Toward Adequate Health Care
Fein, Rashi
Each year more Americans face an uncertain health future with inadequate or no insurance to help pay for medical care. National efforts to control and contain medical expenditures, which are...
...There were efforts at welfare reform...
...Expansion of the service sector, which traditionally has not provided health insurance for its employees, will increase these numbers...
...That is only partially the case...
...I opt for state-administered programs, even knowing that there will be disparities between the states, for what I believe are powerful and persuasive reasons...
...Disparities in access were reduced...
...The United States, of course, is not Canada...
...Perhaps that was not as necessary during periods of rapid expansion...
...Rather it is the sum of the individual perceptions of those who have the dollars...
...This right is similar to our expectations in areas such as access to education, parks, and a basic level of sustenance...
...Income provides a more acceptable way to assess whether we are being "fair...
...By 1986, this was true of only 38 percent of the very same plans...
...The Canadian system works effectively: Canada's universal and comprehensive insurance system is less expensive than our patchwork quilt, yet its health indices equal (and in some cases, exceed) ours...
...Whatever the outcome of this debate, we need to encourage our representatives and those who seek the presidency to address the larger health problems that remain: the inequities in access to care and the ever-increasing expenditures for care...
...National efforts to control and contain medical expenditures, which are endangering the quality of care, have met with few successes...
...Indeed, there is the possibility that some state legislatures would be more daring than the Congress and opt for more broadly based enrollment mechanisms supported by state taxes...
...Let us dispose of myths...
...WINTER • 1988 • 99 The guarantee of funding through public payment stimulated the renovation and expansion of American hospitals and the addition of sophisticated technology...
...We grew cynical (and there was much to be cynical about...
...We were encouraged to think that hope lay only in free-enterprise markets...
...Welcome as increased private effort might be, private charity cannot substitute for government programs, nor can individual priority-setting substitute for communal determination of needs...
...What it may do is erect a façade of legislation that pretends to equality even as the reality is otherwise...
...But that is not all we find on our report card...
...More and more of us will be forced into health plans and patterns of care we now reject...
...Insurers, concerned about future costs, will reject self-selected individual subscribers...
...The various states could develop different mechanisms to discharge those responsibilities...
...Since most group insurance was employment-related, employed individuals who were younger could get a lower premium than called for by the Blue Cross/Blue Shield community rate (which included the retired elderly...
...Third: Medicare, the federal health-financing program for the aged and disabled, has become more expensive...
...Fifth: the health sector is becoming more commercialized...
...The civil rights movement and consequent federal legislation helped remove segregation barriers in hospitals...
...If, as I suggest, both rights are necessary, we require a structure that can determine the citizenry's perceptions and that enables us to translate them into an effective program...
...We do spend more for care...
...These actions were stimulated, implemented, and financed by the most important instruments through which we undertake collective action: the various levels of government...
...Our record was not as good as that to which we aspired, but we did make significant progress...
...We must be more specific when we speak of "the right to care...
...individuals will prove irresistible to firms playing by the rules of the marketplace and trying to maximize profits...
...As I write, the Hundredth Congress is considering some form of catastrophic health insurance for Medicare beneficiaries...
...It assumes competition, but, in fact, the market characteristics necessary to make competition work (e.g., many buyers and sellers, ease of entry, access to information) do not prevail...
...Second: in the two-year period 1982-1984 fully half of America's major corporations increased employee premiums and deductibles and one-third increased co-insurance and copayments, or the amount that the insured must 98 • DISSENT pay for each service...
...We were buffeted by inflation (low by European standards but high by American ones and alien to our experience...
...Another myth: the uninsured generally get care anyway, paid for by Medicaid or given free...
...This arrangement would enable public funds to be mixed with private funds and still allow individuals to select from among providers and reimbursement agents...
...Inevitably, this will be doubly difficult for those not covered by employer group health plans...
...Disparities will only be erased over a long period of time...
...Research activities supported by the National Institutes of Health expanded, as did the number of medical schools and students...
...The first issue is the appropriate level of administration and on that, as on other matters, we would do well to learn from Canada...
...But it is important to recognize that for the last fifteen years that has been the very kind of program that many liberal members of Congress (who in earlier years supported a social-insurance program) have favored at the federal level...
