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Health Care Reform Waits

Image has not been found. URL: /wp-content/uploads/2008/09/thompson.jpgFormer Health and Human Services secretary Tommy Thomposon (HHS.gov)

In 2004, Tommy Thompson, then-Health and Human Services secretary, approached his boss with a request. Observing that the nation’s doctors and hospitals operate a tangled web of incompatible forms and technologies, Thompson asked President George W. Bush to create a universal system of electronic medical records that would follow patients around the country, eliminate redundant treatments and, according to some estimates, trim billions of dollars from the nation’s annual health care tab. Thompson wanted the president to establish the system within 18 months.

“He came out for 10 years,” Thompson said this week, “and as a result, we haven’t been able to get there.”


Illustration by: Matt Mahurin

The anecdote, which Thompson told the Senate Finance Committee Tuesday, offers a glimpse of the obstacles facing health-reform advocates. With medical costs skyrocketing, employers increasingly dropping or trimming coverage, Medicare projected to go belly-up in a decade and the number of uninsured Americans tickling the 50 million mark, most observers contend the health-care system needs a complete overhaul. But such shakeups are rare in Washington, where special interests spend millions to keep things as they are, and the political will to confront industry is all but absent. Instead, lawmakers tend to dabble at the edges of problems until sweeping change becomes unavoidable. The health reform debate now seems to revolve around when that time will arrive.

Thompson said that 2009 brings a great opportunity to overhaul the system. He argued that, politically, big reform will be feasible with the arrival of a new administration, while, fiscally, it will be necessary because of Medicare’s looming bankruptcy.

“It’s the perfect storm,” he said.

On Thompson’s side, there is near-unanimous agreement that the health-care system is broken. Patient advocates, for example, decry the millions of uninsured; employers want a coverage model that won’t nip their competitive edge over foreign companies, and doctors and hospitals want to spend less time wrangling with insurers over payments. Taken together, the troubles reveal a system in need of transformation. “One piece is not going to do it,” Thompson said. “It is too broken.”

Congressional lawmakers acknowledge as much. But identifying the problem is different than agreeing on the solution. Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, which oversees Medicare and tax policy, conceded the “many difficult decisions” lawmakers face.

For that reason alone, few observers agree with Thompson that the reforms will arrive next year. David Walker, former head of the Government Accountability Office, argued that health care costs threaten to bankrupt the country if Congress fails to act, but an overhaul won’t — and shouldn’t — come overnight.

“It is possible to achieve some incremental reforms next year,” said Walker, now president of the Peter G. Peterson Foundation, which aims to promote solutions to America’s budget challenges, “but comprehensive reform will have to be done in stages over a number of years.”

The health care debate arrives during an election year when polls reveal that the struggling economy and the war in Iraq are foremost on voters’ minds. Donna Shalala, secretary of Health and Human Services under President Bill Clinton, however, called those polls “misleading.”

“It seems very clear that when Americans talk about their economic concerns,” she told Senate lawmakers, “they’re talking about health care.”

The three current presidential hopefuls have each unveiled ambitious health reform plans, though in each case, the details — like how to pay for universal coverage — have been kept purposefully vague to avoid criticism. Experts point to popular bipartisan proposals, like renewing the State Children’s Health Insurance Program, as probable successes in 2009. But change on the scale that many say is needed to fix the entire system remains an idea for the more distant future.

“Taking something as big as health care, you’re just asking for trouble if you try to do it in one fell swoop,” said David Merritt, project director at the Center for Health Transformation, a right-leaning Washington-based policy organization. “Hillary Clinton can testify to that.”

Merritt’s reference was to the health care overhaul proposed in the first years of the Clinton administration. Facing well-heeled opposition from the insurance industry, among others, the plan went down in flames. Its failure was seen as a turning point for the administration, and is often cited as a central contributor to the Republican takeover of Congress in 1994.

In a 1995 issue of magazine, several architects of the Clinton proposal weighed in on the reasons for the plan’s failure, and offered some advice to future administrations.

“We have seen that although the ‘window of opportunity’ might exist for major government action to address a particular policy issue, the tendency is for experts to overestimate the willingness of middle-class Americans to sacrifice and risk the uncertain consequences of major changes in their lives,” wrote Robert J. Blendon, Mollyann Brodie, and John Benson, who had all worked on the Clinton plan.

“Thus, if substantial reform is to be achieved during these windows of opportunity, the legislation must be more modest in its reach than many reformers may see as desirable.”

Reached by phone this week, Blendon said, “I haven’t changed my mind a bit.”

Blendon, a professor of health policy at Harvard University, pointed out an irony underlying the health-reform debate: While many Americans express dissatisfaction with the current system, many also harbor a fear of change. “Some of these reforms, while they might make great policy sense, won’t have any legs when brought to the public,” he said. “They are risk averse to a lot of changes in the health-care sector.”

Instead, Blendon said, reform advocates in and out of Congress will probably have to wait a few more years until the crisis becomes the subject of more dinner-table conversations.

“Governments solve things when they perceive a crisis facing the middle class that they can’t escape from,” he said. “And then everyone says we should have done it 10 years ago. But it needs to be perceived as a real crisis and it needs to be on the front pages every day. Then you can really do big things.”

Yet, all sides of the debate agree that the current system is a train-wreck — and they have the statistics to back it up. In 2006, Americans spent roughly $2.1 trillion on health care, according to the Centers for Medicare and Medicaid Services — roughly 16 percent of the nation’s gross domestic product, or $7,000 for every man, woman and child in the country. Meanwhile, medical inflation (at 6.7 percent) is about twice that of overall inflation. Without legislative changes, the Congressional Budget Office projects that total health care spending will jump to 25 percent of GDP in 2025 and 37 percent in 2050.

Despite all the spending, 47 million Americans are uninsured.

“The problems are greater than the incremental solutions that Congress has tried to date,” Baucus said in a statement.

Baucus faces a difficult task. From the left, liberal Democrats and patient advocates are pushing to increase the government’s role in covering the uninsured while improving care for millions more. From the right, conservative Republicans and the numerous medical industries are urging more patient responsibility and privatization of care. The ultimate strategy will inevitably involve some compromise on everyone’s part — and a tangible crisis to bring it about.

As Peter Orszag, head of the Congressional Budget Office, told reporters last November: “The political system is not very good at dealing with gradual problems. It’s good at dealing with crises.”

The question remains when America’s health-care system will be perceived as such.

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