Dr. Brad Spellberg’s new book, Broken, Bankrupt, and Dying takes an unflinching look at today’s healthcare system. In our interview today, he discusses why the system is broken, how and why it got this way, and how we can fix it. I learned a lot from this interview and walked away hopeful. I hope you do too.

Nikki Van Noy: I am joined today by Brad Spellberg,  author of the new book Broken, Bankrupt, and Dying: How to Solve the Great American Healthcare Rip-off. Brad, thank you so much for joining me today.

Brad Spellberg: Thank you for having me.

Nikki Van Noy: I mean, that is a title that really grabs your attention right there.

Brad Spellberg: Well, that was the goal and the leading line in the book is that the American healthcare system is the greatest rip-off perpetrated on Americans in the last century, which could be pretty off-putting and certainly will grab your attention.

Nikki Van Noy: Absolutely. Well, I think a lot of us feel that. I almost felt an odd sense of relief seeing this title if that makes any sense.

Brad Spellberg: Well, that’s fascinating that you say that because it’s felt disconnected to me as well. You hear a lot of people say, we have the best healthcare system in the world. When the numbers say we have one of the worst healthcare systems in the world and there’s this disconnect between how people are living their lives–falling, further and further behind, getting sicker and sicker, can’t access care. But then, we have all these great technologies and these brilliantly trained doctors, what does it all mean?

Nikki Van Noy: Absolutely. Before we dive into all that, I would love it if you could just give listeners an idea of your background and how it led you to write this book?

Brad Spellberg: Sure. I am a board-certified internal medicine and infectious disease specialist. I also am a researcher and for a number of years, I spent a lot of time on Capitol Hill, working on health policy, related to combating antibiotic-resistant superbugs.

Six years ago, I moved over to Los Angeles County University, southern California medical center, which is one of the largest public hospitals in the United States. It is the largest public hospital in LA county and the lynchpin of the safety net.

I moved over to become chief medical officer and I very quickly learned that the national healthcare system in which we’re all trapped is extremely expensive, has gaps in coverage, leaves people choosing between whether they want to be able to eat a meal or take medication or pay their rent. People are suffering, dying unnecessarily young and needlessly, and none of this is making any sense. I wanted to take the policy experience I had gained in my prior life and apply it to figure out what the heck is going on with healthcare in the United States.

The Human Cost

Nikki Van Noy: Fascinating. I love that you’ve looked at this from a couple of different very pertinent angles. In the book, you talk about both the human and financial costs of healthcare. Let’s start with the human cost, what are you seeing and what are some things that people should be aware of that perhaps they are not?

Brad Spellberg: Well, how about we start with death? As it turns out, when you work in healthcare, kind of our whole thing is to keep people from dying, right? If you’re not doing that, why are you even in healthcare?

Nikki Van Noy: Hopefully, yes.

Brad Spellberg: It turns out that the United States is bad at that. We are the worst-ranked amongst the 11 peer, wealthy nations in Western Europe and Australia and New Zealand. We have the highest rate of death, we die the youngest. In fact, we die the youngest amongst any western European comparer. At the same time, our costs are so high that we have more than a half-million medical bankruptcies per year. People declare personal bankruptcy because they can’t afford their medical bills.

We’re paying more money for the privilege of dying younger. This is crazy, we overspend in the United States by more than a trillion dollars per year in pure waste. Name me one other rip-off in the history of the United States where the American taxpayers got taken for more than a trillion dollars per year. And we’re dying younger. What’s going on?

Nikki Van Noy: Yeah, this is incredibly sobering. I mean, it’s hard to know where to even begin, how to even begin to unravel this, what few things lie at the root of this problem, where did we go wrong?

Brad Spellberg: That is a great question and we spend a lot of time in the book looking at it. The book first starts by just showing people the reality, we don’t do well, people are dying, here are the facts, here’s the data, we’re overspending.

How then did we get here?

It turns out, no one ever intentionally designed the healthcare system in the United States, in contrast to many other countries. The healthcare system we have now is an accident of history.

The healthcare system we have in the United States is a byproduct of laws that were passed during World War Two, to combat post world war two inflation.

It organically sprouted out of insurance that grew out of these laws. It was like a city that grows up without a plan and the streets are all zig-zagged and it doesn’t make any sense. That’s our healthcare system, that’s how it’s grown up, that’s why it doesn’t make any sense. How can we possibly compete with healthcare systems that were rationally, thoughtfully, and intentionally designed, what we’re using is an accidental byproduct of history?

An Accidental Byproduct

Nikki Van Noy: Wow, that’s the first time I’ve ever heard that. This is stunning. Just to make sure that I’m understanding correctly, basically, there was a stop-gap created and we have essentially built a system on top of that, for a lack of a better word.

Brad Spellberg: I would say it’s worse than that in a sense. Here’s the reality. In the early 1900s, there was no such thing as a healthcare system. You had doctors, you paid out of pocket, doctors couldn’t do very much for you, they didn’t have a lot of treatments. They could put you to sleep and cut your leg off, right? They had ether in surgery.

