interviews
Insurance Coverage Design
by Naomi Zewde
September 24, 2020
This interview with Naomi Zewde, an Assistant Professor in the Graduate School of Public Health & Health Policy at the City University of New York, and a research fellow at the Roosevelt Institute, was conducted and condensed by franknews.
Naomi | I focus on health insurance coverage and the economic and financial implications of insurance coverage design. I look at how these things affect household financial wellbeing.
franknews | We know that medical debt is rising. What is happening in the healthcare system that explains the increase?
The issue of consumer debt in general in America is almost like a slow fire.
If people don't have the resources to meet their basic needs healthcare, education, housing — these fundamental things end up being sources of debt.
In healthcare, people’s deductibles are growing at incredibly fast rates; deductibles are growing much faster than premiums, and certainly much faster than wages over the past decade. People are left exposed to a greater share of their medical expenses, and exposed to huge medical bills — typically more than what most people have in their savings. That creates a lot of stress and fear, and often the threat of that financial burden deters people from seeking care.
What drives the prices of care up?
We don’t know.
The United States spends more on healthcare, both in dollars and in percent of GDP, than any other OECD country, but it is not clear exactly what we are spending that on.
We have a lower life expectancy. We have fewer physician visits per capita. We have a higher rate of chronic conditions. Those who provide healthcare - physicians, nurses - are not necessarily reaping the benefits either. We know that the utilization rate of the healthcare system is not unique to the United States. So why are the prices so high? That is up for debate.
We do know a few things. One, we know that a lot of this money goes towards the vast administrative bureaucracy — something that is unique to the United States. We also know that the government in other countries set prices: they either operate as the sole purchaser and thus dictate prices or they dictate prices through legislation. In the United States, Medicaid has price controls, but private insurers can charge whatever they want. There is no real way for anyone to fight back. There's no designated person to say no, you're charging too much.
Based on your research, what effect does this have on households’ finances?
I have done work around housing evictions and medical debt. We found that Medicaid expansion reduces the rate of home eviction. Going into the research it was not necessarily clear what relationship the two would have, if any. It sounded plausible — people with chronic conditions, for example, end up having to choose between rent and care. But it is astounding to think about the fact that the design of our healthcare system can have these ramifications.
I also found, in a paper that came out last month, that for 25 percent of people who were uninsured before ACA, it's cheaper to file for bankruptcy than to reach a deductible of the subsidized ACA private insurance policy.
Wow.
It’s surprising right! But it makes sense and might explain why there is such low participation in ACA private insurance policies. The congressional budget office projected that 10 million more people would enroll in these plans than actually did; only 8 million people got these. They were way off. The paper investigates why.
And what did you find?
I suspected from the beginning that it was because the deductibles are so high. The median deductible for the silver tier coverage is $4,000. There is a sweet spot in terms of the subsidies that substantially lower your deductible and premium. If you make between $12,000 and $18,000 a year, subsidies will bring down the deductible to around $200. But once you make $24,000 a year as a single adult, you're facing between a deductible between $3,000 and $4,000. So in designing the policy, it was kind of like, we will give extra subsidies to lower-income households, but not in a way that reflects what it is actually it's like to live with these medical bills. It feels divorced from reality.
Our findings don’t necessarily mean the people have to declare bankruptcy. Bankruptcy sucks and hospitals also know that when you file for bankruptcy, they typically do not get anything out of it. So, they look to work with you. Neil Mahoney has a paper, Bankruptcy as Implicit Insurance, that essentially shows that hospitals tend to settle with consumers at their cost of filing for bankruptcy. Hospitals essentially say, whatever you were going to lose if you were to file for bankruptcy, just give that money to us instead.
That reminds me of what Deborah Thorne said in our interview with her: "As Americans, we often rely on credit cards to be our social safety net. And when that falls apart, we are left with bankruptcy.” What is your understanding of how we got to this place?
It's tied up with a social-political larger trend. I have been watching this show called the Black Journal from 1968 to 1977 with a bunch of progressive Black scholars.
I watched one that was right after Nixon got elected, and everyone was saying, "America is taking a turn towards facism. All of American’s white guilt money is gone.” I think that really well foretold this mass acculturation that happened under Nixon.
The United States is not unique in this march away from social egalitarianism over the last half of the 20th century, but we are living through the consequences.
How do we return protections?
There is this famous paper - It’s the Prices, Stupid. I think there needs to be some kind of direct effect on price.
You mentioned the government can do so by either acting as the sole buyer of care or passing legislation. What do you think is the best way to achieve fair prices?
Right. One way of doing so is through a single-payer system. I am actually working on a study now that is going to be published to the Roosevelt Institute that compares single-payer with a public option.
There are two things to know about single-payer that are useful in this context.
