The Democratic National Convention, 1980 and 2012: Turning Points in American History

I originally published this post on HealthInsurance.org (www.healthinsurance.org) Check there for other posts on the election–just click on “Blog” at the top of the page.

Ted Kennedy’s speech at the 1980 Democratic convention still echoes in my mind. It remains the finest, most inspiring political oration that I have ever heard. Kennedy was speaking from a position of defeat. He had just lost the Democratic nomination to Jimmy Carter.

And yet this was a full-hearted, rousing speech delivered by a man who realized that in the battle ahead, the issues at stake were far, far more important than his own loss. Intuitively, he knew that the country had reached a turning point. (You can listen to the speech at The  History Place.

At that moment, Conservatives were ready to launch a revolution, and they would succeed. In November, Ronald Reagan won the White House, and his administration would set the tone for much of the next 30 years. Tax cuts for the rich, deregulation, a campaign to privatize both Social Security and Medicare. Health care reform would be off the table for many years.

Kennedy saw the danger ahead and addressed it: “My fellow Democrats and my fellow Americans, I have come here tonight, not to argue as a candidate but to affirm a cause. I’m asking you–to renew the commitment of the Democratic Party to economic justice.

“I am asking you to renew our commitment to a fair and lasting prosperity that can put America back to work.” Then, as now, unemployment was a pressing issue. In April of 1980, the unemployment rate jumped to 6.9%; in May it hit 7.5%.  “Let us pledge that employment will be the first priority of our economic policy,” Kennedy declared. “We will not compromise on the issue of jobs.”

Universal Coverage “The Passion of My Life”

Kennedy understood that “we cannot have a fair prosperity in isolation from a fair society. So,” he declared, “I will continue to stand for a national health insurance.”

“We must not surrender to the relentless medical inflation that can bankrupt almost anyone and that may soon break the budgets of government at every level. Let us insist on real control over what doctors and hospitals can charge, and let us resolve that the state of a family’s health shall never depend on the size of a family’s wealth.”

Kennedy had witnessed what economic inequality can mean when a child is sick.  Many years later he recalled “One of the searing memories in my life was being in a children’s hospital in Boston, where my son had lost his leg to cancer. He was under a regime that was going to take three days of treatment, every three weeks, for two years …
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How Soon Can We Expect National Health Reform?

On this blog, we have debated how soon Americans will be ready for national health reform.  Many observers believe that we’ll only get reform when more people are uninsured—specifically when more middle-class and  upper-middle-class families find themselves “going naked.”

The chart below comes from a new Commonwealth Fund Report which shows that while two-thirds of low-income adults (earning less than 200 percent of the federal poverty threshold) were uninsured or underinsured in 2006, just 17 percent of those earning more than 200 percent of the federal poverty level (FPL) were either underinsured or uninsured at some point during the year.

 

Uninsuredandunderinsured_2

“Underinsured” is defined as someone who finds himself spending 10 percent or more of his income on out-of-pocket medical expenses. (For those earning less than 200 percent of FPL, the number is 5 percent.)

The report observes that employers are continuing to back away from offering health benefits:  “Between 2000 and 2005, the proportion of workers receiving employer-provided health insurance declined from 74.2 percent to 70.5 percent,” and again “middle- and lower-wage workers,” suffered most, with “the largest decreases” hitting this group.

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The Academic Buzz around Health Care

Being a young whippersnapper, it never occurred to me that health care policy was a relatively new field of study within our universities. But when Health Beat reader Bradley Flansbaum passed along the  Reuters story below to Maggie (original here)  and she passed it on to me, I gained a new perspective on the issue. It turns out that until very recently, health care used to just mean medicine. But today, thinking about health care demands thinking about  a lot of different things, like public policy, public administration, economics, politics, and even sociology.