But, after World War One, there’s a huge spike in post-war inflation because people were rushing back, the job market became crazy, you had taken all these people out of the labor force and they’re suddenly rushing back. Prices had been fixed and then those fixes were loosened, there was this massive inflation spike.

The people who lived through that era remembered it very well. When we went into World War Two, President Roosevelt and Congress were determined to not let there be another post-war inflationary spike. They passed the law called the Stabilization Act. The Stabilization Act precluded employers from pay raises. Now, they’re competing in a tight job market because all of these able-bodied men were going into the military, they were trying to hire to keep their businesses going but they were legally not allowed to raise pay.

Then the War Labor Board ruled that that freeze in pay did not apply to benefits. Suddenly, companies could stack money into their insurance plans as benefits, as the equivalent of a pay raise, and suddenly, the insurance industry came alive. “Oh, we can sell a bunch of policies to these companies because they’re trying to compete in the labor market.”

Then the IRS passed another law that made the cost of your insurance premiums deductible to both the employer and the employee. Now for these companies, which wanted to tax dodge because taxes were so high to fight the war, that was further fuel to the fire. Suddenly, millions of Americans started getting health insurance through their employment. We are the only country in the world that links health insurance to your job. The reason we do that is these two laws passed to combat post-World War Two inflation. None of it made any sense, it was never intended to deliver healthcare. It was a tax dodge and a way to compete for hiring workers.

Nikki Van Noy: Wow, I mean, very naïve question here but if that’s the case, how has this been allowed to perpetuate, what, 80 years later?

Brad Spellberg: Yeah, it turns out, people are really comfortable with the status quo. You know, I went to Capitol Hill a few years ago as part of a fellowship I did for the American Association for the Advancement of Science. I was talking to staffers, congressional staffers about this problem. I tell this story in the book. I kept trying to get them engaged, you know, we need to change the system, it doesn’t make sense, it’s an accident.

What I kept hearing was, “We’re not going to mess with our healthcare system, it’s working for Americans, why would we mess with it?” I was like, “What does that mean it’s working for Americans? We’re overspending by a trillion dollars per year and dying younger.” Well, I think what they meant was, people are using it, it’s there, it’s like a New Year’s resolution, you know? We know they’re not going to work when we do them, but we still do them year after year, it’s inertia.

It’s challenging, it is inertia backed by a massive amount of money–3.65 trillion dollars. You don’t think there are interested middlemen in there that are making a living off that money? That don’t want to see the waste taken away?

Nikki Van Noy: Wow, I’ve already said this word once but again, this is all sobering to hear. Not surprising although the genesis of it is something that I haven’t heard before. What is confusing to me is hearing that the actual healthcare providers also don’t have enough money coming from a patient standpoint. I’ve had high medical bills, I’ve seen people have staggering medical bills before. What is happening to that money? It seems like the healthcare providers themselves should be in fine shape, is the middleman getting that?

Brad Spellberg: Well, when you say healthcare provider, let’s define terms. This is one of the things we’re very careful about in the book because these terms are so confusing. So, when I use the term provider, I am not talking about a doctor, I am talking about a hospital or a health plan, the place you physically go to get your healthcare that is not just your doctor.

That is the nurses and the phlebotomist and the IT people that set up the computers. And the people that check you in at the front desk and the environmental staff that clean the place, right? All of those people work together in a provider to provide care. Well it turns out because of the mishmash, the confusing multiple-payer zig-zag street way that our healthcare system developed, we spend, and it depends on which country you want us to compare this to, somewhere between 200% and 800% more on administrative costs than our peer nations.

All of this waste because you know what? When somebody gets admitted to the hospital, I have to know what their health plan is. Am I even allowed to take care of them? Are they “in-network?” Do you have any idea how many people it takes in the hospital to figure out who we’re allowed to take care of? It’s hundreds of people employed at hospitals, whose job it is to help us figure out, are we allowed to take care of that person and if so, for what? Then tens of thousands of person-hours per year to generate a bill to figure out what the health plan is. This is all waste, it is all middleman waste.

Nikki Van Noy: So, you obviously wrote this book before COVID-19 hit. I am wondering if in your opinion having been–we are still in the midst of this pandemic–but having been through this experience, do you think that people in charge are looking at the healthcare system any different? Have we learned anything from this?

Brad Spellberg: What COVID-19 has done is it’s torn the veneer off the US healthcare system and exposed the rot. Remember, I said the US is the only country in the world that links having health insurance to your job, which means when you lose your job you have no health insurance. Which means you have no healthcare access. Now, do we think it’s a good idea to take healthcare access away from people in the middle of a once-in-a-century global pandemic? Probably not, right? 40 million people have filed for unemployment, and millions of them depended on that job for healthcare.

If you get sick, you can’t get treatment. Maybe worse, from a population standpoint, if you get sick and you can’t afford to get tested, you won’t know you have COVID-19, you won’t quarantine, and you will spread the virus to your neighbors. This is a terrible public policy.

What Do We Do?

