New York Times
November 28, 2005
Many eulogies were published following the recent death of Peter Drucker, the great management theorist. I was surprised, however, that few of these eulogies mentioned his book "The Age of Discontinuity," a prophetic work that speaks directly to today's business headlines and economic anxieties.
Mr. Drucker wrote "The Age of Discontinuity" in the late 1960's, a time when most people assumed that the big corporations of the day, companies like General Motors and U.S. Steel, would dominate the economy for the foreseeable future. He argued that this assumption was all wrong.
It was true, he acknowledged, that the dominant industries and corporations of 1968 were pretty much the same as the dominant industries and corporations of 1945, and for that matter of decades earlier. "The economic growth of the last twenty years," he wrote, "has been very fast. But it has been carried largely by industries that were already 'big business' before World War I. ... Every one of the great nineteenth-century innovations gave birth, almost overnight, to a major new industry and to new big businesses. These are still the major industries and big businesses of today."
But all of that, said Mr. Drucker, was about to change. New technologies would usher in an era of "turbulence" like that of the half-century before World War I, and the dominance of the major industries and big businesses of 1968 would soon come to an end.
He was right. Consider, for example, what happened to America's steel industry. In the 1960's, steel production was virtually synonymous with economic might, as it had been for almost a century. But although the U.S. economy as a whole created lots of wealth and tens of millions of jobs between 1968 and 2000, employment in the U.S. steel industry fell 60 percent.
And as industries went, so did corporations. Many of the corporate giants of the 1960's, companies whose pre-eminence seemed permanent, have fallen on hard times, their places in the business hierarchy taken by new players. General Motors is only the most famous example.
So what? Meet the new boss, same as the old boss: why does it matter if the list of leading corporations turns over every couple of decades, as long as the total number of jobs continues to grow?
The answer is the reason Mr. Drucker's old book is so relevant to today's headlines: corporations can't provide their workers with economic security if the companies' own future is highly insecure.
American workers at big companies used to think they had made a deal. They would be loyal to their employers, and the companies in turn would be loyal to them, guaranteeing job security, health care and a dignified retirement.
Such deals were, in a real sense, the basis of America's postwar social order. We like to think of ourselves as rugged individualists, not like those coddled Europeans with their oversized welfare states. But as Jacob Hacker of Yale points out in his book "The Divided Welfare State," if you add in corporate spending on health care and pensions - spending that is both regulated by the government and subsidized by tax breaks - we actually have a welfare state that's about as large relative to our economy as those of other advanced countries.
The resulting system is imperfect: those who don't work for companies with good benefits are, in effect, second-class citizens. Still, the system more or less worked for several decades after World War II.
Now, however, deals are being broken and the system is failing. Remember, Delphi was once part of General Motors, and its workers thought they were totally secure.
What went wrong? An important part of the answer is that America's semi-privatized welfare state worked in the first place only because we had a stable corporate order. And that stability - along with any semblance of economic security for many workers - is now gone.
Regular readers of this column know what I think we should do: instead of trying to provide economic security through the back door, via tax breaks designed to encourage corporations to provide health care and pensions, we should provide it through the front door, starting with national health insurance. You may disagree. But one thing is clear: Mr. Drucker's age of discontinuity is also an age of anxiety, in which workers can no longer count on loyalty from their employers.
New York Times
December 4, 2005
By JOHN M. BRODER
LOS ANGELES, Dec. 3 - The number of American children without health care coverage has been slowly but steadily declining over the past several years even as health care costs continue to rise and fewer employers provide insurance, creating a breach that states have stepped in to fill with new programs and fresh money.
The overall ranks of the uninsured continue to swell, to nearly 46 million Americans at the beginning of this year. But a landmark federal program begun in 1997 to provide health coverage to poor and working-class children and additional measures taken by states have provided health insurance to millions of children who might otherwise go without.
In the past year, 20 states have taken steps to increase access to health coverage for children and their parents and nine states have reversed actions they took during the 2001-3 economic downturn to limit benefits, according to the Kaiser Commission on Medicaid and the Uninsured, part of the Kaiser Family Foundation, which tracks health care trends. Among them are Illinois, which just signed a child health bill, and Vermont, with its "Dr. Dynasaur" health program, both of which broadened coverage for children.
As a result of these and other steps, there are 350,000 fewer uninsured children in the United States than there were in 2000, the foundation reported. Over the same period, the overall number of uninsured rose by six million.
While elected officials cannot agree on how to provide or pay for health coverage for uninsured adults, there seems to be a consensus in many states that covering children is medically wise and politically smart.
However, even the situation for children is not uniformly favorable. Eleven states facing political and financial pressure, including Maryland, Pennsylvania and Tennessee, made it more difficult for eligible children to retain coverage.
The movement to expand coverage for children dates to the mid-1990's, after the Clinton administration devised a complex plan to provide all Americans with health care coverage. That plan failed, and advocates of wider coverage began pursuing more incremental changes at the federal level and lobbying legislatures to expand coverage.
Alan R. Weil, executive director of the National Academy for State Health Policy, a nonpartisan research group, said children's health was one area of state spending that had consistently risen. Mr. Weil said it was much easier for officials to approve spending "for the kids" than to expand welfare programs for adults, even in times of hardship.
"It goes back to the Elizabethan poor laws that drew a conceptual distinction between the deserving and the undeserving poor," he said. "It's very hard to call kids undeserving, even if you don't like the parents' behavior."
Illinois took the most far-reaching step this fall, enacting a law intended to provide coverage to all children in the state, extending low-cost or free coverage to the 250,000 Illinois youngsters who are now uninsured.
But even states unwilling to go as far as Illinois are moving to provide insurance for children.
New Jersey, which imposed sharp restrictions on publicly financed health care for families during the economic slowdown, restored eligibility this year to some 75,000 low-income families.
In Washington State, where 39,000 children were dropped from state-financed health care programs in 2003 and 2004, officials reversed course this year. The state eased health care eligibility requirements for families with children and delayed a plan to charge premiums.
And Texas, which has one of the nation's highest rates of uninsured children, took steps this year to stop a decline in the number of children with health coverage. The state eliminated premiums for the poorest families enrolled in state health care programs and stopped cutting off families with higher incomes that failed to keep up with premiums.
As of the beginning of this year, 16 percent of all Americans lacked health insurance, but only 12 percent of children under 18 went uncovered, although that still amounts to nine million children, according to the Kaiser commission. That gap has been widening over the years as fewer employers offer health care coverage, federal spending fails to keep pace with rising costs, and states limit eligibility to balance budgets.
