Health Care: a Crisis for Everyone


Only a few years ago, it would have been unthinkable. Who would have thought that the American Medical Association, Lee Iacocca and the Heritage Foundation -- not a radical tendency among them -- would be joining unions and assorted leftists in calling for an overhaul of America's health-care system?

Hardly anyone agrees on the exact prescription. But across industry, academia, organized labor and politics, a rising chorus is warning of calamity if serious medicine isn't found for the growing ranks of Americans who are walking around without health insurance, justifiably afraid that they are just an ambulance ride away from financial ruin.

Commit this statistic to memory: In America, between 31 million and 38 million people have no health insurance. Many of them do without such basics as prenatal care, immunizations and cancer screenings. Often, they stay home until they are desperately ill. And then, the hospital emergency room becomes their family doctor.

A 1987 survey by the Robert Wood Johnson Foundation found that two-thirds of the uninsured with serious symptoms -- loss of consciousness, bleeding and chest pains, to name a few -- didn't go to the doctor at all.

The problem is likely to get worse. Dr. George D. Lundberg, editor of the Journal of the American Medical Association, says it is reasonable to think that 75 million people -- more than twice the current number -- will be uninsured in five years if the nation doesn't find an effective way to stem health-care costs and insure everyone.

Twenty years ago, Sen. Edward M. Kennedy, D-Mass, proposed national health insurance. But it remained a fringe issue, perceived as too esoteric or too distant a problem to concern a broad spectrum of the electorate. It was a problem of the poor. Now, the issue has emerged into what Alex Gage, a Republican political pollster, calls "a very dominant second-tier issue" -- dwarfed only by foreign policy and recession as the 1992 elections loom.

"It's not too esoteric," says Mr. Gage. "People are so confused. They go [to the doctor] and get 15 bills, and there's a sense that everybody is raping everybody."

Proposals for national health insurance abound in Congress. Sen. Jay Rockefeller, D-W.Va., may make his a launching pad for a presidential run. In May, JAMA and nine specialty journals published by the staid AMA devoted all their pages to proposals for insurance reform. The proposals ran the spectrum, from tinkering with the insurance industry to dismantling private insurance and establishing a Canadian-style system that covers everyone with tax dollars. But they all agree: The current system is failing.

It's doubtful that corporations, doctors and political leaders have suddenly been struck with an overwhelming sense of altruism. They have simply found that when it comes to health care, "poor" describes not only the underclass but the middle class as well. The uninsured have become so numerous -- and the cost of insuring people so exorbitant -- that the problem suddenly belongs to everyone.

The uninsured have grown from an estimated 28.4 million in 1979 to about 37 million by the mid-1980s. The Census Bureau shows a decline by a few million since then, but some experts believe that the difference may lie only in the way we measure and count the uninsured. Over the same period, coverage gaps have grown: People are paying larger deductibles and getting fewer services.

True, many of the uninsured families are impoverished, making less than the federal poverty level of $13,000 per year for a family of four but too much to qualify for Medicaid.

Others fit squarely in the middle class: They are working people whose employers have bailed out of health insurance; people who don't qualify for insurance because they work part-time; employees of small businesses who can't afford to offer insurance; people who work for themselves.

"There's also a growing concern on the part of many people with insurance that they could lose theirs, or that it just isn't as reliable as it used to be," says Dr. Karen Davis, an authority on health insurance at the Johns Hopkins School of Hygiene and Public Health.

It's a fear grounded in reality: While 15 percent of Americans are uninsured at any given time, 25 percent are uninsured at some point over the course of a year due to job changes, layoffs and the like.

Just as important, spiraling insurance premiums have hit business hard, forcing many companies either to absorb the increase, stop providing insurance or sock workers with a greater share of the cost. In 1989, health insurance accounted for 7.6 percent of company payroll costs -- a leap of 23 percent in just three years.

The problem has Lee Iacocca calling for the adoption of something akin to Canada's national health insurance. For every vehicle built in the United States, he points out, Chrysler spends $700 on employee health care -- more than triple the amount paid by manufacturers in Canada and Japan.

