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U.S. Healthcare Reform: 1993 Re-Visited

Posted on: 11 Aug 09

Summary

As Capitol Hill readies itself for the August Recess, and as President Barack Obama demands that a bill reach his desk in the Oval Office by October, healthcare reform still finds itself in more-or-less the same quagmire as it did in 1993. We take a look at the chances of comprehensive reform this year and tackle the nitty-gritty of one of the most complex and polarising issues of Washington politics today.

Simply put, they're at it again. In 1993, Bill Clinton – then 42nd President of the United States – set about to make healthcare reform one of the foremost priorities of his administration and he appointed his wife and First Lady, Hillary Rodham Clinton to set about delivering this seemingly impossible objective. Known for her long-standing interest in healthcare reform and her considerable wealth of knowledge on the subject – having served on the board of the Arkansas Children’s Hospital Legal Services between 1988 and 1992 and having chaired the Children’s Defense Fund for the years 1986-1992 – Mrs. Clinton could have been seen as the perfect pick for the role of Healthcare ‘Tzar’ in the White House. Today, however, the years of ‘Hillarycare’ – as they are now affectionately dubbed – are most known for back-room secrecy, an unwillingness to compromise and above all else, failure. Since the election of Barack Hussein Obama on January 20th of this year, America has been bracing itself for round two of the skirmish and so far, little seems to have changed from the years when it was Hillary and Bill in the West Wing. New Secretary of Health and Human Services, Kathleen Sebelius – formally the second female Governor of the State of Kansas – is having a baptism of fire, to put it lightly.
Yet, before we begin to address the range of hurdles and setbacks that are currently plaguing any notion of reform, it is important to understand how America landed itself in this social quagmire in the first place. To outline some of the most fundamental facts about the current state of the healthcare system in the United States: In 2009, and for well over a decade, The United States has spent more on healthcare - per capita - than any other nation in the world. Be that as it may, whilst successfully forward the kind of world-leading investment that you’d expect from the nation once famously dubbed the ‘shining city on the hill’ (far back in the 17th century), the majority of U.S. citizens still receive one of the worst outcomes the world over. In 2000, the World Health Organization Rankings – no longer produced due to the outstanding complexity of the task - placed the healthcare system of the U.S. at a very middling 37th, far behind The United Kingdom (19th) and France (1st). According to data release by the US Census Bureau for 2007, Over 15% of all U.S. citizens – or 45.7 million Americans found themselves without any kind of health insurance whatsoever.
However, as convincing as such numbers might be, they are also sometimes empirically flawed - something that Conservatives and other supporters of the status quo are all too keen to point out. Therefore, instead of entirely relying on the acknowledged complexity of rankings such as those once produced by the WHO, let us go instead to America’s own academic communities to find out what some of the world’s greatest researchers have found on the issue of cost-effectiveness in the American system.
In a 2005 study, published in the medical journal Health Affairs and conducted at the John Hopkins Bloomberg School of Public Health, study leader Professor Gerard Anderson and his team uncovered some of the true costs of the U.S. system. Amongst a plethora of ultimately condemning data, Professor Anderson and his team reported that whilst only two other nations spend more than 10% of their Gross Domestic Product (GDP) on healthcare (Switzerland and Germany), the United States leads the way, committing more than 14% of its GDP every year. Moreover, where Switzerland, long acknowledged as one of the greatest spenders on healthcare globally, spent $3,446 per capita, the United States spent a staggering $5,267 per U.S. citizen in 2002 (53 percent more than any other country).
Even more staggeringly, whilst you would therefore logically assume that Americans would receive a far greater standard of healthcare services for their increased investment, actually the reverse is true. For instance, compared to a median figure of 3.7 hospital beds per 1,000 residents in other world countries, the study found that the United States can only provide 2.9. And where the average for nurses (per 1,000 people) was 8.9 globally, the U.S. scored a considerably lower 7.9. In many other categories too, the data was equally damning. Even more interestingly, the study showed that where malpractice costs are likely only a small percentage of the extra costs, differences in the cost of primary care services are likely the main source of the problem. In summarizing the study, Dr. Anderson was decisive about the significance of his findings. ‘What we found, is that we pay more for health care for the simple reason that prices for health services are significantly higher in the United States than they are elsewhere’, he said, adding that ‘We have less access to most health services and higher costs associated with malpractice insurance have only a marginal effect on overall health spending’. Put simply, whether paid for by tax dollars or by contributions to private insurers, the average American citizen spends far more every year on healthcare than the citizens of any other nation in the world, whilst also receiving one of the most mediocre outcomes. Henceforth, where many aspects of the discourse are debatable, perplexing and ultimately, difficult to answer, the aforementioned data supports an inescapable fact; the U.S. system is inefficient by definition and evoking scare-stories of ‘socialist Europe’ changes little for any of the 40 + million Americans living without health insurance every day.
In many senses, the immediate outlook on healthcare reform today appears not much brighter than it did in the ‘90s. Once again, ‘reform’ is on the lips of every one of the United States’ many Congressmen and Senators – not to mention the many millions of Americans that are debating the issue at kitchen tables right across the nation – but genuine change still looks a long way away. In the bills that have so far made the rounds in the Congress, the most significant point of contention has consistently been the so-called public option: the idea that the government will compete with private insurers by bringing more competition to the marketplace, with the intention of lowering costs and granting greater choice to those millions of Americans currently idling without healthcare of any kind. Now, however, for many Democrats as well as the majority of Republicans, the idea of a public option is slowly being stripped away from any plans. Indeed, it seems unlikely that any public option will now make it into the final bill that President Obama wants argued out in Congress by the time of the August recess and sitting on his desk, ready to sign by October.