This mixed bag is reflected in the diverse academic offerings at colleges and universities—as well as the swell of students interested in them. The Reuters story below suggests that there are three main motivations for the increased student interest: fascination, idealism, and profit. That sounds about right. You can either be genuinely interested in the complexities of health care or the politics surrounding it; want to fix the system for the greater good; or want to learn as much as you can about the system to better navigate it for GlaxoSmithKline.

There’s obviously a lot of good to be had from generations growing up understanding more about our insanely complex and counter-productive health care system. Teaching college students about the system now might instill a long-term openness to reform and improvement that wasn’t present in generations who never knew about health care until they got sick.

But I can’t help but wonder about the faddishness of it all. After all, health care isn’t the only broken system that could use some attention. Consider the criminal justice system. Back in the day, law and order meant being a lawyer or a cop. But today there are criminology and criminal justice programs around the world that focus on issues like incarceration, community policing, cost, risk management, and more. Yet the buzz surrounding these issues hasn’t been comparable to the much louder debate about health care—even though one out of 32 Americans is currently in the corrections system and a black male is more likely to have served time in jail than have a college degree. This too is a crisis.

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New CDC Report: The Nail in the Coffin for Health Care Myths

On Monday the CDC released a landmark, and in many ways devastating, report on health care in the U.S. The report contains a wealth of data that, while not surprising to some, should help silence the dwindling few who insist that America’s health care system is doing just fine. As a public service, I thought it’d be helpful to list some of the myths that the report demolishes (with some help from other sources as needed).

Myth: If people don’t have health insurance or get medical care, it’s because they don’t want it.

Reality: Actually, the big issue with access is cost. According to the CDC report, more than 40 million Americans—almost one in five Americans over the age of 18—have foregone one of the following in the past year because they couldn’t afford it: medical care, prescription medicines, mental health care, dental care, or eyeglasses.

It’s not that uninsured people don’t understand the value of coverage. Last year a study from the Urban Institute found that less than 3 percent of uninsured adults and children have never had insurance or report having no need for insurance. That same report also found that the high cost of coverage alone explained over 50 percent of those cases where people are uninsured 

And even when the uninsured cite job-related difficulties as the reason why they can’t access employer sponsored coverage, the problem isn’t just that they can’t get it through work—it’s also that they can’t afford individual policies. (Individual policies are much more expensive than group policies, and in many states private insurers can charge individuals astronomical premiums if individuals have any “pre-existing conditions.)  According to the Urban Institute, for 79 percent of adults and 74 percent of children who are uninsured because of job-related problems, the high cost of individual insurance is a major problem.

Myth: The American system relies mostly, if not exclusively, on private enterprise to support health care.

Reality: Yes and no. While the U.S. does have the biggest private sector share of health expenditures in the world, making up 55 percent of our funding, personal health care expenditures (i.e. spending on actual patient care) is mostly public. The CDC reports that in 2005 the federal government and state and local governments combined paid 45 percent of personal health care expenditures; private insurers only paid 36 percent, with 15 percent coming from out-of-pocket payments. So much for the libertarian utopia.

There’s also a bigger public sector coverage presence than many would like to admit. Though two-thirds of insurance policyholders have private coverage, a Census bureau report from earlier this year noted that more than one quarter of Americans (about 27 percent) are covered by government insurance. The American model is much more of a private-public mix than some pundits—and candidates—are willing to admit.

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Obama Says No One Should Be Forced to Sign up For Insurance; Edwards Says If You Don’t, He’ll Garnish Your Wages—Who is Right?

John Edwards’ declaration that under his health reform proposal anyone who refuses to sign up for health insurance will be subject to having their wages garnished has led to a blogstorm of often confusing debates.  Under national health reform, should everyone be required to enroll? The Edwards and Clinton plans have mandates insisting that all Americans purchase insurance; the Obama plan has a mandate for children, but not for adults

New York Times columnist Paul Krugman stirred controversy Friday by defending Edwards, and criticizing Barack Obama: “Under Obama’s health care plan, healthy people could choose not to buy insurance—then sign up for it if they developed health problems later,” Krugman observed. “As a result, people who did the right thing and bought insurance when they were healthy would end up subsidizing those who didn’t sign up for insurance until or unless they needed medical care.”

