No. 19: Great Expectations: The Obama Administration and Health Care Reform, and Medicaid and the U.S. Path to National Health Insurance

July 2009

Background

Much is being said about U.S. health care reform, with this year’s election of President Barack Obama. Similar momentum occurred after the election of the last U.S. Democratic President, when the Clinton administration assumed power and focused on reforms in 1993 and 1994. Despite substantial efforts by that White House and First Lady, fundamental change did not occur. Some believe that this was the result of both the power of the private sector and the concomitant failure by the Clintons’ health policy team to capture the hearts and minds of Americans. This month’s e-Round précis the perspectives of two health policy scholars, Dr. Oberlander from the University of North Carolina, Chapel Hill, and Dr. Sparer from Mailman School of Public Health, Columbia University, New York. These articles are reviewed both for interest and because of the belief that U.S. health reform will have a demonstrable impact on Canada’s health care system or, at the very least, our perspectives on insurance coverage and private funding for health care.

Précis of Overlander

President Obama supports universal coverage and some think that the prospects for this have never been more favorable.  There are, however, daunting and opposing political and ideological barriers, and the policy agenda for Obama’s administration is replete with competing priorities, each of a profound and serious nature. Nearly everyone believes the U.S. system “is broken (but) there is no consensus on how to fix it.” Added to this is the reality that health reform impacts health care incomes and, hence, generates major opposition. The costs of reform will need to be absorbed in the face of an already crushing deficit and unprecedented debt. To deal with this, some argue that reform may have to be a series of incremental steps rather than a wholesale, system-wide and sweeping change. Others support a complete severance between employment and insurance. Reform will confront the reality of growing unemployment and, therefore, growth in the uninsured and anxiety by middle-Americans fearful of jobs, medical bills, and health care coverage. These factors may fuel the Obama agenda, particularly if one adds the industry competitiveness argument to the mix and the potential that the recession could weaken the barriers to progress.

Obama appears to be incorporating lessons learned from 1993/94 Clinton failure, even if there is scarce, if any, evidence that any of these lessons will increase the likelihood of achieving universal coverage: work closely with Congress; preserve current employer-sponsored insurance for those who do not want to change plans; provide tax credits for businesses who support health insurance; move quickly; and, engage the public in the reform process. American health care reform has been the subject of repeated failures spanning decades. Maybe, this time, history will not repeat itself.

Précis of Sparer

The twin objectives of reform in U.S. health care will be to reduce costs and to add a comprehensive and universal insurance system. Dr Sparer argues that one way forward is to expand the current and successful Medicaid – the Federal/State program for the poor. This may work, he asserts, for several reasons: businesses will support anything that relieves pressure on them to cover low wage workers; commercial insurance plans are often used to serve Medicaid beneficiaries; institutions rely on Medicaid dollars; and, Medicaid’s intergovernmental nature supports expansion. Some would say that Medicaid’s sister program – State Children’s Health Insurance Program – has been a successful pilot test. Accordingly, some argue for a combined Medicaid expansion coupled with an “individual mandate” in which Americans who can afford it will be required to buy commercial insurance. The supporters of this Medicaid  plan do not encourage a Medicare expansion because any growth in this system for seniors is seen as a single-payer federal program, fiercely opposed and scorned by the insurance industry.

The pros and cons for Medicaid expansion vary. On the pro side, there is already a Medicaid administrative structure and there is experience with care provision and cost control. State-based experimentation is encouraged by some as a means of responding to local health needs. And, Medicaid is seen by some to be more flexible than Medicare. By contrast, the Medicaid image is that of a welfare program and, worse still, some physicians refuse to treat Medicaid patients because of relatively low reimbursement rates and administrative delays.

Summary

Both of these articles suggest that U.S. health reform deserves the watchful eye of Canada and its physicians. Some in the U.S. support incremental reforms such as those that incorporate elements of the existing employer-based system, or individual mandates that would expand coverage through the purchase of private insurance, or state-based Medicaid expansions. Others support more sweeping reforms, such as an expansion of Medicare’s national program for seniors, or a fundamental transformation toward single-payer insurance that would eliminate the private insurance industry’s costly hold on health care. Whatever changes take place in America will almost certainly have an impact on Canada’s health care system, the nature and direction of which is yet to be revealed. Our medical training is similar to that of U.S. physicians, we read the same evidence, publish in the same journals, collaborate regularly and, though our systems are different, we share a great deal in common. Accordingly, to believe U.S. health reform will not somehow have an impact on Canada and its physicians is, at best, naïve.

Health Care 2009: Great Expectations – The Obama Administration and Health Care Reform. Jonathan Oberlander.  New England Journal of Medicine, 360; 4: 321-323, 2009.

Health Care 2009: Medicaid and the U.S. Path to National Health Insurance. Michael Sparer. New England Journal of Medicine, 360; 4: 323-325, 2009.

Click here to read the pdfs of e-Round #19 [ENGLISH] [FRENCH]

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