US health reform by Himmelstein and Woolhandler

New York Times - December 15, 2007
The attempts by US states to attempt to find some alternative to a truly universal system has not had very positive results and has still left many uninsured.
The stranglehold that private insurers have on the system prevents any radical reforms.

I Am Not a Health Reform
By DAVID U. HIMMELSTEIN and STEFFIE WOOLHANDLER

Cambridge, Mass.

IN 1971, President Nixon sought to forestall single-payer national
health insurance by proposing an alternative. He wanted to combine a
mandate, which would require that employers cover their workers, with
a Medicaid-like program for poor families, which all Americans would
be able to join by paying sliding-scale premiums based on their income.

Nixon's plan, though never passed, refuses to stay dead. Now Hillary
Clinton, John Edwards and Barack Obama all propose Nixon-like
reforms. Their plans resemble measures that were passed and then
failed in several states over the past two decades.

In 1988, Massachusetts became the first state to pass a version of
Nixon's employer mandate — and it added an individual mandate for
students and the self-employed, much as Mrs. Clinton and Mr. Edwards
(but not Mr. Obama) would do today. Michael Dukakis, then the state's
governor, announced that "Massachusetts will be the first state in
the country to enact universal health insurance." But the mandate was
never fully put into effect. In 1988, 494,000 people were uninsured
in Massachusetts. The number had increased to 657,000 by 2006.

Oregon, in 1989, combined an employer mandate with an expansion of
Medicaid and the rationing of expensive care. When the federal
government granted the waivers needed to carry out the program, Gov.
Barbara Roberts said, "Today our dreams of providing effective and
affordable health care to all Oregonians have come true." The number
of uninsured Oregonians did not budge.

In 1992 and '93, similar bills passed in Minnesota, Tennessee and
Vermont. Minnesota's plan called for universal coverage by July 1,
1997. Instead, by then the number of uninsured people in the state
had increased by 88,000.

Tennessee's Democratic governor, Ned McWherter, declared that
"Tennessee will cover at least 95 percent of its citizens." Yet the
number of uninsured Tennesseans dipped for only two years before
rising higher than ever.

Vermont's plan, passed under Gov. Howard Dean, called for universal
health care by 1995. But the number of uninsured people in the state
has grown modestly since then.

The State of Washington's 1993 law included the major planks of
recent Nixon-like plans: an employer mandate, an individual mandate
for the self-employed and expanded public coverage for the poor. Over
the next six years, the number of uninsured people in the state rose
about 35 percent, from 661,000 to 898,000.

As governor, Mitt Romney tweaked the Nixon formula in 2006 when he
helped devise a second round of Massachusetts health care reform:
employers in the state that do not offer health coverage face only
paltry fines, but fines on uninsured individuals will escalate to
about $2,000 in 2008. On signing the bill, Mr. Romney declared,
"Every uninsured citizen in Massachusetts will soon have affordable
health insurance." Yet even under threat of fines, only 7 percent of
the 244,000 uninsured people in the state who are required to buy
unsubsidized coverage had signed up by Dec. 1. Few can afford the sky-
high premiums.

Each of these reform efforts promised cost savings, but none included
real cost controls. As the cost of health care soared, legislators
backed off from enforcing the mandates or from financing new coverage
for the poor. Just last month, Massachusetts projected that its costs
for subsidized coverage may run $147 million over budget.

The "mandate model" for reform rests on impeccable political logic:
avoid challenging insurance firms' stranglehold on health care. But
it is economic nonsense. The reliance on private insurers makes
universal coverage unaffordable.

With the exception of Dennis Kucinich, the Democratic presidential
hopefuls sidestep an inconvenient truth: only a single-payer system
of national health care can save what we estimate is the $350 billion
wasted annually on medical bureaucracy and redirect those funds to
expanded coverage. Mrs. Clinton, Mr. Edwards and Mr. Obama tout cost
savings through computerization and improved care management, but
Congressional Budget Office studies have found no evidence for these
claims.

In 1971, New Brunswick became the last Canadian province to institute
that nation's single-payer plan. Back then, the relative merits of
single-payer versus Nixon's mandate were debatable. Almost four
decades later, the debate should be over. How sad that the leading
Democrats are still kicking around Nixon's discredited ideas for
health reform.

David U. Himmelstein and Steffie Woolhandler are professors of
medicine at Harvard and the co-founders of Physicians for a National
Health Program.


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