...It charged the same premium to all subscribers even though, as a function of age 100 • DISSENT and health status, some individuals predictably would use more and others would use fewer services...
...Thus, if we give up voluntary cross-subsidies we must be prepared to replace them—as in the case of Medicare—with collective and compulsory redistribution programs...
...Although personal behavior in regard to smoking, diet, and life-style played a role in improving health indices, the record we achieved was largely the result of collective rather than individual and independent action...
...As in Canada, we would have state programs meeting basic federal requirements, but each would be administered in ways that more adequately reflected local priorities...
...It does not require that government run the delivery system, but it does require that those who run it be held accountable...
...It reflects the difference in the attitudes we hold, and the social and economic policies we have chosen to pursue...
...There is little reason to believe that the two voting systems would yield the same result...
...Of course, it does not function as well as it might...
...But that runs counter to what we have heard for seven years from an administration that has been telling us that we should do privately what we had been doing communally through government...
...The marketplace determines what we spend on fine brandy, vacations in Acapulco, sun-dried tomatoes, yachts, and other less exotic consumer products...
...That did not happen, but the fact that leaders of Congress and the president debated specific health insurance proposals showed a willingness to address issues of social policy— specifically that millions of Americans did not have any insurance to protect them against rapidly increasing costs of medical care...
...Their "bottom-line" mentality has led to denial of care to those patients who will not be "profitable" or who cannot pay...
...Our history, tradition, and attitudes are different...
...It is called government...
...The first is that the states are not likely to develop social-insurance-based enrollment proWINTER • 1988 • 103 grams...
...In large measure our problem derives from inadequate prenatal care, often due to lack of access...
...When medical care could do less and was less costly, we spoke as if every American should have a right to all the care that he or she might benefit from, however marginal that benefit might be and however large the cost...
...The age (and, in the case of airline and telephone service, residence) distinctions on which cross-subsidies are based are poor proxies for distinctions based on income...
...A larger and larger proportion of our income and total production goes for medical care...
...Our health care financing system has two unfortunate characteristics: (1) private insurance is employment-related rather than universally available...
...We can expect additional pressure to restrict existing health insurance policies, to increase patient "cost-sharing," and to cut benefits...
...But there is disagreement about whether government or the free market is the appropriate mechanism...
...In 1986 these totaled $458 billion, an increase of 8.4 percent over 1985...
...It, too, is a concept with which we are familiar...
...It would not do to adopt the Canadian health insurance program, but we can adapt it...
...Other entries are disconcerting: First: the percentage of Americans under age 65 without any public or private health insurance has been growing—up by over five million persons since 1980...
...there is much reason to believe that the democratic method, though imperfect and in need of repair, could more appropriately reflect the health needs of the total population...
...The consequence was clear: the young and healthy opted for lower premiums and dissociated themselves from those who were older and likely to need more care...
...104 • DISSENT...
...Such a structure exists and operates at various levels...
...We did not think it unreasonable for the president to tell us that decent medical care should be available to all and that government could solve domestic social problems...
...New leaders told us we couldn't solve problems by throwing money at them—quite as if money didn't matter...
...It was a golden age for American medicine...
...under Medicare...
...This issue has already arisen: insurers do not want to enroll individuals at risk of contracting AIDS...
...That debate assumed that Medicare, the largest public health-financing program, was working well...
...What Are our Health Care Rights...
...One should not succumb to nostalgia—not for Vietnam, the oil crisis of 1973, Watergate, or rapid inflation...
...Between 1960 and 1980, life expectancy at birth increased by a full four years...
...Although the federal government can use the power of purse to "induce" states to participate (for example, denial of business deductions for health insurance premiums in states that fail to set up an approved program), federal authorities should assess performance and be prepared to administer the program in any state that fails to discharge its responsibilities...
...Advances in biomedical science, though welcome, will add to costs and will further strain government and private budgets...
...The federal government would have the responsibility to define the benefit structure (the list of covered services), to monitor compliance, review quality, assure nondiscriminatory behavior, enforce portability of benefits across state boundaries, and set standards for enrollment...
