Jun
01
2008

Media Miss Bigger Picture in Healthcare Debate

Ignoring ‘mandate’ plans’ record of failure

Photo Credit: Flickr Creative Commons/tjmwatson

Photo Credit: Flickr Creative Commons/tjmwatson

In the 2008 Democratic primary campaign between Barack Obama and Hillary Clinton, each is offering a slightly different variant of individual mandate-based healthcare plans relying on the private insurance industry. Media coverage has magnified the slight variations while almost entirely ignoring the big picture: Both health plans are based on a model that has consistently failed to get off the ground in numerous states.

Most media analysis has focused on the political advantage provided by each proposal, rather than on the evidence that either plan would actually deliver quality, affordable care to all Americans.

Obama proposes that parents be mandated to buy private insurance for their children, with an individual mandate for adults to be imposed once “cost controls” drive down the cost of insurance—a highly optimistic scenario, given that he is not addressing insurers’ extremely high administrative costs. For her part, Clinton insists on an immediate and universal mandate for all to purchase private insurance. “As a practical matter, the difference between Senator Clinton’s and Senator Obama’s approaches comes down to timing and sequencing,” stated former Clinton Labor Secretary Robert Reich (American Prospect, 1/10/08).

Some health policy experts trace the roots of the Democratic candidates’ insurance-centered, mandate-based healthcare plans to Republican President Richard Nixon, who recognized the need for health reform but sought to protect private insurers and other powerful interests. In 1971, Nixon proposed mandating employers to cover their employees and requiring poorer Americans to pay reduced insurance premiums in an expanded Medicaid program. Over time, Nixon’s concept has devolved into an approach with less stress on employer payments and more emphasis on individual mandates to purchase private insurance.

The individual mandate essentially requires citizens to buy private insurance that is unaffordable for tens of millions. Consequently, it has been the rock upon which one “universal” state plan after another has crashed and splintered, as noted in a New York Times op-ed (12/15/07) by Harvard Medical School doctors Steffie Woolhandler and David Himmelstein.

Much-heralded plans passed in the late 1980s and early 1990s in Massachusetts, Oregon, Minnesota, Tennessee, Vermont and Washington all promised to provide universal coverage, most often based on a combination of employer and individual mandates. In each case, the mandate-based approach has failed to deliver any decreases in the number of uninsured; in several states there were substantial increases, as Himmelstein and Woolhandler detail.

The most recent experiment with mandates in Massachusetts appears to be sinking fast. The plan, signed into law in 2006 by Republican Gov. Mitt Romney, charges employers just $295 per year while forcing families earning as little as $29,400 a year to buy insurance without any subsidy, backed up with penalties as high as $4,000. While state officials claim progress, “according to the Census Bureau, the new sign-ups amount to less than one-quarter of the uninsured,” noted Himmelstein and Woolhandler (Boston Globe op-ed, 9/17/07). They pointed out that “244,000 of the Massachusetts uninsured get zero assistance—just a stiff fine if they don’t buy coverage.”

Essentially, healthcare plans have been configured to prevent a showdown with private health insurers over their unaffordable premiums, driven by astronomical U.S. administrative costs. As Woolhandler and Himmelstein observed in their New York Times op-ed (12/15/07):

The “mandate model” for healthcare rests on impeccable political logic: avoiding challenging insurance firms’ stranglehold on healthcare. But it is economic nonsense. The reliance on private insurers makes universal coverage unaffordable.

With an estimated excess administrative burden of $350 billion to $400 billion annually, it is impossible to envision effective cost controls under a system dominated by private insurance, at a time when per-person healthcare costs have reached $7,400 in the U.S. (New York Times, 3/3/08), virtually twice the cost of any other advanced nation.

Even when the individual mandate/private insurance approach is coupled with an option to choose a public insurance plan, as both Obama and Clinton have proposed, only a small portion of the excess insurance overhead can be eliminated, because providers and patients must contend with multiple insurers seeking to maximize profit. While some Democrats, like former candidate John Edwards, envisioned the public plan as the incubator for an evolving single-payer system (New York Times, 1/25/08), such an alternative system might also be transformed into the insurers’ dumping ground for patients who would likely diminish their profits by requiring more care.

The individual mandate approach is also weighed down by an unappealing political message, a point rarely mentioned in mainstream media. Rather than focusing on the benefits a new government program would confer on all Americans, the individual mandate puts the spotlight on the immediate burden of buying often-unaffordable insurance. As economist Robert Kuttner put it (American Prospect online, 1/30/08): “Universal social insurance signals government help. A mandate signals government coercion.”

