If the Health of the Nation Were Really an Issue

The Hour

By Leonard Fein

Published February 12, 2008, issue of February 15, 2008.
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By now, we’ve been told repeatedly that there’s not a dime’s worth of difference between the policies of Hillary Clinton and Barack Obama. There’s really only one exception, and because it stands alone, the interviewers and the pundits keep coming back to it.

That is, of course, the healthcare proposals that the two have put forward. Clinton proposes a universal system, mandating participation for everyone. Obama believes that by driving costs down, almost everyone will voluntarily participate in the system, so there’s no need for a mandate (except for children, all of whom would be covered).

Which is the better choice? Simple: Obama falls short on universality, Clinton on sustainability.

Rather than pick apart the two proposals, let’s consider the problem that both address: the more than 45 million Americans who are today uninsured. These are a huge drain on the system; if and as they do need medical care, they end up (often too late) in the emergency room, and costs there, which all of us are paying for, are frightfully — and unnecessarily — high. Hence the emphasis on “universal health care.”

But even if, whether by magic wand or by detailed legislation, all the currently uninsured were suddenly covered, the crises in our health system would not be solved. For, indeed, there are two crises — and the one the candidates are addressing cannot be solved unless the other is adequately addressed.

That is the crisis of ever-increasing healthcare costs — not the number of people outside the system, but the costs within it. Healthcare costs continue to rise much faster than the growth in our Gross Domestic Product and the rate of inflation; the price of private and employer-based insurance becomes confiscatory, the cost of government-mandated programs — principally Medicare, SCHIP and Medicaid — threatens to displace other critical social expenditures, from education to infrastructure to basic scientific research.

Currently, healthcare takes 16% of our GDP — $7,000 for every man, woman and child in the United States — and it is projected to reach 20% of GDP in another seven years. It is fair to say that any proposal that does not focus centrally on cost-containment is missing a central ingredient of a long-run solution to both health care crises.

In the current issue of the New England Journal of Medicine, Robert Kuttner argues persuasively that the “usual suspects” that account for the cost problem — “The aging population, the proliferation of new technologies, poor diet and lack of exercise, the tendency of supply (physicians, hospitals, tests, pharmaceuticals, medical devices, and novel treatments), excessive litigation and defensive medicine, and tax-favored insurance coverage” — have been misidentified. They are all real enough, but the underlying issue is that the American system stands alone in its complete commercialization. Healthcare in the United States is a for-profit system, and that’s the heart of the problem.

The result? As Kuttner points out, “Researchers calculate that between one-fifth and one-third of medical outlays do nothing to improve health.” That “extra” expense pays for billing, marketing, administration, executive compensation — and, of course, profit. Covering everyone while leaving the for-profit system intact, or tinkering with cost-containment efficiencies while the incentives in the system remain profit-oriented, leaves the mess intact.

Imagine: Mark the halfway point in the estimate of current medical outlays that “do nothing to improve health,” and calculate what it would mean were the cost of healthcare to be reduced by that amount. We’d save, at current prices, more than $500 billion a year. (The Clinton and Obama plans both seek greater efficiencies in the system, both depend on rescinding the tax cuts on the very wealthy, and both require new federal dollars as well.)

More: The notion that all of us who are currently insured are “safe” is just that — a notion. Between deductibles, co-payments and exclusions, the actual coverage of those who are ostensibly protected is spotty, uncertain. And very expensive, to boot.

Furthermore, it is simply not true that because our system costs so much more than the systems of other industrialized nations, we get better care. Last May, The Commonwealth Fund reported on health outcomes in Australia, Canada, Germany, New Zealand, the United Kingdom and the United States. Ours is by a wide margin the most expensive of the systems studied (on average, about twice as much per capita as the other five nations), yet ranks last on dimensions of access, patient safety, efficiency and equity.

Or try this: We rank 21st among industrialized nations on infant mortality — behind Greece and Portugal, behind the Czech Republic and Italy — and 16th in life expectancy, tied with Cyprus and a few months ahead of Albania.

The nature of the American health care crisis and the international data demonstrate the superiority of a single-payer healthcare system. Why not, then, let employers and individuals choose between a government Medicare system and a private one and see which costs less and which serves them better?

But a single-payer system is plainly not in view in the United States today. Both Clinton and Obama know that; it is not an obscure piece of esoteric knowledge. Alas, they know as well they’d be pilloried were they to propose it.

Yet we can do better then what they do propose. Why not insure everyone up to the age of 25 — that is, essentially, Medicare for the young as it is today for the aging — and then, perhaps in five-year stages, creep upward from 25 and downward from 65 until everyone is covered in a rational and efficient system?

It won’t happen during this campaign. Instead, we will devote much energy to debating the relative merits of two fundamentally flawed plans. A pity.

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