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A Flexible Approach to Health Care Reform

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Former Congressman Bill Gradison, former president of the Health Insurance Association of America

Before attempting to improve health care, one must first understand the policy process and recognize that government decision-making plays a major role in shaping the context in which the private health care sector operates. About half of health care financing in the United States comes from government, and health care is highly regulated. Health care policymaking in recent years has been greatly influenced by budgetary considerations and by resistance to all but incremental changes. Looking at how policy decisions are actually made may help in understanding and influencing future events.

Budget Policy, Not Health Policy
Longer-term health care policy is seldom considered in the Congress; budget policy dominates action on health legislation most of the time. No wonder that what action is taken is incremental and opportunistic—that is, barring an unusual action-forcing event such as fear of a flu pandemic. Significant changes occur only on those rare occasions when there's money on the table. Compounding the problem, there is no single "health" committee in the House or the Senate or, to be more exact, there are multiple committees and subcommittees with divided and sometimes overlapping—read competing—jurisdiction.

Another complicating factor is that health care is a multifaceted issue. It is: coverage, cost, quality, AIDS, stem cell research, Medicare prescription drugs, patient protection, medical liability, tort reform, association health plans, consumer-driven health plans, mandated benefits (especially mental health parity), and National Institutes of Health funding. Governmental action on one or two of these items won't satisfy those with other health care needs. If your main concern is the cost of your own health insurance, for example, congressional action that affects other people's coverage may not seem very responsive.

One should not assume that the next time large amounts of money become available for health care, the funds will necessarily go toward those most in need. When money became available, with surpluses projected as far as the eye could see, it was used to improve Medicare benefits rather than assist the 40+ million Americans who have no coverage at all.

Finally, Congress tends to be a crisis-activated institution. As regards the health uninsured, there has been no point of time when the alarms sounded—no action-forcing event.

Outlining the Obstacles
Where do we go from here, especially with the issue of the uninsured? When looking for governmental action, recall Gradison's rule: health care legislation will not be decided by speeches and political advertising, but by Americans over the kitchen table as they discuss how any specific health plan will affect their family.

There are overarching realities in the political and economic environment, which suggest to me that there are even fewer prospects for meaningful, comprehensive action than in the recent past. I think it's getting harder to get people to agree to a larger governmental role in the health care system, as important as health care is to their families. Over the years, the competence of the government to run much of anything has been questioned from the left, the right and the middle. The wars in Iraq and Vietnam, the failings of FEMA, the weaknesses of public education, the unfairness of the tax system, and the lack of confidence in the security of personal medical records are examples.

While my comments may appear to be more about the political process than health policy or budget policy, here's how I sum up my current thinking.
  1. Unresolved and probably unresolvable philosophic differences that transcend partisan labels make it unlikely that comprehensive health reform will be achieved anytime soon.
  2. Our politics and civil discourse are increasingly polarized, and some of the issues at the heart of this polarization are health care issues—abortion, cloning, stem cell research, to name a few. In other words, health care controversies may be as much a cause of polarization as an effect.
  3. Our fiscal house is not in very good order. The new Medicare prescription drug program would be most unlikely to be enacted in today's environment of huge deficits. Since there is a demonstrated reluctance to eliminate programs or increase taxes, new initiatives take a back seat to continued funding of existing activities.
  4. The notion that we can make health care so much more efficient that universal coverage can be financed without increasing outlays is a non-starter, in part, because stakeholders use the political process to protect their incomes, avoid price competition, and resist unfavorable regulation.
  5. Bold ideas are discouraged. Laying out a long-term goal and advocating incremental steps toward that goal create such a push back from those who favor the status quo that even modest first steps are hard to accomplish.

Am I discouraged? Not really. I've come to believe that we never solve human problems. At best we can only deal with them. And in health care this may be accomplished in unremarkable ways—through actions at the state and local levels, through expansion of community health centers, public health initiatives to discourage smoking and obesity, and by continuing to finance uncompensated care with hidden subsidies (so-called cost shifting), rather than direct, transparent payment schemes.

Achieving Compromise
There may be a reward in heaven, but legislators focusing on health care in recent years have found it mostly an exercise in controversy and frustration without much to show for their efforts.

For those who are not satisfied with the status quo—and I certainly am not—my advice is to build when we can on what's there and try not to be doctrinaire about solutions. If those who favor expansion of public programs dig in their heels and those who favor private-sector solutions do the same, nothing will be achieved other than a political standoff. Yet, gridlock has been the hallmark of the health care debate for too long. Senator Everett Dirksen of Illinois once said, "I am a man of principle—and my first principle is flexibility." He could easily have been talking about how we should approach health care.

Mr. Gradison was a member of Congress for 18 years, during which time the Ohio Republican was the ranking member of the House Budget Committee and the Health Subcommittee of the Committee on Ways and Means. He later served for six years as president of the Health Insurance Association of America.

The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff, or the Public Company Accounting Oversight Board, where Mr. Gradison serves as a board member.

Publication Details



B. Gradison, A Flexible Approach to Health Care Reform, The Commonwealth Fund, March 2006