President-elect Barack Obama and his new health-reform chief, Tom Daschle, made clear on Thursday that even amid tremendous economic crisis, their new New Deal would take on that persistent piece of unfinished business from the old New Deal -- health care.
"Some may ask how at this moment of economic challenge we can afford to invest in reforming our health-care system," Obama said. "And I ask a different question. I ask how can we afford not to."
A recent report by the New America Foundation's health-policy program estimates that the cost of doing nothing about health care, including poor health and shorter lifespan of the uninsured, is well above $200 billion a year and rising. That's enough to cover the uninsured and still have some left over for other public-health needs.
Health-insurance inflation will continue to outpace wages; the average cost of an employer-sponsored insurance plan for a family would reach $24,000 in 2016, an 84 percent increase from today. At least half of U.S households would need to spend more than 45 percent of their income to pay for insurance -- while the coverage itself would be sparser. Health costs would further undermine the ability of U.S. manufacturers to compete internationally, threaten the stability of U.S. jobs, and deepen the burden on local, state, and federal budgets
Activists and advocates might focus on access, outcomes, and equity. But "what's really moved health care to the forefront is costs," said Drew E. Altman, president and CEO of the Henry J. Kaiser Foundation, summing up months of Kaiser public-opinion research. "It's an economic issue. The combination of health-care costs on working people with other economic burdens -- mortgage, rent, fuel -- are just devastating."
"There's a growing sense of crisis that health care will be unaffordable ... and that the little insurance we have will be increasingly worthless," said Dr. Elliott Fisher, one of the main forces behind the Dartmouth Atlas, the bible of U.S. health-care irrationality. "And there's a sense of crisis about public health, about the need to refocus the system on prevention, on health promotion, on the growing burden of chronic disease."
Yet for all the positive signs coming from Obama, from Senate Democrats, even from some segments of the health industry itself, there is still a strain of conventional wisdom, in the media, in parts of Wall Street, and even in the policy blogosphere, that says health reform is just too risky and too costly. We don't have the consensus and we don't have the cash. Democrats can pass a bigger and better State Children's Health Insurance Program (S-CHIP), a little of this, and a little of that and call it a day.
Obama knows the history. "Year after year, " he said. "Our leaders offer up detailed health-care plans with great fanfare and promise only to see them fail, derailed by Washington politics and influence peddling. This simply cannot continue."
In 1993-1994 we had "fanfare and promise." But proponents of health reform massively bungled the politics, the process, and the policy. Foes of reform, expensively and expansively, exploited their errors. The upshot was that we, as a nation, rejected comprehensive health reform. We didn't understand it. We didn't like it. We certainly didn't want to pay for it. We decided that the status quo, however flawed, was better than change.
What we didn't recognize in the 1990s was that the status quo was an illusion. Imperceptibly to most of us, dramatic changes were underway in how we pay for care, how we access care, and in the quality of our care. For the most part, they were not changes for the better.
The number of uninsured spiked in the late 1980s, and when Bill Clinton was elected in 1992, there were 38.6 million uninsured. By the time his health plan died in 1994, another 1.1 million had lost coverage. Now, we're at 46 million, and it's likely soaring as jobs vanish and businesses cut benefits in a sinking economy.
Health-care spending in 1992 was $849 billion. Now it's $2.2 trillion -- slightly less, actually, than pessimists had forecast back in the 1990s, because of the cost-savings blip brought to us during the short-lived era of HMO ascendency. But premiums in the early 1990s ate up 7 percent of family income. Today, it's 17 percent and growing, a trend that is aggravated by rising deductibles and co-pays. Employers' burden has also grown. The average employer paid about $3,700 toward a family plan in 1996; it's approaching $10,000 today. That's for those who are lucky enough to still have health benefits on the job. Had we passed the Clinton health-care plan, with all its flaws, the Congressional Budget Office had projected that overall health-care spending would have slowed down (after an initial uptick) by about 7 percent by 2004, a $150 billion annual savings. And everyone would have been covered.
The costs aren't measured only in dollars. Ample research by the Commonwealth Fund and others has shown that for the uninsured and underinsured, health care is often too little, too late. A recent Commonwealth study found that chronically ill adults in the U.S. were far more likely than their counterparts in other developed countries to face cost barriers to getting care. They were also more likely to have experienced poor care coordination and/or a medical error.
Our health system today -- and it's become a cliché to wonder whether we should even call it a "system" -- is different and more challenging than it was in 1992. Then we had a coverage crisis. Now we have a coverage, cost, and quality crisis. We have an aging population with multiple chronic illnesses being treated inefficiently by numerous doctors who are paid to pile on tests and procedures but who have no incentive to coordinate care. Research by the Rand Corporation has found that when we do see a doctor, we only have a 50-50 chance of getting the right care. Assuming we can find a doctor in a world where specialties like dermatology and radiology bring more cash and cachet than primary care. We may not get our diabetes controlled, but if we've got the money, we can have our body parts scanned and erase our wrinkles.
Back in 1992, we had doctors, not primary-care providers. We were patients, not "health-care consumers." About half of us were still in traditional fee-for-service medicine (which is not necessarily the model that will serve us best in the future as we reinvigorate primary care and tackle chronic disease). Then, managed care extended its reach. But to borrow a phrase from Dr. Donald M. Berwick, president and CEO of the Institute for Healthcare Improvement, instead of managing our care, HMOs managed their cash.
"There were those that thought that managed care would save us. So we had the 'halcyon days' of managed care, only to see the managed-care revolution fail in a public revolt," recalled Kaiser's Altman. The next solution, he noted, was "cost-shifting to working people as the answer to our problems." That's still where we are. Workers' share of employer-sponsored family policies rose by more than 160 percent from 1996 to 2008, far outpacing the growth in median household income. Deductibles of $1,000 for an individual are the norm.
The link between quality gaps and the failure to cover everyone in 1994 is neither as direct nor as easy to measure as the economic fallout. But it's not irrelevant. An inefficient system, marked by cost-shifting, perverse incentives, fragmentation, overcrowding, and frayed safety nets does not a quality nirvana make. After a pair of Institute of Medicine reports documented that up to 98,000 people die in hospitals each year through medical errors, an inpatient-focused quality movement has made strides. "I'm moderately optimistic that over a period of years ahead we'll have care that is safer and more evidence-based in hospitals," IHI's Berwick said. But you can only go so far in repairing quality in a broken system. "It's like fixing a carburetor but having the wrong car," he added.
Barack Obama's election has created a second chance. The moral case for reform is beyond question. The uninsured live sicker and die sooner. No other country comes anywhere near our record of spending so much and leaving so many uncovered.
"The dynamics of this recession are worse than in 1992," said Paul Ginsberg, president of the Center for Studying Health System Change. "What people today see is that they are a job loss away from being uncovered. Or, if they work for a small employer, from paying a lot more for coverage. If they have it. If their employer continues providing it."
Throw in the quality challenges, the errors and infections, the lack of care coordination, the vast and unjustifiable variations in how medicine is practiced from one place to another, an emergency system so strained that an ambulance is diverted from an overcrowded emergency room at least once every minute. It's bleak.
So bleak that it might change the conventional wisdom. In short, we need to understand that just like in 1992, we're on a trajectory. And the status quo is not an option.