Our health-care system is a frustrating mix of routine miracles and scandalous failures. The miracles abound; Bill Clinton's recent open-heart surgery was cutting-edge a few decades ago. Failures also abound. In 2003, 45-million Americans lacked health insurance, and medical spending spiraled furiously upward. Since 2000, private insurance premiums have increased 59 percent. Both George Bush and John Kerry say they'll "fix" the health-care system, but their campaign proposals suggest that neither is serious.
To be serious would require admitting that the basic problem does not lie with insurance companies, trial lawyers, hospitals or any of the usual suspects. It lies with public opinion. We Americans want the impossible. We want our health-care system to: (a) provide everyone with good care covered by comprehensive insurance; (b) prevent insurance companies or government bureaucrats from dictating our choice of doctors, hospitals or treatments; and (c) hold down costs. Well, we can have any two of these goals _ but not all three. If everyone has coverage and choice, costs will skyrocket. No one is empowered to control them. But controlling costs involves limits on insurance or choice.
Consider managed care as a case study. It expanded in the 1990s and, by limiting choice, restrained costs. "You needed permission for admission to hospitals or to get an MRI," says Paul Ginsburg of the Center for Studying Health System Change. Doctors and patients revolted against restrictions that seemed cruel or wrong. Managed care relaxed. Spending surged.
Not wanting to offend voters, Bush and Kerry ignore conflicting goals.
Kerry's approach is to throw money. If you spend enough, you can insure many uninsured. He would expand government insurance for the poor and near-poor. Children of families with incomes of under three times the poverty line, or about $56,000 for a family of four, would become eligible. Kerry would provide tax credits for small businesses that offered insurance. The federal government would also subsidize the insurance of big employers.
If enacted, Kerry's plan would extend insurance to 27-million people, according to separate estimates by Kenneth Thorpe of Emory University and a team headed by Joseph Antos of the American Enterprise Institute. The cost is unclear. Thorpe puts it at $653-billion from 2005 to 2014; the Antos group estimates $1.5-trillion from 2006 to 2015. Either way, Kerry's plan is expensive.
Bush's plan costs less _ and does less. The White House says its plan would insure "more than 11-million and as many as 17.5-million" Americans. Antos' team figures 6.7-million and estimates the cost at $129-billion from 2006 to 2015. The president proposes tax breaks for "health savings accounts." Tax-deductible contributions to these accounts can be used for ordinary health expenses. People with HSAs are also required to have catastrophic insurance coverage for medical emergencies. The idea is to promote cost-consciousness for routine spending, while making insurance _ covering only big bills _ more affordable.
Despite rhetorical boasts, neither plan would control health spending.
Kerry claims to make health insurance slightly more affordable. Technically, this is true. But he merely shifts health costs from private companies and workers to the federal budget and taxpayers. Because health spending is hard to control, this would make future budgets less manageable.
Bush says his plan "will help reduce the rising cost of health care." Just how is unclear. Even if HSAs unexpectedly explode, the resulting cost-consciousness would affect only a small part of spending. About 10 percent of patients _ the very sickest _ account for 70 percent of spending, says health economist Len Nichols. HSAs don't touch these costs.
What unites Bush and Kerry is an unwillingness to challenge public opinion. People blame high health costs on "waste" or excessive profits. These convenient explanations are exaggerated. In 2003, the profits of all health maintenance organizations totaled $10.2-billion, reports Weiss Ratings Inc. They represent a small percentage of the $1.6-trillion spent on health care. The real causes of higher spending are stubborn: we're an aging society; science continually creates new drugs, diagnostics and treatments; and people want the latest and best _ at someone else's expense.
Our medical advances save lives and improve the quality of life. But some spending is unneeded. The practical problem is to find ways of imposing limits on individual patients. This requires a political will that's missing. Bush and Kerry won't tell voters what they don't want to hear. Regardless of who wins, the prognosis is for more of the same.
Robert J. Samuelson is a columnist for Newsweek.
Washington Post Writers Group