In 1993, two unlikely public policy leaders took to the airwaves and in less than one minute helped to scuttle a health care reform bill that had been at the center of national debate. Broadcasting from their kitchen table, “Harry and Louise” leafed warily through a stack of documents representing the Clinton administration’s universal health care proposal, commenting on its lack of individual choice and seemingly endless bureaucratic complications. “They choose, we lose,” the two concluded.
Sponsored by the Health Insurance Association of America (HIAA), the Harry and Louise ads became a landmark in television advertising for their effectiveness. They also capture what will undoubtedly be one of deciding factors in the re-emerging debate on health care reform in the U.S.: public opinion, or what Arnold J. Rosoff, Wharton professor of legal studies and business ethics, calls “national character or will.”
In an ongoing study of health care systems spanning five countries — Argentina, France, Italy, Japan and Singapore — Rosoff has identified a set of factors that, in one combination or another, come into play when a country commits to adopting universal health care. In addition to national character — which, in the U.S., includes fear of “big” government impinging on personal choice — the list includes economic strength, history, demographics, politics and provider infrastructure. At a recent talk, Rosoff noted that his intentions are not to distill a short-list of conditions that lead to adoption; if anything, his research has indicated that each country has its own idiosyncratic elements that make adoption possible. Rather, he wants to use his observations about these countries as a mirror for understanding why the U.S. has repeatedly failed to commit to universal health care, when nearly all developed nations have already done so.
Sheer economic factors beg that question as well. “More than enough ink has been spilled on the debate itself,” Rosoff notes, citing several statistics that indicate reform of some kind is imminent. Presently, some 46 million Americans either have no health coverage or inadequate coverage. Even for those who do have coverage, the news is not so great. The U.S. spends roughly 15% of its GDP on health care, whereas the world average is 7% to 8%. According to the journal Health Affairs, the U.S. figure will rise to 19.6% by 2016. For every dollar spent on private health insurance, 30% to 40% goes toward administration costs and investment return to shareholders. Rosoff compares that with Medicare — the publicly funded health care program offering coverage to the disabled and elderly — for which an estimated 97% of each dollar is put toward actual health care. Moreover, along with the rest of the world, the U.S. population is aging and living longer, which will only increase the burden on an already foundering system.
The issue of universal health care has been in the public eye many times before, but Rosoff’s current research is particularly timely: Several of the Democratic candidates vying for the 2008 U.S. presidential nomination have taken a stance on health care reform — including, of course, Senator Hillary Clinton. “Although we don’t know yet who the presidential candidates will be, it’s a certainty that health care reform will be a major policy issue in the campaign,” he says, adding that recent polls indicate the U.S. public may be open to a universal health care system. In another measure of public sentiment, Sicko — the new film by Michael Moore showcasing the inadequacies of U.S. health care coverage (in comparison to countries like France and Cuba) — debuted to cheering crowds at the Cannes film festival earlier this year and has received glowing reviews so far in the U.S. prior to its June 29 nationwide release.
Italy, France and Singapore
When Bill Clinton won the presidency in 1992, the timing also seemed right for universal health care, Rosoff notes. Two years earlier, Democrat Harris Wofford attracted national attention by winning the Pennsylvania Senate race on a platform that included health care reform. National polls indicated that U.S. citizens believed changing the health care system was nearly as important an issue as reducing the national debt. Clinton placed health care at the center of his campaign, and the country responded. In January 1993, he announced the formation of the President’s Task Force on National Health Reform and appointed First Lady Hillary Rodham Clinton as its head.
According to Rosoff, while the factors he cited in his five-country research tend to overlap, “in a broad sense it all comes down to politics. You have to identify who the stakeholders are and what they are willing to trade off.” In the case of the U.S., the stakeholders in the early 1990s included not only the voting public but the “entire medical-industrial complex”– doctors, hospitals and insurance providers, all of which were deeply entrenched in a rigid payment system that had developed over generations. Most employers, although they were laboring under the burden of rising health care costs for employees and their families, still largely took it as a given that health care should remain an employer responsibility, one that they took on voluntarily and not because of a government mandate. They viewed their own corporate health care plans as tools to recruit and retain valued employees and were therefore heavily invested in the current system.
The Clinton proposal included guaranteed coverage for all employees, financed through payroll taxes and provided by highly regulated, non-profit HMOs. Anyone not employed would receive a government subsidy for HMO enrollment. Not surprisingly, insurers voiced the loudest opposition to the Clinton plan. The HIAA mounted its own $30 million campaign promoting alternatives to the proposal, and in September 1993 it introduced Harry and Louise to the American public. But Harry and Louise didn’t arrive in a vacuum: The National Federation of Independent Businesses had begun lobbying vigorously to eliminate the Clinton plan’s “employer mandate” requiring all businesses to provide insurance for employees. Meanwhile, on Capitol Hill, conservative operatives aimed to kill the plan without amendment because of its potential to galvanize future voter support for the Democratic Party.
The magnitude of public debate surrounding the plan — nearly $100 million was spent by interest groups between 1993 and 1994, according to a paper published by the Penn National Commission on Society, Culture and Community — points up elements of national character not found in the countries Rosoff studied. In the U.S., he notes, there is an emphasis on individualism and a “unique distrust of government” that can be traced back to the nation’s founding by people escaping persecution. Countries like Italy and France, however — whose health care systems are among the best in the world, according to the World Health Organization — are more “consolidated” in terms of national identity and have a strong history of public services.