Something else exacerbates the problem: The insurance industry used to charge people equally, spreading the cost of insuring the sick across a broad population of generally healthy people. It was called "community rating." Recently, the industry has moved to "experience rating," meaning it charges higher premiums to small groups and individuals with histories of serious illness.

Worse, people with histories of cancer, diabetes or other chronic illness are often excluded altogether.

While Lee Atwater was dying from an inoperable brain tumor, he remained on the Republican National Committee payroll and its health plan. But the insurance carrier gave the committee a choice: drop Mr. Atwater or face a tripling of its insurance rates. The committee, according to the Wall Street Journal, changed insurance carriers but now pays so much that some employees can't afford the coverage.

The insurers, in turn, bear the expense of health-care costs that are spiraling out of control. Sen. Rockefeller predicts that the $675 billion we spend today on health care will become $2 trillion by the year 2000. The reasons are many. The population is aging. Medical malpractice premiums and jury awards are rising. Space-age technologies costs millions, and hospitals want them all to remain competitive. Consumers often demand them.

Magnetic resonance imaging -- that wonderful technology that produces crystal-clear pictures of the body's tissues -- is cropping up in hospitals and private radiology offices everywhere. The equipment costs more than $1.2 million; patients or their insurance carriers pay $700 for each use of it.

"MRI is a wonderful example of American business going too far," says Dr. Lundberg. "It's fueled by this runaway health-care system. In fact, everyone doesn't have to have one. We've created a system where everyone wants to have one, and it wastes all our money."

The debate over the insurance crisis is not so much whether the health-care system needs reform. It's how to reform it. Doctors' groups and politicians are weighing in with plans that have the ring of political slogans: Health USA, Americare, Health Care for All Americans, Health Access America.

Many of the proposals follow the "pay or play" model, requiring employers to supply health coverage to their workers or to fork over a new payroll tax. The taxes would flow into a trust fund that would supply health benefits to people who aren't tied to Medicaid or company health insurance. Proposals advanced by Senator Rockeller, Senator Kennedy and Rep. Henry Waxman, D-Calif., as well as the AMA, are variations on this theme.

More radical models would abolish private insurance and establish a single payer -- government -- that would guarantee health care for all. Proposals like the one advanced by the Harvard-based Physicians for a National Health Program borrow heavily from the Canadian system, which makes the provincial governments the single payers of physicians and hospitals.

Those doctors contend a national health program would cost less, even while doing away with deductibles and copayments, while guaranteeing health care for all. Hospitals would be given an annual budget to treat everyone, sparing them the exorbitant cost of compiling bills and chasing after patients and insurance companies for payment. Treating patients early also costs less than treating patients late, they say.

Dismantling the insurance industry seems a tall order, but Dr. David U. Himmelstein of Physicians for a National Health Program believes Americans are ready.

"The only way to do it is to build a crusade against the insurance companies and portray the realities of the situation," says Dr. Himmelstein, who is working temporarily with the Washington-based Public Citizen Health Research Group. "They are the single greatest force preventing America from solving its health-care crisis."

He adds: "Politically, it's tough. They are an enormously powerful group. But groups like Chrysler are realizing that insurance costs come out of their pockets. It's coming out of big pockets and small pockets alike."

Henry J. Aaron, a Brookings Institute economist, doubts the country is ready for a complete overhaul. "The U.S. does not have a history of engaging in radical social surgery," says Mr. Aaron, who has offered his own variation of "pay or play."

Necessity will drive policy-makers to do something in the next decade, most experts agree.

Mr. Aaron says the national debate won't "begin in earnest" until an incumbent president finds it politically attractive to embrace the issue. He finds little evidence that George Bush, riding high amid Desert Storm euphoria, will see the need to tackle health-care reform. So far, Mr. Bush has remained quiet on the issue. Don't look for serious action until after 1996, says Mr. Aaron.

Others, like Dr. Lundberg, are confident that lawmakers will be driven to take action in a "few years" because of the the health-care Armageddon that will arrive if they wait any longer.

"I'm quite confident this will be done because the alternatives are so grotesque and unthinkable if we don't do that."

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