Health Care Reform: What Happened This Year, What Will Happen Next Year

By Marinello, Tony | Management Quarterly, Fall 1994 | Go to article overview

Health Care Reform: What Happened This Year, What Will Happen Next Year


Marinello, Tony, Management Quarterly


The health care reform debate will continue when the 104th Congress convenes next January. This article will examine why health care will continue to be a Congressional issue, why it is important to the economy and to rural America, and details NRECA's role in the health care reform debate.

What happened to health care reform? The same thing that happened to baseball this past year: both became engulfed in controversies that couldn't be resolved because the parties involved were too intransigent. Like baseball, health care reform is over for this year. What will happen next year? It's a whole new ball game.

Last January, most of those who follow health care issues were certain that some form of health care reform would be enacted by the end of the year. While President Clinton's proposal, which included those controversial regional alliances, was relegated to the back burner early in the process, many still believed that it would be used as the basis for drafting a reform bill that would eventually become law.

No single health care reform plan had enough support to pass.

As spring turned to summer, however, it became clear that no single piece of reform legislation had enough support to get the troops to rally in either the House or the Senate. Even the "centrist" approach failed to draw enough supporters to overcome political obstacles.

A variety of opposing factions fought health care reform for a variety of reasons: small business groups claimed they couldn't afford to offer insurance to employees; big business opposed mandates that dictated terms of coverage; unions did not want to give up benefits that they had fought for years; each sector of the health care industry had its own problems with each reform plan. More liberal members of Congress did not believe such plans went far enough to curb costs and achieve universal coverage--two of the primary goals of health care reform. Conservatives, along with many interest groups, successfully argued that most American voters did not want to pay more for their health care, which we would have had to have done to achieve universal coverage; along with special interest groups, they helped convince a public (leery of health care reform to begin with) that many of the controls that would have been placed on the health care system to keep health care inflation at a reasonable level would have lowered the quality of care, while raising prices. In the end, many also blamed President Clinton for pushing an overly complex and cumbersome plan.

So, while health care reform dominated Congressional debate the past year, support behind any one bill never materialized. By September, the World Series was cancelled; health care reform was declared dead for 1994. Impasses, however, seldom last forever. When Congress reconvenes next year, it will be with a whole new set of players.

Why revisit health care reform?

Why, when health care reform could not be accomplished after months of committee work, will the 104th Congress revisit the issue? First, because health care consumes about 14 percent of our GDP, or gross domestic product. This mount increases, on average, by 3 percent more per year than does any other part of our economy. Advances in medical technology and our aging population suggest that this trend will continue well into the next century.

Economists usually applaud such growth, because it creates jobs, increases profits and investment and provides additional tax revenue. Our health care system, however, is causing employers to pay an increasingly large share of employee compensation in health care benefits. Federal and state governments are using larger shares of their tax bases to pay for Medicare and Medicaid. In fact, based on current trends, the Congressional Budget Office predicts that health care spending will account for over 27 percent of the federal budget in 2003--up from the present 16.5 percent. Individuals--especially those on fixed incomes--are concerned that larger portions of their income is being consumed by a health care industry with an insatiable appetite. …

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