The picture is brighter for children than for adults in large part because of the enactment of the State Children's Health Insurance Program, or Schip, in 1997. The program provides federal money for child health care to states, which determine eligibility, income limits and covered benefits within federal guidelines. The number of children covered under the federal-state program grew rapidly, from 897,000 children nationwide in 1998 to 3.95 million in the middle of 2003, before leveling off.
The percentage of uninsured children ranges from less than 5 percent in Vermont to almost 20 percent in Texas. The differences reflect state policies, the poverty rate, the number of immigrants, and the percentage of children covered by employers and other programs.
The chief factor determining how many children are covered is the income eligibility level set by the states under Schip. The federal government requires coverage for families at or below the federal poverty level, about $20,000 for a family of four. Only a few states set the limit that low. In some states, including Minnesota, Rhode Island and Vermont, families with incomes at 250 percent or even 300 percent of the federal poverty line qualify.
California is witnessing a battle that is also playing out in Washington and other states. State officials here and private groups are trying to bring health coverage to more than a million California children who now go without it. A bill that passed the Legislature this year would have eased eligibility requirements for the poorest families, bringing coverage to hundreds of thousands of children. Gov. Arnold Schwarzenegger
, a Republican, vetoed the bill, saying that he agreed with its aims but that the sponsors had not come up with a way to pay for it.
Partly in reaction, a coalition of health groups including the American Cancer Society and the American Heart Association are proposing a ballot initiative to raise the state cigarette tax to finance universal health care for children. Sponsors say that the estimated $1.4 billion raised by the new tax would pay for health coverage for more than 800,000 California children.
Vermont leads the nation in the percentage of its children who are insured through state and federal programs and private insurance, with almost 95 percent coverage.
In 1989, Madeleine M. Kunin, then the governor, created a state-financed program for pregnant women and for children up to age 6 who did not have private insurance and did not qualify for Medicaid. The program, which came to be known as Dr. Dynasaur, was expanded in 1992 under Gov. Howard Dean
to cover children through age 17. Families with incomes up to 300 percent of the federal poverty level, or nearly $60,000 a year, qualify, and the program covers doctor visits, dental care, immunizations
, vision care, medicines and mental health
Financing comes from the federal government, tobacco taxes and general state revenues.
Despite the fading fortunes of the auto industry, 93 percent of Michigan children are covered, several percentage points higher than the national average. But that still leaves 200,000 Michigan youngsters uninsured.
Even though Ms. Granholm intends to ask for significant cuts in some state programs in her budget next month, she said she would propose increasing spending to address the problem of uninsured children.
"Let's get real about it," Ms. Granholm said. "Let's design a public system that truly reflects where we want to be, so states are not twisted into pretzels to try to insure their most vulnerable citizens. I don't think we want to be a nation where you go to Dunkin' Donuts to put a quarter in a jar for Aunt Linda's mastectomy. We need a national solution for competitiveness and moral reasons. And Washington is utterly silent."
WASHINGTON, July 14: In a shocking development, George W. Bush, stuns Republican Party contibutors by calling for a single-payer universal health care plan. Saying "I can no longer live with my conscience," Bush fell to his knees before the TV cameras and apologized to the American people.
Following the announcement, Karl Rove collapsed on the stage, foam exuding from his mouth.
by MORTON MINTZ
[from the November 15, 2004 issue of The Nation]
Business leaders complain endlessly that the current system of private healthcare insurance based on employment provides fewer and fewer people with less and less quality care at higher and higher cost. Yet Corporate America turns its back on a publicly financed system, which, by all indicators, the taxpayers would willingly support.
Publicly financed but privately run healthcare for all--including free choice of physicians--would cost employers far less in taxes than their costs for insurance. Universal coverage could also work magic in less obvious ways. For example, employers would no longer have to pay for medical care under workers' compensation, which in 2002 cost them more than $38 billion. Auto-insurance rates would fall for them--and everyone--if the carriers were no longer liable for medical and hospital bills. You'd think that in its own selfish interest, Corporate America would be fighting to replace the existing system with universal health coverage. Yet it doesn't lift a finger.
Meanwhile, under the Bush Administration healthcare coverage steadily shrinks. In 2000, according to the Census Bureau, 14 percent of Americans didn't have it; in 2003, 15.6 percent--45 million--did not. Actually, 85 million Americans under age 65 were uninsured over varying periods during 2003-04, up from 81.8 million in 2002-03, according to Families USA, the consumer health organization. As more and more Americans become uninsured, spending on healthcare soars. By 2001 it accounted for 13.9 percent of US gross domestic product. (It constituted a much smaller share of GDP in countries with universal healthcare, such as Sweden, 8.7 percent; France, 9.5 percent; and Canada, 9.7 percent.) Average family premiums in 2005 are projected to be $12,485, up $1,768 from 2004. The federal Centers for Medicare & Medicaid Services expects healthcare outlays to rise from $1.8 trillion in 2004 to $2.7 trillion in 2010, nearly a trillion-dollar increase in six years. The forecast reflects annual increases of 14 percent to 18 percent. David Walker, head of the Government Accountability Office (GAO), the auditing arm of Congress, calls them "unsustainable."
A simple fact largely explains why spending bloats while the ranks of the insured thin: Health insurance is increasingly unaffordable. After rising 38 percent between 2000 and the last quarter of 2003, the costs of providing healthcare to employees rose 11.2 percent between January and May of 2004, according to the Kaiser Family Foundation's annual survey of 3,000 companies. "Close to 75 percent of 205 senior-level executives surveyed [in May] by the Detroit Regional Chamber rank employee health insurance as 'unaffordable' and 25 percent consider it 'very unaffordable,'" the Detroit News reported. The Kaiser Family Foundation says that from 2001 to 2004 the proportion of workers receiving health coverage on the job dropped from 65 percent to 61 percent, a loss of 5 million jobs with health benefits.
"Double-digit increases in healthcare costs are a drag on economic growth," says Henry Simmons, president of the National Coalition on Health Care, an alliance of groups working for healthcare reform. They "slow the rate of job growth," "suppress wage increases for current workers," "undercut the viability of pension funds," "put American firms at a steep disadvantage in world markets" and produce "severe long-term budgetary problems" for the federal and state governments.
