America’s health choicesBMJ 2008; 337 doi: http://dx.doi.org/10.1136/bmj.a1563 (Published 23 September 2008) Cite this as: BMJ 2008;337:a1563
US presidential candidate Barack Obama was not even born when national health insurance was first proposed under the Truman presidency in the 1940s. Twenty years later, Congress voted in Medicare, a publicly funded, national insurance programme for everyone over 65. At the time, Medicare seemed to be the first step towards universal coverage. But further steps were never taken. Failed health reforms in the 1970s and 1990s have left the United States as the only developed country not to provide all its citizens with access to health care.
America’s inability to fix something that all other developed nations take for granted may seem baffling. But two facts begin to explain the puzzle: 94% of Americans who vote have health insurance,1 and nearly three quarters of people who have insurance think that what they have is either good or excellent.2 While most voters agree that everyone has a right to high quality, affordable health care, no one wants to give up too much of what they already have to fix the problem. Mindful of this, proposals by Mr Obama and presidential rival, John McCain, steer clear of grand reform. The question is whether either candidate’s proposals will be enough to make a real difference to health care but not too much to put off voters.
The World Health Organization’s final report on the social determinants of health, published in August this year, called on national governments to develop healthcare services on the principle of universal coverage, focusing on primary care. The report is relevant to the US, which not only does not provide health coverage for all but is the most expensive system in the world. In 2006, the US spent just over $2 trillion a year on health care, or 15.3% of gross domestic product (GDP), compared with an Organisation for Economic Cooperation and Development (OECD) average of 8.9% of GDP and 8.4% in the United Kingdom. Extra dollars spent on health care do not translate into better health for Americans on some very basic measures. Life expectancy in the US ranks 22nd in the OECD and infant mortality is higher than the OECD average.3
The health insurance system that Americans have today is the result of historical accident. During the second world war, employers were prohibited from giving their workers pay increases so they used non-monetary benefits, such as health insurance, to reward workers and lure prospective employees. Before anyone had the chance to develop a blueprint for health care, a system based on employer sponsored health insurance had emerged. Today, 62% of working age Americans get their health insurance through their employer. It is not mandatory for employers to provide insurance or to contribute to its costs, and small firms and companies with a large proportion of low wage workers are much less likely to do so.
The problem of the uninsured stems partly from this link between employment and access to health care. If employment is the main route to health insurance, those not in the labour market will inevitably be left out. This is not just the unemployed but stay at home mothers, children whose parents are not employed, and elderly people. The public insurance programmes Medicare (for disabled and elderly people), and Medicaid (for poor people, as defined by each state) pick up some of the those left behind by the employer based system. But 47 million Americans, close to 17% of the working age population continue to fall through the safety net.4 In states such as Texas and Oklahoma, more than 30% of under 65 year olds are uninsured.4 They tend to be low income working age adults who are not poor enough to qualify for Medicaid but do not get, or cannot afford, insurance through their employer.
A new approach
Faced with America’s sprawling healthcare system with different public and private funders, multiple insurance companies, management organisations, and providers, the logical response from any president committed to serious reform would be to tear down much of what is there and start again. The most obvious solution would be to create a publicly funded national insurance system built on the foundation of Medicare. This would cover all citizens at the same time as improving quality of health care and reducing costs by eliminating much of the duplication.
There are good reasons for building on Medicare. It has lower administrative costs than its private sector rivals, and, as the largest insurance plan, already sets the tone for much of what happens in the healthcare industry. This type of single payer solution in which care is funded by the government but provided by many different private and voluntary sector organisations is common in other developed countries, including Canada and Australia. But the most promising solutions on paper are often the least popular with American voters because they involve giving up too much of what they already have. In particular, shared responsibility for health care and patient choice are two features of the current system that Americans are not prepared to lose.
According to a poll conducted by leading Democratic pollsters, Lake Research Partners, 75% of Americans believe that employers, individuals, and government must share responsibility for paying for universal health care, as they currently do. Unlike citizens in other nations, Americans do not naturally turn towards government to tackle social problems. On the contrary, the average American is more concerned about government failure than market failure.
This scepticism about government has deep roots in the American constitution, which sets out to limit the power of government over the people. Over time, this constitutional settlement has led to what the political scientist John Kingdon describes as a kind of “path dependence.” This path has been challenged at different points in history but tends to place the centre of gravity of American politics in a different place from that of nearly every other industrialised country. Even well respected, liberal policy thinkers in Washington often describe the National Health Service as “socialised” medicine. It is not a great stretch to think that in the minds of some, socialised and socialist are one and the same.
Fear of a big government solution was one of the reasons for the failure of the Clinton health plan 15 years ago. The Harry and Louise advertising campaign, funded by the influential trade organisation America’s Health Insurance Plans, is credited with stoking much of this fear among the public. One of the adverts in the campaign shows a white, middle class couple, Harry and Louise, wading through reams of paper and despairing over restrictions imposed on their use of health care by new government designed health plan options. The strap line, “If we let government choose, we lose,” leaves nothing to interpretation.
So how do the prospective candidates measure up? “If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums,” Mr Obama reassured voters in a speech at the University of Iowa last year. His plan is mindful of the status quo bias of the electorate. It is explicit about not disrupting employer provided insurance and is deliberately piecemeal in its ambition. Mr Obama’s plan is based on the health insurance reform passed in the state of Massachusetts in 2006. The Massachusetts plan is far from a big bang solution. It was designed to fill the gap between Medicaid at the bottom and employer based insurance at the top. It does this in three ways. Firstly, the reform introduced an individual mandate that makes it compulsory for everyone to buy health insurance if they can find an affordable plan. Failure to buy insurance results in a fine. Secondly, employers with 11 or more employees have to contribute to the costs of health insurance or pay a penalty. Thirdly, the state created a new subsidised insurance plan for those on low incomes and reformed the insurance market to provide better access and choices for people shopping on their own.