In Singapore, which is about 100 times smaller than the U.S., the strong universal health care system “embodies the latest thought in health plan design, including … innovations that emphasize individual responsibility and cost containment incentives,” Rosoff says. “The key question is whether, in terms of ethnicity or culture, the people feel they are ‘one.'” Singapore’s solidarity (more than three-quarters of its population is of Chinese descent), its highly effective governmental system (a hold-over from British colonial rule), the strength of its economy and the low age of its population all contribute to the success of its health care system, he notes.
Several elements of the Clinton plan played on the public’s distrust. First and foremost, Clinton had appointed his wife — an unelected official — to oversee an issue of national importance. The task force the Clintons convened to manage the health care project operated in relative secrecy — at least, that was the perception of key stakeholders. And finally, when the public debate became unwieldy, the Clinton administration was not forthcoming on even the most important specifics of the plan, believing that the public was growing wary of the potential complications brought by change. The Health Security Act proposal, when finally unveiled, was a whopping 1,364 page tome, which magnified fears of “big government.” According to the Penn National Commission report, senators and congressmen responded by introducing a total of 27 alternative reform plans, which the media referred to by 110 different names.
Rosoff notes that in countries like France, where the political system includes strong executive power, public debate is less of a factor. In a sense, the democratic nature of the political process in the U.S. is a major impediment to the launching of major reforms. “It takes a lot of hot air to blow up a balloon,” he says, referring to the Clinton plan and to future health care reform initiatives, “but only one small pin prick to deflate it.”
What’s Different Now?
If health care reform could not be achieved in the mid-1990s, are the prospects any better now? Although one might argue that politics and national character have largely stayed the same since the Clinton era, the economic factors have surely gotten worse. Although the spread of “managed care” in the 1980s and into the 1990s sought to rein in health care expenses, that measure has largely failed, Rosoff says, and garnered no fans in the process. The public, employers and the provider community are increasingly disillusioned by rising costs and increasingly complex plans. Employers, especially, are at a tipping point, and that might make a difference this time around. “As the cost of insurance rises, employers are shifting the increase to employees, and employees are getting angry. Employers believe they are doing their best, but now they’re earning the enmity and disrespect of employees. Insurance plans are no longer a recruitment tool — they are a liability. Although employers are generally reluctant to cede power to government, they might be willing at this juncture to put the monkey on someone else’s back.”
Rosoff notes some additional conditions his five-country study has revealed about universal health care adoption. Often, adoption follows a period of economic strength. This was not the case for France and Italy, which implemented their universal health care programs following the devastation of World War II, but they had the right mix of nationalism and a socialist outlook to counterbalance that, he says. Universal health care often requires a strong thought leader at the center of debate, he adds, citing Argentina’s Juan and Eva Peron, and England’s Lord Beveridge, an economist and social reformer who was a compelling advocate for the expansion of social services. (In his current research, Rosoff chose not to focus on England or Canada because there is already a wealth of information available about the evolution of their health care systems.) With candidates still staking out their positions for the 2008 presidential election, it’s unclear who might emerge as the champion for health care reform in the U.S.
The health care landscape is changing, too, with the recent introduction of a universal health care plan in Massachusetts and a highly publicized debate on the subject in California. If health care reform does come in the U.S., it might be through a series of state-based initiatives, Rosoff says. As in other legal reforms, the states might serve as “experimental labs” for trying out innovative health care approaches. He is careful to note, however, that each state has its own complex factors that might facilitate universal health care or kill it. “Massachusetts is not an easy model to replicate; it’s a state with adequate resources and a liberal outlook. A plan that works in Massachusetts wouldn’t necessarily play in Kansas.” Still, the fact that key states are moving in the direction of universal health care shows that there is substantial support for the ideal of reform — and that will likely affect national as well as state-level politics.
Don’t Knock Complexity
Although people who hear of Rosoff’s research often ask which of the health care systems he’s studied would work best in the U.S., he deflects that question and declines — for the present, at least — to offer his prescription for achieving universal health care coverage. None of the countries he has studied perfectly matches the conditions in the United States (or each other, for that matter), so trying to superimpose one country’s health care system on another country is not the answer. “We have a very complicated health care delivery and payment system that has evolved over a long period of time. There are a lot of powerful vested interests, so change won’t come easy. And those who insist on simplicity will be frustrated; you can’t solve a complex problem with a simple solution.” The Japanese health care system, he notes, functions well in part because attention to detail — such as precision and fairness in the distribution of funds — is inherent in the national character. “The devil is in the details,” he says.
Despite his reluctance to be pinned down to specific predictions, Rosoff is willing to commit on one point: If health care reform is in our near future, it won’t come as a “revolution,” he says. Incremental change is far more likely. “It’s probably the only way to get there from here. Given our history, politics and national character, sweeping health care reform would be too big a pill to swallow. But change in some form certainly seems inevitable; there’s just too much dissatisfaction with the current situation.” Try as they might, Harry and Louise — or their current counterparts — won’t be able to hold on to the status quo indefinitely.