There has never been much question that the health care system in the United States could deliver medical services equal or better to any that can be found elsewhere in the world. The primary issue over the past half century has been who has access to those services.
The number of Americans who lack basic health care coverage now numbers over 41 million, with millions more underinsured. Ironically, the number of uninsured includes millions of workers, who pay a 2.4% tax on their wages to support health care for senior citizens and the indigent (Medicare and Medicaid) while being unable to afford basic health care coverage for themselves and their families.
Many Americans might be surprised that Bill Clinton was not the first president to make universal access to basic health care a national issue. In his State of the Union address on January 5, 1949, President Harry Truman called for a nation-wide "system of pre-paid medical insurance which will enable every American to afford good medical care."
Nearly fifty years later, however, we are no nearer to seeing universal coverage in the United States than we were in 1949. As we near the end of the twentieth century, the U.S. stands out as the only major industrialized country that does not provide some form of universal health care coverage for its citizens, in spite of the fact that it spends more per capita on health care than any other nation.
In 1960, health care expenditures accounted for just 5.3 percent of the United States’ gross national product; by 1992 it had grown to 14 percent. Over the past ten years, health care costs have grown at a far faster rate than inflation for the economy as a whole. If the United States could claim bragging rights that the large expenditures have brought better health to its citizens, it might justify the excessive cost. But a comparative analysis of two key indicators with other nations belie that claim.
Infant mortality and life expectancy are the two measures most often used as an indicator of the quality of health care services provided to a population. Unfortunately, when the United States is compared with most of the other major industrialized countries, the United States has higher infant mortality and lower life expectancy.
There are, of course, a number of factors other than the quality of health care services that can account for some of the differences. The infant mortality rate is impacted by drug use and other poor health practices by too many expectant mothers. Life expectancy is impacted by a whole range of factors, such as:
In spite of whatever impact those factors might have, the U.S. would be hard pressed to claim that the excessive amounts it spends on health care compared to other countries has resulted in better health for its citizens. In addition, our disproportionate spending on health care compared to other nations puts the U.S. at a distinct disadvantage with respect to competition in the global economy, especially since businesses in the U.S. currently pick up a large percentage of the health care tab. This, at least in part, accounts for some of the millions of manufacturing jobs that we've lost to overseas competitors over the past few decades.
It’s ironic that the United States outspends all other countries in health care while more than 15 percent of American citizens are denied access to basic health care services. Over the past decade, as health care costs have skyrocketed, so have the number of Americans without health care coverage. Over 41 million citizens without access to health care services would be unthinkable in other industrialized countries. Among major trading partners such as Canada, Japan, Germany, Italy and Australia, where life expectancy is greater and infant mortality and per capita health care costs lower, health care coverage is nearly universal.
Even for the majority of Americans who are fortunate enough to have comprehensive health care coverage, the economic impact of a major illness can be significant. In its December 1994 issue, the Journal of the American Medical Association reported that, in a study of families that experienced a serious illness of an adult member:
How Other Countries Provide Universal Coverage
Over the past half century, while Americans have been debating the merits of nationwide health care coverage, our friends and allies have been implementing it. Their successes, however, provide us with an opportunity to benefit from the plans they have pioneered. We may not want to adopt any of these other systems in total, but the lessons and the successes are there and demonstrate that, with the proper national will, universal health care can be effectively achieved.
Canada. Of all of the universal health care systems in place around the world, the Canadian health care system is the one most often talked about as a model for health care reform in the U.S. The Canadians, like most other industrialized nations, have adopted a single-payer type health care system (the single payer being the government). The Canadian system, however, was not put in place overnight. It was developed and implemented gradually over a period of more than 30 years.
Much like what we are beginning to see happen in the U.S., major health care reform in Canada began in individual provinces, akin to our states. The beginnings of nationwide health care coverage in Canada began with a hospital insurance program introduced by the province of Saskatchewan in 1947.
By 1950, four of Canada’s ten provinces had hospital insurance plans in place. The success of those programs led to the adoption of the Hospital Insurance and Diagnostic Services Act in 1957, which provided cost sharing by the federal government, provided certain conditions were met. Those conditions were that each province’s plan had to:
By 1972, all ten provinces and the two Canadian territories had a program in place that provided full doctor and hospital care. The program, now providing universal, comprehensive health care coverage for all Canadians is called, like our health care plan for senior citizens, Medicare.
Not only is the Canadian system comprehensive and universal, care is provided at costs far lower than in the U.S. The Canadians control health care costs by limiting the amount that doctors can charge and hospitals can spend. The federal government is responsible for setting overall health care system policies and standards with the individual provinces and territories responsible for overseeing the actual delivery of health care services.
To participate in the program, Canadian citizens need only register with their local health care office, where they are issued an identification card that they present when they go for medical care. Services covered under the Canadian health care system include:
Health services not covered, such as eye care, have to be taken care of by the individual either by direct payment or through private insurance.