The Massachusetts reform is widely recognised as a success. Around 340 000 people who were uninsured now have coverage, and the rate of uninsurance in the state is down to only 7%, from 13% in autumn 2006.5 Half of the newly insured population is in private, unsubsidised insurance, and there has been no obvious erosion of employer provided insurance—a hallmark of acceptability for any reform. The only feature of the Massachusetts reform that Mr Obama has not adopted is the individual mandate. It has been controversial, and he has deliberately steered clear of discord. Health policy experts argue that the lack of an individual mandate could undermine his plan because young and healthy people will not buy insurance unless they have to. For insurance pools to be cost effective, the healthy have to buy in to offset the costs of treating the sick.
Mr McCain’s advisers are publicly positioning him as the more radical candidate on health care. The centrepiece of his plan is a new tax credit worth $2500 a year for an individual and $5000 for a family that can be put towards health care. Mr McCain would simultaneously end tax breaks on employer based health insurance that currently cost the federal government $200bn a year and favour the wealthy, who have a higher tax bill. Mr McCain’s campaign argues that his proposed tax credit would be fairer, providing as much government support to low income families as to wealthy ones. Under the plan, there would no longer be any financial advantage to getting health insurance through an employer, and the assumption is that people would start to shop around. Mr McCain’s plan is deliberately more disruptive of the status quo but remains relatively cautious. The erosion of employer sponsored health insurance, if it happens, will take years.
Neither candidate’s plan will fix America’s twin healthcare problem of high costs and uninsurance. McCain’s proposals are unlikely to make any big dents in the numbers who are uninsured. Even with the new tax credit, premiums for people with pre-existing conditions will remain unaffordable. Mr Obama’s plan will give more people access to insurance but with the real risk of exploding costs. Healthcare costs are already growing 2.5 percentage points faster than GDP. His plan contains few proposals that will squeeze enough extra value out of each dollar spent on health care to expand coverage without significantly pushing up costs.
History and the electorate are not on the side of major health reform. Whoever wins in November will know that the outcome to be avoided is complete failure. Raising expectations of major reform to end up with nothing by the end of 2009 will set universal coverage back a decade, just as the failure of the Clinton plan did in the 1990s. One approach that the next president should consider would be to focus first on achieving universal coverage for children. The Children’s Health Insurance Programme comes up for reauthorisation by Congress in March 2009, providing an early opportunity for a victory on health care. Focusing on children would be incremental enough to pacify voters but would put America decidedly on a path to achieving coverage for all. Children are popular with the electorate, and the moral argument for covering all children irrespective of their parents’ income or situation is the easiest to make. With all children and everyone over 65 taken care of, taking an extra step to close the gap in between to create universal coverage might suddenly seem achievable.
Uninsured in America: Jeff Rubin
Two years ago, 41 year old Jeff Rubin was diagnosed with multiple sclerosis. His condition quickly deteriorated, and he was unable to keep working for a medical packaging firm in Philadelphia. When Jeff lost his job, he also lost the health insurance for his family provided by his employer. Uninsured, he suddenly had to find thousands of dollars a month to pay for his treatment. He needs nine different drugs a day just to make it out of bed. Despite cutting up tablets to make them stretch further, getting samples from his doctor, and borrowing money from friends and family, Jeff eventually had to stop paying his mortgage to afford his medical bills. The mortgage company soon repossessed his house, and he had to declare himself bankrupt.
Getting individual insurance is rarely an option for people with serious health problems like Jeff. In many states, insurance companies will take on only healthy and relatively young people. People who are already sick are an obvious bad risk. Employer based insurance covers the costs of those with serious health problems by pooling risk and offsetting the costs of the sick against the healthy majority. In the individual market, the people who need insurance most are often excluded as medically uninsurable or their premiums are set so high as to put health insurance beyond reach.
In December this year, the federal Medicare programme will start paying for Jeff’s healthcare costs and things will finally start looking up for the Rubin family. Having worked before becoming ill, Jeff qualifies for social security disability insurance, which in turn makes him eligible for Medicare.
Uninsured in America: Deamonte Driver
Deamonte Driver, a 12 year old boy from Baltimore, died last year when bacteria from an abscess in his tooth spread to his brain. Without health insurance, he did not get to see a dentist until he could no longer bear the pain and he had to be taken to the emergency room. By that point, even two operations and six weeks in hospital at a cost of $250 000 (£140 000; €175 000) could not save him. If he had been insured, he could have had his tooth removed when it first started to bother him for less than $100. With limited access to routine care, uninsured people get most of their treatment in emergency rooms, the most expensive place possible. Their treatment also tends to be less effective because problems are allowed to deteriorate for too long.
The choice agenda
In a 2006 survey of patient preferences in UK hospitals conducted by the Picker Institute, choice of hospital, choice of admission date, and the availability of information to make an informed choice ranked among the 10 least important aspects of care. Patients surveyed were most concerned about whether the doctor treating them would know about their medical history and be able to answer questions about their treatment.
In contrast, Americans regularly sacrifice more coordinated care for the ability to see any doctor they choose. They are prepared to retell their history and repeat tests to get a second or third opinion. Choice is a basic value in health care for Americans and is a founding principle of public as well as private programmes.
Attempts in the 1990s to restrict choice and restrain costs through the introduction of managed care failed in part because patients rejected having their choices limited by anyone other than their doctor. Polling indicates that choice has to be a strong value for any healthcare reform to succeed and many Americans instinctively consider choice and a single payer system to be incompatible.
Cite this as: BMJ 2008;337:a1563
Competing interests: None declared.