Nikki Van Noy: So, what do we do? I heard you say, and I very much heard this, that we need to get out of partition mindsets when it comes to things like this in particular. What else can we do as the average citizen to move things in the right direction?

Brad Spellberg: Yeah, that is a great question and I spend the last chapter talking about that. This is what I learned from my past experience when I first started doing interviews with the media–and I did a lot of them about antibiotic-resistant superbugs 15, 20 years ago–the first question I would get always asked is, “You mean people still die of infections?” Nobody had a clue. There was no awareness of it.

So, you go talk to politicians on Capitol Hill. And they would be like, “Yeah okay, you are complaining. Nobody else seems to be, what’s the problem?” What I learned–and to be honest I learned this in part directly on Capitol Hill and in part from watching An Inconvenient Truth from Al Gore. Because in the movie he says he was convinced all he had to do was get elected to Congress and then he would convince all of his colleagues to fix global warming and he learned it doesn’t work that way.

You know what? Elected officials fix the things their constituents care about. If you want elected officials to fix healthcare, we have to show them and convince them that their constituents have made this the number one priority for them to fix. So, if you really want to make a difference–I never thought in my lifetime McDonald’s would be selling antibiotic-free meat and that wasn’t because Congress told them to, it was because their customers told them to. The public has the power to influence politicians and businesses far more when they act collectively than any lawyer or any politician ever could. Rally, put it on social media, post it on Facebook and Instagram and Twitter. Put a Tik-Tok video out there for goodness sake, I don’t care. Have a dinner symposium, invite a speaker, talk about it. Let’s get people on Capitol Hill to realize the time for dithering about has passed. We are tired of getting ripped off, we are tired of dying younger, it is time to fix this.

Nikki Van Noy: You know, I feel I am horrified by a lot of what you have to say, Brad, but what actually makes me feel hopeful is I feel like we are very much in a cultural moment where we are learning collectively how important it is to stand up. To make our voices heard–to not take no for an answer when no is not the correct answer. It would be great if this would just become more ingrained in us. I feel like we could make a better country for everybody in so many different ways.

Brad Spellberg: Well, I completely agree with that. I actually think the US has a long history of public activism that has done a lot of good over the years. What tends to devolve is when people start bickering over the non-core parts of it where we agree on certain elements and we could say, “You know what? I want this. If you give me this, I am happy to give you that, let’s meet in the middle.” That is the part we’re not that good at.

We need to get to the point where we rally together to solve big problems, recognize that there are multiple views of how it could be solved and that it doesn’t have to be a win-lose. It should be a win-win. You know what I say if you think single-payer is absolutely the best or you think multi-payer private is absolutely the best then put them in competition–what are you afraid of? If you are so confident you’re right, why are you afraid of competing? Put them both into play and let them compete. That’s the American way.

Nikki Van Noy: Yeah, I so appreciate you breaking this down in such a straightforward way. I am definitely one of those people whose brain starts to fry with all of this as I hate it and it frustrates me and it makes me so angry, but I also have a very hard time making heads or tails of it. So, there comes a point where I sort of run out of time and give up. Hearing it explained is incredibly helpful.

Brad Spellberg: Listen, I am a simple country kid from Palos Verdes, California. I am a knuckle-dragging infectious disease doctor. I don’t have an MBA. I didn’t go to school to study this stuff. I learned this stuff on the job. I have watched, this is true, I have watched in astonishment as patients have voluntarily relinquished high-end expensive private insurance to sign up for Medi-Cal, the state Medicaid for poor people because it would give them more reliable insurance coverage. There is something wrong in this country and it is time we called it out.

Nikki Van Noy: So before I let you go, speaking of Medi-Cal, I know that you speak to that in the book, can you give a brief rundown of Medi-Cal and what we can learn from that?

Brad Spellberg: Well, I don’t know if anybody can be brief. Medicaid is the health plan that states enact for poor people who make below a certain income level and don’t have healthcare access. The Affordable Care Act leveraged Medicaid in many states, in California it is called Medi-Cal, to provide additional insurance coverage to people, raising the income threshold so more people could get access to healthcare, which is a really good thing.

18 million more Americans have health insurance now. But here is the thing, we have a broken system. What we have done is to invest more money in that broken system. We have leaned into the rip-off.

No, no, no stop talking about incremental expansions of Medicare and Medicaid. Stop talking about incremental expansions of the private exchanges the private health plans have put into the Affordable Care Act. We need to transform our healthcare systems so that it is intelligently designed. Let us not lean into the rip-off.

Nikki Van Noy: Perfect. Brad, so great talking to you. I have taken a lot away from this. The book again is Broken, Bankrupt, and Dying: How to Solve the Great American Healthcare Rip-off. Brad, is there anywhere else listeners can find you outside of the book?

Brad Spellberg: Well, I have a website, bradspellberg.com. I am on Twitter @bradspellberg. So yes, both those ways, certainly, I would encourage.

Nikki Van Noy: Excellent. Thank you for joining me today. Thank you for putting this book into the world and best of luck to you.

Brad Spellberg: Thank you very much, I appreciate it.