On Sunday former FCC Commissioner Reed Hundt called Krugman out on TPM Cafe in a post headlined “Ease up, Dr. Krugman.” According to Hundt: “The very idea of government mandates directed to individuals evokes a command-and-control model that disturbs citizens who want to enjoy certain freedoms in choosing health care.” As of yesterday, Hundt’s post had drawn some 60 comments—some on point, others muddying the waters.

Meanwhile, at TNR Jonathan Cohn weighs in with a long discussion of just how many people Obama’s plan might leave uncovered—and suggests that one of Obama’s advisers has information showing that under Edwards’ plan, even more Americans would be left “going naked.”

Because the conversation in the blogosphere has become such a mix of good information, misinformation and false assumptions, I’ve decided to try to spell out, as clearly as possible, why we need a mandate. Very simply, it addresses a serious defect in our health care system:  under existing rules, you don’t have to buy insurance, but you can be priced out of the insurance system if you are sick.

After examining that problem–and looking at how requiring insurance solves it– I’d like to answer a sensible question that observers like the Washington Monthly’s Kevin Drum have raised: Why force people to buy insurance? Why not just tax everyone, put the money in a pool similar to the Medicare Trust Fund, and use it to buy universal insurance?

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The New York Times “Gets Cracking” on Rising Health Care Costs

On Sunday the New York Times published an editorial that set out to analyze “The High Cost of Health Care.” The result might best be described as “muddled.”

What is exasperating is that about 85 percent of the facts in the editorial are true. But a good 15 percent are simply wrong.  And the Times’ editors managed to weave truth and error together in such a way that it would take a knitting needle to separate the two. As Matthew Holt put it on The Health Care Blog: “the piece looks entirely as though it was written by a committee that couldn’t agree with itself.”

As you read the editorial, you can almost see the editors sitting around a table, negotiating. “Okay,  we’ll let that sentence about the value we’re getting for our dollars stand—as long as well keep this sentence about  ‘skin in the game.’”  The result, a mix of propaganda and analysis, is far more dangerous than outright lies because the many true facts make the whole thing sound credible.   

Because I hate to see our paper of record disseminate disinformation, I am going to try to separate the wheat from the chaff. Begin with the truth: Near the top of the story, under a sub-head that reads “Varied and Deep-Rooted,”  the Times provides a nice summary of the main reasons why we lay out roughly twice as much as the average developed nation, without getting care that is twice as good:

“we pay hospitals and doctors more than most other countries do. We rely more on costly specialists, who overuse advanced technologies, like CT scans and M.R.I. machines, and who resort to costly surgical or medical procedures a lot more than doctors in other countries do. Perverse insurance incentives entice doctors and patients to use expensive medical services more than is warranted. And our fragmented array of insurers and providers eats up a lot of money in administrative costs, marketing expenses and profits that do not afflict government-run systems abroad.”

Spot on. If only this section of the editorial had not begun with a casual half-truth: “Contrary to popular beliefs, this is not a problem driven mainly by the aging of the baby boom generation, or the high cost of prescription drugs, or medical malpractice litigation that spawns defensive medicine.”

They first part of the sentence is correct: the aging of the boomers is not a major cause of health care inflation.  The last clause of the sentence is debatable, though probably true.
What’s troubling is the middle clause:  Why does the Times feel obliged to declare that the “high cost of prescription drugs” is not an important factor behind soaring medical bills?

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Health Care Reform: What Do Americans Want? (Or Think They Want?)

On the surface, it seems that American voters have made their will clear.  Poll after poll shows that they are calling for a major overhaul of our health care system.

But when you look closer, their responses bristle with contradictions, contradictions that I think the reform-minded presidential candidates will have to consider when deciding how to approach health care reform. 

