National Health Insurance

...It is the price-based rationing of the commercial marketplace...

...employersponsored insurance...

...Similarly, the Canadian health care financing system is universal: all individuals resident in a particular province are automatically covered by the single provincial program...

...Inevitably, "public" programs would be under-funded and access to care restricted...

...In a democratic society the debate around budgets—which really is a debate about the resources to be devoted to medical care and the resources for other things (of which many, for example, education, food, housing, may do even more for health care) is the best protection we have against the twin dangers of over- and under-funding...

...Since our incomes and needs differ, such devices impinge negatively on equity and, because of the costs of administration, may even increase the level of 160 • DISSENT total expenditures...

...Complexity means error, and error undercuts the program's ability to survive...

...This bit of history is informative...

...Yet truly effective cost containment requires the adoption of budgets...

...2. Universal enrollment...

...In a universal program, risks would be shared by the entire community...

...We must know what we should use as a template by which to judge the various proposals...

...Nevertheless, the problem is so real and affects so many of us that there is a chance that the electorate will force those who run for office to debate seriously the merits of various "solutions...

...Frictions are bound to arise as workers fight to retain benefits that are becoming more valuable as a consequence of cost increases, while management fights to reduce ever more costly benefits...

...Within the macro budget, we should demand systems of negotiated prospective hospital budgets and capped physician payments...

...Now is the time to press those Democratic candidates who tell us they favor NHI but prefer not to tell us what that means for their commitment to restructuring...

...Most Pennsylvanians who voted for Harris Wofford had insurance...

...Surely in the United States, a country with a long tradition—for example, in education—of private sector options coexisting with publicly financed services, we will need to permit "opting out...

...By setting forth a plan for the best-of-worlds and by formulating a debate around those goals we can help expand what our representatives view as politically realistic...

...We should strive for a system that raises the required funds through taxes (rather than insurance premiums...

...The fact, however, is that the quality of health care is declining rapidly under existing arrangements where we attempt to contain costs by "controlling" physician behavior by questioning their clinical decisions, and forcing them to justify every action that falls outside some narrow limits...

...Everyone should have the same level of protection and, ideally, be enrolled in the same program...

...A national health insurance program that provides useful benefits in an equitable manner but that fails to address the question of costs is irresponsible and dangerous...

...There will be debate about coverage for drugs, eyeglasses, foot care, dental care, and long-term care, as well as about mental health services...

...But we should recognize that the "play or pay" approaches (sponsored by various senior Democrats) that attempt to achieve equity while retaining today's link between employment and insurance would involve costly complexity, expensive data systems, and the perpetuation of misallocations of resources from health care to administration...

...Such approaches do help "most of the people most of the time," but that is not good enough...

...The critical elements are the following: 1. Simplicity...

...Put simply: a program that addresses only the needs of the uninsured and places little emphasis on cost containment would be inadequate and irresponsible...

...health sector...

...5. Minimal cost-sharing...

...Industry's need to meet health insurance costs for current and already retired employees constrains expenditures for research and development...

...it cannot remain viable if that leakage keeps growing...

...When clinical judgment about the needs of individual patients is questioned on the basis of cost and physicians spend their time justifying the "extra" day in hospital, the additional visit or test, to a person at the other end of a telephone line, we hardly have a prescription for quality care...

...But it needs to be "on the table" even as the NHI debate moves forward, especially since the abolition of Medicaid would remove the largest source of governmental support for long-term care...

...Nevertheless, in order to keep the program strong over the long run, we must be careful to maintain the quality of the publicly funded program by minimizing the possible advantages of opting out...

...If one assumes a reasoned debate, such a program would be unappealing to the vast majority of voters...

...The differences between long-term care (both in and out of institutions) and acute and preventive care are many and call for differences in funding and eligibility...

...The need for control measures arises because expenditures for health care are growing much more rapidly than in other nations...

...Our goal ought to be as comprehensive as possible, to adopt a timetable for the phasing in of benefits not included in the first phase—and not to place patients or caregivers in a position where the coverage for important services is limited, thereby making these available only to those who can afford them...

...We should require that (as with education) taxes for the program be paid by all, including those who prefer privately funded services...

...The game is not worth the candle if we are offered a program that is limited to "catastrophic" care...