Two unrelated but mutually reinforcing reports coming out on a single day, August 19, validate the economic-drag theory. First was a study that found a "relationship between job growth and health-care costs" in eighteen industries between 2000 and 2003. It was done for the Kerry campaign by Sarah Reber, assistant professor of policy studies at the University of California, Los Angeles, and Laura Tyson, dean of the London Business School and former head of President Clinton's Council of Economic Advisers and National Economic Council. The evidence, the authors write, "suggests that employers have reduced hiring in response to rising health insurance premiums," and that rising premiums have led to a deterioration in the quality of jobs. In industries where health-insurance benefits accounted for a comparatively large share of total employee compensation, job growth was slower than in industries where they accounted for a smaller one. Thus, in the accommodation and food services industry, "benefits constituted about 12 percent of total compensation for workers...and jobs grew...by about 2.5 percent. In manufacturing...the benefits share was 18.5 percent and job losses topped 18 percent." [Emphasis in original.]
This picture was reinforced by a New York Times article based on "government data, industry surveys and interviews with employers big and small." It said:
A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth.... employers big and small...remain reluctant to hire full-time employees because health insurance, which now costs the nation's employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs.... Health premiums are sapping corporate balance sheets even more than the rising cost of energy.
Reacting to rising expenditures on insurance, corporate managements cut back on employee health benefits, triggering worker unrest. Consider the five-month strike against supermarket chains in Southern California--the longest in the industry's history. It left about 60,000 union workers jobless, and it seriously hurt the owners as well. The central issue--in a state where half of all personal bankruptcies are related to medical bills--was the demand by Safeway, Kroger and Albertsons that members of the United Food and Commercial Workers (UFCW) union pay much more for health benefits. The settlement, reached last February, sent a grim message to grocery workers everywhere.
The strike "would not have occurred if we had a system of universal healthcare coverage," Greg Denier, assistant to the international president of the UFCW, told me. "All of our strikes in the past decade have occurred because of the absence of universal healthcare." Moreover, universal health coverage would have narrowed the wide gap in operating costs between the unionized chains and nonunion competitors, particularly 800-pound gorilla Wal-Mart. Unlike the chains, the world's biggest retailer charges so much for miserly health insurance that more than 60 percent of its poorly paid employees (averaging $8 an hour) don't buy it. Denier saw the strike as a symptom of "the slow-motion collapse of the employment-based healthcare system."
Lawyer Harry Burton represented Safeway and Giant Food in subsequent negotiations with the UFCW in the Washington, DC, region. Speaking "as an individual," he essentially agreed with Denier. Universal health insurance would have "a profound effect" not just on the supermarket industry but "on nearly all collective bargaining," he told me. Nonunion companies "virtually never" provide healthcare of the same quality as that provided by unionized competitors, thus creating "a vast disparity in costs." That's why a tax-supported national system would result in "a leveling of the playing field." I asked Burton what explains the resistance or indifference of employers to universal health insurance. "Very frequently it's ideology," he replied.
Business leaders worship marketplace ideology "almost like religion," says Raymond Werntz, who for nearly thirty years ran healthcare programs for Whitman Corporation, a Chicago-based multinational holding company. "It's emotional." In 1999 Werntz became the first president of the Consumer Health Education Council in Washington, a program of the Employee Benefit Research Institute, a nonprofit, nonpartisan group. He saw it as his mission to try to persuade employers to face the "huge, huge" issue of the uninsured because, he told me, "business has to be involved with the solution." The problem that emerged was its "unwillingness to even think about a solution." Last year, after funding ran out, a disappointed Werntz became the council's last and only president.
Publicly financed universal health insurance comes in different forms. For Americans, however, none should hold more interest than single-payer. It's "one and the same thing" as Medicare for everybody, Werntz told me. Does the Corporate America that's happy with Medicare understand this? I asked. "It's a dialogue that hasn't happened yet," he replied. "My life for four years was trying to get business people in a room with single-payer people. I couldn't do it." CEOs of large corporations see it as something "that smacks of socialism," Werntz said, and therefore as "heresy."
Somehow, they don't see Medicare as heresy. Yet it's largely why the tax-financed share of US health spending is "the highest in the world," according to Drs. Steffie Woolhandler and David Himmelstein, associate professors at Harvard Medical School and founders of Physicians for a National Health Program. Writing in the July/August 2002 issue of Health Affairs, they put the share at 59.8 percent. No wonder: Federal tax revenues pay for Medicare, Medicaid and the medical-care systems for the military, the Veterans Administration, federal employees and Congress; income-, sales- and property-tax revenues buy coverage for state and local public employees. Taxation also hugely subsidizes health insurance while benefiting mostly "the affluent," the authors noted.
In 1991 the GAO made a stark finding regarding single-payer's benefits: "If the universal coverage and single-payer features of the Canadian system [had been] applied in the United States" in that year, "the savings in administrative costs"--$66.9 billion--"would have been more than enough to finance insurance coverage for the millions of Americans who are currently uninsured," the GAO said in a report. The $3 billion left over "would be enough...to permit a reduction, or possibly even the elimination, of copayments and deductibles."
Early this year, a comprehensive study published in the International Journal of Health Services reached this stunning conclusion: "The United States wastes more on health-care bureaucracy than it would cost to provide health care to all its uninsured." The authors, Woolhandler, Himmelstein and Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, went on to write: "Administrative expenses will consume at least $399.4 billion of a total health expenditure of $1,660.5 billion in 2003. Streamlining administrative overhead to Canadian levels would save approximately $286 billion in 2002, $6,940 for each of the 41.2 million Americans who were uninsured as of 2001. This is substantially more than would be needed to provide full insurance coverage."
Canada has had a single-payer system for more than thirty years. (Australia, Denmark, Finland, Iceland, Sweden and Taiwan also have one.) American executives who have run Canadian subsidiaries see it as a business boon. Take General Motors. In 2003 its costs of building a midsize car in Canada were $1,400 less than building the identical car in the United States (the comparable figures for DaimlerChrysler and Ford were $1,300 and $1,200). Such savings are no mystery. Canadian companies pay far less in taxes for health coverage for everyone than the premiums they would pay under the US system to provide their employees with comparable benefits.
Highly placed Canadian business executives affirm that single-payer nurtures free enterprise. A. Charles Baillie, while chairman and CEO of Toronto Dominion Bank, one of Canada's six largest, hailed it in 1999 as "an economic asset, not a burden." He told the Vancouver Board of Trade, "In an era of globalization, we need every competitive and comparative advantage we have. And the fundamentals of our health care system are one of those advantages." He added: "The fact is, the free market...cannot work in the context of universal health care. While health care could be purchased like any other form of insurance...the risk and resource equation will always be such that, in some cases, demand will not be matched by supply. In other words, some people will always be left out." (A recent report by the World Bank ranked welfare states like Denmark, Finland and Sweden high in international competitiveness. An author of the study said, "Social protection is good for business, it takes the burden off of businesses for health care costs.")
