependent on grant money, scrapes together enough grant money to do something different and what you see is that is never going to happen.” She says that Parsley Health could expand to include more socioeconomic groups over time. The business model is also adaptable, she says, should the country move toward universal healthcare.

Other companies are also leaning away from an insurance-based healthcare toward something more bespoke and more focused on prevention. Google is investing heavily in systems that mine healthcare records for insights through Verily. Apple has not only developed a consumer health monitoring app, it’s also diving into primary care through a series of new clinics for employees.

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What is most exciting about some of these private-side efforts is that they are being lead by actual doctors; people have been fighting for a long time for the opportunity to provide better care to Americans, like  Berzin and notably, prominent surgeon and writer Atul Gawande. The latter is heading up Amazon, JPMorgan Chase, and Berkshire Hathaway’s concerted effort to bring down medical costs for employee healthcare through a value-based care system. He has been a vocal critic of the current medical system and champion of incremental care.

“The foundational principle of medicine, going back centuries, is that all lives are of equal worth,” Gawande told UCLA’s medical school graduates in June. “We in medicine do not always live up to that principle. History has been about the struggle to close the gap between the aspiration and the reality. But when that gap is exposed—when it turns out that some people get worse or no treatment because of their lack of money, lack of connections, background, darker skin pigment, or additional X chromosome—we are at least ashamed about it. We believe a CEO and a cabbie with the same heart disease deserve the same chance at survival.”

The bigger hope is that if any of these efforts are successful, they could potentially be extended to regular Americans. In such a world, who knows where employer-funded insurance would fit in.

[Source Photo: XiXinXing/iStock]

Why not universal care?

Medicare, which provides healthcare coverage to Americans over 65 (and various other qualifying groups), is the closest system the U.S. has to nationalized healthcare. While private corporations have been tinkering on the future of healthcare, so too have those working within Medicare and Medicaid, which serves low-income Americans. One of those innovations has been the creation of Accountable Care Organizations, which were brought to prominence by the American Care Act. ACO’s are groups of doctors, hospitals, and specialists that tag-team care for patients in their network. The value-based care model does away with the fee-for-service paradigm, incentivizing organizations to be cost-efficient by sharing the savings they achieve and, in a two-sided risk scenario, requiring them to pay back for services that don’t yield results. ACO’s are very literally accountable for a patient’s health.

Though private insurers are now contracting with ACOs, a number of Democrats are more interested in extending the benefits of Medicare and its care models to Americans another way: letting everyone have access to Medicare, no matter what their age. Senators Jeff Merkley, Chris Murphy, Tim Kaine, Michael Bennet, and Brian Schatz have all introduced bills that would create a way for Americans to buy into the Medicare system. These bills differ in nuanced ways, like whether employers can buy into Medicare as well as individuals, but they are fundamentally similar in creating a single payer Medicare option to go along side private insurance.

Meanwhile, Senator Bernie Sanders and House Representative Keith Ellison have laid out the most audacious proposal, which calls for universal health, unshackled from premiums and deductibles, and the rapid burial of private insurance. None of these proposals have gotten past their introduction, but Democrats would be wise to focus the 2020 electoral race on healthcare reform—it’s what the people want.

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About the author

Ruth Reader is a writer for Fast Company. She covers the intersection of real estate, technology, and the future of work.

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