...The best way to inhibit growth of the privately funded sector is to maintain the quality of the publicly supported sector...

...The debate on NHI should begin with agreement that universal means that everyone is enrolled in the same program...

...It is worth stressing one political fact (which seems to be overlooked by senior congressional Democrats): there is a major new ally in the SPRING • 1992 • 157 battle for NHI, the middle class...

...To do so would be to fly in the face of realism: every other nation has found it necessary (or advantageous) to permit a private sector "escape valve...

...and so on...

...That doesn't define their program...

...4. Comprehensive benefits...

...The program would be "simpler" if it were possible to insist on a single system of care, a single system of (public) funding, and a ban on private care and private payment...

...I know no way to achieve cost containment without relying on a budget...

...If they were the basis for action, we'd have a publicly administered, tax-based, universal, and comprehensive program that was equitable in its benefit-cost structures, and that worked to contain costs...

...That is not to say that everything about the program must be "simple...

...Certainly the political world will require compromise...

...A more efficient health care system would benefit most Americans...

...3. Public administration...

...The system can accommodate a stable "leakage...

...A national unitary program would necessarily be funded in a very different way than would the Mitchell and Rostenkowski programs that rely on a mix of public and employer-based private insurance...

...So, too, with programs that set low maxima to the protection they offer (for example, ten days of hospital care or five physician visits per annum...

...In 1991 we need a program that, like Social Security, Medicare, and free public education, sounds as if it was developed to respond to human needs, not to provide consulting contracts for technocrats...

...every left-wing organization . . . the Communist Party...

...We face the prospect of a Willie Horton-like "debate...

...The president excepted, there is today a greater understanding of the importance of health care issues than ever before...

...There are numerous other characteristics that health experts would look for in a quality national health insurance plan...

...There is an important lesson in the fact that Social Security fares better than welfare and Medicare better than Medicaid...

...Thus, the temptation to seek the necessary funds from many pockets...

...The idea that somehow one can achieve a level of cost-sharing just sufficient to dissuade patients from "unnecessary" services but not so great as to interfere with needed care and that, somehow, that level will work "correctly" for all of us though our incomes, access to services, culture, and traditions differ is ludicrous...

...It is also to recognize that with the required "sorting" of individuals into a multiplicity of programs some would fall between the cracks and be without coverage for periods of time (even for such "benign" reasons as a change in employment or place of residence...

...The first is that there be a general acceptance that the health care/insurance situation is a mess and "something has to be done...

...This has significant implications if we want to define an NHI plan that would be politically appealing as well as socially useful...

...In considering cost-sharing we should be clear that balance billing—the physician's ability to charge more than the approved fee and bill for the balance between the charge and the reimbursement—should not be permitted...

...We are close to meeting that precondition—my hesitation in saying that "we are already there" derives from an inability to match the words and deeds of the White House incumbent: on December 6, 1991, President Bush stated, "I do think the time has come for the administration to come forward with a comprehensive program...

...If the political process requires some cost-sharing so that the plan be seen as "American," we should insist that the level be so small that it has a trivial impact on equity and on the use of preventive services...

...Even worse: the issues tempt sloganeers to use labels that obfuscate rather than illuminate— remember the slogans used against Truman's "socialized medicine" proposal, which, according to the American Medical Association, was supported by "the Federal Security Administration...

...There will be time enough for consensus and compromise...

...Thus it makes those of us with access feel comfortable and, by covering up the real problems, supports inaction...

...We should be prepared to share those gains by assisting the small minority whose jobs would be at risk...

...We should aspire to more...

...And back to misstatements of facts: it is Canadians who get to choose their own physicians...

...Its capacity to absorb additional funds is greater than any of us—other than Defense Department aficionados—could have imagined...

...Surely this seems obvious...

...to the view that without payment, there is no barrier to utilization (to many economists noneconomic barriers simply don't play a role), and, therefore, demand would be "infinite" and we'd "break the bank...

...It is not enough for candidates to say they are in favor of a comprehensive national health insurance plan...

...The program we advocate must be comprehensive...

...Visible gaps can lead to action and response...

...We may even have defined a program so complex that, if enacted, it would not operate at an acceptable error rate in a nation as geographically, economically, and demographically diverse as ours...

