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What You Didn't Hear About the Politics of Health Care
by Chris Glazek
If not as sensational as car bombs in Iraq, or swift boats in Vietnam, health care costs in America are hitting voters where it hurts, to the point that many of them are willing to slog through swamps of unsexy statistics, if that's what it's going to take to keep their families safe.
That is what it's going to take, slogging through (literally) deadly statistics, but at least Bush's and Kerry's health plans offer two distinctly different approaches to keeping the nation well, so voters have a real choice in the matter. Though you might not know it from stump speeches and front pages, health care is consistently ranked by voters as one of the top issues facing them as the country heads into the next four years. Americans have good reason to be concerned.
It is an open secret in Washington that the health care system is destined for crisis if legislators do not act soon to combat rising costs and plummeting rates of insurance. Every year, health care expenses eat up a bigger and bigger portion of household income; at the same time, more and more Americans go without health insurance entirely. According to the latest Census report, the ranks of the uninsured surged to 45 million in 2003, just over fifteen percent of the population. At the same time, national spending on health care, public and private, climbed to fourteen percent of GDP. By comparison, Canadians spend only seven percent of their country's GDP on health care, while managing to deliver coverage to every citizen through a national program.
The future's financial situation looks even worse. As the baby-boomer generation retires, Medicare faces almost certain bankruptcy, threatening the government's long-standing commitment to providing health care to the elderly. According to the President's 2004 Budget Report, between now and 2040 the Federal Government's commitments under Medicare will exceeded its revenue by almost twenty trillion dollars. Simply stated, the nation is getting older and health care is getting more expensive. If Congress fulfills expectations and makes the Bush tax-cuts permanent, the budget shortfall will be even larger.
So why isn't the media providing more election-time coverage of the sorry state of American health care? Part of the reason is that health issues are exceedingly complicated and do not lend themselves to sound-bites and headlines. The third presidential debate demonstrated just how difficult it can be to communicate the finer points of health policy in a ninety second rebuttal. Partly, however, the fault lies with the candidates themselves. Despite the severity of the crisis, neither candidate is proposing anything like comprehensive health care reform. In fact, since the heady days of Bill Clinton's first term, no president or nominee has dared to tinker with health care in a serious way. At that time, Hillary Clinton spearheaded a proposal for national health care that would have provided universal coverage without dramatically increasing federal spending. Much of the savings were to have come from eliminating the high overhead costs from the private sector. The plan was soundly defeated, and Senator Clinton's reputation suffered from her unpopular handling of the whole endeavor. Still reeling from the wounds of that political debacle, health care reformers in Washington have convinced themselves that piecemeal reform, whether to the left or to the right, is the only way that politicians will stomach attacking something as politically delicate as health care. For better or for worse, both Kerry and Bush seem to have taken these lessons to heart.
As Harvard health economist David Cutler explains it, policy makers tend to fail at health care reform because they refuse to choose among conflicting priorities. Most people agree about the broad goals of reform: we need to reduce cost, increase access, and improve quality. What few are willing to acknowledge, however, is that you can't insure more people, improve quality, and spend less money all at the same time. As Cutler puts it, we can either "spend money to get stuff" or "not spend money" and "not get stuff."
Clinton's failed 1994 plan, it was widely believed, would have financially compensated for increasing access by decreasing quality, not unlike the Canadian compromise. This seemed to assure the plan's defeat. The Kerry and Bush plans each face similar priority choices, even if on a smaller scale.
President Bush summarizes his plan with three goals: "give patients more options" (improving quality), "reduce costs," and "extend coverage to the uninsured." This should raise some suspicions. How can Bush spend less, do more, and do it better? The answer of course, is that he can't, and that he must strike some balance between these three priorities. If we were to evaluate the Bush plan on each goal, we would come to the conclusion that it does a lot to increase patient options, little to reduce costs, and almost nothing to extend coverage to the uninsured. This mix of priorities reflects the Bush administration's market-oriented focus. In a free market, options are numerous, quality reflects price, and the poor are excluded altogether. This is exactly what you would expect from a conservative health plan: instead of the winners subsidizing the losers, the winners subsidize themselves.
Continued
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