Healthcare Reform

In an April article, Jonathan Chait attempted to explain "Why the Democrats can't govern." This week, Jonathan Cohn focused on the same concern by asking the question, "Do the Dems have what it takes?"   Based on the results of several recent surveys showing a slow erosion in President Barack Obama's overall approval ratings and a more precipitous decline in his handling of specific issue areas such as the economy, the answer to this question seems far from certain.

Right now, the major inside-the-Beltway test case for measuring the success of the Obama administration and the Democrats is passage of comprehensive health care reform legislation in this session of Congress, preferably before midterm recess in August. According to E. J. Dionne, the key to doing this is for President Obama "to convince his fellow Democrats that they're in the majority." Dionne's focus is entirely on congressional Democrats, especially that wing of the party variously known as moderates, conservatives, or, in the words of Washington Post columnist, Harold Meyerson, the "can't do" Blue Dogs. But, the Democratic majority extends well beyond Washington and Congress to the American electorate. For the first time in decades, due largely to the emergence of the Millennial Generation (young Americans born 1982-2003), the Democratic Party holds a clear and decisive majority in party identification nationally, one that overwhelmingly favors, even demands, meaningful health care reform.

A mid-July Washington Post-ABC News poll that showed a decline in the president's overall job performance mark and indicated that only a bare plurality approved rather than disapproved of his handling of health care (49% vs. 44%), also found the Democrats with a clear 53% vs. 38% party ID edge over the GOP. This margin is virtually unchanged since the president was inaugurated in January or elected last November, but it is far different from the situation that existed during much of the past three decades. The last time Congress considered comprehensive health care reform in the early 1990s was during an era when neither party had a party identification majority and the margin between the two parties rarely exceeded four or five percentage points.

The current solid Democratic majority within the electorate provides support and, if necessary, political cover for health care reform. In part, this is true because Democrats, especially the young Millennials, who identified as Democrats over Republicans by nearly a 2:1 margin in a June Pew Research Center survey  (56% vs. 30%), are significantly less likely than Republicans and older Americans to even have health insurance. Nearly nine in ten Republican identifiers, but only eight of ten Democrats are now insured. That number falls to less than two in three among Millennials (63%). In stark contrast, 96% of senior citizens (who, of course, already participate in a federal health care program) have health insurance.

Because they are less often insured, and perhaps because whatever insurance coverage they do have may not be as comprehensive, Democrats have greater difficulty meeting and paying for their health care needs than Republicans. As the following table indicates, half of all Democratic identifiers (and non-aligned independents) say they have trouble paying for the cost of a major illness and for health insurance. About four in ten are concerned with having to pay a larger share of employer-provided health insurance and for routine medical care and prescription drugs.

As a result, it's hardly surprising that virtually all Democrats (91%) and 80% of Millennials, but barely half of Republican identifiers (54%) favor "changing the health care system in this country so that all Americans have health insurance that covers all medically necessary care" or that a majority of Democrats (51%) believes that the country is spending "too little" on health care while a plurality of Republicans (46%) believe we are spending "too much." Nor is it hard to understand why few Democrats and Millennials are put off by the possibility of greater federal government health care activity. In a May Pew survey, 69% of Republicans, but only 28% of Democrats and 36% of Millennials, professed concern about the government becoming too involved in health care.

These broad beliefs are reflected in attitudes toward the specific health care reform package now before Congress. The July Washington Post and ABC News survey indicates that a majority of all Americans (54%) favor the legislation. This includes three-quarters of Democrats and six in 10 independents, but fewer than a quarter of Republicans.

In the end, however, in spite of claims by Republicans such as South Carolina's Senator Jim DeMint that congressional failure to pass health care legislation could prove to be Obama's "Waterloo," the matter is really an almost entirely Democratic concern. Throughout the current health care debate commentators have drawn a parallel with the situation that existed in 1993, when a newly elected, personally appealing, young Democratic president--Bill Clinton--last pushed for comprehensive health care reform. From the Democratic perspective, the outcome nearly two decades ago was disastrous. In spite of having majorities in Congress similar to the current Democratic majorities, the effort to remake America's health care system foundered and died. A year later, the Republican Party, led by Newt Gingrich, took control of the both the Senate and House, a majority status it did not relinquish until 2006. Many of the Democratic Senators and Representatives who resisted health care reform in 1993 were defeated in 1994 and, as Nate Silver points out, only a handful ever returned to Congress. But, E.J. Dionne reminds today's congressional Democrats that they "are not living in the Republican congressional eras of 1995 or 2003...they have the strength on their own to win."

