Tuesday, March 23, 2010

(No.85) U.S. health care reform: how big is the victory?

The midnight vote on Sunday March 21 in the U.S. House of Representatives passed (219 to 212) the Democrats' health care bill. It has been greeted by many of its supporters as an "historic" victory, as the most important American social legislation since the medicare and civil rights legislation of the 1960s.

Is the passage of this bill really a fundamental change to the U.S. health care system, the sort about which I wondered in an article for the Toronto Star (" A puzzled Canadian ponders surreal U.S. health care debate", Sept.9/09)? The answer is yes -- and no.

The legislation, which goes back to the Senate for a reconciliation vote, represents a hard fought and much needed political victory for not only the majority Democrats in both houses of Congress but also for President Obama. Failure would have blighted the Democratic election prospects in Nov. this year (and may still cost them their majority in the House) and would certainly have dealt a body blow to the President's ability to get major legislation through Congress during the remainder of his term.

As for 'historic' change to the very expensive U.S. health care system, one which it must be admitted serves the majority of Americans well but a substantial minority poorly. The biggest change brought in by the bill is to extend health insurance coverage within a few years through a system of subsidy and mandating to 31 million of the more than 45 million Americans who have no health insurance.

Many American advocates of a Canadian-style single payer health system and many more who supported a modest 'public option' proposal regard the bill as a failure while others (like single payer proponent Democratic Representative Dennis Kucinich) see it as better than nothing, indeed as a step which will keep alive the political battle for true health care reform, preserving a platform and an opportunity to push for further changes which either received no political hearing at all (a single payer system) or were dropped (the public option) in order to round up enough votes to pass something that could be seen as a positive change -- no matter how far short it fell.

There are indeed positive changes in the bill as passed. For example: it will eventually prohibit or restrict anti-patient actions available to insurers involving such things as caps on claims, denial of coverage, termination of coverage and use of pre-existing conditions as the reason for all sorts of 'no' responses. Moreover for individual policies and for small groups the law requires companies to pay out in claims 80% of premiums (an industry ratio now ca. 60%).

However I among others would argue that the bill will bring about something that falls far short of fundamental health care reform. Moreover many of the bill's changes will not be effective for a number of years: until 2014 or 2018 or 2020. Nor, it must be admitted, will the real cost of continuing to keep health insurance the monopoly of insurance companies be capable of being accurately assessed for some time.

The world-leading high cost of the U.S. health care system -- currently 17.3% of GDP -- will continue and one of the reasons for this will be the continuing administrative cost burden and inefficiencies of leaving health coverage exclusively in the hands of private insurance companies. This alone will preclude bringing American health care costs down to a level comparable to other western countries.

The modest "public option" proposal for making government-provided health insurance available (for those under age 65) in order to provide Americans with an alternative to insurance companies as the sole providers of health insurance was a particular lightning rod for opposition lobbying. It was dropped in order to get 'reform' through a thoroughly polarized political process. A victory for anti-reform interests.

One safe bet among many is that health insurance premiums paid by business and by individuals will continue to rise significantly. The tax on employer-provided 'Cadillac' health insurance coverage does not even start until 2018. Nor does the health care reform bill take any substantive action to address a very serious problem in every developed country including Canada: the steady annual increases in the rise of the country's overall health care costs.

The opponents of health care reform legislation before and after its passage in the House also characterize it as a major change for America. The Republicans (not one representative voted for the bill), the Fox News talking heads, the Tea Party protesters and others of that ilk also see the passage of the bill as historic but with a different slant -- as socialism, as a government takeover of U.S. health care (but without squaring the circle by explaining how this direction differs from Medicare and Medicaid), as a major blow to the freedom of Americans, etc etc.

This is consistent with the propaganda from this crowd during the health care debate of the past 13+ months. The opponents of health care reform in the U.S. have been quite successful in raising public concern about reform of the system. Fine, they are entitled to express their opinions, however far they may be separated from reality. What they are not entitled to is their own set of 'the facts' with which to misinform and mislead Americans.

However flawed and incomplete this health reform legislation may be it was passed after long and bitter debate because of a multitude of real facts, many of which reform's opponents consistently failed to engage. Of all of them, and the analysis will doubtless fill books in the years to come, the bill addressed a central core challenge of the U.S. health care system: a key to a country's ability to achieve superior health care results for its people as a whole is their actual access to care.

This is not merely a principle of intelligent health care systems it is directly relevant to the current indices of the lack of success of the U.S. system for so many of its people: among Americans age 55-64 the lack of health insurance is the third leading cause of death (after heart disease and cancer). In general uninsured Americans are significantly more likely to die prematurely than insured people. The estimates of the number of Americans who die each year as the result of not having health insurance (i.e., of not having non-emergency room access to the health care system) range from 20,000 to 45,000.

The truth therefore is this: the strongest argument for the health care reform bill's passage being historic lies in the fact that, before it became law, the non-partisan U.S. Congressional Budget Office projected that by 2019 there would be 54 million uninsured.

[Previous columns on RickardsRead.com on the subject of U.S. health care reform include column Nos. 51, 55 & 65.]

Alastair Rickard

RickardsRead.com

email: Alastair.Rickard@sympatico.ca