COVER

Faltering reform

The number of Americans without health insurance is growing

ANDREW PHILLIPS December 2 1996
COVER

Faltering reform

The number of Americans without health insurance is growing

ANDREW PHILLIPS December 2 1996

Faltering reform

COVER

The number of Americans without health insurance is growing

ANDREW PHILLIPS

The health-care system of ours is badly broken, and it is time to fix it. —Bill Clinton, 1993

I made a blunder. —Bill Clinton, 1995

Between the President’s confident assertion that only major surgery could heal American health care, and his rueful admission that his own reform plan was dead on arrival, lay a world of political disappointment. Bill Clinton’s attempt to give Americans universal medical coverage was supposed to be the touchstone of his first term in office. Instead, it collapsed under the weight of its own complexity and the fierce criticism of its opponents—and almost took his presidency down with it. But the problems it was designed to solve have not gone away: if anything, they have gotten worse. One fact serves to illustrate that better than any other. When Clinton unveiled his plan in September, 1993, he told Congress that 37 million Americans had no health insurance at all. Today, that number is more than 40 million—and rising.

The politicians may have deadlocked over the issue, but American health care is being revolutionized as they watch from the sidelines. Intense pressures to cut costs are forcing doctors to take less and prompting employers to cut back on the coverage they provide for their workers. So-called health maintenance organizations, networks of doctors and hospitals that increasingly control the supply of medical services, are booming amid concerns about the restrictions they place on care. Large profit-seeking corporations are entering the field more aggressively than ever before. And the government programs that cover about one in four Americans, Medicare and Medicaid, face unprecedented pressure. The result, journalists Haynes Johnson and David Broder conclude in The System, a detailed new study of how Clinton’s plan failed, is not a pretty one. “It is a grim picture,” they write, “and suggests a more polarized, class-based society, where people with money are going to be fine but people without money are going to be much worse off.” The irony, of course, is that is exactly the opposite of what Clinton hoped to accomplish when he launched his reform plan in 1993 and put his wife, Hillary, in charge. The President hoped to ensure that all Americans were covered, mainly by requiring employers to help pay for coverage and by subsidizing health insurance for the unemployed. And he wanted to control the growth of medical costs, which are increasing far faster than other costs and now consume 14.5 per cent of the national product—fully one-seventh of the entire American economy. The plan was certainly ambitious: when

Clinton sent it to Congress, the proposed bill was 1,342 pages long. But its opponents, led by a potent insurance industry ad campaign, successfully portrayed it as an attempt to have the federal government take over medical care. And many Americans fortunate enough to have adequate coverage—the majority—feared that it would mean cutting their benefits.

Three years later, they face the same pressures— but from private business rather than government. The trend towards downsizing means that many companies have replaced full-time employees with parttimers and contract workers who do not get medical insurance benefits. As a result, even during a long economic boom, the number of Americans without insurance continues to climb. And employers are increasingly turning to managed care plans to keep costs down. Under those plans, patients typically pay a fixed monthly fee for health coverage, but they can be treated only by doctors and hospitals affiliated with the plan. The theory is that managed care keeps costs down by increasing efficiency and giving doctors an incentive to keep patients healthy through counselling and preventive medicine. The reality can be less rosy.

The fastest-growing type of managed care are HMOs—and critics say many of them increasingly pressure doctors to limit the kind of health care they offer. Aready, 58-million Americans are enrolled in such plans and in some parts of the country, notably California, they are the dominant form of health insurance. For the most part, surveys show, patients are

satisfied. But in 35 states and at the federal level, there are campaigns to make sure that HMOs do not unduly restrict the care they offer just to save money. One target is gag rules that forbid doctors in some HMOs from telling patients about treatments that the plan’s managers regard as too expensive—or even from criticizing the HMO. Other critics are trying to make sure that managed care plans do not restrict treatment too much. In September, for example, Congress passed a law requiring insurers to allow women to stay in hospital for at least 48 hours after giving birth—ending what Clinton denounced to great political advantage during his re-election campaign as “drive-by deliveries.”

Others are trying to end the increasingly common practice of having mastectomies performed as outpatient operations—avoiding the need for a costly hospital stay. Rosa DeLauro, a Democratic congresswoman from Connecticut, introduced a bill that would stop some HMOs from setting rules requiring their hospitals to send women home the same day they have a breast amputated, usually because of cancer— what have become known as “drive-thru mastectomies.” Even the association grouping most American HMOs advised its members to stop that practice in a bid to avoid national legislation against it. In California, two propositions were on the ballot in the Nov. 5 election that would have required tighter state regulation of HMOs. They were defeated, in part because their supporters were divided. Still, says Sara Singer, a health-policy analyst at Stanford University, many HMOs are finding creative solutions to the problem of restraining medical costs. “The industry as a whole is getting a bad rap,” she says. “Some HMOs are doing very innovative things.”

At the same time, big business has entered the medical field more actively than ever before. Mergers and acquisitions of hospitals, laboratories and even doctor groups complete with their patient lists have become commonplace. To some observers, it is a predictable development. A vast industry that consumes a seventh of U.S. national output, they say, could not go on operating as a collection of tiny, inefficient enterprises. To others, the so-called corporatization of American medicine has more sinister implications. Dr. Arnold Reiman, a professor of medicine at Harvard University and editor emeritus of The New England Journal of Medicine, predicts it will lead to more uninsured people, greater inequity in health coverage,

and a neglect of medical research. And, he says, doctors who opposed Clinton’s reform efforts because they feared the heavy hand of government bureaucrats may well find that the cost-cutters in charge of some HMOs are worse. “They are already finding out that the people running corporate plans are even tougher task masters than the government,” he said in an interview.

In the short run, at least, the death of Clinton’s ambitious plan means that U.S. politicians are likely to attempt only modest measures to improve health care for Americans. One recent

step, pushed through Congress by senators Edward Kennedy and Nancy Kassebaum, improves coverage for people who change jobs, or lose their jobs. But the biggest political challenge is rescuing Medicare, which consumes $265 billion a year and covers almost 38-million elderly and disabled Americans. The plan is spending more every year than it takes in, and will go bankrupt in the year 2001 unless Washington acts. Medicaid, the $120-billion program that covers another 32-million people, mainly those on welfare, also faces a financial crunch.

Democrats and Republicans agree that urgent action is needed to save the plans, and Clinton’s aides say he is considering appointing a bipartisan commission to come up with a formula. But that is far short of what he set out to accomplish only three years ago. As a result of his failure, Johnson and Broder conclude in The System, “the goal of providing affordable quality health care for all. . . is farther from realization in the United States in 1996 than it was at the beginning of the decade.” □