Yet, beyond all of the chutzpah, what are the foremost issues that will define any measure of healthcare reform in 2009?
For many legislators, the proposed National Healthcare Exchange is arguably one of the most important facets of any future reform. Under this system – essentially a working marketplace for choice and competition – consumers would be able to choose between healthcare providers competing in regional or national exchanges, where natural market competition would, in theory, finally bring some degree of market competition to healthcare. Any proposed ‘public plan’ would also find itself competing on price with private insurers within the same universal marketplace. In order to protect the elderly, the disabled and those Americans with pre-existing conditions, risk adjustment - where the government would subsidise private insurers for offering quality healthcare to those most at risk - would ensure that healthcare providers are actually encouraged to offer quality plans to some of those Americans currently denied any coverage whatsoever. As a way of insisting that the same market forces that lower costs in most other industries are also allowed to successfully operate in healthcare, the Healthcare Exchange is one of the most critical parts of any forthcoming reform. The worry, however, is that the eventual form of the healthcare exchange proposal that makes it into the final bill will be too watered down, too localized to truly tackle the problems of high cost and limited choice that it would be intended to fix. Equally, no healthcare reform can be anything like reforming without a provision that denies healthcare providers the right to discriminate against people with pre-existing conditions. Under current conditions, America’s insurance companies are shockingly unrestrained in their ability to deny coverage to those most in need. In layman’s terms, if you develop cancer as an un-insured American today, your chances of buying coverage – let alone affordable coverage – are little or none. Any form of the bill that might eventually wrangle its way to the Oval Office in a few months time must include the assurance that insurers are forbidden from denying coverage to anyone – least of all the sick. Then, unlikely as its inclusion may now seem, the question of the public option remains. For many Congressmen and Senators, the dilemma that surrounds the idea of a public plan is far more dangerous in symbolic terms, than it ever would be in reality. For Republican Senators, the political backlash that would likely accompany their support for any such proposals makes it highly unlikely that any of them would dare to side with what so many right-wing radio talk show hosts like to deem the attack of ‘socialized medicine’; the return of the Red Scare. The reality, however, is that the only danger that would be presented by the so-called public option would be that private insurers would be forced to compete with a public plan on price – thus lowering costs and providing the public with more affordable coverage. What exactly is unfair about that, you might ask? And unfair in the sense that such a plan may actually lower the currently outrageous premiums charged by most insurers, or unfair in the context of the average American struggling to meet their monthly payments? In the words of The New York Times’ Paul Krugman, winner of the Nobel Memorial Prize in Economics in 2008, ‘Isn’t the purpose of health care reform to protect American citizens, not insurance companies?’ The truth is that, within the working criteria of reducing costs and increasing competition – and thus quality – the public option is far less scary than most of the GOP would have you know. Hanging on the wings of the debate are a number of additional, innovative new proposals often put forward by leading academics, that seek to offer a third way to those proposals currently making the rounds on Capitol Hill. And whilst perhaps not entirely implementable in all cases, a richer, more creative debate can surely only make for a better outcome? This is after all, currently more of a political brainstorming session and less of a fixed outcome (or bill). Unsurprisingly, however, there is a considerable gap between what Ezra Klein of the Washington Post terms the choice between ‘good policy and good politics’. In other words, for those Congressmen (and women) most committed to securing a meaningful brand of healthcare reform, the debate will be centred on facts and figures, truths and mistruths. For a whole host of other Republicans and, yes, newly elected Democrats – because a Democratic majority in the Senate means nothing without political application – this is also about protecting their own electoral interests at home, and sadly in some cases, preserving the flow of campaign funds that they receive from insurance lobbyists. In terms of achieving sweeping healthcare reform - and guaranteeing everything from lower costs to the elimination of rejection on the basis of pre-existing conditions – there is little dangerous about the majority of the current provisions being pushed in the Congress. However, for many pundits, the Republicans’ role in the debate is now less about ‘loyal opposition’ and more about outright political sabotage. In a recent Op-Ed for the Washington Post, political commentator Steven Pearlstein opined that recent Conservative attacks on the healthcare issue had now crossed the line – describing Republican leaders on the issue as ‘political terrorists’. ‘There is no credible way to look at what has been proposed by the president or any congressional committee and conclude that these will result in a government takeover of the health-care system’ he said, adding that ‘Republican lies about the economics of health reform are also heavily laced with hypocrisy’. And whilst Mr. Pearlstein’s comments could appear to be at the more extreme end of the spectrum, his argument is essentially correct. In a repeat performance of 1993, there are a number of powerful men and woman in Washington that will not sleep until any idea of reform is de-railed and for the television and radio presenters of the far-right, slogans of fear such as ‘Socialist Europe’ and ‘Government-run-healthcare’ continue to function as the easy alternatives to genuine debate and discussion. Republican Sarah Palin, the ex-Governor of the State of Alaska, recently tried to characterize a provision of the Obama’s plan providing counseling as part of a holistic approach to end of life care as ‘euthanasia’, whilst other GOP-ers have suggested that any universal, government run plan will inevitably lead to rationing. A rather illogical stance, given that rationing already occurs in the system at the hands of private insurers. According to a recent New York Times/CBS News poll, the majority of Americans are now not only ready for healthcare reform – they are embracing of it. The real question is, can the American political system prove its mettle on the issue or will special interests once again rule the day? Over 40 million Americans are waiting on the answer.

Max Golby

Last updated on: 27/08/2010 11:40:18

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