In 2002, top executives of the Big Three automakers' Canadian units joined Basil (Buzz) Hargrove, president of the Canadian Auto Workers (CAW) union, in signing a "Joint Letter on Publicly Funded Health Care." At a press conference with Hargrove, Michael Grimaldi, president and general manager of GM Canada and a GM vice president, called single-payer "a strategic advantage for Canada." The joint letter, also signed by Ford's and DaimlerChrysler's presidents and CEOs, Alain Batty and Ed Brust, said that while providing "essential and affordable healthcare services for all," single-payer "significantly reduces total labour costs...compared to the cost of equivalent private insurance services purchased by US-based automakers" and "has been an important ingredient" in the success of Canada's "most important export industry." The Toronto Star explained how the CAW used "credible corporate data" to quantify "the competitive advantage that [single-payer] provides to the Canadian auto industry. The union compared the hourly labour costs of vehicle assembly in Canada and the United States. The Canadian rate, including wages, benefits and payroll taxes, was $29.90 per hour. The American rate was $45.60. (All figures are in US dollars.) Healthcare accounted for more than a quarter of the difference. It saved Canadian employers $4 per hour per worker." Monthly health-coverage costs for Canadian employers average about $50, mostly for items such as eyeglasses and orthopedic shoes; health-insurance costs for US employers average $552, the Washington Post has reported.
"The rising cost of health benefits is the biggest issue on our plate that we can't solve," Ford CEO William Clay Ford told a 2003 conference of Michigan business executives. "Healthcare is out of control--it's a system that's broken." Last year the company spent $3.2 billion on healthcare for 560,000 employees and their dependents and surviving spouses, or more than six times net profits of $495 million. William Ford urged a national solution and assigned vice chairman Allan Gilmour to craft a proposal. Early this year Gilmour told fellow industry executives that high healthcare costs have "created a competitive gap that's driving investment decisions away from the US." He told a subsequent investment conference, "We're going to have to have a national solution," only to add, "That national solution does not mean, necessarily, national healthcare." Why not? He didn't say.
After Jack Smith, president and general manager of GM Canada, became president and CEO of the parent company, an ad in the New York Times placed by single-payer advocates in 1994 quoted him as saying, "I personally favor single-payer." Now, however, GM "does not support" it, spokesperson Doris Powers told me. Because? "Much has changed in health care since Smith...made statements about universal, single-payer healthcare." What's changed? She didn't say.
A General Motors that hugs single-payer in Canada would seem to have compelling reasons to hug it here. GM covers healthcare costs for 1.1 million Americans. Last year's bill was $4.8 billion--$1 billion more than earnings. In its third-quarter report the company reduced its 2004 earnings forecast because rising US healthcare costs were hurting profits. GM's projected costs for providing healthcare benefits to current and future retirees is $63 billion, a burden immensely heavier than is carried by competitors based in universal-coverage countries, the New York Times reported in September. Yet, as the Detroit Free Press has noted, GM "has set aside less than $10 billion for that obligation."
In 2001 GM was reeling from a prescription-drug bill up to 22 percent above 2000's $1.1 billion. "Prescription drugs are the fastest-growing part of GM's health-care costs, accounting for more than 25 percent of its total medical spending last year," Newsweek reported. GM was "seeing red" because in 2000 it had spent $52 million just for Prilosec, a brand-name ulcer medicine. "That is millions more than GM executives believe they should have spent," the magazine said. "They blame much of the extra cost on savvy marketing by Prilosec's maker AstraZeneca." GM is fighting back with an "aggressive plan to curb drug spending," Newsweek continued. "Point man" James Cubbin "has been taking his case to senior executives at some of the nation's largest drug makers, including AstraZeneca."
But Newsweek--and Powers--missed an embarrassing part of the story. AstraZeneca chairman Percy Barnevik joined GM's board in 1996, while Smith was GM's chairman. Pfizer executive vice president Karen Katen followed in 1997, and the noses of both of these price-gouging drug companies are still in GM's tent. Surprise: The pharmaceutical houses "aren't backing down," Newsweek said. Rather than going hat in hand to pharmaceutical executives, Canada uses single-payer's price controls to cap drug prices. In two other universal-coverage countries, Australia and New Zealand, pharmacies charge 20 percent to 30 percent less than in Canada, the Wall Street Journal reported in July.
Unlike GM and Ford, DaimlerChrysler supports single-payer. "A lot of people think a single-payer system is better," vice president Thomas Hadrych told the Washington Post. Since 1990 Chrysler--and DaimlerChrysler after the merger--has regularly endorsed it, in a letter appended to its contracts with the United Automobile Workers.
No matter how urgently needed, no matter how common-sensical, no matter how much bottom lines would be fattened, single-payer or other fundamental healthcare reforms stall unless backed by the business organizations that govern the government. The Clinton Administration learned this to its sorrow after proposing its complex, comprehensive plan. Business organizations "effectively killed the bill," Walter Maher, former vice president for public policy of DaimlerChrysler, wrote last year in the American Journal of Public Health. The bill aroused formidable opposition from businesses such as fast-food chains like McDonald's. It mostly hired young people, worked them less than full time, paid them little and provided scant if any health coverage. Of the PepsiCo chains' hourly employees, a survey indicated, 71 percent were covered by someone else's health insurance. If that someone was a parent employed by, say, an automaker facing global competition, the manufacturer was effectively subsidizing chains that had no such competition. Free-riding defeated a primary goal of the bill, which was to spread healthcare costs throughout the economy by letting no employers escape paying their fair share.
The bill received a big boost when the US Chamber of Commerce and the National Association of Manufacturers (NAM) let pragmatism trump ideology and endorsed it. And the mighty Business Roundtable (BRT), an association of 150 CEOs of the country's biggest corporations, with multitrillion-dollar revenues, was "at least prepared not to oppose" the mandate, Maher said in the article.
But insurers and other businesses that profited from preserving the healthcare status quo exerted fierce counterpressures. The Chamber "suddenly reversed course and totally rejected the Clinton Plan," Maher wrote. The NAM abruptly withdrew its endorsement six weeks after granting it. At the BRT several politically powerful members, including the CEOs of eight major and a few lesser pharmaceutical manufacturers, and of a dozen insurers and healthcare providers, opposed the bill. It got only a single vote--Chrysler's, Maher told me. "It's definitely fair to say that CEOs are very reluctant to take unpopular positions against their colleagues in the BRT," he added. "If a huge majority of them are staunch conservatives who have no interest in health reform, or in using the government to control costs, or to expand coverage, or even to moderate health costs using regulatory tools, it'll be a rare CEO who will want to take on his CEO buddies. That's absolutely true."