...It's also worth noting how different were our attitudes toward reliance on government's helping hand...
...Harry Truman's plan of the late 1940s is not appropriate today and neither are the ideas put forward in the 1960s and 1970s...
...A second argument against state administration is that it would inhibit equalization between the various states...
...To understand what is at stake requires a redefinition of the "right to medical care...
...In contrast to today, when many Americans "mistrust" government, in the mid-1960s we did turn—with ambivalence, but turn nevertheless—to government to lead the war on poverty and to provide the social insurance of Medicare...
...Yet, in 1983, sixteen countries around the world had lower infant mortality rates (a traditional health measure) than we...
...Though the federal government could (and should) take account of income differences and provide funds for equalization purposes, there is the possibility that residents in some localities would have more and better health care than if they lived elsewhere...
...But it would be beneficial if we are trying to contain costs and are engaged in political battles about health budgets, appropriate levels of spending, and necessary trade-offs...
...There is another issue...
...Yet we should recall that in spite of those difficulties, we were seriously examining important social issues...
...Important as medical care is for the achievement of higher health status, so also is an increase in living standards...
...That, too, is not an accident...
...In recent years, however, many federal health programs have been cut back...
...That system collapsed in the face of competition from commercial insurers whose "experience rating" premium structure reflected the health experience and projected use of health care services of particular groups narrowly defined...
...We hunkered down and, beset by problems, looked inward and tried to protect our individual selves...
...Over the years countless polls have shown that the American people support national health insurance...
...That requires a recognition that the right is composed of two parts...
...Thirty-seven million individuals, one out of every six Americans, have no health insurance whatsoever and millions more have inadequate coverage...
...The resolution of that issue remains on our agenda...
...They prefer to build upon existing employment-based insurance, believing that employers view premiums differently than taxes...
...Something important happened to the sense of community...
...In contrast, the free-market solution to America's health problems is replete with problems...
...Such systems of cross-subsidy existed in airline and telephone service as well as in health insurance...
...It is cumbersome (though the "invisible hand" of the free market can be "all thumbs") nor is it always wise or beneficent...
...We could spend our money on health care rather than on enrollment, marketing, claim forms, and bookkeeping...
...Where the economic gains of the 1960s were widely shared and poverty rates declined, recent advances have been smaller and have not been distributed as widely...
...None of us is certain we are getting value for money...
...The enterprises they work for do not provide the "fringe benefit" of nontaxable health insurance, do not organize group enrollment at lower premiums, and do not pay wages sufficient to enable individual purchase of policies...
...In 1981, 84 percent of a sample of corporate medical-insurance plans paid all hospital room and board charges incurred by employees or their dependents...
...Liberals and conservatives agree that we need a control mechanism (liberals would say "an equitable control mechanism"), a process by which to determine how much society will spend...
...But the development of appropriate health-care budgets, payment mechanisms, enrollment options, and ways to raise and pool dollars would be state responsibilities...
...One desirable approach would require that states set up "authorities" into which all funds would flow (including all subsidies) and from which "premiums" would be disbursed, in response to the insured individual's choice, to insurers acting as fiscal intermediaries or to organized delivery systems...
...It is time to develop the detailed specifications for a federal-state national health insurance program that explicitly recognizes which macro-health-care decisions are essentially political and invite more active participation by the electorate...
...It is not clear that a purely federal program will achieve more rapid equalization...
...The assumption in the early 1970s—and it was a reasonable assumption—was that national health insurance would soon be enacted...
...In a word, we are healthier...
...Fewer Americans have insurance and those that do, have less of it...
...Income disparities have widened...
...If we adopt a similar system, we could use part of the savings on administration to offset the increased costs associated with increased access...
...But this level of expenditure does not represent the collective perception of all the citizenry...
...If we seek equity, we should be troubled by situations in which low-income young persons subsidize the health care of more affluent older individuals...
...Nevertheless, cross-subsidies do help in the "average" case...
...It does not require that government make clinical decisions, but it does require that government set appropriate incentives and a framework for those decisions so that they more adequately reflect medical and social needs...
...2) public and private payment systems have no control mechanism, no way of arriving at a decision concerning the appropriate level of total expenditures...
