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A tranquil portrait of a desolate, sandy beach hung in the hallway. I had been staring at the white foam of the crashing waves and undisturbed golden sand for ten minutes in my own oasis of silence, tucked away in a hallway that nobody traversed. My audible breathing from wearing a surgical mask and the faint reflection of bloodshot eyes staring back at me from the portrait were the only reminders of the medical sounds and nurses that surrounded my solitary hallway.

“Dad, we’re ready for you”.

Snapped out of my bizarre trance, I was guided to a surgery room where the sandy beach portrait was replaced with my wife’s beautiful eyes staring into mine as I held her hands. Ten minutes would pass before I was staring at a new set of eyes struggling to open, that of my son’s, who I held in bliss as the medical staff members worked around us in a blur.

Two months later my wife and I received a $58,000 bill with a $400 copay. My experience with maternity care at one of San Diego’s premier maternity hospitals, sparked many reflections on how secure I felt entrusting the most important people in my life to the care of great medical professionals. At the same time, the odd bill brought to life conflicting feelings over the future of our healthcare system which had just delivered the peace amidst the chaos, the quiet hallway within the bustling hospital.

When you buy insurance, you pay a premium. A premium implies you pay more than you must in return for security and peace of mind. In America, we collectively pay a premium. We pay taxes to support Medicare and Medicaid, employers purchase coverage for their employees and parents purchase coverage for their families. All in all, we collectively pay close to 20% of GDP to provide the current level of security in America. Through paying more than we must, our brightest citizens are enticed to become doctors with lucrative pay, hospitals build luxurious facilities with cutting edge practices and investors pour money into research for the next miracle pill or cure to the ever-present reminders of our mortality. As citizens, most of us live with peace of mind and high expectations of medical care when we need it.

For nine months my wife and son were carefully monitored along the perilous journey of pregnancy. In the 19thcentury, approximately 5 out of 1,000[1] deliveries resulted in the death of the mother with infant mortality occurring at a rate of 150 out of 1,000[2]. Today, those numbers are respectively, .1 and 5.8[3] out of 1,000. I approached what in relative human history was an extremely dangerous event with the greatest confidence in our healthcare system. If I am honest, that security is worth every penny I am overtaxed, every mansion a healthcare executive buys and every flat screen tv purchased for the maternal ward. As an upper-middle-class American, my natural preference is to keep the status quo, pay the societal premium for our over-bloated healthcare system and be grateful for the miracles it produces.

But life does not stand still, nor is life equitable. When I received the $58,000 bill with the $400 copay, I also saw a warning of the inevitable changes that will come through such a lopsided pair of numbers. The $400 meant that nothing during our maternity experience was going to be elective, that my wife and I were not making financial decisions, rather we were going to experience the care to its fullest and not worry about the cost. The $58,000 meant a multitude of services, luxuries and security would have assuredly been excluded if we had to pay the actual bill.

How much would we have sacrificed if we had to pay 20% of the bill? what about 50%? There would be some balancing of values if we had to pay. We probably would have left the hospital a few days earlier, denied certain bedside services, limited lactation consultants, asked for the room without tv and perhaps would have price shopped for hospitals that were not the finest in San Diego. The balance would be cost and quality, picking a facility with reasonable costs but enough security to entrust my loved ones. Hospitals would likely have to create a maternal package that was more efficient, also balancing cost and quality to drive enough revenue to maintain operations. If individuals bore the cost directly and not through third-party payers (employers and government in particular), our collective societal premium would be lower, total costs would be lower but our security in healthcare would also be lower.

In a system that isn’t paid for by individuals, but rather collectively through third-party payers, inequities tend to feel more arbitrary and unjust.

Then, of course, there is the reality that I am an upper-middle-class American who receives a generous benefit from my employer and had the choice of what health plan I wanted, to have access to a premier hospital. I got to research who had the best NICU if anything went wrong for my child. Others are not so fortunate. In a system that isn’t paid for by individuals, but rather collectively through third-party payers, inequities tend to feel more arbitrary and unjust. What I paid personally through employee contributions and cost-share payments was a drop in the bucket to what was paid collectively to build and maintain the hospital. Further, all of us contribute some portion through taxes and premiums that have flowed through to this hospital but not all of us get access. Who am I to be so lucky to bring my wife and child there?

The status quo may always be untenable, but inefficiency and inequities make it that much more unbearable. And so, we find ourselves staring down the inevitable path of radical change in our healthcare system. On one side, the more defined path of government control which may lower costs and lower inequities at the expense of individual choice and quality of care. On the other, the seemingly impossible task of rolling back the 50-year march towards greater government involvement in healthcare and returning the value equation to the individual.

Whatever the path our country goes down, I instinctively knew through the nine months of care, the comfort during the delivery and the minor cost of the $400 copay, that the current system is a present luxury. Unlike the picture of a sandy beach with the rolling waters frozen and undisturbed by the passing of time, society presses on, continually battered by the waves of change. As I reflect on the birth of my son, I wonder what type of hospital and choice he will have when he’s pacing back and forth during the most eventful day of his life. For myself and my family at least, I am incredibly grateful to live in today’s society with the current American healthcare system, however flawed and however transient that system may be.





Daniel Cruz, ASA, MAAA is an Actuary at Axene Health Partners, LLC and is based in AHP’s Temecula, CA office.