Today, BRT executive director Patricia Hanahan Engman contends that "public financing cannot provide the same level of quality doctors, hospitals and prescription drugs generated by the competition inherent in the private market." She should tell that to GM president and CEO G. Richard Wagoner Jr. Judged by sixteen top health indicators, he said in June, the United States ranks twelfth among thirteen industrialized countries. "It will be a cold day in hell when the BRT leads the charge for universal health coverage in the United States," Maher told me.
If the Democrats win the White House and take control of Congress, John Kerry could pass his employer-based healthcare plan, which calls for expanding coverage to nearly 95 percent of Americans, including all children, and for a federal insurance pool that would pay 75 percent of "catastrophic" illness bills. Crucial elements might survive even if the GOP continues to control the House--mainly because of forceful backing from pragmatic business leaders. For example, the Chamber of Commerce signed on early to Kerry's pool idea, calling it "a seed for bipartisan reform." In late October the New York Times reported that the Chamber was acclaiming the idea as "a worthy concept, an excellent use of federal tax dollars," while some Senate Republicans are pushing it, and "lawmakers and lobbyists say that regardless of who wins the presidential election, Congress will soon take up the idea." To be sure, Kerry's scheme may face attacks by the usual suspects and the lawmakers they buy. One influential critic, the National Business Group on Health, has more than 200 members, including at least a dozen drug and medical-device manufacturers plus three dozen healthcare providers and insurers. A Wal-Mart vice president sits on its board.
Advocating universal health coverage while the GOP controls the White House and Congress would be "tilting at windmills," DaimlerChrysler's Dennis Fitzgibbons told me. Maher said any industry subject to government regulation "has got to be concerned about irritating the regulator," meaning the Bush Administration. A single-payer reform proposal, by seeking to eliminate the insurance industry, he warned in his article, would make it and many other businesses "instant and unnecessary opponents." He recommends other forms of tax-financed universal health coverage that would use the industry. An example would be a system in which employer/employee payroll taxes would finance coverage for the working population, with employees offered several choices of health plans, as the Federal Employees Health Benefits Plan does. A Medicare equivalent would provide for the elderly and nonworking population.
"I don't believe [single-payer] will be achievable in my lifetime," says Ron Pollack, executive director of Families USA. Ideologues "will never support it." Industries heavily invested in the present system "will spend every last dollar to stop it." He recognizes that on "a blank slate," employer-based coverage "absolutely" makes no sense. But "in terms of political feasibility," trying to dismantle the present system would make matters "much worse," he told me. "The most important thing is the achievement of affordable, high-quality health coverage for everybody." To him, the crucial question is: "At what point are we willing to say that there's a higher principle in truly moving toward universal coverage than in knocking our heads against a stone wall, in absolute frustration about a methodology [single-payer] that is not going to be achievable in our lifetime?"
Surely in a Republican Washington the prospects for publicly financed universal health insurance are remote. But Washington isn't everywhere. Deborah Richter, a Vermont physician, believes it could still be enacted in every state. As president of Vermont Health Care for All, she's been campaigning to that end in her own state for five years, with impressive results [see sidebar, page 20]. Universal access to affordable, high-quality healthcare should be conceived "as a public good, as are roads, education, and police and fire protection," she says. Making it "a practical issue works. Trying to win support for it by making it a moral issue never works." By resisting the merger of practicality with morality that universal health care embodies, Corporate America is blowing a supreme opportunity to do well by doing good. Enlightened self-interest this is not.
December 3, 2005
Where were we? Oh, yes. I was saying last week that it's about time we joined the rest of the civilized and industrialized world in providing publicly financed, universal health care for the American people and their families. But I didn't say why or how.
After all, the United States has some of the finest, most modern medical facilities in the world. I ought to know; Baltimore's Johns Hopkins Medical Center saved my life.
Nearby, the National Cancer Institute and the National Institutes of Health, outside Washington, D.C., set the standards for American research. And patients come from abroad seeking help from many U.S. hospitals.
If you don't have a life-threatening illness, you won't have to wait weeks, as you might in Canada or Britain, for elective surgery on those cataracts or to repair a hernia - if you have the right insurance.
Ah, there's the rub for nearly 46 million Americans (including 9 million children) who have no insurance. For a hacking cough bordering on pneumonia, they wait in crowded clinics or go without care. Caring for a child burning up with fever can be frightening enough, with insurance; being uninsured can end up killing that child.
A Florida study found that children who enter a hospital without insurance are more than twice as likely to die as children with insurance. Another study reported that 18,000 Americans die each year because they are uninsured.
Millions more Americans are underinsured or find that their insurance doesn't cover what they thought. In the United States, administrative costs amount to 25 percent of health care spending, or $300 billion a year, says economics columnist Paul Krugman, partly because the huge bureaucracy is engaged in denying care to those who most need it. The rest of those costs are profits.
According to The New York Times, many of the non-Medicare insured go broke trying to keep up with co-pays for chronic illness or the bills from hospitals, for the room, surgeons, labs, anesthetists, drugs and any other white coat that drops in. A third of American patients spend more than $1,000 a year out of pocket, and 68 percent of those who declared bankruptcy because of medical bills had insurance.
The Washington Post reported weeks ago that the Blue Shield HMO in California, to save money for the company and patients, is sending members from the San Diego area to Mexico for nonemergency care because services are less expensive than in the United States.
A doctor, who performs laser eye surgery on both sides of the border, told the Post he charges in Mexico a third of what he charges in San Diego. A hysterectomy that averages $2,025 in the United States costs $810 in Mexico. Blue Shield said the services on both sides of the border are comparable. And in Mexico the doctors' parking lots are filled with California cars.
The United States spends more than any nation on health: $5,600 for every American, or 14.6 percent of national income, compared with Germany, 10.9 percent; Canada, 9.6 percent; New Zealand, 8.5 percent; and Britain, 7.7 percent. Yet a recent study for the private, nonpartisan Commonwealth Fund, which surveyed 7,000 of the sickest patients in Australia, Canada, Germany, New Zealand, Britain and the United States, found that American medicine has the highest error rates, the most fragmented and disorganized care and highest costs.
Are we getting our money's worth?
Infant mortality - the number of deaths of children under one year, probably the best measure of the level of health of any country - actually increased from 6.6 to 7 per thousand live U.S. births. That's higher than 41 nations, including Italy (6.07), Canada (4.82), Germany (4.2) and Japan, which has the lowest rate in the world at 3.28. The percentage of live births classified as low birth weight, an indication of the mother's health and prenatal care, is 7.8 percent for the United States, behind Canada (5.6), the Netherlands (4.7), Australia (6.2) and all of Europe.
