Understanding Health Care Reform. - book reviews

Washington Monthly, Jan-Feb, 1995 by John B. Judis

Theodore R. Marmor's book of essays was completed before the Clinton administration's health reform proposal met its doom in Congress, but Marmor has nonetheless written its epitaph. Reflecting on the possibility of "systemic reform," Marmor writes, "The likelihood is that our politics will leave Americans with confused choices, escalating inflation, and considerable despair." Marmor's recent essays, collected under the title Understanding Health Care Reform, could have been more accurately titled Understanding the Failure of Health Care Reform.

Marmor, a professor at Yale's School of Organization and Management and an expert on health care policy, has been a leading proponent of a Canadian-style single-payer health insurance system, but like many health reform advocates, he tried to make the best of the Clinton effort. These essays, many of which were written during 1992-1993, record Marmor's attempt to explain what the choice of reforms entailed and why it would be difficult for any fundamental reform to be adopted. The essays range from outstanding to dispensable, and there is considerable repetition among them. But several themes emerge which are important to any future consideration of health care reform.

Marmor argues that, leaving aside political feasibility and the precise details of implementation, the Canadian system remains the best model for American health care reform. It provides its citizens with univrsal and high-quality care--in polls taken in Western Europe, North America, and Japan, Canadians are the most satisfied with their nation's health care system--at a price considerably less than that of the American system--about nine percent of Canada's GNP, compared to 12 percent of GNP in the U.S. Unlike its primary rival, managed competition, a single-payer system would preserve and even revive consumer choice. And also unlike managed competition, it has been tried and proven workable.

Marmor's support for a single-payer system, while controversial among lobyists on Washington's K Street, is widely shared by health and economic policy experts who have looked at the subject dispassionately. In the last five years, the General Accounting Office, the Congressional Budget Office, and, most recently, the Office of Technology Assessment (none of which are known for their reckless radicalism) have issued studies favorable to single-payer reform. And most health experts who favor other plans--from the Brookings Institution's Henry Aaron to Princeton University's Paul Starr--acknowledge that they do so only because they believe the rival plans have a far better chance of getting through Congress.

One of the primary objections to a single-payer system is that it would encourage a "big government" approach to health care, but Marmor points out that managed competition would itself require extensive new layers of regulatory bureaucracy to ensure, among other things, that rival health plans don't try to skim off the least disease-prone customers. Marmor also suggests that there are sharp differences between the plans that present themselves as managed competition. The model championed by former Rep. Jim Cooper would rely on competition among the health plans for members to hold down prices and would not guarantee universal access; Starr's and, later, Clinton's plan would guarantee access and would impose a "global budget" to attempt to hold down overall prices. Marmor sees the Clinton plan as a step toward a Canadian system, writing, "The pairing of global budgets and univesality reflects the seeping into the U.S. reform mind of precisely the key elements analysis of Canadian experience has been emphasizing for two decades."

Marmor argues in these essays, however, that neither single-payer nor the Clinton version of managed competition would be likely to get through Congress. He contends that reform would be blocked by Americans' "ideological predilections" against state action and higher taxes, which would be required either directly or in the form of premiums to finance health reform, and by the "fragmented" American political system, which makes it easier to block legislation than to pass it. Health industry and other business lobbyists opposed to change could take advantage both of Americans' antipathy to taxes and big government and Congress' Byzantine committee structure and prerogatives to stop a significant reform bill from even reaching the House and Senate floor. And that is exactly what happened.

Marmor thinks that in order for fundamental reforms to be adopted, an administration would have to enjoy large mandates in Congress and the legislation itself would have to be surrounded by a sense of popular crisis. These conditions were present in 1935 when Social Security passed, and in 1965 when Medicare was introduced but they have not been obtained since then. As a result, health care reform has been repeatedly stymied--in 1971-1972, 1978-1979, and now again in 1993-1994.

Marmor cites the general reasons why significant reform failed, but there are also two more specific reasons. First, the postwar alliance between business and labor that backed Medicare in 1965 was not around in 1994 to back health care reform. This alliance disintegrated in the seventies, and business is now represented in Washington by self-interested lobbies like the Business Roundtable that reflect their members' narrow, short-term interests. Even though health reform was in the long-term interest of both large and small business, their lobbies ended up united against it.