In a poll reported in Health Affairs at the end of last year, sixty-nine percent of respondents rated the US system as “fair” or “poor.” Yet in the same survey, when asked about their own experience with receiving medical services or with their own physician, 80 percent who had received care in the last year ranked their care as “excellent” or ”good.”

Other polls reveal the same pattern.

According to a survey released by Greenberg Quinlan Rosner in July, voters express doubts about the quality of the American health care system (with 49 percent dissatisfied), while 74 percent were dissatisfied with the cost.   Yet, “at another, more personal level,” the pollsters note, “a slightly different picture emerges. Fully eight in ten (82 percent) describe themselves as satisfied with the quality of the health care they receive personally. This number jumps to 90 percent among seniors (64 percent very satisfied), but includes impressive majorities of nearly all groups…”

Nevertheless, when the pollsters asked the same group about health care reform, three-quarters called for “major changes” or “completely rebuilding” the system. 

If they are satisfied with the care they are receiving, why would they want radical change? Because they don’t feel secure that they will be able to keep what they have:  “There’s a precariousness to Americans’ contentment with their own health insurance coverage,” the Kaiser Family Foundation reported after looking at a number of polls at the end of last year.  “Among the insured, six in ten are at least somewhat worried about being able to afford the cost of their health insurance over the next few years, and nearly as many (56 percent) said they worry that by losing a job, they or their family might be left without coverage.”

This, then, is why so many Americans want universal health care: it would guarantee that they and their families would always be covered.

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Conditional Cash Transfers: An Interim Model for Health Care Reform?

This past September, New York City’s Mayor Bloomberg welcomed 5,000 families into the pilot program of Opportunity NYC– the nation’s first conditional cash transfer (CCT) program. Based on a Mexican program called Oportunidades, CCT programs like Opportunity NYC (ONYC) provide financial incentives for poor households to “meet specific targets” in three areas: education, employment/training, and health.

I recently spoke with Héctor Salazar-Salame, Advisor to the Center for Economic Opportunity, which operates ONYC, about the health components of the program. I wanted to get an idea of the aims and strategy behind ONYC—and also to learn more about CCT as a potential model for thinking strategically about health care reform. 

According to the city’s press release, ONYC’s health incentives will be offered “to maintain adequate health coverage for all children and adults in participant households as well as age-appropriate medical and dental visits for each family member.” In terms of coverage, families can earn “$20 or $50 per adult per month for maintaining health insurance and $20 or $50 for maintaining health insurance for all the children in the family.”

The point is to encourage low-income families to enroll in health insurance plans. “Many families work for employers that offer insurance,” Salazar-Salame explains, but “many times the necessary employee contribution is quite high for low-income families. We’re providing an incentive for families to opt into their work-based, private health plan—and hoping that the incentives will help them offset the cost of the employee contribution.”

If parents are unemployed—or work for employers that don’t offer coverage—the family can still be eligible for health incentive rewards that keep them enrolled in Medicaid. “We know that to recertify for Medicaid can be a challenging yearly process that takes a lot of time,” says Salazar-Salame. (It’s worth keeping in mind that roughly 30 percent of parents who don’t manage to enroll or re-enroll their children in Medicaid have less than a high school education).  “We’re hoping the incentive will help them maintain the insurance that they’re eligible for,” Salazar-Salame explains.

Maintaining insurance is harder than it sounds. In October, Maggie wrote about  just how difficult it can be to stay enrolled in Medicaid and SCHIP, pointing to a Health Affairs article titled "Why Millions of Children Eligible for Medicaid and S-Chip Are Uninsured."

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Herzlinger’s Meme on Switzerland and Consumer Driven Medicine

In today’s Wall Street Journal, Harvard Business School professor Regina Herzlinger offers an upside-down account of what’s right and what’s wrong with Switzerland’s health care system.  A leading advocate of “consumer driven” health care, Herzlinger assumes that because the Swiss pay for so much of their care out of their own pockets, consumer choice drives their system. 

