Reforming US Health Care: Key Considerations for the New Administration

THE ELECTION OF PRESIDENT BARACK OBAMA HAS SET in motion high expectations that he will undertake systematic reform of the US health care system in his first term. Such reform must address 3 persistent problems: the uninsured, the high and rapidly increasing cost of care, and significant lapses in quality. Having studied these problems for more than 40 years, I would like to share in this Commentary some conclusions about reforming health care in the United States. Before suggesting what should and should not be done, however, it is important to learn from the failure of the proposed health reform in 1993. Sixteen years ago a bright, young, charismatic Democratic politician entered the White House with a high priority of reforming US health care. The First Lady, Hillary Clinton, led the effort; a 500-person task force worked on the plan for more than a year; and Democrats controlled both houses of Congress. Nevertheless, the Clinton plan never reached either house for a vote. What went wrong? Articles and books dissecting the Clinton plan’s failure are enough to fill a small library. Their discussions of political missteps, design complexity, and misleading arguments by opponents are instructive. They do not, however, get to the heart of the matter. Although public opinion polls reported clear majorities in favor of health care reform, support for substantial change was weak and divided. In an article directed to then President Clinton in April 1993, I pointed out that “[m]ost Americans have health insurance. Most Americans are satisfied with their doctor. . . .” More generally, numerous individuals and organizations preferred the status quo, and the political system gave them many opportunities to block change. Most critics of US health care incorrectly focused on “greedy” drug companies and “overpaid” physicians rather than on systemic problems in funding, organization, and delivery of care. Most workers mistakenly thought that their insurance was a gift from their employer rather than an offset to higher wages. The Clintons never rose to the challenge of explaining these problems to the public. Most importantly, the Clintons were not alone in failing to achieve reform. The experienced and influential Rep Pete Stark (D, California) submitted a bill calling for greater reliance on government than the Clinton plan. Rep Jim Cooper (D, Tennessee) put together a bipartisan group of 80 representatives in support of a more market-friendly plan, and Senators Breaux (D, Louisiana) and Durenberger (R, Minnesota) authored a similar bill in the Senate. Significantly, no reform plan was ever reported out of committee. Weak, divided, uninformed public support combined with failure of reformers to unite behind a single plan doomed the effort. What is different this time around? Not so much. Public opinion polls in 2008 show support for health care reform at levels somewhat below those in 1992. Public understanding of the problems still misses the mark; this time insurance companies are now the favorite villains. Few critics realize that insurance companies are usually only providing administrative services. Employers are typically self-insured, and most workers still do not understand the connection between insurance and wages. The major problems are as great or greater now than they were in 1993, but individuals and organizations who like the status quo are also still numerous. Furthermore, the inability of reformers to unite behind a single approach remains a major obstacle. The biggest difference is the economic climate. In 1993, the economy was on the rise after a mild recession in 1991. Now the economy is headed downward. The recession that began in December 2007 shows no sign of ending and may turn out to be the worst since the 1930s. Advisors to the president will probably differ on how the overall economy affects the prospects for health care reform. Some will say that declines in employment and employment-based insurance strengthen the pressure for bold new approaches to coverage. Others will argue that because the federal government already faces a large and increasing budget deficit, this is not an opportune time to increase government spending on health insurance. These conflicting views can be reconciled if reform addresses coverage and cost issues simultaneously. The need to control costs strengthens the case for universal coverage instead of targetingparticulargroups.An incremental strategymayhavea shortrun political payoff, but as long as millions are uninsured, poverty health clinics and public hospitals will still be needed. Also, uncompensated care by physicians and hospitals will still be inefficient and inequitable. Universal coverage creates opportunities for significant improvements in the organization and delivery of care.