 Democrats have that congressional strength because the country has entered a new political era, driven by the emerging civic Millennial Generation, in which the Democratic Party is now clearly the majority party within the American electorate and is in position to retain that majority status for decades to come. Most in that Democratic electoral majority personally need meaningful health care reform and expect Congress to enact it. This is today's new political reality. The next several weeks will tell us whether congressional Democrats will perceive and take advantage of that new reality or look backward to the old realities of the past. The stakes in that decision for the Obama presidency, the Democratic Party, and the nation will be crucial for years to come. We will soon see if congressional Democrats have the ability and courage to choose wisely and perceptively.

Beijing, China -- As the health care debate in Washington begins in earnest, a quick trip around the world over the last week has given me a fresh perspective.  My first stop was Sweden, to deliver a talk on the America's economic prospects, post-financial crisis.  But, first I found I had to see a doctor for a mild, recurrent eye infection, and I experienced first-hand some of the advantages and drawbacks of one of the world's best national health care systems.  I saw a physician who prescribed antibiotic drops within an hour - try to do that in America -- and the visit and the prescription together cost me less than $50.  (It would have cost a Swede nothing but taxes).   It also turns out that the medication was one developed years ago - one reason it was so inexpensive - and which takes about 10 days to clear up the problem instead of five to six days using the more advanced drops I would have received at home, at a much higher cost..  It was a small example of how national health care can trade-off technological advance for universal access - thankfully in this instance with no difference in the outcome. 

My next stop was Ulan Batar, the capital of Mongolia, to give government officials advice on economic development.  It's one of the world's poorest countries, yet the government has set up networks of clinics around the country to reach not only those in the cities, but also the other half of the population, many semi-nomadic peoples, who live in the vast countryside.  (It's a place with 2.6 million people spread across an area three times the size of Texas.).  Again, access is near-universal with much of the cost coming from taxes - business pays them there.  And while the quality of care is basic and often spotty, so is the quality of everything else in Mongolia.  It was a small example of how a society with very little of anything chooses to devote enough of its small resources to provide most of its people much of the health care they need. 

I'm writing now from the sparkling, cavernous airport in Beijing, waiting for my flight back to Washington.  Here, the government used to deliver basic care to everyone through agricultural communes and state-owned enterprises.  When the leadership decided to unravel those institutions in favor of market-based enterprises, they also unraveled the old health care guarantees, so they could channel the resources into economic development.   About 20 percent of Chinese today have coverage - essentially, those working for the central government, the People's Army, and foreign-owned companies (they're the only ones required to insure their workers).  The rest of China lives with a system they call "pay or die" -- if you're sick or injured and can't pay on the spot, you simply don't get treated.  The result is a 30 to 40 percent personal saving rate - ironically, one of the underlying factors that created the conditions for our financial meltdown - by people terrified of getting sick or having an accident.  And international health experts estimate that literally millions of Chinese die from conditions which can be treated easily.  It's the world's biggest example of how the tradeoff between providing universal care and spurring economic growth can leave most people profoundly vulnerable.

No one imagines the United States will ever find itself in China's position, although a small share of Americans do so regularly.  But the three examples can provide lessons for us.  From China, we can learn about the pitfalls of unraveling the way we currently deliver medical insurance to most people, through the tax preferences for employer provided coverage provision.  Unravel that without making provision for government-guaranteed coverage, and millions of us in the world's richest society will find ourselves profoundly vulnerable. From Sweden, we can learn that the cost pressures associated with an efficient, universal system inevitably produce less access to the most technologically advanced and expensive treatments, although it may not make much of a difference for most people.  Of course, that also means it will make some difference in the health of some people - although certainly less of a difference than whether or not they smoke, drink or exercise.  And from Mongolia, can't we learn that we can establish universal coverage tomorrow, if we choose to?  We'll just have to pay for it - and the bill will be a whopper as medical advances grow even more expensive and tens of millions of baby boomers reach the age when the most costly-to-treat conditions become most prevalent.  Yes, alongside the cost-saving reforms and efficiencies from phalanxes of experts, there will also have to be higher taxes.   But if the choice is, your money or your health, what choice is there?

