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Cost and Coverage c. 1989-91: Part 2 of Historical Perspectives on Health Reform

Posted Nov 17 2009 10:02pm

As I mentioned in my last post, in going through old files I found many memos and articles about health reform.  Some of them from 1989-91 illustrate the long history of the challenge of controlling costs and providing care for more people - and eerie similarities to the current debate:

For example, below are some pieces of text from articles and commentaries published in the New England Journal of Medicine from January 1989 - October 1990:

  • A Consumer-Choice Health Plan for the 1990.   America’s health care economy is a paradox of excess and deprivation.  We spend more than 11 percent of the gross national product on health care, yet roughly 35 million Americans have no financial protection from medical expenses. To an increasing degree, the present financing system is inflationary, unfair, and wasteful. In its place we need a strategy that addresses the whole system, offers financial protection from health care expenses to all, and promotes the development of economically financing and delivery arrangements. Such a strategy must be designed to be broadly acceptable in our society. To remedy this deprivation, we propose that everyone not covered by Medicare, Medicaid, or some other public program be enabled to buy affordable coverage, either through their employers of through a ‘public sponsor.’ … The U.S. health care economy is inflationary. It is still dominated by fee-for-service payment of doctors and hospitals by third party intermediaries with open-ended sources of finances. There is no total budget set in advance within which providers must manage the care of their patients. For the most part, there is no incentives to find and use medical practices that produce the same health outcome at less cost.” (1/5/89 -  Enthoven and Kronick)
  • A National Health Program for the United States: A Physicians’ Proposal. Our health care system is failing.  Tens of millions of people are uninsured, costs are skyrocketing, and the bureaucracy is expanding. We propose a national health program that would (1) fully cover everyone under a single, comprehensive public insurance program; (2) pay hospitals and nursing homes a total (global) annual amount to cover all operating expenses; (3) fund capital costs through separate appropriations; (4) pay for physicians’ services and ambulatory services in any of three ways: through fee-for-service payments with a simplified fee schedule and mandatory acceptance of the national health program payment as the total payment for a service or procedure (assignment), through global budgets for hospitals and clinics employing salaried physicians, or on a per capita basis (capitation).” (1/12/89 - Himmelstein and Woolhandler)
  • Sounding Board: It Is Time for Universal Access, Not Universal Insurance. … Universal health insurance is not a good idea.  To control goods and services through a single agency - especially when the driving force is economic - would fly in the face of the American way of doing things. … Rather than support such unworkable, soulless programs, I propose universal access through a pluralistic funding mechanism. … So, we ought not to be talking about a universal health insurance scheme, but rather about universal access - access to needed care, on a timely basis, with controls on quality and use that have been accepted by everyone involved.  The key principle of effective access and limited cost is the rationalization of care.  In this age of high-technology medicine and miracle drugs, we must realize that we can no longer do everything for everybody just because it is possible. Rather, we should develop a system in which decisions about what we do, when, where, and to whom are based on reasonable expectations of the benefits involved and on sound medical principles communicated clearly to patients and their families.” (7/6/89 - James Todd, MD - American Medical Association)
  • Special Report: The Pepper Commission Report on Comprehensive Health Care. A look at the outcome of the commission’s deliberations give a good indication of what, in fact, it takes to build political consensus. The commission basically face two separate tasks - reform of the nation’s existing system for insurance medical or health care, and creation of a system for insuring assistance in the task of daily living we call long-term care. The commission voted overwhelmingly (11 to 4) in favor of a major government initiative in long-term care. … By contrast, the commission’s vote on health care reforms - universal coverage for people under the age of 65 (at a cost of $24 billion) and measures to promote the efficient delivery of health care - passed by the slim margin of eight to seven. … The difference between the commission’s votes on long-term care and health care, then reflects the many and pointed political pressures that will work against consensus on health care reform, not for it. … First, and most obvious, the vast majority of commission members face reelection campaigns this fall… … Second, and related, in the wake of the traumatic repeal of Medicare catastrophic coverage, members will remain acutely sensitive to potential voter reaction to any particular reform package. Third, in health care there are entrenched political interests. … Fourth, with a complex issue such as this, consensus on the whole requires many, many concessions on individual provisions. … Finally, outright partisan politics will undermine consensus on health care reform, as the commission found in the days preceding the vote, when the White House placed intense pressure on some members to resist any consensus before the November elections. … If we do not act promptly, I believe our health care system may well implode by the end of the century.   The need for action is starkly clear.” (10/4/90 - Senator John D. Rockefeller IV, Chairman of the Pepper Commission)

And other articles from 1991 show similar perspectives on health reform and the urgency for action:

Washington Post, February 17, 1991 “Devising a Cure for High Costs of Health Care: Support Grows for Concept of National Medical Insurance. … The idea [of government-imposed universal health care that would provide quality coverage for everyone], in various forms, is gaining the support of groups ranging on the political spectrum from the AFL-CIO and the American Association of Retired Persons to the National Association of Manufacturers and the American Medical Association.  For the first time since the mid-1970s, supporters of national health insurance believe they have a legitimate chance of winning congressional approval for a universal health care bill, if not this Congress, then the next. ‘This is the best shot we’ve had in 15 years,’ said a key congressional aide. With health care costs climbing more than 20 percent a year for major corporations and even more for many small businesses, disparate political groups are beginning to form a coalition for reform.

USA Today, March 11, 1991 - “Health care costs more, serves fewer.  No other part of the US economy seems less understood than health care.  Few realize why health care costs are so stubbornly high ($2,700 per American per year) or why health care seems to defy free-market economics. … What a growing number of people are coming to know is dissatisfaction with a health care system that absorbs ever-soaring sums of money while letting more and more people fall through the cracks. …  Of all the cold showers of reality falling on the USA as the ’90s dawn, none is as chilling as this: The healthcare system in this country is in deep, deep trouble.”  (Graphic shows that of the 37 million people in the USA without health insurance 49% are working adults.)

Bottom Line - The more things don’t change the more they sound the same.

Next Up: Part 3 - Perspectives from a 1992 Medical School Class “The Crisis in the American Health Care System”

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