One of the major concerns raised during the debate over health care reform in the U.S. is an individual’s ability to choose their own doctor. Although the growing shift to HMOs in the U.S. means just such a loss for an increasing number of Americans, under the Canadian system, patients are free to choose their own doctor.
At the other end of the debate in the U.S., doctors have expressed a concern about the loss of income under a single-payer system. Once again, however, with the shift to HMOs, doctors have, in fact, seen their income levels drop over the last few years. In Canada, while it is certainly the case that doctors earn less than they would under a free market system, doctors rank among the top 1% in income among Canadians.
Germany. Germany has the world’s oldest health care system, established in 1883. Health insurance is compulsory for 98% of the population. Only citizens with sufficient personal income to cover potential health care costs can opt out of the system.
The German system is organized on a local basis; choice of doctors is limited to those associated with the local "sickness fund." Charges are negotiated with doctors’ groups, based on the amount available in local funds. All Germans are covered for care at any hospital in the country. Services provided under the German national health care system are comparable to those covered by the Canadian system.
Japan. Japan didn’t establish its national health care program until 1961. Health insurance is compulsory. Most Japanese citizens are protected through a work-based insurance plan, with costs generally shared between employer and worker. Coverage of services is comparable to the Canadian and German plans. The Japanese control health care costs by placing limits on what doctors and hospitals can charge.
Not only do these other countries provide comprehensive universal coverage at significantly lower per capita costs than in the U.S., their citizens are generally pleased with their health care systems. For example, in a Gallup poll conducted in July 1991, a group of Americans and Canadians were asked to respond to the following question:
"Overall, how would you rate the quality of health care available to residents of your community; excellent, good, fair or poor?"
The results - 71% of Canadians rated their health care as good or excellent compared to only 59% of Americans.
A few years ago, many politicians and health care experts lauded health maintenance organizations, or HMOs, as the answer to spiraling health care costs. In the last 20 years, the number of Americans enrolled in HMO plans has jumped from 6 to over 50 million. HMOs have, it appears, lived up to their cost control billing. The rate of increase in health care costs, while still higher than the rate of inflation, has decreased over the past few years.
But, as the saying goes, there is no free lunch. Because HMOs are paid a fixed annual premium for each patient, they have a strong incentive to restrain costs. As a result, many HMOs have tried to restrict the kind of procedures covered and have often refused to pay for costly experimental treatments.
Recently, major publications have been full of horror stories about patients being denied treatment or having to battle the system to get the treatment they need. As a result, lawsuits on behalf of patients have been waged to force HMOs to provide adequate care. At the same time, state legislatures across the country have been working overtime to put some much needed regulation in place to catch up with the tremendous growth in HMO enrollment. During 1996, laws have been adopted in sixteen states restricting HMO "gag rules," which are efforts by HMOs to limit what their doctors can tell patients about treatment options and the financial incentives to withhold treatment.
The big promise of HMOs was to lower costs and by doing so, enable more Americans to be covered. But because cost cutting has been the major impetus behind HMOs, many HMOs try to avoid insuring sick or high risk people to begin with. While costs for those covered have in fact been lowered, per capita spending on health care in the U.S. is still much higher than any other major industrialized country. Many experts assert that only when everyone is included in a coverage plan can costs really be contained. Until then, cost cutting is primarily cost shifting.
While dollars spent on medical care have been cut, some of those savings have gone for computers and paper to track expenditures. The move toward HMOs has generated a huge paperwork bureaucracy which, in the case of hospitals and clinics, accounts for more than a quarter of their staff, eating into funds that could be going toward providing better care. And inspite of whatever cost cutting successes HMOs have achieved, the percentage of employers now providing health care coverage has dropped.
The cost savings being achieved by the growing number of HMOs may be coming to an end. Using a series of studies on the state of the U.S. health care system, the National Coalition on Health Care has recently reported that "health care costs are increasing at twice the rate of inflation and consuming an increasing share of national spending...By the year 2007, we will be spending almost $1 of every $5 in the American economy on health care, and there is no end in sight."
According to an article in the Washington Post, since 1989, the percentage of U.S. workers covered by employer health care plans has dropped from 77.7 to 73.9 percent. The number of uninsured Americans, now more than 41 million, continues to grow.
When President Clinton signed new health care legislation last year in a gala ceremony on the White House lawn, he said that the new law would “seal the cracks” that permitted insurance companies to deny coverage to workers who lose or change their jobs. Known as the Health Insurance Portability and Accountability Act of 1996, it does make it easier for workers to keep their health insurance and also limits the ability of insurance companies to deny coverage for people with pre-existing conditions. But the law’s benefits are overstated, by President Clinton and the Congressional Democrats and Republicans trying to claim credit for its passage.
The new law provides that workers who lose or change jobs have the opportunity to continue maintaining some form of health care coverage. Among the laws provisions:
Although the Health Insurance Portability and Accountability Act is a positive step, it is only a baby step in achieving the real reform needed in the United States. While the new law requires insurers to provide coverage to workers who lose or change jobs, it makes no provision for making such coverage affordable. An individual health insurance policy costs $3000 or more. For a family policy, the cost can be more than twice as much.
