As this is being written in December, there is every indication that health care will be more of a political issue in the 2008 elections than it has been since 1992. This is too early for anything but generalizations, but it will be difficult and unfortunate if the new president fails to recognize that a decade and a half of no federal initiatives, with the single exception of pharmaceutical payments, has left problems that will only get worse without drastic action.
Look at some of the incentives to take action. A recent estimate pegged the number of Americans with no health care insurance at 47 million and rising. Last fall, the first baby-boomer filed for Social Security and Medicare, soon to be followed by millions of others. At least $1 in $6 of our gross domestic product is now spent on health care, with that number regaining a double-digit annual increase. A linear projection suggests that by the end of this century, we could spend 100% of our national income on health care. Recent surveys contradict the assumption of a decade ago that the nation would have too many doctors and now predict a shortage in the near future.
Politically, health care is poised on the cusp of the argument about the role of the federal government in shaping the future of the population and the national economy. Medicare was conceived as a public program eligible for anyone at age 65 and Medicaid as a federal-state program for the “medically indigent.” Both programs were financed by public funds and implemented by private health insurers and the existing melange of private practicing physicians, hospitals, and other health providers. Thus far, no US politician has proposed a single-payer system with the federal government as the payer and the employer of everyone in health care disciplines.
As enacted in 1965, Medicare was an incredible demand mechanism that spurred an increase in national health spending from $49 billion in 1964 to $1.6 trillion or so last year. Some of that increase should be attributed to the growth in the US population. Some can be credited to advances in medical technology, which have contributed wonderfully to the increased life span of most Americans. And some of it should be blamed on the proliferation of health care insurance programs for most of the rest of the population, which make possible their utilization of high-technology medicine. Malpractice litigation certainly contributes to utilization of medically marginal diagnostic services.
A few years after Medicare began, politicians and private insurers realized a need to restrain health care spending. Regulatory approaches, such as health planning requirements and freezes in payment, had little effect. In 1981, President Ronald Reagan rejected the regulatory approach. He proclaimed health care to be a business rather than a public utility and thus subject to the imperatives of the marketplace. The proliferation of managed care schemes as profit-based business ventures was intended to trim waste and restrain growth by application of management principles. To some extent, that approach worked in the operation of hospitals. But it missed the mark as a change mechanism for medical practice.
A campaign promise that helped Bill Clinton capture the presidency in 1992 was to reform health care spending. The proposal was crafted by working groups led by his wife, Hillary. It called for most Americans to be funneled into private managed care plans, with a new federal bureaucracy created to regulate the plans. Collectively, health insurers and managed care organizations decided that the added number of individuals pushed into their schemes was not enough to offset the restraints of federal regulation. Their highly effective lobbying campaign killed the plan.