Will Government Force a Healthcare Marriage

By Reynolds, Larry | Management Review, April 1990 | Go to article overview

Will Government Force a Healthcare Marriage


Reynolds, Larry, Management Review


hen Washington power brokers

get together for their

power breakfasts these days, they still talk taxes and budget deficits over their eggs Benedict. Increasingly, however, these two topics of the 1980s are being forced to share the political menu with another hot issue: the rising cost of healthcare. Me refrain I keep hearing from my corporate and association clients about their health insurance coverage is: I want it. I need it. I can't afford it," says John Satagai of London and Satagaj, a Washington law and lobbying firm. "In my opinion, the healthcare issue has reached the boiling point and is going to be the political issue of the early 1990s." From Capitol Hill to the special interest groups representing business, labor, insurance, medicine and the elderly, just about everyone agrees that something needs to be done to control the rising cost of healthcare. -Me only answer is a national health plan for everyone," argues Erma Bennett of the Dade County Council for Senior Citizens, a position an increasing number of business executives are also taking.

Even President Bush, who up to now has stayed out of the healthcare debate-except for stating his opposition to any kind of federally mandated national insurance-is being encouraged by members of his domestic policy staff to make the issue part of his presidential agenda.

Yet, other than dismissing the idea of a federal government-run national health insurance program, there is still no consensus among key competing interest groups on the best way to both curtail healthcare costs and also provide benefits for the 37 million Americans who currently have no health coverage. Still smarting from last year's humiliating repeal of its catastrophic care program, Congress isn't going to move until it believes the broad outlines of a compromise consensus are firmly in place. We must develop a program that's not only sound in concept, but has the acquiescence and support of the constituency and community to which it's directed," House Speaker Thomas Foley (D.-Wash.) recently told his Capitol Hill colleagues.

One idea that is getting increased congressional and business attention is the so-called "play or pay" concept backed by Senator Jay Rockefeller (D.-W. Va.). It aims to provide universal coverage by levying a payroll tax on employers not providing employee healthcare benefits used to pay for government provided insurance for "everyone not covered through an employer plan, " according to a working draft of the Rockefeller proposal, which is modeled after a similar state plan approved in Massachusetts. There is also talk of the government assuming the first six months of nursing home coverage for the elderly along with some home care services. Currently, nursing home residents must use nearly all of their savings before qualifying for Medicare coverage.

While the business community has been generally united in its opposition to Senator Ted Kennedy's mandated health benefits proposal (MR Dec. 1989, page 15), serious splits are beginning to appear among business groups over this new "play or pay" plan. "My reading is business isn't going to hold together on this issue because of the division between

the have's and the have not's," observes Satagaj. "Many companies are so fed up with rising healthcare costs that they just want someone to do something that sounds like it might work. An easy answer for the firms already providing employee health benefits is to say: To hell with those who don't, let them start paying part of the tab," adds Satagaj. "I don't know if this will solve the problem, but it does provide a certain amount of satisfaction to those CEOs who feel if they have to suffer, then everyone should suffer."

Re tension is growing," agrees Walter Maher, director of federal health policy for the Chrysler Corp. "It's growing because we don't have any type of national health policy, and there are thousands of potential bill payers trying to shift the cost onto others. …

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