One, it would get rid of most of the bureaucracy involved in negotiating prices — the different insurance companies, the different kinds of billing, and different plans. Right now, every doctor's office has multiple people whose full-time job is to understand how to interact with every single different plan of every different insurance company. There are many people employed on the side of the insurance company as well. Under a single-payer system, that would be gone. There wouldn't be multiple different rules to understand, and that reduces the aggregate resource use that is allocated towards healthcare.
Two, a single-payer system is tax-financed. That is important in terms of equity. You get to decide what percentage of household income should be allocated towards healthcare. Basically, the way our healthcare system is designed now means that the more money you make, the smaller percentage of it you have to put towards healthcare.
It is regressive, and no one has a choice but to participate in it.
If we structure it as a tax-financed healthcare system, the way we fund most of our infrastructure, you just get to decide what percentage of household income you are going to take from each household along the income distribution.
interviews
An Interview with Jee Mee Kim, Principal at HR&A Advisors
by Jee Mee Kim
May 17, 2018
This interview with Jee Mee Kim, principal at HR&A Advisors, was conducted and condensed by frank news.
What is the role of an advisory firm in relation to government agencies, city planning, and architects? How do you fall in to that mix?
Our work is really focused on helping cities. Either at the level of a private developer or a land owner trying to figure out what they should build on their site or helping the mayor of the city determine how to create an economic revitalization strategy that will bring jobs and reinvigorate downtowns and position them for the next economy. So, it really varies.
We also have a lot of open space and transit projects. For open space projects in particular, we help clients think through creating a design that is respectful of the urban context and supports their vision and goals? We help clients think of ways to pay for upfront costs of construction and ongoing maintenance, often through real estate as a vehicle for funding.
We also help clients think through the political and community buy-in needed for a project of scale and impact . It boils down to bringing all of those different pieces and perspectives together to create and help shepherd a project along that both satisfies the public goals as well as private interest.
Which projects do you see as a passion?
I've been exposed to a lot of places that are not big cities. I've been a planner for almost 20 years and spent most of my time in New York. Recently I started to get projects in the Midwest. I've been spending a lot of time in Indiana which is having a bit of an economic boom. For example, Indianapolis is really thriving: Salesforce just located its second headquarters there.
There are so many small cities across the US that are thriving and doing really innovation, interesting things. And some of these cities are former Rust Belt cities that are reinventing themselves. As New Yorkers, big city dwellers, we tend to think we’re the center of the universe
These places that are in the middle of cornfields that have traditionally been very auto-centric. Maybe have a small Main Street, but these places are largely single detached homes with the yard and garage.
If they want to entice young people, professionals, and if they want to grow their population, they need to create places that are like the neighborhoods of New York.
As a consultant, I have the privilege of being able to travel across the country and see so many different types of projects. I love being able to share what I see and learn with my clients all over the country and even now in Saudi Arabia.
We keep hearing that young, expanding families are choosing to move out of New York to other cities, rather than to the suburbs.
I'm totally seeing that. I think places like Indianapolis and Pittsburgh, are realizing they have competitive edge because the quality of life is still pretty good. But the housing costs and the cost of living are so much lower.
They're trying to figure out, how do we create these amenitized communities that can really attract people who once lived in New York or Chicago or LA, and entice them to come to their cities? They're really making investments in their downtowns, parks, and waterfronts. That's really cool.
How do you see this playing out as a planner? What are your biggest concerns and hopes?
I think there's a running debate. I was just at a planning conference, and I was on a couple of panels talking about the future with autonomous vehicles.
The other scenario is that because you have broader and cheaper accessibility to AV technology, people will want to live even further out. We'll see greater sprawl. We'll see more cars and more driving.
Obviously, it's unknown right now. What I think is really positive is the move towards creating these downtowns. It's really heartening because a lot of these places, especially the Main Streets that we're looking at, those Main Street retailers have suffered over the past 30 years. The discussion you hear a lot is there's still a future for brick and mortar retail because people want to go to a store where they can have an experience. I think of Warby Parker, that revolutionized how you purchase glasses. I was in a Warby Parker and I said, "there's never a crowd like this at a LensCrafters."
I think that's what cities are embracing now, that they have assets they can take advantage of. I think on the optimistic side, with more people living in cities instead of living in these big sprawling suburbs, where you're driving everywhere, land value is tied to walkability. There are clear statistics that having access to transit, parks, and bikeable, pedestrian friendly streets, actually increases property values. It's this virtual cycle of what makes a great place.
That's heartening.
But the suburban revolution, is it really over? No, the suburbs are actually trying to figure out what to do now. How do we become relevant again?
What are your thoughts on loneliness? When you're driving your car alone there's loneliness, highways, loneliness, shopping online, loneliness. We're craving human interaction, and I wonder if this psychology factors into your work.
