Healthy disagreement - alternatives to Hillarycare

Reason, Oct, 1993 by John Hood

The struggle to offer a politically palatable alternative too Hillarycare

For activists on the American "right"--the loose confederation of conservatives, libertarians, and free-market thinkers ranging from economics professors to U.S. senators--the early months of the Bill Clinton presidency have been fun. Jokes at the president's expense are rampant. Speeches and rallies against Clinton programs attract great crowds and enthusiasm. Republican presidential aspirants such as Sens. Phil Gramm and Bob Dole make easy headlines by savaging Clinton. The president's image seems defined by expensive haircuts, political disarray, waffling on issues, wayward White House staffers, an antagonistic press corps, and Rush Limbaugh's one-liners. For Clinton's opposition, it all seems too good to be true.

And, indeed, it is. The president's political operation has been revamped. After a dramatic, even melodramatic, confrontation on Capitol Hill, Congress finally acted on the federal budget with only modest deviation from Clinton's script. And waiting in the wings is Hillary Rodham Clinton's task force on health care.

Few observers believe the plan Mrs. Clinton's group has devised--the "managed competition" approach in which regional health-purchasing cooperatives negotiate on behalf of individuals to get heavily regulated health coverage--will be enacted in recognizable form by the Congress. With its price controls and budget caps, Hillarycare gores too many health-care oxen.

But something is likely to pass. Too many politicians have invested too much time and money in the issue to let it disappear. State budgets are bursting at the seams as Medicaid costs skyrocket. Local communities feel the pinch as hospitals struggle under the crushing burden of regulations and paperwork and companies try to afford basic insurance coverage for their workers. Families worry about coverage and the quality of the care they receive.

The battle will be joined in earnest in 1994. At stake is the roughly one-seventh of the nation's economy devoted to the health-care industry, plus the share of economic output needed to pay new taxes to fund reform. Also at stake are the lives and well-being of 250 million Americans. Faced with such a staggering problem, the opposition to Clintonomics and Hillarycare can't afford to assume that the administration's complex and costly plan will collapse of its own weight. Clinton critics need a plan of their own to present to a confused and worried public.

They have two.

Or, rather, there are two main groups advocating their particular versions of markets and consumer choice in health care. One is headed by Stuart Butler, vice president of the Washington-based Heritage Foundation. The other is headed by John Goodman, president of the National Center for Policy Analysis in Dallas.

Butler, a native of Great Britain, has enough first-hand experience with socialized medicine to fear its even partial imposition here. "My mother still lives under that system," Butler says, referring to the British National Health Service. "And I spend a good deal of my time on the telephone to Britain trying to get her the health care she needs. She is lucky. I still have reasonably good political connections there."

Goodman's first foray into health-care research also involved socialized medicine in Britain. In the late 1970s, he says, "Teddy Kennedy, Joseph Califano, and others were pushing the British model here. We needed to know exactly how the system really worked." Goodman's research has since led to an examination of national health-care systems from Canada to Singapore, and to a detailed understanding of how American hospitals, doctors, insurers, and patients act within the medical marketplace.

Butler and Goodman share a deep antipathy for socialized medicine, and the similarities between their health-care "factions" don't end there. Both groups are clustered around think tanks and academics, with some support in the insurance and health-care industries. Both have the ear of politicians on Capitol Hill. Both receive favorable notices in the right-leaning press and, to some extent, from strange bedfellows on the other side of the ideological divide. And both Heritage's and Goodman's plans purport to be based on similar principles: Markets can work in health care; consumers must retain choices; and the system of third-party payment is the major source of health-care inflation.

Why, then, are there two warring factions instead of one, unified opposition? Because the devil is, indeed, in the details--and each side sees a touch of evil in the details of the rival plan.

The Heritage Foundation, the E.F. Hutton of the conservative movement (when Heritage talks, conservatives listen), began working on a comprehensive health-care reform plan in the late 1980s. Foundation executives believed that previous efforts to oppose liberal-leaning policies and budget-busting medical entitlements were doomed to eventual failure. They concluded, said Butler in a recent speech, that "conservatives must instead counterattack with proposals that achieve the goals of society, but do so according to conservative principles. If a team plays only defense, the best it can hope for is a scoreless draw. More likely, no matter how good the defense is, it will lose the game."