The once and future healthcare crisis - healthcare reform

Healthcare Financial Management, July, 1998 by Jeanne Schulte Scott

"There's no real healthcare debate right now, but there sure is a crisis." - Alan Sager, a professor at Boston University School of Public Health, suggesting that both the number of uninsured individuals and the overall vulnerability of the nation's healthcare system are greater now than in 1994.

"There's this underlying belief that progress in America means that things get better for you, and people don't think their health care is getting better."

- Professor Robert Blendon, Harvard University School of Public Health, commenting on the national healthcare malaise.

Do you remember Harry, and Louise, the couple created for television commercials sponsored by the Health Insurance Association of America, whose anxiety-ridden kitchen table discussions played a major role in scuttling President Clinton's healthcare reform proposal in 19947 They were symbolic of the general opposition to any healthcare reform in 1993-94. This opposition was so successful at the time that coupled with the nation's robust economy in the ensuing years, it caused the nation's so-called healthcare crisis to fade almost to oblivion. Any remaining concerns about the healthcare delivery system's service to the public has been muted somewhat by a few incremental changes in national healthcare policy - most significantly, the insurance portability provisions of 1996's Health Care Portability and Accountability Act and the "KiddieCare" expansion in last year's Balanced Budget Act.

Despite some minor reform, however, the all-but-forgotten healthcare crisis has become far worse. The number of uninsured Americans has jumped from 33 million at the peak of the Clinton reform effort in 1993 to 47 million today.(a) After a two-year lull, overall healthcare costs are rising rapidly again, with many companies experiencing double-digit increases in their employee healthcare coverage rates. And, according to a number of surveys, many Americans feel, based primarily on their perceptions of managed care, that the quality of health care is deteriorating.

Indeed, Americans appear to be increasingly uneasy about their health insurance coverage, whether or not they belong to an HMO. For example, a recent survey by the National Coalition on Health Care, which comprises many of the nation's largest employers and healthcare trade groups as well as labor unions and not-for-profit organizations, found that a majority of Americans think the healthcare system is seriously flawed. Those who don't have health insurance worry that they will be unable to pay their bills if they become ill. Those who do have coverage think that if they become seriously ill, their insurance will not cover all the costs or provide for the kind of care they need. Many worry that they are only a paycheck away from losing their health coverage.

Several factors have helped mask the growing public dissatisfaction with the nation's healthcare system. One factor is the shift of millions of Americans from traditional fee-for-service insurance programs into managed care plans, which has helped to placate consumers by keeping a lid on healthcare costs. Ten years ago, 1 in 10 Americans was in some type of managed care plan; today, that number has risen to nearly 9 in 10.(b) Many economists feel that this shift has only temporarily helped to slow cost increases because many cost-cutting opportunities already have been realized and an aging population will increase both the demand for healthcare services and, consequently, costs.

The nation's media also played a role in the "vanishing" of the healthcare crisis. Almost as soon as the Clinton healthcare reform plan failed in Congress, healthcare-related stories disappeared from front pages and TV screens as the media became engrossed in the good news about the economy and other, more titillating, matters. Only now are the media beginning to report an increasing number of "horror" stories about managed care.

Inevitably, healthcare reform has reemerged as a high-profile issue on the political scene, and a flurry of new healthcare bills is circulating around Congress. The differing positions of the major political parties regarding the need for new regulations and government intervention into managed care could play a key role in the outcome of the midterm congressional elections this fall. Many Democrats hope to regain control of the House of Representatives based on just this one issue.

The Republican Party has split over the need for managed care legislation. The GOP leadership does not want to offend its traditional base of business conservatives who are opposed to almost any government intervention. However, increasing numbers of politicians within the party ranks worry that this issue may cost the party clearly in the coming elections if they do not support the popular public sentiment that managed care needs to be controlled. Indeed, one very visible battle within the party is being fought over the controversial Patient Access to Responsible Care Act (PARCA). The bill, cosponsored by more than 80 congressional Republicans, is being criticized by GOP leadership and traditional Republican supporters as being "even more liberal" than the bills proposed by the Democrats.