More evidence from coast to coast that American medicine may be on an unsustainable path

What do a nurses strike in New York, a proposed wealth tax in California, and a sudden plunge in health insurance stocks have in common? A system that's eating itself.

You’ve heard billionaires are leaving California over a ballot proposal that if passed this November will make them pay the state 5 percent of everything they own.¹

What has gotten less attention is where the wealth tax is supposed to go: to support the state’s Medicaid program, Medi-Cal.² Medicaid spending has jumped 25 percent statewide in two years and doubled since 2019. This year it will reach almost $200 billion, in part to cover 1.6 million illegal immigrants at a cost of almost $10 billion.

President Trump’s efforts to turn down the spigot — slightly — have panicked California’s healthcare unions. They’re so desperate for cash they are even risking the Silicon Valley golden goose.

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(Facts and figures without bias. For pennies a day.)

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Meanwhile, in New York City, weeks of brutal cold have not stopped the local nursing union from striking local hospitals.

The nurses walked out three years ago and came away with average pay hikes of 6 percent annually plus other big gains. The election of economic imbecile Zohran Kwame Mamdani as New York’s mayor seems to have emboldened them further.

Mamdani briefly joined the nurses on their picket lines, meaning that he was effectively negotiating against himself, or more accurately against taxpayers. (The nurses are striking non-profit private hospitals, but whatever contract they reach will apply to the city’s frequently terrible public hospitals too.)

With Mamdani in their pockets, the nurses went for broke. Pretty much literally.

They demanded 10 percent annual wage hikes, plus other salary, benefits, and work rules changes. The average nurse’s salary and benefits would have reached $272,000 per year by the end of the proposed new contract in 2029 — an increase of $110,000 from current levels. The demands would have raised costs for New York hospitals, which are already extraordinarily expensive, by several billion dollars a year.

Even the New York Times broke from its nearly reflexive support for public employee unions to offer a somewhat cynical take on the walkout:

Since the start of the strike, nurses on the picket line and their union leaders have tended to minimize pay as a major reason for the labor action, instead highlighting other demands.

The nurses now seem to have recognized they overreached.

They have backed off slightly on their wage hike demands, lowering them to an average of 6 percent a year, same as the last contract. Meanwhile, the hospitals have told the unions they will raise overall compensation by $4,500 per year for each of the next three years.

Ironically, given spiraling health-care costs, much of that extra money would likely go to pay for health insurance.

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The nurses justify their demands in part by pointing to the multi-million dollar salaries the big hospital systems pay their executives. And, yes, they have a point, considering the hospital companies are both theoretically nonprofit and survive on taxpayer-financed Medicare and Medicaid programs.

In 2024, New York Presbyterian paid its chief executive, Dr. Steven Corwin, $26.3 million. It also offered more than 20 of its top executives, including its “Chief People And Culture Officer,” its “Chief Marketing Officer,” and, yes, its “Chief Nursing Officer” annual pay and benefits of more than $1.5 million.

This is what happens when an entire sector of the economy breaks down and everyone working inside it views it as little more than a honeypot to be abused with impunity.

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The difference between medicine and most other parts of the economy, of course, is that in medicine the customers don’t (directly) pay, so they don’t have much say in the costs.

But the Trump administration seems at least to be beginning to recognize that it can no longer give insurers, hospitals, and drug companies a blank check. The shares of UnitedHealth Group and several other big insurance companies plunged up to 20 percent Tuesday after a report that Medicare plans to hold reimbursements to insurers flat next year.

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No doubt the insurers have already quietly begun a massive lobbying campaign.

If it fails, the companies will likely go public, telling the world that the Trump administration is killing old people by slashing Medicare. (Only in the world of government budgeting does keeping spending flat — or even raising it less than predicted — count as “slashing.”)

If that happens, the legacy media response will be interesting.

In general, left-leaning outlets like the Times and CNN have simply refused to consider whether the healthcare system’s overall costs are sustainable.

But the nurses strike coverage suggests a glimmer of realization that no one can say with a straight face that the United States does not spend enough money on healthcare, that maybe the problem is on the cost side.

Or maybe I’m being too hopeful. The coverage last fall of the fight over expiring subsidies for Obamacare rarely took notice of how quickly insurance premiums have spiraled since Democrats passed Obamacare, much less ask the question of whether Obamacare might have driven those costs up.

If reporters were good at math, they wouldn’t be reporters.

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(With some exceptions. Exceptions, umm, worth paying for.)

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The strike, the wealth tax initiative, and the proposed Medicare cuts are broadly unrelated.

But squint hard enough and they look like a $5 trillion healthcare system that may be more fragile — and more dependent on unlimited government subsidies and funding — than it seems.

Maybe.

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More proof of Mamdani’s economic foolishness (if you needed it):

1. One provision deep inside the proposal suggests that billionaires who own shares that have super-voting rights in their companies — like Google’s co-chief executives — might have to turn over much more of their wealth. It is unclear whether that language is intentional or a mistake, but the Google executives aren’t taking any chances; both are buying properties in Florida.

2. Clever, right? I say Medi-Cal, you say medical, let’s call the whole thing off!