The challenge for universal healthcare in the United States is to change a costly and complex system to one that is accessible and insures quality care at reasonable costs to the entire population. In 1993 the Clinton administration proposed a health insurance program that would have provided coverage for most citizens, but opposition to aspects of the program from the insurance, medical, drug, and small business communities ended it.

Various cooperative or commercial health programs have evolved in the United States, offering limited benefits to group or individual subscribers. The nonprofit agencies Blue Cross (which covers hospital care) and Blue Shield (which covers doctors’ fees) are the largest such insurers. In 1965 the federal government established Medicare for persons age 65 and over, providing basic hospital insurance and supplementary insurance for doctors’ bills and other healthcare costs; and Medicaid for low-income persons, is operated by the states and covers hospital, physician and other services.

Most Americans benefit from the superior technology and expertise of well-trained healthcare providers in the United States. Premature infants who did not survive 10 years ago may now thrive thanks to the specialized care available in newborn intensive care units. Yet infant mortality is higher in the United States than in some other Western nations. More than 35 million Americans have no healthcare insurance coverage and are ineligible for current government assistance or entitlement programs. These include people and families among the working poor — those holding low-wage jobs that offer no health benefits.

The cost of health care excellence in the United States has been high. Over $756 billion was spent on health care in 1991, and the government estimates healthcare costs will approach $2 trillion by 2007. Most dollars currently go toward high-tech interventions supporting the last few months of life. Until recently, the clinical and economic benefits of primary prevention and health-promotion programs have gone unrecognized. Lack of primary prevention has contributed to the growing need for intervention dollars.

The 1993 debate for health-care reform favored a competitive market of managed care — so-called managed competition — over that of a single payer or national health insurance plan. The Federal Employees Health Program is an example of managed competition. Eleven million government workers, including the President and members of Congress (see sidebar), select from competing private plans. Options may include health maintenance organizations (HMO), preferred provider organizations (PPO), and fee for service (FFS) agreements, among others. All plans provide drug coverage but offer a variety of co-payment or deductible arrangements. The government does not set the price of any plan’s components, insurers develop their own arrangements with service providers and suppliers. Federal workers exert ultimate control by selecting among competing plans. Many state and county governments have adopted the federal model.

Private sector employers have fewer options to implement sound cost-containment practices without incurring substantial income tax penalties. And employees have fewer opportunities to purchase less costly health insurance tailored to their individual and family needs. Tax law generally prevents employees from choosing between wages and health insurance, and insists that all employees be offered the same coverage on the same terms. As a result, an employer must often provide an expensive group policy with a package of benefits that no single employee may want. The employer is forced to adopt a health care plan in which benefits are individualized but where costs are collectivized.

There is little relationship between premium costs and individual employee wages. In many cases employees do not know what the premiums are. In cases where employees are aware (e.g. when employees are asked to pay part of the premium), each employee is charged the same premium regardless of age, sex, type of work and other factors that might affect real premium costs. Consequently, to the employee, there is no relationship between the cost of employer-provided health insurance and personal take-home pay. There is also no relationship between wasteful health care purchases and salary under conventional employer health plans. So, regarding their healthcare practices, employees have no incentives to be prudent consumers.

Since employee benefits law prevents smaller firms from adopting a sensible approach to employee health insurance, many employers respond to rising health insurance premiums by canceling their group policy. Employees are given bonuses or raises in exchange for health insurance benefits, and are then encouraged to purchase individual health insurance policies (with after-tax dollars) on their own. Many do not. Ironically, while designed to encourage the purchase of health insurance, employee benefits law has, on occasion, increased the number of people without health insurance.

Trends In the private sector…
• Major corporations, business coalitions and health coalitions are using their market power to promote quality by collecting data on quality as well as cost, using the data to select health plans and providers, and offering employees financial incentives to enroll in plans with good performance records.
• Employers in some parts of the country are teaming up with government purchasers, such as state Medicaid programs and local health departments, to develop common strategies for encouraging quality care in their communities.
• Many job seekers are giving benefits packages greater weight than salary and other criteria when evaluating prospective companies’ offers. A transient job-market condition to be sure, but a recent Gallup poll found that twenty percent of respondents said they had passed up a job offer solely because of dissatisfaction with the company’s health benefits.
• Increasingly, the economic and clinical benefits of health promotion are being recognized. Wellness specialists are providing employees with education in personal risk factors, early warning signs of disease, and prevention.

On the government front...

Federal tax law has historically encouraged an employer-based system under which people lose their health insurance when they leave a firm. Some employers might reduce coverage after an employee gets sick. And when employees with preexisting conditions leave, they may find it impossible to obtain insurance coverage elsewhere.

Future initiatives may include:
• Health insurance coverage that is personal and portable (a fact with retirement packages);
• Health insurance premiums included in the gross wages of employees, with tax credits for those premiums allowed on individual tax returns;
• Individual employees offered the opportunity to choose between lower wages and more health insurance coverage (and vice versa); and
• Individual employees offered freedom of choice among all health insurance policies sold in the marketplace.

As a result, rising health care costs would no longer be a problem for employers — health insurance premiums would substitute directly for wages. Employees would have the option to choose lower-cost policies and higher take-home pay. Employees would be able to select policies tailored to their individual and family needs.
Employees would be able to retain the tax advantages of the current system, but avoid the waste inherent in a system in which benefits are collectivized. And employees would be able to continue coverage at actuarially fair prices if they quit work or switched jobs.

On the clinical front…
• There has been a significant decline in the marketplace for expensive specialists. Medical school graduates in some specialties are having difficulty finding employment while their primary care classmates are being recruited with lucrative incentives.
• Nearly 70 percent of operations are now being done on an outpatient basis. More than half of those procedures no longer require a surgical suite thanks to advances in monitoring equipment and anesthetics.
• We are soon likely to see hand-held analyzers that can sample a drop of blood or saliva, analyze its proteins and genes and determine what is going on in a patient’s body. By studying how patterns of genes and proteins result in a particular disease state, it will be easier to stop the disease process (and, arguably, insurability) — to cure or even prevent disease before symptoms appear.

(Editor’s Note: Steve Littfin is a freelance writer based in Port Orchard.).