How people are experiencing technology is changing, social norms are changing, and so many people work from home. They work these off hours, and somebody could have made the case, well, we won't need offices anymore. But WeWork spaces and coworking spaces are so popular. People are willing to pay money to be surrounded by other people, even if they have nothing to do with the business that they're in. Maybe it is the loneliness. Being at home and working all day in your pajamas isn't all that interesting.
Secondly, people still thrive on the social interaction and the bumping into each other and sharing ideas and this notion of the agglomeration. There's a reason why institutions and hospitals are clustered together. Because of that bumping into each other.
As planners we always think about those spaces. There's a reason why public plazas are so popular. There's a reason why people are craving sidewalks, and bike lanes, and nice parks.
It's intrinsic to the human condition. Cars and the highway revolution took some of that away. There's still a place for it, I'm not going talk about it as someone who wants that one-acre lot with a yard. We should still provide options. I think if we can create better cities, it's going go a long way for everyone.
You're creating more vehicle miles, more travel - there's just more of an impact. Whereas you add a 10-story, 20-story tower in Manhattan, most of those people are going take transit or walk or bike.
In a past job, I worked on the Barclays Center Arena. People were freaking out. I worked on the transportation side and said, "well, you're putting an arena up. It's like Madison Square Garden on top of one of the best served transit hubs in the city." It's probably unprecedented to have an arena so well-served by transit. Would you rather have it here, over in some less dense location, where you're going have to create all this economic activity? We can guarantee a lot of people who come are not going to come by car.
Where does community come into that?
Well, that's the thing about planners, and this is where we can get more on the fuzzy side because so much of the work we do has to do with community engagement. In some cases, it's not just about notifying people that some project is happening. I would say 80% of the projects I do, there is some form of robust community engagement where you're getting people's feedback. I think the multidisciplinary folks I work with, generally are very attuned to recognizing the history of the community and recognizing the different tensions and dynamics of a place. What you're getting at is how do you deal when a neighborhood changes? When a neighborhood increases in value? Are you displacing people? What happens to the folks who can no longer afford to live there?
We've been spending more time in recent years, really thinking about how you do inclusive development and inclusive planning. How do you create more opportunities for affordable housing? How do you mitigate the impacts of just creating a place and only thinking about space? You have to think about the people. That is part and parcel of all of the projects we work on. How do you make sure that the economic and social benefits of a new investment, of a new project, of a new building, don't just serve one group? Especially in many communities, you have these historical neighborhoods that have always been underserved. How do you make sure those benefits occur to those folks?
What's one piece of technology you're really excited about that you think it going have a big impact on city planning?
I've learned a lot about autonomous vehicles recently. I think transportation has informed the way our cities look, has informed the way our communities look. I think we take so much transportation related stuff for granted.
The way we move is so important. New York is such an exciting place because it's easy to get from point A to B, barring New York City traffic issues. With new transportation coming online, it's going to change the way our places look. It's going to change behaviors. It's going to change economy. There's a lot of talk about what happens when trucks become autonomous? What happens to all those truck drivers? It has this ripple effect, and I don't think we really figured that out.
How did you come to this profession? What's your background?
Some people are fascinated with their cities as children, that's what they do. I always liked to draw. I went to school, and I got a BFA in Painting. I painted landscapes. I loved that. And then I got an American Studies degree at the same time, and I did a lot of research on immigration and cities. And then, when I was an undergrad, I got tired of naval gazing. That's what I called it. I got tired of being an artist. I became really active doing community organizing work, mostly in New York's Chinatown, doing tenant organizing, vendor organizing, youth development.
As I was working on a volunteer basis and having other jobs, I thought I should go to planning school because that's going make me be a better organizer. I felt like there were certain things we wanted from the city, but I didn't understand how you get to the actual implementation. When I went to planning school, I was set in my ways. I'm going to be in the nonprofit grassroots sector forever, and I graduated and I needed a job. And there was a small company called Sam Schwartz Engineering, and I thought I would stay there for a year because I needed work.
They had a marketing position. I didn't know anything about the business of consulting. I didn't know what marking did. I didn't know what engineers did. I just took the job. And then about 14 years later, I decided to leave.
I did all sorts of work from doing land use approvals in the city, environmental review, transportation planning projects, to building up a great network of people around me. And then I came to HR&A. A firm I worked with a lot in the past. I was always fascinated by economic development and real estate, and more recently on issues of resilience and dealing with the impact of climate change. So, I ended up here. It's just an interesting career, because you really do get to do so many different things, meet so many different people, and go to so many different communities.
As a consultant, I would say consulting is not for everyone. It can be a little crazy, and also, it's really a business, right? There are some down cycles that you have to muddle through, but then there's also intense moments where you get 10 jobs at once. I find it exciting because I don't think I could work on the same project for four years. A lot of learning, and I really like that.