Health care policy: 2007 and beyond

The Minnesota legislature will take up a proposed statewide smoking ban as one of its first pieces of business in the 2007 session. It will also be asked to consider Gov. Tim Pawlenty's surprising call for guaranteed health care for all children in the state. And it will be asked to deal with other health-related issues, such as providing more funding for programs that educate nurses. (One cause of the nurse shortage is that current nursing programs can't keep up with the demand, although there is an abundance of qualified student candidates.)

Yet the elephant in the parlor is universal health coverage. Is it feasible or just a pie-in-the-sky dream of social liberals? Our focus in "Health care policy: 2007 and beyond" will cover just this subject.

Toward a universal, guaranteed health care delivery system

By far and away the most important step forward in health care in the past year for Minnesota, the U.S. and perhaps worldwide came on November 7. That's when voters rejected a political agenda first set forward in the election of 1994, and one that reached its pinnacle during the current Bush administration when the Republican Party held both houses of Congress and the White House.

This agenda rewarded the well-to-do, socio-religious conservatives and anti-governmentalists at the expense of the middle and lower economic classes, science and those who believe that government can serve all the people.

Whether the election will create a sea change is anyone's guess. Right now the new Congress and to a lesser extent the new legislature in Minnesota will spend much of its time simply trying to undo the damage the country and the state have suffered over at least the last six years, perhaps the last 12.

Make no mistake: This is not a Republicans-are-bad, Democrats-are-good argument. Prior to 1994 the Republican Party had a wing that promoted a liberal social agenda and believed that government had a duty to help all Americans. But that wing was all but subsumed by a medieval retreat to religious conservatism and a poorly disguised conviction that the primary role of government was to help big business.

Case in point: House Resolution 1 in President Richard Nixon's first term, put forward by a Republican administration, was a bill calling for guaranteed, universal health coverage.

In the 2006 election universal health coverage was an issue that candidates were able to put forward without embarrassment or apology. For the most part, this was a major change from 2004. But will universal insurance or health care become the law of the land in the next few years? Probably not, and the reason is simple: There are too many forces that are making too much money from the current highly protective, highly inefficient system. And they are able to hire too many well-paid lobbyists and pull too many connection strings in an effort to stifle Congress and the President from committing to true reform.

Yet there is hope for the major change that many regard as inevitable. And ironically that vanguard of change may come from forces that have heretofore been among the primary bulwark for the status quo — most notably General Motors, Ford Motor Company and Daimler-Chrysler. For it is Detroit that has found its bottom line and ability to compete in a worldwide market so eroded by promised benefits — particularly health insurance — that in competitor countries is absorbed by the government. In fact, the U.S. is unique among industrialized nations in placing the onus of health insurance on companies rather than government.

There will not be a wholesale move from employer-based to government-based health insurance in 2007 or even before 2010, because the complexities in making the conversion are so daunting. But the seeds of change can be planted and fertilized particularly at the state level.

Already three states — Massachusetts, Vermont and Maine — have passed legislation guaranteeing universal health care to their citizens. At least another eight states are considering it. In Minnesota, Republican Gov. Tim Pawlenty has reversed himself on the issue, at first supporting cut-backs to health care programs that serve the state's neediest children to advocating universal health coverage for all Minnesota children.

Ultimately, the decision to move to universal health coverage will be made for economic reasons. The current system is far too inefficient with its 25%+ administrative costs (compared to less than 5% for Medicare) and frustrating complexities. Further, many big players, such as hospitals, major employers, and local and state governments who have been absorbing the costs of the 43 million uninsured in the U.S., are going to band together to force change.

How this change will be manifested is still up in the air. Progressive states will be figuring out their own systems. But what could happen is that Congress may pass legislation to allow certain segments of the economy, such as farmers and owners and employees of small businesses, to sign up with the subsidized Federal Employees Health Benefits Program. If this is done, it will eventually open the floodgates to allowing anyone to sign up for the program, putting the federal government in direct competition with private insurers.

To free marketers this sounds like a terrible solution. But Milton Friedman (God rest his soul) has been buried, and hopefully his overly dogmatic theories of allowing the market to be the sole arbiter of economic health will be buried as well.

This country has long had a public-private sharing of many segments of its economy, most notably in education and mail and package delivery. In this model the government, representing the people, guarantees a certain basic standard of service while the private sector adds bells, whistles and options. And despite its sometime flaws and rocky moments, these systems survive. Like democracy, we cannot expect perfection from them; but also like democracy's constant challenge, name another system that in practice works better for the nation as a whole.

Hopefully, we will be able in 10 years to look back at this period of so many un- and underinsured and wonder how we could have ever been so stupid to put off the transition to guaranteed health care for so long.

Uwe Reinhardt, arguably the dean of health care economists and a long-time critic of our current health care system, often quotes Winston Churchill: "In the end, Americans will always do the right thing... after exploring all other alternatives." He says this in a hopeful sense.

Going through a period of angst is part of the process before the U.S. makes any major social changes, and fortunately the country almost always comes comes out of this period with a pretty good solution. This should happen as we move to a more efficient and universal health care delivery system.