Can our economy get healthy if we don't reign in skyrocketing healthcare costs? That's a question President Barack Obama talked about in his weekly radio and Internet address ("Health Care Reform as the Key to Our Fiscal Future") and an issue NDN's Dr. Rob Shapiro wrote about in a May 14 essay.

With skeptical Republicans -- and some Democrats in Congress faced with a presidential deadline of October to send a bill to the White House, the healthcare debate -- Obama's top domestic priority -- is front and center.

In his address, Obama detailed savings he would make in Medicare payments, reigning in the costs of prescription drugs, among other changes, and said the current path of massive spending on U.S. health care is untenable:

When it comes to the cost of health care, this much is clear: the status quo is unsustainable for families, businesses, and government. America spends nearly 50 percent more per person on health care than any other country. Health care premiums have doubled over the last decade, deductibles and out-of-pocket costs have skyrocketed, and many with preexisting conditions are denied coverage. More and more, Americans are being priced out of the care they need.

These costs are also hurting business, as some big businesses are at a competitive disadvantage with their foreign counterparts, and some small businesses are forced to cut benefits, drop coverage, or even lay off workers. Meanwhile, Medicare and Medicaid pose one of the greatest threats to our federal deficit, and could leave our children with a mountain of debt that they cannot pay.

We cannot continue down this path. I do not accept a future where Americans forego health care because they can’t pay for it, and more and more families go without coverage at all. And I don’t accept a future where American business is hurt and our government goes broke. We have a responsibility to act, and to act now. That is why I’m working with Congress to pass reform that lowers costs, improves quality and coverage, and protects consumer health care choices.

I know some question whether we can afford to act this year. But the unmistakable truth is that it would be irresponsible to not act. We can’t keep shifting a growing burden to future generations. With each passing year, health care costs consume a larger share of our nation’s spending, and contribute to yawning deficits that we cannot control. So let me be clear: health care reform is not part of the problem when it comes to our fiscal future, it is a fundamental part of the solution.

In his essay, Shapiro had this to say about healthcare costs and our economy:

Most important, any realistic prospect for financing universal coverage depends on getting those costs under control. Otherwise, President Obama will likely find his Administration caught in the same vise that has immobilized health-care reformers for two decades, pressed between the social imperative to cover everyone and understandable resistance to paying for it from the majority of voters who are already covered. On the current path of medical cost increases, the taxpayers’ tab to pay for universal coverage would rise by five to seven percent every year, with damaging effects for other programs that the President would have to pare back to protect the new achievement.

Then comes the sticky matter of actually slowing down those increases. Earlier this week, the White House presented a roster of medical and insurance organizations who pledged together to support $2 trillion in cost reductions over the next decade. The main strategy is to attack “overuse and underuse” of health care. But it doesn’t include many details about how to do it. The administration’s program to computerize health care records over the next five years makes sense here, to help avoid wasteful or needlessly dangerous treatments. The hurdles will be very high, however, to actually putting in place a workable system covering tens of thousands of hospitals, clinics and doctors’ practices across the country.

The stimulus also includes $1 billion for prevention and wellness programs to improve diets, encourage exercise, reduce smoking and drinking, and detect cancers and other conditions early. Various studies have shown that some community-based intervention programs in these areas achieve very high returns, especially those aimed at young people. An analysis of several community-based programs to promote physical exercise, better nutrition and stop smoking, for example, found long-term reductions in diabetes, high blood pressure, heart and kidney disease, with a financial payoff of $5.60 in savings for every $1 invested. Large, long-term savings also were reported in a Michigan program that provides continuing education to prevent, recognize and treat athletic injuries, as well as a number of local programs that counsel low-income, first-time mothers on how best to care for their infants. But there also are many other programs that save little or nothing; and it could prove very difficult for Washington to identify and responsibly scale up those that work best.

The other large, promising approach, touted for several years by this writer and, of late, by OMB Director Peter Orszag, involves developing and applying data about what medical treatments work best, or work as well at less cost. The Dartmouth Atlas study of 2008, for example, found that the costs of treating older people for nine serious conditions, with the same outcomes in each group across five leading medical centers, varied by 30 percent to 45 percent based on where it was done. We could develop much more information in this area, identify those “best practices,” and mandate their use by health care facilities that accept federal money (which is almost all of them).

So the Administration’s health care focus, goals and priorities are right in the ways that matter. Now they need to provide a more detailed blueprint of how they intend to reach those goals and achieve those priorities.

Today, Obama laid out part of the blueprint Shapiro says is necessary. Watch the address below: