OK, you say you want a revolution
Why Americans settle for a broken health-care system
By MICHELLE L. BRANDT
Graham Walker is going to be a doctor. But the second-year Stanford medical student hates the idea of working in a system that fails to meet the needs of so many patients — a system he has found to be disorganized, inefficient and harmful. He can’t forget the diabetic woman he met while volunteering in rural Tennessee — the one who went blind because she didn’t have the money to get treatment. And he can’t look past the fact that she is only one of at least 45 million Americans without health insurance.
“When people say we have the No. 1 health-care system in the world, I find it insulting to the millions of people without coverage,” says Walker, a self-described policy wonk who has dedicated his free time (as spare as a medical student’s may be) to stump for national health insurance.
Says Walker on the Web site (www.grahamazon.com/sp) he created to extol the benefits of a single-payer system: “We can do better.”
Nearly everyone who knows anything about health care agrees that our health-care system is flawed. The World Health Organization ranks our system 37th (between Costa Rica and Slovenia) in performance, and the National Academy of Sciences said in a 2002 statement that the system was in crisis and incapable of meeting the public’s needs. Exit polls from the last presidential election show that more than 90 percent of Americans are concerned about the cost and availability of health care, and Philip Pizzo, MD, dean of Stanford’s medical school, recently called the assertion that our country has the best health care in the world “bogus.”
“The whole thing is broken,” says David Magnus, PhD, director of the Stanford Center for Biomedical Ethics. “The core problem is that we have a completely irrational way of paying for and delivering health care.”
Our national leaders haven’t adequately addressed the issues, and — despite survey after survey showing that Americans believe our health-care system needs reform — the public hasn’t taken them to task for it. Health care hasn’t reached critical mass as a political issue, experts say, because Americans are worried about the future but not concerned enough with their current situation to clamor for change.
Iraq, the economy and terrorism — the three issues that most influenced Americans’ votes in the last presidential election — can hurt you today, but the health-care issue is seen as something that can hurt you tomorrow, according to ABC News pollster Gary Langer. “Health care isn’t ripe as a political issue,” he says.
And this begs the question: just how bad does it have to get before Americans
step up to the plate and demand change?
Bad on so many levels
The United States’ health-care system is unique among industrialized countries’. Despite spending the highest percentage of its GDP, 15 percent, on health expenditures, the United States is the only developed nation without taxpayer-supported universal health coverage. Its residents are instead covered through employer-sponsored plans, private insurance or government programs. Or, as is the case for millions of Americans, they are not covered at all.
Forty-five million Americans are uninsured, and the number of those without coverage is increasing at a rate of 100,000 people a month. The Institute of Medicine says the lack of coverage is responsible for the deaths of 18,000 people each year.
Even among those with coverage, care can be uneven. A 2003 study published in the New England Journal of Medicine found that patients received recommended care only 55 percent of the time. And Donald Barr, MD, PhD, a Stanford sociology professor who teaches an undergraduate course on health care, points out that a new and costly treatment might be given to one person before someone with the same disorder receives any treatment at all. Our system lacks a mechanism to ensure resources are efficiently allocated, he and other experts say.
“We’re proud of the new advances in health care, but people are getting them so unevenly and in such unsystematic ways that they’re not getting the full benefit of what they’re paying for,” comments Alain Enthoven, PhD, a Stanford business school professor who is known, along with Stanford medical alumnus Paul Ellwood, MD, as the “father” of managed competition.
And Americans are paying a lot. The typical worker now pays $750 more per year for insurance than just three years ago, and the cost of private health insurance is increasing at an annual rate of 12 percent. “The health-care system is increasingly pricing itself out of reach of the people who need it most,” says Mark Smith, MD, president and CEO of the California HealthCare Foundation, an independent organization committed to improving health care in the state.
Individuals aren’t the only ones to feel the pinch: employers are also grappling with high costs. Costs per average employee have approached $7,500 and many family premiums now exceed $10,000; in 2003, Ford Motor Co., the nation’s fourth-largest company, spent more on health care for its employees than it did on steel. Peter Lee, head of Pacific Business Group on Health, a consortium of employers that buy health coverage for their workers, says employers are frustrated by soaring costs for merely mediocre benefits.
To make matters worse, everyone expects the costs and problems to mount as our population ages. By the year 2050, 1 in 5 Americans will be age 65 or older — and experts doubt Medicare will be able to accommodate everyone. Even people with good health insurance now could someday find themselves with less or more expensive coverage.
How did we get here?
Once upon a time, Americans paid for their health care out of pocket. It wasn’t common practice for employers to provide health coverage until World War II; wage controls prevented companies from luring workers with juicier salaries so they began offering health care through private insurance companies instead. The practice stuck, despite the fact that it excluded large segments of the population. To address this concern Congress implemented Medicare and Medicaid in 1965.
“Our current health-care system is not really a system — it’s a by-product of wage control during WWII,” says Pizzo. Problems arose in the 1960s and 1970s when health-care costs began rising rapidly and employers felt squeezed.
Insurance companies implemented managed care — a system under which companies provide physicians and hospitals with a fixed budget to provide care for a designated population — as a way to control costs. Due in part to changes in how physicians and hospitals were reimbursed, costs eventually began rising again and insurers raised premiums. Employers that were able to absorb the increases during the good economic times were unable or unwilling to do so when the economy took a dive in the late 1990s; they passed on the increases to their employees.
“We have a system of finance that has been unchanged since 1965,” says Victor Fuchs, MD, a Stanford health economist. “The system has been reasonably functional, but the three main elements — an employment-based system, Medicaid and Medicare — are deeply and irreparably flawed. Major reform is needed, but the U.S. political system resists radical change except in times of war, depression or large-scale civil unrest.”
Even before the economic boom and bust of the late 1990s our country contemplated overhauling the system. President Bill Clinton was the fourth president — after Woodrow Wilson, Harry Truman and Richard Nixon — to introduce a universal health-care plan and, as was the case with the others, his plan was never implemented. Special interests targeted it for defeat and much of the public was confused by the complexities of Clinton’s 1,342-page plan. Opponents portrayed it is as a government takeover of the health-care system. Despite initial support, polls from early 1994 showed that by a 2-to-1 margin participants thought they would be worse off under a new system.
Although it brought health-care reform to the national stage, some experts say the plan’s legacy was political leaders’ reluctance to revisit the issue. “Folks in Congress, especially Democrats, are gun-shy about pursuing comprehensive reform proposals; they’re very politically sensitive to what happened,” says Ryan Adesnik, director of federal government relations for Stanford.
Don McCanne, MD, former president of the advocacy group Physicians for a National Health Program, says the result has been the passage of minor plans that haven’t addressed the real problems. “Every step we’ve taken since the Clinton plan is theoretically an improvement, yet we have more and more uninsured, our insurance is less effective and costs continue to skyrocket,” he says. “It’s just getting worse and worse as we follow the path of incrementalism.”
One of the problems with implementing anything more substantial, experts say, is widespread disagreement over how the system should be changed. And the public has yet to make health care a priority policy issue. As an example, only 8 percent of voters said health care was the issue that mattered most to them in the recent presidential election.
So fix the &%$#!! thing
The debate over health-care reform boils down to two issues: access and
cost. The uninsured population is steadily growing and medical costs are
Complicating matters, not everyone agrees that cutting costs is the answer. After all, medical technology — which benefits all of us — is responsible for the bulk of the rising health-care costs. “There might not be anything inherently wrong with spending if we’re getting value for our money,” says Stanford health economist Laurence Baker, PhD.
But access is something people tend to agree on: polls over the last 50 years show that a majority of Americans consider medical care to be an entitlement.
Most reform proposals under discussion today impact both access and cost, and one involves the government picking up the tab for everyone. Medical student Walker and other proponents of national health insurance look to our northern neighbor as a model: under Canada’s system, private providers deliver medical services and the government uses taxes to pay everyone’s bill. This single-payer system, which frees consumers of co-payments, premiums and deductibles, is quite simple; explains Baker, “If you live here, you’re covered.”
Proponents of what some dub “Medicare for all” argue that because one entity would oversee the system and pay the bills, billions of dollars in administrative costs would be saved — providing the means to cover everyone. While most private insurers in the United States spend around 12 percent on administrative costs, Medicare’s overhead is about 3 percent and Canada’s is about 1 percent. Sen. Sheila Kuehl (D-Los Angeles), who has authored legislation that would insure Californians under a single-payer plan, says this system would save California $14 billion in annual administrative costs. She plans to reintroduce the bill this year.
Surveys indicate the public’s interest in getting the government more involved in health care: a 2003 survey from the nonprofit Civil Society Institute found that two-thirds of Americans favor some form of government-backed health care. And proponents tend to emphasize that they are in favor of a system under which the government would only have a hand in the payment of care — not in its actual delivery. “The government wouldn’t tell physicians how to do medicine,” Walker says.
Yet a national health insurance system would likely have flaws. Government-imposed cost controls could prohibit or delay patients from getting certain treatments — especially high-tech and expensive ones. “Stable insurance for everyone comes with the risk of less fancy stuff,” says Baker. Patients in Canada currently face long waits for routine care; waiting lists for elective surgery can be as long as one year. And reports have shown that Canadian physicians are frustrated by the rationing and government controls; some have moved their practices to the United States.
Canadian and American values differ, and some experts believe a Canadian-type system could not work here. Bioethicist Magnus explains that people in the United States tend to feel entitled to the most sophisticated type of care and would not take well to being told “no” or having to wait in lines. “People in Washington understand that their constituents are very sensitive about freedom with regard to health care,” Adesnik, Stanford’s federal government relations director, elaborates. “They have heard 101 spooky stories about ‘socialized medicine’ and people not getting the care they want. Lawmakers are acutely aware that not having that freedom frightens the hell out of people.”
Others agree. “You have to find a system that is congruent with American values. We can’t have a highly egalitarian system because we’re not an egalitarian society,” says Fuchs, who instead favors a system involving health-care vouchers. Under his plan, families and individuals would be given vouchers to enroll in qualified plans that cover basic needs and would have the option of paying more for additional services.
A 2003 paper in the Journal of the American Medical Association reported that the single-payer system has failed to receive political support in the United States, primarily because of a widely held view that the idea is “too radical” and could never pass in Congress. Many experts agree with the assessment, saying not only is there a general aversion among the public to things run by the government but also gigantic opposition from high-powered companies that stand to lose money under a new system. If a single-payer bill was introduced in the Congress chances are good that lobbyists would wage a P.R. war akin to the one that killed Clinton’s plan a decade ago.
Spyros Andreopoulos, co-author of a book on the Canadian health system, concurs that Congress, “which is indebted to powerful health-care industry lobbies,” is the reason we don’t have a single-payer system. But he calls the notion that a single-payer system is incongruent with American values “preposterous.” Andreopoulos, a former director of Stanford’s medical news office, believes that a Canadian-like system could work here. If the United States were to adopt this type of system, he says, “it would be no different than the hassle-free federal insurance programs that now cover more than 48 million Americans — the elderly, the poor, war veterans, civil service employees and members of Congress.”
Unlike single payer, many other approaches to reform leave the current insurance industry in place and might be more feasible politically.
Under one such plan, known as “consumer-driven health care,” consumers would have — in combination with high-deductible, catastrophic insurance — a tax-free savings account from which to pay their health-care expenses. President George W. Bush is a fan of this approach.
At the crux of consumer-driven plans is the idea that consumers use more health services than they need because the costs are being paid by their insurance. “People are anesthetized to cost consequences,” says Enthoven. If consumers felt the pinch, the argument goes, they would have incentive to spend less money and would help keep costs down. At the same time they would have greater control over their care.
To have such control, though, consumers need access to vast amounts of information (e.g. the cost of having a certain procedure, the consequences of not seeing a doctor at a particular time), and some experts say this information is not readily available. “If you go to a hospital and ask how much it would cost to get your appendix out they would laugh you out the door,” says Alan Garber, MD, PhD, director of Stanford’s Center for Health Policy and the Center for Primary Care and Outcomes Research. “It’s harder still to get good information about quality or to learn whether you really need to have the procedure your doctor recommends.”
Opponents of reform that force high out-of-pocket costs on the consumer worry that some might skip important preventive care when faced with paying for it. And others argue that this type of reform most benefits individuals with high incomes and could lead to a system of rationing by income: the more money you have, the better care you can buy.
Other approaches include implementing “pay or play,” under which employers provide coverage for their employees or pay into a government fund; providing tax credits to individuals and expanding Medicaid and/or Medicare; and creating a system of public, private and employer-based “insurance exchanges” that would offer choices of health plans to pools of people. The latter plan, designed by former Stanford health policy expert Sara Singer along with Garber and Enthoven, is based on free-market principles: consumers, responsible for cost differences, would choose between private plans and the resulting competition would give companies an incentive to lower their premiums and improve their quality.
Advocates have been vocal about the need to enact their reform of choice. Numerous nonprofit organizations, such as the Alliance for Health Reform and Families USA, promote high-quality, affordable health care for all Americans. The aforementioned Physicians for a National Health Program, and groups such as the American Medical Student Association, tout the benefits of a single-payer system, while the HSA Coalition, a Washington, D.C.-based coalition of non-profit organizations, advocates for health savings accounts.
Individuals are also busy promoting their ideas: Stanford’s Fuchs,
for example, has written and talked extensively in the national media
about his universal voucher plan.
Lawmakers are likely to steer clear of the issue because, as Fuchs point outs, “There are always huge numbers of people who have a stake in the status quo.” Pharmaceutical companies and private insurers, for instance, profit from the current system and have enormous influence in the health-care debate. These groups give millions of dollars to politicians each year. It seems inevitable that their big checks provide lawmakers strong incentives not to rock the health-care boat.
Not only are lawmakers influenced by outside groups, they are hesitant to upset their constituents with talk of tough choices, says Garber, who has helped draft health-care plans for presidential candidates Bill Bradley and John Kerry. “If we’re going to propose serious solutions to rapidly rising health expenditures and a lack of insurance among large sectors of the population, we’re going to have to discuss options that will make some people unhappy,” he explains. “It’s very hard for a presidential or congressional candidate to say ‘We have to talk about ways to cut back on benefits.’ ”
Garber notes that few lawmakers will publicly discuss the problems with Medicare, for example, because if they did their constituents might throw them out. And, as Adesnik, Stanford’s director of federal government relations, points out, many lawmakers remember far too well the failure of the last major health-care debate.
“This is an issue that is difficult for politicians,” explains the California HealthCare Foundation’s Smith. “No matter what anyone says, if [reform] were simple we would have done it a long time ago. There are so many important economic and political interests with different points of view. You have fundamental conflicts.”
Americans are conflicted themselves, and experts say they are hesitant to fight for reform when they’re accustomed to the current set-up — warts and all. Baker points out many people have gotten access to quality care and they get nervous when others talk about change. “It’s not clear that there is a better option for people,” he says.
Yet many continue to push for reform, including medical student Walker, who is hoping to soon begin a documentary on the health-care system. He’s among those who feel confident that change is coming. Says another believer in change, advocate McCanne: “I personally suspect it will happen in years, rather than decades.
“We want our technology, we want great advances in health care. When we see only the wealthy can get them, that's not going to be acceptable.”
Sociology professor Barr agrees and predicts that increasing numbers of “horror stories” will eventually cause people to vote only for those politicians who address the health-care issue. And that’s exactly what we need to have happen: only when the public puts the pressure on legislators — and becomes entrenched in the fight like Walker and others — will the nation get real reform.
For those interested in advocating for health-care reform or simply looking to learn more about the issues, here are some resources:
Alliance for Health Reform
Health Care for All-California
Looking for a group near you?
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