Typifying the media analysis were New York Times reporter Kevin Sack’s pieces on the healthcare policy debate (12/25/07, 2/23/08). Sack pointed out (12/25/07) that the number of uninsured grew to 47 million in 2006, over 2 million more than the year before, and that employer-provided coverage now reaches only 60 percent of Americans, compared with 64 percent in 2000. Despite these mounting indicators of an increasingly crisis-wracked healthcare system, none of the “sweeping plans to restructure healthcare” in California, Illinois or Pennsylvania “will finish 2007 with a bill passed and signed.”

By way of explanation, Sack wrote, “In each state, the initiatives confronted entrenched opposition from insurance and other business lobbies that made it far more difficult to build a consensus than in the small New England states that acted in recent years.”

Such a statement is most notable for what it fails to illuminate. For one thing, the failures of the various New England mandate plans went unmentioned.

The candidates’ promised means of lowering insurance premiums also escaped any serious examination. “The difference is that Obama insists he will be able to lure all of the uninsured simply by dangling the carrot of low premiums; Mrs. Clinton believes there will always be some free riders who respond only to a government stick,” Sack wrote (New York Times, 2/23/08). While Sack cited cost-cutting proposals by Obama and Clinton for electronic record-keeping, preventive care and chronic disease management, he ignored the elephant in the room: the huge excess administrative costs in the U.S. imposed by private insurers. Overall, such costs account for 31 cents out of every U.S. dollar spent on healthcare (New England Journal of Medicine, 8/21/03; Health Affairs, 11-12/05).

Like much of the major media, Sack’s articles spotlighted relatively trivial procedural differences between Obama and Clinton while overlooking proven models of healthcare financing that deliver both universal coverage and effective cost controls through negotiations between provincial governments and providers. For example, neighboring Canada provides healthcare to every citizen for 52 percent of U.S. per-person costs, allows free choice of doctors, and produces far better health outcomes in terms of infant mortality, life expectancy and many other key indicators (Health Affairs, 1-2/08).

Yet many key policymakers and media commentators have utterly disqualified the single-payer plan from serious consideration. “If you want to get to universal coverage, then you have to do the individual mandate,” Urban Institute economist Joe Holahan told the Washington Post (2/24/08). “You can do it with a single-payer system, under which one entity, the government, would finance all healthcare,” he said. “But assuming that’s [politically] off the charts, then I think it [the individual mandate] is the only way to go.”

In the same vein, leading pundits like Ron Brownstein have pronounced (L.A. Times, 7/1/07):

For all the passion it evokes, the single-payer idea remains at the fringe of political viability. Though the cause energizes the left, the idea of the federal government completely replacing the private health insurance industry is so far outside the American experience that even the vast majority of health reform advocates consider it politically dead on arrival for the foreseeable future.

This viewpoint, while widely held among Washington, D.C. political and media insiders, overlooks the largely positive experience of over 40 million Americans with the Medicare and Veterans Administration systems that operate on a single-payer model.

Moreover, this exclusion reflects a vast gulf between Democratic leaders and the party’s constituency, as 70 percent of Democratic primary voters support a single-payer model of reform (Greenberg Quinlan Rosner Research, 5/4/07). This level of sentiment among Democratic voters was only slightly higher than that found among samples of all American citizens, as when CBS (9/14-16/07) found that 55 percent preferred “having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers,” vs. 29 percent who chose “keeping the current system where many people get their insurance from private employers and some have no insurance.”

But this overwhelming popular support for a single-payer system (both among the general public and increasingly doctors as well—Annals of Internal Medicine, 4/1/08) has rarely been found worthy of mention in influential media like the New York Times or Washington Post, where a search showed no record of articles on such polling over the last three years.

Meanwhile, a widely quoted New York Times poll (3/2/07) failed to even raise the single-payer issue, instead asking a much less revealing question about support for universal healthcare, a general goal supported by “nearly 8 in 10.” However, the ambiguous phrasing of possible alternatives—a list from which single-payer was omitted—produced predictably ambiguous responses from the public. Consequently, the accompanying story concluded by citing a Harvard expert predicting that public divisions would probably generate a “train wreck,” once more blocking reform. Such coverage reinforces the dubious notions that Americans resist large-scale healthcare reform and have no preferences on specific alternatives to the status quo.

Roger Bybee, a frequent contributor to Extra!, is a Milwaukee-based freelance writer and consultant who often writes about healthcare policy and corporate globalization.