...Few current proposals have cost-sharing levels that meet that test...

...What we seek is a program that provides for "such physician and hospital care as is medically necessary" —and that includes preventive care...

...In 1965, senior citizens could, and did, organize and rally for Medicare because they understood the principles behind "health insurance for the aged...

...there would be no place for insurance company "competition" that results in the rejection of subscribers perceived to have above average health care risks and unwillingness to cover costs stemming from "preexisting conditions...

...Nevertheless, it is important to recognize that there is as yet no evidence that there is such support in Congress...

...Pennsylvania demonstrates that health insurance has become a middle-class issue that focuses on costs and the fear of losing insurance more than the problem of the uninsured...

...It pays homage to the view that people don't "appreciate" the services they receive except as they pay for them...

...Cost containment is not only good social policy but good politics...

...That brings me to the second point: the need for a reasoned debate...

...economists, in the virtues of cost-sharing is deep-seated...

...People with insurance want change because they are hurting...

...Twenty years ago the social insurance KennedyGriffiths NHI bill proposed a mix of payroll and income taxation...

...The monetary savings—tens of billions of dollars—can then be used to increase services to the population at need...

...I also speak of the right of physicians to see "private" as well as "public" patients and to decide how much of their effort to devote to each kind of patient (more correctly, to patients with these alternative funding sources...

...Thus cost-sharing is defended as: (1) moral and "educational" and (2) a useful cost-containment measure...

...Is there any question where they'll move if there is no pressure from the left...

...Interest in health care reform, dormant since the early 1980s, has revived as the problems of inequitable access and of cost increases have grown...

...What do we term plans that require employers to make insurance "available" to the employee but permit pressure on the employee not to purchase the insurance...

...some will "merely" add complexity and costs while others will be destructive...

...their concerns about costs and the impact on potential wage increases...

...Our short-run prospects, as well, are hurt: a high percentage of collective bargaining disputes now revolve around health insurance issues...

...The belief, especially among U.S...

...to the view that there is something immoral and anti–free enterprise if services are "free" (of course, given waiting time and costs of transportation, they're never free...

...The way Medicare pays physicians and hospitals is quite 158 • DISSENT complex, but that complexity need not be part of the basic description of a program for the aged and disabled...

...in the 1970s dozens of congressmen sponsored NHI proposals, as did Presidents Nixon, Ford, and Carter...

...So we are back to the old slogans about "socialized medicine...

...Although it is true that many employees could and would find employment in the single universal program, there is need for an active employment policy, one with retraining and labor market programs...

...What, however, should we make of American proposals that would call for all persons to have financial protection but would provide that protection through a large number of different plans: Medicare...

...Not at all...

...their fear of cutbacks in benefits...

...Cost-containment issues are difficult to discuss because slowing down spending increases sounds like (or can be attacked by those who insist it means) a decline in quality, an increase in waiting lines, the early signs of SPRING • 1992 • 161 rationing...

...The fact that Harris Wofford's victory in Pennsylvania was attributed to his stand in favor of some form of National Health Insurance does not ensure a serious national debate on the alternative approaches...

...They drive out necessary expenditures in other social and economic areas...

...if the voter wonders how and whether it would really work...

...Thus, most "establishment" proposals avoid talking in specific terms about cost containment mechanisms...

...This, however, is not yet the time for compromise...

...Of course, cost-sharing has an important political attraction: the more that can be collected from patients, the less that has to be paid for through insurance premiums or taxes...

...Preserving Medicaid or other incomerelated programs funded separately through budgetary appropriations is to assure the continuation of multiple-tier medicine...

...For years, this was the single most important raison d'être for a national health insurance program: we searched for an equitable system in which everyone had the financial protection that enabled medical care to be a "right...

...And, after all, wasn't it worth wasting money to achieve equity...

...We believed we could assume that if expenditures became irresponsibly high, the body politic would enact necessary control measures...

...Medicaid...

...I think we've got the best quality health care in the world and I don't want to see that diluted by socializing our medical treatment and diminishing the choice for individuals about going to their own doctor...

...It was easy (and, as it turned out, incorrect) to assume that such agreement would lead to enactment of legislation...

...Is something universally available if the amount the individual would have to contribute is so high as to be prohibitively expensive...