...The second right is the individual's right to an equitable share of those total health resources, where equitable means that the distribution of care reflects medical needs and the costs and benefits of care rather than individual income, wealth, political power, or social status...
...Though many providers take care of people who can't pay, the uninsured—who tend to be poorer and sicker—receive half the hospital care and two-thirds the physician care that others do...
...Therefore, it is not clear that we lose anything by going the state route...
...Solutions for the disparities in our income distribution will not be found in privatization, competition, or the free market...
...There is a myth that the uninsured are shiftless, lazy, and unwilling to work...
...Today we are increasingly aware, if only because of advances in medical science, that no society can make that definition operational...
...Furthermore, our health care delivery system is far more heterogeneous than in earlier days...
...It is not the way we decide how much to spend on education or other public goods in which public benefits exceed private ones...
...What makes sense in St...
...In 1965, in the wake of Lyndon Johnson's landslide victory over Barry Goldwater, Congress enacted Medicare and Medicaid...
...So, too, have disparities in access to care and in health indices...
...By 1965 most of the population age 65 and over had no private health insurance because the unsubsidized rates they faced had increased beyond their ability to pay...
...For-profit firms have been legitimized...
...We must take account of recent changes in the health sector and in the American economy...
...Medicare now pays for less than half of the health care costs of the elderly...
...Paul may not fit Des Moines' needs or be responsive to its population's desires...
...Expenditures are high...
...Indeed, it is in the context of the free market that our major corporations indicate their unwillingness to continue to pay the higher premiums that once provided funds to cover the costs incurred by the uninsured...
...Not so...
...Indeed, in 1972, Medicare was liberalized to include the disabled and those suffering from renal failure (it was suggested, sardonically to be sure, that we might get comprehensive national health insurance "organ by organ...
...Of great significance for the longer run, and tied to the decline in the sense of community, is the coming apart of arrangements by which one group of consumers assists another (sometimes, to be sure, without knowing it and as a consequence of regulation...
...What characteristics might a national health program have...
...I do not find them compelling...
...Health Maintenance Organizations are far more prevalent in some parts of the nation than in others...
...Defining a Universal Health Insurance Plan The two-part formulation of rights has an operational counterpart: a universal health insurance program with budget control...
...More resources for medical care means fewer resources for capital investment, education, parks, housing, or consumer goods...
...A third argument stems from the fact that not all the states have equal administrative ability or commitment...
...Most states will mandate employers to provide insurance for their employees (with state assistance to meet the premium costs) and will develop special enrollment programs to cover remaining parts of the population...
...The existing insurance systems have not furthered equity and have encouraged the expansion of the health sector without consideration of real costs, alternative ways that medical care could be produced, and other social priorities...
...Given the freedom to act (federal legislation now prevents that) and some part of the necessary funds, they are likely to move with vigor...
...So too, our size, population, and economic structure...
...A future president could articulate a vision of a more equitable and responsible health care system...
...It will become harder to pay for the care we need...
...In constructing a universal health insurance system with budget controls, it will not do to present the national health insurance plans that were debated in the 1910s or 1920s or 1930s...
...Our infant mortality rate is 23 percent higher than that of our neighbor, Canada...
...They have not been enamored of the kind of program that would increase the federal budget and raise taxes...
...A number of our states have worked at cost-containment issues and have developed expertise that can be built upon...
...Given advances in medical science that will permit assessment of the future risk of heart attack, diabetes, and other ailments, the temptation to segment the market and exclude some (many...
...Most of those without insurance are employed (or dependents of people with jobs...
...This article focuses on the way we finance health care and its implications for equity and expenditure control...
...I would suggest a different approach: administration by the individual states (Canada uses provincial administration...
...It would also provide financial assistance to help the individual states enroll their total population in the insurance program (the goal is an insurance program, not a pool of funds to pay for "uncompensated care...
...It's not that we lack medical technology or expertise...
...Nevertheless, all states should be given the opportunity to implement an insurance program...
...That right is similar to our expectations in areas such as national defense, highways, education, etc...
...Put differently, but no less dramatically, the age-adjusted death rate—that is, the number of deaths per 100,000 population adjusted for the changing age of that population—declined from 760 in 1960 to 585 in 1980...