The United States boasts a life expectancy for men of 77.3 years, but we're behind 34 other nations, including New Zealand (79), Germany (79), Britain (79), Canada (80), Australia (81) and Japan (82). Need I add that all these countries provide universal health care - the ability to walk into a doctor's office without worrying about cost? What are we waiting for?
Polls indicate most Americans (75 percent) would support universal health care. And leading newspapers, commentators, economists, lawmakers, 13,000 doctors, former surgeons general, businessmen and a few conservatives have come to the same, obvious conclusion: If we were to pay in taxes just a fraction of what health care now costs us, we could afford it.
But universal health care is much easier said than done. How to deal with the entrenched insurance-medical-hospital complex? How to make the transition relatively painless for medical professionals and patients?
The answer is also obvious: Medicare for every American, or what I proposed years ago, "Medicare for All." A distinguished panel of health care experts, Democrats, Republicans, financiers, insurance executives and academics concluded in an open letter to the journal Health Affairs, that Medicare must be empowered as the vehicle "to make pay-for-performance a national strategy for better quality." Lawmakers, medical journals, a couple of former surgeons general and 13,000 doctors have proposed phasing in "Medicare for All."
And if this administration doesn't trash the rest of Medicare before it leaves the scene, it remains the most obvious, affordable and doable way to providing universal coverage.
WRITE TO Saul Friedman, Newsday,235 Pinelawn Rd., Melville, NY 11747-4250
(from Des Moines Register -- published on December 6, 2005)
Here’s news for anyone who opposes a taxpayer-financed system of health care in the United States: The country already has one. More than one. Public dollars subsidize health care at every turn.
According to the Centers for Medicare and Medicaid, the government picks up nearly 44 percent of the cost of health care in the United States. Medicare, for seniors and the disabled; Medicaid, for the poor; and health insurance for veterans are all government systems of care. All are funded with taxpayer dollars.
Plus, public employees’ health insurance is at least partially subsidized with tax dollars. In the Des Moines schools, for example, tax dollars paid $36.2 million for workers' health care last fiscal year, the equivalent of salaries alone for about 840 teachers.
Residents of Des Moines pay more than $1,000 a month to provide family health care for each of their part-time City Council members. The state of Iowa will spend $245 million in 2006 on medical care for state workers. That doesn't even include state troopers or faculty and professional staff at the three state universities. At Iowa State University, for example, the projected medical and dental cost in 2006 is $43 million.
Everyone from the city engineer to members of Congress gets a little help from the taxpayer.
Taxpayers also pay, in a sense, to help employers pay for health insurance. Employer contributions for medical care and medical-insurance premiums are excluded from taxes. That was a loss of revenue for the federal government that totaled more than $120 billion in fiscal year 2005 — more than 20 times Iowa's $4.9 billion state budget.
So people may say they oppose a tax-financed system of health care for everyone, but the country already pays part of the bill for nearly everyone, at least indirectly.
That's one reason why no one should resent people who receive direct taxpayer-funded care, from the federal-state Medicaid program or Iowa's HAWK-I, the state program for kids in low- to moderate-income families.
The current system isn’t fair, though. Uninsured workers pay taxes to fund others’ care, but have none for themselves.
Non-veterans can’t visit the veterans hospital their tax dollars pay for, even if it's right down the street and provides the best care. Working Americans fund the Medicare system, which pays for an elderly person’s knee surgery. That same taxpayer may not be able to afford his own knee surgery.
The system is inefficient, too. Thousands of private insurance plans add up to a tangle of red tape and administrative waste — dollars not spent directly on care. A Harvard study found bureaucracy accounted for more than 30 percent of total health-care spending in 1999.
Since the government is already involved with nearly everyone's health care, why not allow everyone to buy into a uniform government program such as Medicare? Then public dollars would be spent more wisely. Fewer people would be employed to push papers. If Medicare were reformed to be more comprehensive and add a government drug benefit, the coverage could be top notch.
HR 676, a bill introduced in Congress by U.S. Representative John Conyers Jr., would institute a single payer health care system in the U.S. by expanding a greatly improved Medicare system to cover every resident.
It would cover every person in the U.S. for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. HR 676 ends deductibles and co-payments. HR 676 would save billions annually by eliminating high overhead and profits of the private health insurance industry and HMOs.
68 House members have now signed on as co-sponsors, and more than 100 labor organizations have officially endorsed it.
More information on the movement for single payer national health care can be found at the website of Healthcare NOW!
SPAN Ohio Walk for Health Care Justice
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Part of the Media Blackout series on underreported labor stories
By David Swanson, ILCA Media Coordinator
Single-payer health care is, according to numerous surveys, supported by a majority of Americans.i Few public policies are inspiring more activism and advocacy in the United States right now than single-payer health care at the national and state levels.ii Organizations are holding marches across major city bridges. Think tanks and foundations and labor unions are generating studies. Doctors, patients, and labor and community organizations are rallying for the cause. Bills have been introduced in Congress and various state legislatures. Polls by the media consistently rank health care as one of the public's biggest concerns when considering political candidates.iii
Labor unions on strike and negotiating contracts usually cite health care as a primary point of contention. Numerous Congressional and state candidates advocate single-payer health care, as did a third of the presidential candidates during much of the run-up to the Democratic primaries. And the media gives extensive, though rarely substantive, coverage to health care. Yet, the media marginalizes single-payer health care, omitting it from discussion, failing to cover mass movements in support of it, misrepresenting what it means, falsely reporting that it is unpopular, and labeling it with scary names intended to make it inadmissible for consideration.
Single-payer health care means private health care publicly paid for. Under such a system, patients would choose their own doctors but be insured by the government rather than being covered by an HMO or private insurance company or not being covered at all.iv The United States would join nearly every other industrialized nation in covering all of its citizens fully, from cradle to grave, with no individual bills, co-payments, or deductibles. Vast amounts of waste in the private insurance industry would be eliminated, so that, according to countless analyses, the nation would spend less to cover everyone than we now spend to leave 45 million uncovered and tens of millions more insufficiently covered.v In effect, Medicare would be enhanced and expanded to cover all patients and to cover all necessary and preventive medicine. But doctors would remain in private practice and would not become government employees.
October 3rd to 10th was "Health Care Action Week" and witnessed numerous public forums and protests. As part of this largely unsuccessful effort to get the media's attention, Jobs With Justice released a report funded by six labor unions and developed by the Center for Economic and Policy Research. The report covered new ground with national data and, for the first time, provided state level data on the funds that could be saved by cutting out waste in the health insurance and pharmaceutical industries. The report, titled "Waste Not, Want Not," showed that approximately $245 billion is wasted on private insurance red tape, patent protection sheltering drug companies from competition, and subsidies to private insurance companies in George W. Bush's recently enacted Medicare bill. That's more than enough money to insure all Americans who lacked coverage all or part of last year.
