A Mandate for Health Reform?
by Kevin Van Dyke, Editor
November 12, 2008
Democrats have officially taken a trifecta or control of the White House, House of Representatives, and Senate for the first time in fourteen years. House Democrats have picked up over 20 seats and Senate Dems will likely have between 57 and 59 seats in 2009. These majorities are the largest since the days of Lyndon Johnson. Like that time period, there is a real chance for a progressive window. In this type of window, which does not come about very often, the Democrats will have the potential to pass landmark legislation.
What will be the policy priorities?
My guess is that there will be three top priorities: health care reform, environmental cap and trade, and financial regulatory reform.
For now, I will focus on one of these priorities
Health Care Reform
The United States has come tantalizingly close to universal coverage several times in the last 60 years. First, in the 1930s, health care was left out of the original Social Security bill after much debate. Next, in the late 1940s, under President Truman, health care reform came within a few votes of passage. Next, in the last progressive window in 1965, Medicare and Medicaid were passed as a first step to what was thought to be universal coverage. However, other political realities, such as the Vietnam War, got in the way. Then in 1993, the last time the Democrats controlled the trifecta, came President and Hillary Clinton’s failed attempt at universal health care.
The first two efforts were stymied in part by the strong opposition of organized medicine. Ironically, the same Harry and Louise characters, who were famous for their 1993 commercial about government staying out of their medicine cabinet, have returned in a health reform commercial put forth by various leading health care associations and lobbying groups. Unlike the previous ads, these characters are now in favor of some sort of universal coverage as part of a comprehensive reform solution. In addition, unlike previous attempts, one of the leading organizations calling for reform in 2008 has been the American Medical Association. While it is true that agreeing to reform in general will not necessarily lead to policy cohesion, having virtually all industry groups at the table is encouraging as long as reform does not become captive to these same groups.
There is general agreement among most of these groups that universal coverage must not only be for all, but must also be paid for by all. Thus, there is a sense of shared sacrifice that must take place to achieve universal coverage. With that said, it is important to note that universal coverage alone is only half of the solution. There must be cost controls and a continued increase in tying provider payments to performance and high-quality outcomes. In addition, there must be incentives to help ease the maldistribution of providers. Having insurance matters little if you cannot get high quality care and/or there are no health care providers in your area.
Many health care experts believe that the states are the best laboratories. In this sense, the relative success of the Massachusetts health care plan in terms of achieving universal coverage should serve as a model for moving forward. However, at the same time, policy makers should be aware of the limitations of this model since it has not necessarily done enough to control costs. According to the Massachusetts model, there will still be a private health insurance market, and no one will be forced to sign up for a government plan. (In fact, in Massachusetts there is no public plan at all, which may be part of the reason for the lack of cost containment.) Building on the successes and failures of Massachusetts and other states, regional “health markets” should be set up to help keep costs down and to provide efficient coverage to every citizen.
What about mandates?
President-elect Barack Obama was generally against mandates during his campaign for president. This is naïve from an economic standpoint. In order to control costs and to avoid adverse selection, mandates must be in place so that all healthy individuals diversify the risk pool. Without a truly diverse risk pool, there is no way that universal coverage can be sustainable.
It is important to highlight the need for mutual sacrifice for the good of the country that will be needed to achieve the type of real health care reform that will be needed to lead to a fulfillment of the Institute of Medicine’s six aims–health care that is more safe, effective, patient-centered, timely, efficient, and equitable.
We must have a real call to action for all Americans to do something for their country. Such a call hasn’t been made since JFK, and it’s been a long time coming. I hope that President-elect Obama will issue such a call, because nothing less will be sufficient enough to lead to a more sustainable and moral health care system.
Any views expressed here do not necessarily represent the views of any organizations that the author is in any way affiliated with.
Interesting – what role does preventative care play, in your view?
Preventive (or preventantive) care plays a big role in improving the quality of care. The evidence is mixed on whether preventive care actually saves money. In fact this question is one of the most disputed questions in all of health economics. Regardless, even if cost neutral, if it improves quality of care, then it is a step that we should take. This relates to the maldistribution of physicians. Largely because of payment incentives (although longer work hours play a role as well), there is an undersupply of primary care physicians in this country. This is particularly a problem in certain urban and rural areas (especially rural areas). It is important to note that there isn’t a general undersupply of physicians overall–just a maldistribution of physicians. In other words, there needs to be reform within organized medicine to increase incentives to go into primary care AND increase incentives to practice in underserved areas. But of course these changes are not likely to be a pareto improvement (there will be winners and losers). In order to increase incentives for primary care, it is likely that incentives will decrease for other specialities (such as surgery) that are culturally dominant within medicine.
By the way, there are also improvements in information technology and audit reforms, along with tort reform as mentioned above, that could save money. Out of the three, information technology holds the most promise. Tort reform wouldn’t amount to much–it would probably cut about 1% of all spending. However, it would be a big help in solving the maldistribution of providers in areas such as OB/GYN.
(By the way, I should say primary care providers above. Non-physician providers are a big part of the solution, and would likely save money. But that leads to the other workforce issue–undersupply of nurses. Oh god, I’m going to have to do a follow up article. Too much for comments!)
[...] Make no mistake about it, this is a very important appointment. In fact, it is very hard to overstate its importance for anyone who cares about health care. Daschle will be no Tommy Thompson or Mike Leavitt, picked to head a HHS that wasn’t a top priority for their President. Daschle will also not be a Donna Shalala, who had no real power during the Hillarycare debacle. In his role as HHS Secretary, Dascle will be an all out Health Care Reform Czar for the Obama administration. In this role, Daschle will be charged to use his thirty-plus years of Washington experience and contacts to push comprehensive health care reform, including universal insurance, through the congress. And if successful, Daschle will be in charge of getting the new national health program (not to be mistaken with nationalized health care) off the ground running and through its first few years of existence. This may seem easier than the tasks awaiting the new Secretary of State or Treasury Secretary, but bear in mind that similar tasks to reform health care have failed many times over the past 60 years. I wrote more about this history last week. [...]
Mandates, or do you really mean forced labor. I think maybe you should be “mandated” to work for on third of your paycheck for the national good. How’s that sound to you?
You think you see a shortage of qualified nurses now? Just wait. rationed care with no alternative means black market health care. It is the norm in countries with socialized medicine. Visit England or Canada and you will get the real story. I already have, and have been invited to help establish private dental care clinics in the UK. BTW, they have almost abandoned their state dental care system that has been in place for so many years. Ever notice the British teeth?
Thomas, hate to correct you, but Canada actually doesn’t have socialized medicine. Socialized medicine by definition means that there are no private hospitals, private doctors, etc. This is not the case in Canada. Universal insurance, Single-payer insurance, and socialized medicine are different things. Britain has socialized medicine, Canada does not.
This article has nothing to do with dental care, although dental care is not talked about enough–I completely agree. I don’t see how “socialized medicine” as you call it has anything to do with dental care?
In relation to England, I recommend you read the two part series by Warren McInteer. Warren does a good job comparing and contrasting the US and UK health care systems. You can access these two articles here:
http://demockracy.com/health-care-in-america-a-time-for-change/
http://demockracy.com/health-care-in-america-a-way-forward/