...Fourth: Medicaid, the federal-state healthfinancing program for the poor (more correctly: for some of the poor), now assists only 40 percent of America's poor and only half of America's poor children...
...But given the fact that, except for the United States (and South Africa), every industrialized nation has some form of national health insurance, it is clear that the obstacle to such a program is ideological rather than technical...
...A final myth: because America spends more on health care than other nations, our health indices lead the world...
...For some time it has been assumed that NHI would be a federal program administered from Washington...
...The fact is that at present many of our states have greater capacity for effective administration than does the federal civil service, which has been decimated in recent years...
...Between 1977 and 1983 the number of Americans in poverty grew by 10.5 million while the number of Medicaid recipients declined by 1.3 million...
...Rising incomes and full employment (for part of the period) and increases in Social Security also made significant contributions to improvement in America's health indices...
...The Office of Economic Opportunity helped organize and fund neighborhood health centers...
...This two-part definition is the antithesis of one that calls for private decision-making through the marketplace...
...Though there are large variations between subgroups of the population, on the whole we live longer and with less impairment...
...The enactment of Medicare, a compulsory collective effort to help the aged, was the inevitable consequence of the collapse of the earlier voluntary system of sharing costs...
...There is reason, particularly with a set of services as personal as health care, to bring decision-making about the allocation of resources closer to the citizenry...
...But if each insurer or delivery system competes for healthy patients, who will protect or take care of those who are sicker and "bad risks...
...Social insurance was acceptable and accepted...
...Many of us still remember the days when Blue Cross used "community rating" —a system of voluntary cross-subsidy—to set premiums...
...Perhaps one of the reasons we were willing to do so was that the issue of distributional equity was raised at the highest level of government...
...Some Progress, Many Gaps Progress has been made over the last two decades...
...That remains the case even in Great Britain, which has a National Health Service, and in the U.S...
...We were lectured that there were no simple answers—almost as if complex ones were un-American...
...It is influenced by small but powerful groups—though we may all enjoy free speech, some use loudspeakers while others can only whisper...
...Medicaid covers less than one-half of America's poor...
...I suggest that we view health care as part of a general set of issues concerning the nature of the American community and our social well-being...
...In the early 1970s our social outlook and attitudes were different...
...President Nixon even proposed a national health insurance program...
...compulsory taxation is a more refined tool to achieve equitable redistribution...
...attaché case and threepiece suit will replace stethoscope and white coat...
...Furthermore, competition is likely to lead to segmentation of the market and to inequities...
...Even so, in the political realm each of us has no more or fewer votes than the next person, whereas in the marketplace each of us votes with dollars and that means that some have far more votes than others...
...The percent of the Gross National Product allocated to the health care sector has expanded from 5.9 percent in 1965 and 8.3 percent in 1975 to 10.9 percent in 1986...
...It does not require that government produce medical care, but it does require that government be concerned with how much care will be produced...
...Premiums for physicians' services have increased and the hospital deductible rose frOm $400 in 1985 to $520 in 1987...
...There are arguments against relying on state administration...
...Decisions will be made for us and for physicians by cost accountants...
...Medicare, however, is only one item on the health policy agenda...
...The first is the right of citizens to expect that the dollars and resources allocated to medical care will be consistent with their collective perception of the benefits that care confers and the alternative benefits WINTER • 1988 • 101 that might be generated were the dollars and resources used in other ways...
...it's not a question of survival rates for low-weight babies...
...In spite of the fact that many of us have less protection and receive less care than we require, American health expenditures continue to grow rapidly...
...The Choices We Made The progress we once made (as well as the slippage in the recent past) was neither preordained nor accidental...
...I shall briefly review our recent record, examine the genesis of our present situation, and describe the characteristics of a responsible comprehensive and universal health insurance program...
...There is profit to be made by enrolling healthier patients into an insurance or delivery program...
...Even the best program will not operate perfectly, for the design will have to compromise between our 102 • DISSENT various goals...
...Our attitudes changed...
...Support for nutrition programs and maternal and child health activities expanded...
...One reason the Canadian system costs less is that administrative costs are lower...
Vol. 35 • January 1988 • No. 1
