Health Biz: Advancing national healthcare

By ELLEN BECK  |  March 29, 2005 at 3:52 PM
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WASHINGTON, March 29 (UPI) -- National or universal health-coverage proposals go nowhere on Capitol Hill if they mandate business participation. Two plans proffered recently, however, either eliminate the need for employers to provide health benefits -- which would cause many to breath a sigh of relief -- or work through existing employer-based coverage.

What kills these plans, however, is another show-stopper: They rely on a value-added tax all Americans would pay.

The "Prescription for a Healthy America" is published in the journal Health Affairs and the "Prosperity Project" is found in the New England Journal of Medicine. Both come from highly respected experts in the health-policy field and both are destined for oblivion -- at least while Congress and the White House are in Republican hands and possibly much longer.

What the proposals do, however, is to continue the national discussion of what kind of healthcare system Americans want in the future, allowing it to bubble up between the bigger controversies over Medicaid, Medicare and Social Security. They all weave together financially, but politically speaking, reforming any of the three big entitlement programs is easier for lawmakers and the public to grasp than is dumping the entire U.S. healthcare-financing system in favor of something that would look at lot like the British or Canadian alternative.

Congress is not going to move on the uninsured until the costs of doing nothing hit the middle class or upper-middle class squarely in the pocketbook and there is a resulting public outcry or mandate for change. That is just beginning to happen as Americans feel the side effects of 45 million uninsured citizens in the form of higher premiums and co-payments for their own insurance plans -- the healthcare industry passing on the cost of unreimbursed care.

John Podesta, former White House chief of staff under President Bill Clinton and now president of the Center for American Progress, told a news briefing that the center's "Prescription for a Healthy America" would build on the employer-based coverage and expand Medicaid.

The proposal would create new purchasing pools for individuals and employers to draw from. People who did not join a plan would be assessed an income-related fee for the cost of their future care under Medicaid. The plan would cost from $100 billion to $160 billion per year, not including any savings such a system might reap. It also would require a dedicated value-added tax of 3 percent to 4 percent, with small business, food, education, religion and medical care exempted.

"We believe Americans are ready for a bold solution to the real problems they and their neighbors struggle with every day," Podesta said. "Such a solution, if designed to be practical, to be fair and responsible, can overcome the political obstacles."

Dr. Ezekiel Emanuel of the National Institutes of Health, where he chairs the Department of Clinical Ethics, along with Dr. Vic Fuchs at Stanford University, proposed in NEJM the "Prosperity Project," based the idea the healthcare system is broken and cannot be fixed -- so dump it.

They also espouse a VAT as a funding mechanism, but their plan retains the private insurance industry, while getting rid of the employer-based system with its tax breaks for companies, as well as Medicare and Medicaid. Instead, it uses a voucher system, giving each American a government-paid voucher, with which to purchase a basic health plan. If a person wants more than the voucher affords, he or she can pay out-of-pocket for better coverage.

"We rely on the private sector to deliver care just as it does now," Emanuel said. "We believe there will be some shake-out in the private sector. It can't continue with 1,300 insurance and health plans in this country. It doesn't make any sense, but we don't mandate that."

Dr. Jim Morgan, president of the Partners Health System in Boston, said the biggest obstacle to overcome is the anti-tax sentiment in Congress.

"Make no mistake about it, increasing taxes to pay for health insurance will run into the teeth of the strongest political force of the last 40 years -- the anti-tax movement," Morgan said. "This obstacle will only be overcome when we as a nation answer the question, 'What happened to social justice as a moral value?'"

That moral or social responsibility theme has existed in the background of national healthcare discussions, but not as a banner anyone in Washington would carry when delivering a proposal to Congress. Far easier to arm one's self with statistics and forecasts and just imply the moral implications.

"In my judgment, morality will not be a compelling selling tool unless the United States is on the heels of a virtual economic collapse and true fear pervades the majority of American families," said Wally Maher, a former vice president for public policy at DaimlerChrysler.

Maher said national coverage, with a VAT that spreads the financial burden, actually would be good for U.S. businesses -- as the cost of providing healthcare benefits weighs heavily on the corporate bottom line.

"I would be far less than candid if I did not point out that our board (back in the 1980s) was also keenly aware of the fact that were the United States to develop universal coverage -- particularly with cost containment as part of the solution -- it would help moderate (DaimlerChrysler's) healthcare cost and improve its global competitiveness," he said.

National healthcare proposals that mandate business participation -- for example one supported by at least one health plan and former Sen. John Breaux, D-La. -- requiring them to provide the benefit to all employers or pay a percentage of their payroll into a national insurance fund, get a cold shoulder from the business sector.

"We keep in place the policies that are there to date that sustain employer coverage," said Jeanne Lambert, a senior fellow at the Center for American Progress and the lead author of its proposal. "We create this new pool -- that is small employers, large employers -- any employer can come into to purchase coverage through. And in fact, if they do so, they qualify for some reinsurance or federal subsidy for their high-cost cases. So we kind of give a new option with some choices. We actually hope that there may be some employers who are not offering today that will do so."

"If you're interested in political feasibility, it seems me an employer mandate kills your plan," Emanuel added. "Business wants out of healthcare. They don't want to be locked into it and if you put an employer mandate, you can be sure they're going to oppose you."

The Physicians' Proposal for Single-Payer National Health Insurance -- offered up in 2003 by physicians and published in the Journal of the American Medical Association -- went to another extreme. It all but eliminated the health insurance industry -- a major nemesis of physicians -- for a single-payer, government run system based on Medicare. The plan, its authors envisioned, would not cost more than what the United States now spends on healthcare because it would implement a system that would ensure best practices and reduce overhead, administration, inefficiency and waste.

An extreme shift, Lambrew said, was something the "Prescription for a Healthy America" plan tried to avoid.

"We learned in 1994 that people can easily be scared by people like Harry and Louise to think that they're going to lose what they have today," she said, "and even though you can argue that a more ideal system would be more seamless with one source of coverage, talking to seniors about losing their Medicare (as in the Prosperity Project plan), I think, might even scare them more."

Some of what's been proposed for national healthcare actually was included in Sen. John Kerry's Democratic Party health platform when he ran for president last year. The public had a tough time grasping it, compared to the relatively simple idea of tax credits or health savings accounts supported by President George W. Bush.

Like any policy, however, the more the public hears about an issue -- and Bush is banking on this in his Social Security proposals -- the more likely people will latch on to an idea and push it forward -- forcing Congress to act.

That moment is not here yet for national health insurance, but proponents will keep the discussion alive until that political time arrives.



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