But the truth is that Swiss patients have relatively little say over either the cost or the quality of the care they receive. Prices are regulated by the government, which also tries to make sure that consumers are getting value for their health care dollars by selecting which drugs, devices and tests insurance will cover. In fact, it is the very visible hand of a smart, largely efficient government that accounts for Switzerland’s relative success.

Before explaining how Herzlinger gets so much so wrong, let’s look at what she gets right. “The Swiss have achieved universal coverage,” Herzlinger points out “at a far lower cost than the U.S.”  In 2003 Switzerland spent 12 percent of GDP on health care while we laid out “a staggering 15 percent of GDP” while leaving roughly 14 percent of our population uncovered. Switzerland also has “far better health outcomes than the U.S., even when Switzerland is compared to socio-demographically similar U.S. states such as Connecticut and Massachusetts,” Herzlinger acknowledges. Moreover, while U.S. insurers in most states can shun sick customers, either by refusing to cover them—or by charging them astronomical premiums—in Switzerland you are not penalized for having cancer. The sick “can afford health insurance and pay the same price” as everyone else.

Finally, while the cost of care continues to snowball in both countries, the Swiss seem to have a better handle on health care inflation. From 1996 to 2003 health care spending in Switzerland rose by an average of 2.8 percent a year, Herzlinger says, versus 4.1 percent in the U.S.  Meanwhile “Switzerland boasts substantially more in the way of health-care resources and . . . tops the world in most measures of user satisfaction.”

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The Truth about the Politics of National Health Reform

For the past year, progressives have begun to talk about health care reform as if it is inevitable. Listen to the Democratic Party’s presidential candidates, and it seems just a question of what form the health care revolution will take, how quickly it will happen, and how we’ll finance it. After all, the polls show that the majority of taxpayers, employers and even most doctors want to see a major change.  Moreover, health care research shows that if we cut the waste in our system, we could fund universal coverage. What, then, is stopping us?

As regular readers know, I recently attended a Massachusetts Medical Society Leadership Forum where what I heard about the Massachusetts plan made my heart sink. While everyone in Massachusetts wants health care reform, no one wants to pay for it. Those who are receiving state subsidies to buy insurance are enthusiastic. But uninsured citizens earning more than 300% of the poverty level are expected to purchase their own insurance. The state hoped that 228,000 of its uninsured citizens would sign up; as of last month, just 15,000 had enrolled. Many have decided that they would rather pay the penalty than buy health insurance.

At the forum, Robert Blendon, professor of health policy and political analysis at Harvard’s Kennedy School of Government, talked about what Massachusetts’ experience might mean for the national health care debate: “Massachusetts is the canary in the coal mine,” Blendon, who is also a professor at Harvard’s School of Public Health, declared bluntly. “If it’s not breathing in 2009, people won’t go in that mine.”  If the Massachusetts plan unravels, he suggested, Washington’s politicians will say “If they can’t do it in a liberal state like Massachusetts, how can we do it here?” 

I’m not writing Massachusetts off. The state’s leaders are behind the plan and they may be able to persuade the Commonwealth’s citizens to come on board. But it won’t be easy. 

In the meantime, this week I decided to ask Blendon some follow-up questions: Just what would it take, politically, to achieve national health care reform sometime in the next two to four years?  How many seats would reformers have to capture in Congress?  Is this likely?   Some observers say that if a reform-minded president hopes to succeed, he or she will have to ram a plan through Congress sometime in 2009. But health care is complicated; wouldn’t it make more sense for a new administration to take its time and explain what it is doing to the public, while trying to create a sustainable, affordable, high quality health care system?

Finally, what are the biggest barriers to reform?  If major change proves impossible, what more modest back-up plans should a new president have in mind? What other health care legislation could he or she hope to pass?

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