Without much public notice, health care is entering a crisis. The events of 11 September and the Enron collapse have made that crisis more imminent, serious, and even more likely to come on the American public and politicians unnoticed. September 11 gave the economy another major hit, led to a military build up that will consume whatever budget surplus there might have been, and drew whatever political and public attention exists away from domestic issues. Nevertheless, we should attend to health care reform. There will soon be a major crisis, and we need to be ready with a reasonable policy for politicians who will suddenly find themselves in need of answers.
Consider four descriptive and five prescriptive propositions that lead to the outlines of a politically palatable and ethically justifiable strategy.
1) No one is happy with the current health care system. Doctors and patients hate the encroachment on their choice, feel they have no control over their health plan, and trust no one. Managed care organizations and employers feel that doctors and patients have unrealistic demands, are unwilling to confront the need to cut costs, and are unwilling to be held accountable; managed care is asked to do the impossible to simultaneously improve quality and keep costs down.
2) Health care costs are going up and will continue to go up in the foreseeable future. Whatever savings there were in the 1990s from managed care, they are gone, and they will not return. With pharmaceuticals rising at 20 to 30 percent per year, and hospitals and doctors demanding more money, premiums are heading up at double digit rates with no end in sight.
3) The number of uninsured Americans is going up and the range of health benefits for those who are insured is going down. Increases in unemployment and increases in health care premiums mean more people will lose their health insurance. Decreases in corporate profits mean that those still insured will have skimpier benefit packages and bear more of the premium price with higher copayments.
4) Pressure on state budgets will also mean close looks at Medicaid budgets. As the economy declines, state coffers shrink. Coincidentally, rises in unemployment and health care costs will increase Medicaid expenditures, further squeezing state budgets and crowding out other vital state programs, including education and infrastructure improvements.
This is the crisis. But we have been here before. This was almost exactly the situation in the early 1990s, except that then managed care had the potential to constrain costs. And yet, as we all know, health care reform failed. In part, it failed because Clinton spectacularly misplayed the politics of health care reform, and in part because employers embraced managed care--and abandoned Clinton's plan--on the premise that managed care was a more certain path to controlling costs.
What better proof is there that everyone makes big--multibillion dollar--mistakes? But we can learn five key lessons from that stunning and tragic failure that might help develop universal health care coverage.
5) The big hurdle for health care reform is not ethics or economics but politics. Ethics supports universal coverage. Both ethics and economics urge the need for cost constraint. But even when everyone agrees that there is a problem, that is no guarantee they all--or even a majority of them--will support the same solution. The key is to provide a solution that both liberals and conservatives can endorse, making it harder for any single interest group to kill it.
6) Retain a private health care delivery system. "Harry and Louise" ads proved that the health care insurance industry is strong and can torpedo almost any reform package that tries to eliminate it. After all, its survival is at stake, and the industry has nothing to lose in such a life-and-death struggle. …