...Certainly we can "compromise" and retain Medicare as a separate program without doing violence to universality...

...Nevertheless, I believe I have presented the major criteria that nonexpert citizens can use to judge NHI proposals...

...We'd have what in today's terminology is a single-payer, not a play-or-pay dollars is not the only obstacle to equitable access, we'd need to retain (indeed, expand) existing special programs for populations whose social conditions severely impinge on their need for medical care—populations with a special need for prenatal care, maternal and child health services, clinical and social interventions to assist in fighting AIDS, and so forth...

...At earlier times I and others were quite willing to worry about benefits and equity even though we recognized that resultant expenditures would be unnecessarily high...

...That brings me to the third point: what are the critically important characteristics of the kind of program we should favor...

...If the program can't be understood...

...8. "Opting out...

...It goes without saying that a national health program must address the need for long-term care...

...It is no exaggeration to say that there are many in the business community—particularly in large manufacturing firms—who could be enlisted in the effort to enact NHI if they saw the benefit of cost containment...

...all who seriously believe in a Socialistic State...

...Experience tells us that meeting that need cannot be taken for granted...

...A publicly administered program would eliminate the marketing and many of the administrative costs inherent in today's system involving over one thousand insurance companies...

...It is up to us to apply that pressure...

...We should make utilization rates for privately funded care public so that, should those rates grow, the body politic is forced to react to the perceived growing disparity between the publicly and privately funded sectors...

...A single universal program covering all Americans does not SPRING • 1992 • 159 National Health hiourance require (or, indeed, leave room for) the underwriting function now performed by individual insurance companies...

...Thus, universality—achieved through a single program—is to be favored not only because it is simpler and cuts down administrative costs (which are very much higher in the United States than in other countries and are the most rapidly growing part of our health sector expenditures...

...Both of these mean that providers are paid in a manner unrelated to the number of specific services they provide and, thus,with that link broken, the need for claims and claim forms is vastly reduced...

...If the political system forces compromises, those should be judged in terms of how far they take us from that ideal...

...I do not speak about free choice of physicians, which should of course be maintained, but about the right of individuals to use the system when they prefer and, at other times, to step outside and buy services they perceive as "better" or more readily available outside the publicly financed/ insured sector (thus "jumping the line...

...That is not a recipe for political success...

...They permit the continuing existence of multiple-tier medicine and (by encouraging government to underpay and physicians to overcharge) lead to the withering away of the universal program...

...Little wonder that Canadians long ago rejected cost-sharing...

...We 162 • DISSENT nations—that providers elect to be in or out of the program but not be permitted to be both in (for some patients) and out (for others) at the same time—thereby behaving in ways that maximize their incomes at the expense of equity...

...That approach remains meritorious: some payroll tax so as to create the symbolism and associated political strength of "benefits" and "beneficiaries" (as with Social Security and Medicare) but largely dependent on income tax receipts because already high payroll taxes are regressive at worst and at best approach proportionality (that is, when there is no wage base cap and when our frame of reference is wages rather than total income...

...Such devices (already being reduced in Medicare and banned in Canada) are at variance with the goal of equity...

...in the 1950s and 1960s political efforts concentrated on Medicare, yet even that was viewed as a building block toward NHI...

...The methods by which a national health insurance program would be financed will vary with the enrollment structure adopted...

...If multiple programs are erected in order to phase the program in over a period of time, they might well be related to age or geographic location, but we must not permit them to be income related...

...In 1991, however, it is estimated that expenditures totaled $738 billion and 13.1 percent of the GNP (and, given the state of our GNP, that may well be an underestimate...

...To call a mélange of programs "universal" is to accept the loosest of definitions of adequate health insurance...

...There is even a chance that those who are elected will be forced to act...

...What should we be working for...

...One reason we haven't made progress is that there is not yet an agreed-upon definition, something that might be termed a "set of principles...

...it is Americans whose choices are increasingly restricted as employers select insurance/delivery systems under managed care agreements...

...If there is to be change, three major preconditions will need to be satisfied...

...None of us thirsts for waiting lines, but we should note that they provide visible evidence of the gaps between needs, demand, and supply...

...as well as special plans for the unemployed, those not connected to the labor force, those who work part-time, those who work for employers who find the cost of employee health insurance premiums onerous, if not prohibitive...