Jobs With Justice and other organizations promoted this report ahead of its release date in many states. Often reporters enjoy nothing better than the ease of covering a report that provides them with new information on a major story and includes both national and state angles. Not this time. New York Times reporters either didn't return calls or said they were too busy, according to Jobs With Justice National Organizer Rand Wilson. A Boston Globe reporter told him the study was "biased." Various labor and progressive web-based publications covered the report, including the Union Advocate, Press Associates Inc., TomPaine.com, and BlackCommentator.com. But the corporate media was less interested. Marketplace Morning Report on public radio was the only national outlet to report on the study.
Six local newspapers covered it, the largest being the Boston Herald, which devoted about 100 words to the report and another 100 to the opinion of a "pro-business" institute that called the report "naïve." To its credit, the Herald printed a 160-word letter from Rand Wilson responding to the article. While no national newspapers, magazines, or broadcast news outlets covered this story as news, USA Today did cover it as opinion, printing a column by the report's primary author, Dean Baker.
The media's handling of this report is in many ways typical of its handling of single-payer health care. An unusually high percentage of the items found when searching in the Nexis database for "single-payer" are letters to the editor, almost all of them in support of single-payer and written in response to articles or columns that opposed it. Other than letters, many of the items found in Nexis are articles listing positions that a political candidate supports or opposes. "Single-payer health care" is listed in these articles but not explained.
Of 205 items containing "single-payer" in the past two months in Nexis, I was able to find only two articles that gave any substantive explanation of what it was. Equally rare are articles explaining that national health care is a solution already arrived at by almost every other wealthy and some much less wealthy countries in the world. Much more common are articles giving the impression that this is a uniquely Canadian idea.
Even opinion pieces explaining single-payer are rare: a total of seven in the past two months in Nexis, one of them by United Auto Workers President Ron Gettelfinger. Only one of the seven was by a staff columnist, Paul Krugman of the New York Times, who "supports" single-payer but says it's not politically feasible right now. In contrast to his usual care, Krugman offered no evidence for this assessment but said he was deferring to the wisdom of others.
Many, if not most, discussions of single-payer in the U.S. media falsely, and without making claim to any evidence, dismiss it as unpopular. During the past two months, false claims that single-payer is unpopular could be read in many "mainstream" newspapers.vi Often the same articles or commentaries argue that this alleged unpopularity will prevent passage of single-payer through Congress.vii Mainstream outlets are towing the very same line on health care as outlets commonly labeled right-wing.viii As documented in a recent study by FAIR, the media almost never mentions insurance industry contributions to Congressional campaigns. This gap makes it easier for a false unpopularity to fill in as an explanation for Congress's failure to pass single-payer.ix
The fact that the media's own polls find popular support for a position that the media keeps telling us is unpopular suggests that there are limits to the media's ability to create reality. When people see their loved ones dying for lack of health coverage, apathetic is the last word in the dictionary that could be applied to their behavior. People in these situations try everything and find information anywhere they can. Many people have obviously found their way around the media to useful information about single-payer.
But the media knows how to play rough and is nowhere near finished supporting the private insurance industry. The right-wing Investor's Business Daily in a September editorial claimed that Canada's health care system is "a disaster." Ted Koppel tried this same lie in 1993, when he told Bill Clinton that Canadians were saying to America "Whatever you do, don't exchange what you've got for what we've got." It would have been hard for Koppel to find an actual Canadian to say that, since only 2 percent of Canadians believed that the U.S. health care system was better than their own, according to a Gallup poll taken only a few days earlier.x
A more creative lie is the one that holds that people simply CHOOSE not to have health coverage. An example of this one was found in the Journal News of Westchester County, N.Y., on September 20th in an interview with Michael Stocker, President and CEO of WellChoice Inc. and Empire Blue Cross Blue Shield, who said: "I believe that we need a universal coverage solution but that such a solution should not be a single-payer, government-run system. People are uninsured for many reasons, some by choice and some by circumstances, and we need to ensure universal coverage through a variety of targeted programs in which both the private and the public sectors participate."
When the media finishes lying about single-payer, it likes to call it names, including "extreme." Often, the current system is depicted as a moderate middle road between single-payer and some unspecified other "extreme."xi One of the media's favorite names for single-payer is "socialized medicine." In searching Nexis, I found, in the past two months, 141 items mentioning "socialized medicine," the vast majority of them using the phrase pejoratively, and virtually none of them offering any explanation of what it meant or why it was so undesirable. "Socialized medicine" is also a common reason for opposing John Kerry's candidacy for president, despite the fact that Kerry opposes single-payer, and despite the fact that not a single American politician that I'm aware of supports making doctors and nurses state employees.xii
State-level candidates also come under attack. The Worcester (Mass.) Telegram & Gazette reported on a local candidate's view that safe staffing levels for nurses is "socialized medicine": "Ms. Blute labeled one of the ideas -- to recruit and retain nurses -- as a step toward 'socialized medicine,' because it is apparently based on legislation backed by the state nurses union to mandate 'safe' nurse staffing levels." The Florida Times-Union reported that a local candidate's proposal "offers a modern, free-market solution as an alternative to the tired, old remedy of socialized medicine being proposed by others." How something never implemented can already be a tired and old remedy was not explained.
The St. Louis Post-Dispatch this month ran an article attempting to chronicle the fate of national health care proposals since Truman, which included this analysis: "Princeton University professor Uwe Reinhardt, an expert on the politics and economics of health care, said at a forum on universal health care in April that 'Americans fear American government even more than weapons of mass destruction.' With each failure, the task gets harder. The private insurance system becomes more deeply rooted, the political interests more powerful, the public more resistant to dramatic change."
The same article blamed labor unions' resistance to compromise for Congress's failure to pass national health care under Nixon, even while quoting an analyst who blamed Nixon's impeachment proceedings. Next, the Post-Dispatch blamed Hillary Clinton for resistance to compromise, even though her proposal was so corporate and compromised from the outset that many called it oxymoronic: "managed competition." The Post-Dispatch article cited criticism of the Clinton plan as "socialism," "big government," and "stupid." But the Post-Dispatch, to its credit, quoted an analyst to the effect that simple single-payer health care would have been an easier sell.xiii
The Post-Dispatch's chronicling of national health care closed with this false description and baseless crystal ball reading:
"Some advocates of universal care now say the best hope is at the state level; others still want a federal plan. The politics of it won't change anytime soon. 'It's a deeply divisive matter,' Marmor said. 'It divides the country into broad blocs concerning basic values and basic understandings of what government ought to do.'"
How does this fit with all the polls showing that, despite every effort of the media, a strong majority of Americans favor universal health insurance?xiv
The forecast that "the politics of it" won't change anytime soon should be taken with the same grain of salt as the pronouncement by the New York Times in an October 10, 1992, editorial that "the debate over health care reform is over. Managed competition has won," an outcome that the Times found "delicious" and "wondrous."xv
The argument, which I've heard more than once, that the media doesn't cover single-payer health care as a viable option because our elected representatives don't treat it as one is undone by the media's own cursory reporting on Congressional candidates favoring single-payer. In the early 1990s, when 100 members of Congress co-sponsored a single-payer proposal, it received little coverage, even at a time when health care reform was one of the media's top issues. ABC World News Tonight, for example, mentioned the bill only once in all of 1993.xvi The case that the media opposes single-payer for its own reasons was made quite starkly during the 2003-2004 Democratic presidential primaries. Substantive coverage of issues was sparse, but where it existed, it covered the positions of those candidates who did not step outside the range of debate that the media preferred.xvii
In Warren Beatty's 1998 political comedy, "Bulworth," a straight-talking candidate who bad-mouths the insurance industry and makes fun of people who fear the word "socialism" is embraced by CNN's Larry King and skyrockets to electoral victory, after which the insurance industry assassinates him. Back here in reality, Larry King tries to shut down any movement toward single-payer health care by dismissing it as socialism. This is from the transcript of the February 26, 2004, debate that included Kerry, Edwards, Sharpton, and Kucinich:
"KUCINICH: I agree with my friend John Edwards about we need to do something about poverty. And that's why I'd like you to join me in this proposal to have a universal single-payer, not-for-profit health care system, because that would lift tens of millions of Americans out of poverty. And, Larry...
"KING: By the way, Harry Truman proposed that in 1948.
"KUCINICH: Well, and you know what? John Conyers and I introduced the bill in this Congress. And that would provide all coverage for everyone, all medically necessary procedures, plus vision care, dental care, mental health care...
"KING: In other words, socialism?"
End of discussion.
But I prefer to give the last word to Jared Bernstein, senior economist at the Economic Policy Institute, who wrote this letter, published by the New York Times, in response to Krugman's column:
"To the Editor:
"Paul Krugman (''America's Failing Health,'' column, Aug. 27) argues convincingly for a single-payer health care system, but then cites health economists who claim such a goal is politically unrealistic.
"With all due respect to those, like me, in that profession, economists don't always have the best political antennas. Especially where health care is concerned, many economists still believe that markets can save the day, despite the lesson from international comparisons that the best way to provide health care is to take it out of the market.
"Perhaps we need to turn to the political scientists to help us figure out how to build a movement that can alter the political realities that are supposedly blocking the way to universal health care."
The article can be reproduced with or without the endnotes if credit is given to the ILCA and this link to the full text is included: http://ilcaonline.org/modules.php?op=modload&name=News&file=article&sid=801
The International Labor Communications Association, founded in 1955, is the professional organization of labor communicators in North America. The ILCA’s several hundred members produce publications with a total circulation in the tens of millions.
Published in the Cleveland Plain Dealer 12/27/05 under the title: No easy cure for health care maladies
New York Times
Health care seems to be heading back to the top of the political agenda, and not a moment too soon. Employer-based health insurance is unraveling, Medicaid is under severe pressure, and vast Medicare costs loom on the horizon. Something must be done.
But to get health reform right, we'll have to overcome wrongheaded ideas as well as powerful special interests. For decades we've been lectured on the evils of big government and the glories of the private sector. Yet health reform is a job for the public sector, which already pays most of the bills directly or indirectly and sooner or later will have to make key decisions about medical treatment.
That's the conclusion of an important new study from the Brookings Institution, "Can We Say No?" I'll write more about that study another time, but for now let me give my own take on the issue.
Consider what happens when a new drug or other therapy becomes available. Let's assume that the new therapy is more effective in some cases than existing therapies - that is, it isn't just a me-too drug that duplicates what we already have - but that the advantage isn't overwhelming. On the other hand, it's a lot more expensive than current treatments. Who decides whether patients receive the new therapy?
We've traditionally relied on doctors to make such decisions. But the rise of medical technology means that there are far more ways to spend money on health care than there were in the past. This makes so-called "flat of the curve" medicine, in which doctors call for every procedure that might be of medical benefit, increasingly expensive.
Moreover, the high-technology nature of modern medical spending has given rise to a powerful medical-industrial complex that seeks to influence doctors' decisions. Let's hope that extreme cases like the one reported in The Times a few months ago, in which surgeons systematically used the devices of companies that paid them consulting fees, are exceptions. Still, the drug companies in particular spend more marketing their products to doctors than they do developing those products in the first place. They wouldn't do that if doctors were immune to persuasion.
So if costs are to be controlled, someone has to act as a referee on doctors' medical decisions. During the 1990's it seemed, briefly, as if private H.M.O.'s could play that role. But then there was a public backlash. It turns out that even in America, with its faith in the free market, people don't trust for-profit corporations to make decisions about their health.
Despite the failure of the attempt to control costs with H.M.O.'s, conservatives continue to believe that the magic of the private sector will provide the answer. (There must be a pony in there somewhere.) Their latest big idea is health savings accounts, which are supposed to induce "cost sharing" - meaning individuals will rely less on insurance, pay a larger share of their medical costs out of pocket and make their own decisions about care.
In practice, the health savings accounts created by the 2003 Medicare law will serve primarily as tax shelters for the wealthy. But let's put justified cynicism about Bush administration policies aside: is giving individuals responsibility for their own health spending really the answer to rising costs? No.
For one thing, insurance will always cover the really big expenses. We're not going to have a system in which people pay for heart surgery out of their health savings accounts and save money by choosing cheaper procedures. And that's not an unfair example. The Brookings study puts it this way: "Most health costs are incurred by a small proportion of the population whose expenses greatly exceed plausible limits on out-of-pocket spending."
Moreover, it's neither fair nor realistic to expect ordinary citizens to have enough medical expertise to make life-or-death decisions about their own treatment. A well-known experiment with alternative health insurance schemes, carried out by the RAND Corporation, found that when individuals pay a higher share of medical costs out of pocket, they cut back on necessary as well as unnecessary health spending.
So cost-sharing, like H.M.O.'s, is a detour from real health care reform. Eventually, we'll have to accept the fact that there's no magic in the private sector, and that health care - including the decision about what treatment is provided - is a public responsibility.