Saying that workers who lose their jobs can keep their policies, when they can’t afford to pay for them, is a hollow benefit. Further, the new law does virtually nothing for the 41 million Americans who are currently without coverage, the vast majority of whom can not afford the stiff cost of health insurance.
Tennessee. While Congress continues to stumble through fits and starts in an attempt to achieve more meaningful health care reform, many states are moving forward with their own program. Tennessee, Oregon, Florida, Washington, New York, Vermont and Minnesota have all made efforts at some form of reform to control costs and extend coverage.
Tennessee’s experimental health plan, known as TennCare, was started in 1994. With the state budget hemorraging from soaring Medicaid costs, the legislature passed what many consider to be the boldest health care reform effort of any state. In less than three years, TennCare has thus far achieved its goal by cutting the growth in Medicaid spending to 5 percent a year.
Beyond the cost savings, TennCare has also put a major dent in the problem of the medically uninsured. In 1993, before TennCare was put in effect, nearly half a million Tennesse residents lacked health care coverage. By 1995, that number had been reduced by nearly 200,000.
TennCare is a managed care program. The state apportions money to 12 managed care organizations, each organization receiving a fixed amount per patient. After its first two years, the program is getting mixed reviews from its patients. In a 1995 poll, nearly a third of patients that had been part of the Medicaid program that preceded TennCare considered their care to be worse under the new program with only 23 percent believing it was better.
Because TennCare still leaves nearly 300,000 Tennesseans uninsured, hospitals, who are receiving lower payments under TennCare than they had under Medicaid, are being squeezed by the costs they must absorb to treat “charity” cases. In addition, the quality of health care services provided by Tennessee’s managed care organizations are being questioned in much the same manner as HMOs across the country.
Hawaii. The State of Hawaii implemented a major health care reform initiative in 1974. Under Hawaii’s Prepaid Health Care Act, employees who work 20 or more hours per week must be offered health care coverage by their employer. Under the plan, employers must pay at least 50 percent of an employee’s premiums. In 1991, Hawaii added the State Health Insurance Program, know as SHIP, to provide health benefits for the poor who were not covered by Medicaid.
Republicans, in particular, like to raise the concern about the negative impact of employer mandates, particularly on small businesses. Hawaii is a small business state. Almost 95 percent of its businesses employ less than 50 people. The results of a study published in the Journal of the American Medical Association in May 1993, concluded that, after more than 20 years, Hawaii’s Prepaid Health Care Act had no appreciable impact on business.
Hawaii’s success in providing health care insurance to nearly 98 percent of its population has gotten little attention in the "lower 48." Perhaps it’s because of Hawaii’s island economy and relatively small population. With health care costs running below the national average, in a state where the cost of living runs 30-40 percent higher than the rest of the country, Hawaii is a success story that warrants more attention.
In today’s political climate, it may seem like folly to suggest that the government manage one seventh of the U.S. economy. But in light of all of the failures of health care reform to meet the twin goals of cost reduction and universal coverage, a single-payer system such as Canada’s seems to be the most logical solution to a growing crisis in U.S. health care.
There’s no doubt, of course, that "single-payer" is a radical idea in the U.S., considering the current health care insurance industry would have to be dismantled in order to make it happen. But single-payer would solidify two policies that are near and dear to a majority of Americans, particularly conservatives: the freedom of an individual to choose their own doctor and the doctor’s freedom to order care for their patients as they deem necessary. And, as the experience of Canada and other countries have shown, a single-payer system could provide quality coverage for all Americans at a rate far less than is being spent on health care today.
Of course, the government is already a huge player in providing health care. The current health care bill is being paid in the United States as follows:
With Federal and state governments already paying nearly half of the nation’s health care bill, and polls showing voters opposing cuts in Medicare, Medicaid and VA health benefits, the government’s major role in health care is assured. But with concern about budget deficits and taxes dominating the political agenda, is it realistic to believe that the 50-year fight for some kind of universal coverage can be won?
The answer - yes! In spite of President Clinton’s monumental failure to achieve major health care reform in his first years in office, health care is an issue that just won’t go away. After all, who would have believed that even modest health reform legislation could possibly pass the Republican Congress. But in 1996, it happened.
With the expectations that HMOs could fit the bill for solving America’s health care woes falling woefully short, and the Medicare and Medicaid trust funds going broke, the move toward comprehensive health care reform that assures all Americans have adequate health care services seems inevitable. As we have seen in 1996, politicians do sometimes react in response to the concerns of their constituents. With health care industry interests pouring millions into the coffers of congressional and state legislative campaigns, the going won’t be easy in trying to win major reform. But workers and their families have the numbers on their side. They need only exercise their untapped power in the political process to make it happen.
Last updated: November 1997
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