...These criteria call for restructuring, not reform...

...NHI is necessary but not sufficient, and we must recognize that the barriers to health and to health care are not solely those of economics, money, and insurance...

...In striving for a program whose universal characteristics do not atrophy over time, we must address the issue of "opting out" by patients and physicians...

...6. Progressive funding...

...Put crassly, it would convert a middleclass issue into one more "welfare" program...

...And perhaps they were also concerned about the uninsured...

...Clearly one should hesitate to sign a blank check to the U.S...

...Taxes, at least in principle, can be related to ability to pay...

...It reminds us not to lose our perspective...

...Such a design has its place, but that place is the classroom, not the political arena...

...national health expenditures totaled $84 billion and represented 7.7 percent of our Gross National Product (GNP...

...SPRING • 1992 • 163...

...We know they will be pressed from the right...

...There is an unfortunate long-standing tradition in American private and public health insurance: the use of deductibles, co-insurance, and co-payment provisions that require patients to pay for part of the care they receive...

...Details do matter, and in the politics of legislation it is often the case that what the nouns give the adjectives take away...

...The essentials of the Medicare program (eligibility, financing, even benefits—though that is more true in the past than today) can be described in understandable terms...

...True, different observers have different priorities: the uninsured, the underinsured, reform of the small-business insurance market, doing something about "pre-existing conditions," reducing administrative costs and paperwork, increasing access to quality care, containing costs, and sharing these costs in a more equitable manner...

...Our forces are not so powerful as to permit us to write off these potential allies (and the "respectability" they confer on our cause...

...Though there were wide differences among the various bills, their very presence seemed evidence that everyone agreed there was a real problem...

...It is clear that the elimination of private commercial health insurers (even the retention of a much reduced role as financial intermediaries, as in Medicare) would be resisted by private insurers and their employees...

...On December 6, 1991, President Bush, speaking in Ontario, California, stated: "When I hear people say what we ought to do is put the Canadian system into effect, I think they're wrong...

...We are at the beginning of a debate, and are not yet certain what will be "politically realistic...

...Yet those different perceptions of the problem —which can be roughly grouped under two major headings: (1) equity and (2) costs—make for wider support for change and for new political coalitions...

...The fact also is that even today there is rationing, but that rationing is not the kind that shares scarce products in an equitable manner based on need...

...Under their countries' national health plans, establishments abroad do not face the health insurance costs faced here at home (President Bush would have done more for American car manufacturers and UAW members had he pledged his support for NHI rather than pleading with the Japanese for an aid package...

...the President...

...I argued that way in 1971 when U.S...

...if the explanation leaves the listener at sea about what the program would do for her or him—we have, most probably, defined a program that can't muster the support required for enactment...

...Yet, both before and since, he has behaved as if he believes that "the time has come" because there is political pressure rather than because there are real social needs...

...Yes, there are many ways to try to deal with hospital per-diems and physician fees, and I do not mean to imply that these various approaches are of no value...

...Our present system hides those gaps by "rationing" people out...

...It may be that a long-term care program should be enacted separately rather than as part of an NHI proposal...

...7. Cost containment...

...In those earlier periods there was a consensus that we were close to enacting comprehensive national health insurance legislation...

...It is possible to design an elegant and extremely detailed system that attempts to anticipate every possible substantive and political problem...

...They were voting their fears: their fear of losing jobs, and, thereby, insurance...

...Some compromises will be better than others...

...Universality should be our goal because the best protection for the poor and the disenfranchised is to be enrolled in the same program that serves the rest of the community...

...A month later Louis Sullivan, secretary of Health and Human Services, stated that proposals sponsored by Senate Majority Leader George Mitchell and Chairman of the House Ways and Means Committee Dan Rostenkowski —proposals that many would criticize as insufficiently bold—"would constitute a fatal first step . . . toward nationalized medicine...

...The government's expenditures on health care are limiting its ability to fund education and the renewal of our public infrastructure...

...Nevertheless, the term "universality" can have widely different definitions: Medicare is a universal program that (with minor exceptions) covers all individuals over sixty-five years of age...

...The fact that many Democrats and some Republicans have introduced health care reform legislation does not mean that one or another bill will command a majority in Congress and be veto-proof...