WASHINGTON -- An array of high-powered forces in medicine, law, business, and labor are preparing for what promises to be a major debate in Congress over legislation aimed at reforming the U.S. health-care system.
The political heat is turning up as demands for universal health coverage and affordable care gain momentum.
"Consensus has begun to emerge on meaningful health-care system reform," the American Medical Association said in a recent statement, adding that "congressional action appears more and more likely."
Lobbyists and deep-pocket special interest groups that stand to be affected by health-care reforms already are beginning to position themselves. Besides the American Hospital Association, the American Medical Association, and the Health Insurance Association of America, groups involved include the AFL-CIO, trial and antitrust lawyers, and representatives of large and small business.
"The health issue is of tremendous concern to a lot of Americans," said an aide to Rep. Steny Hoyer, D-Md., chairman of the House Democratic Caucus. "It's an issue that a lot of members from both sides of the aisle have been hearing a lot of from their constituents lately."
Health-care professionals, despite the rising clamor in Congress, remain skeptical that much will happen. According to a survey by Arthur Andersen & Co. and the Chicago-based American College of Healthcare Executives, only 35% of those surveyed said they expect to see universal medical coverage within the next five years.
"Universal health-care insurance is often discussed as a remedy for the nation's health-care woes," said Dr. Stuart Wesbury, president of the college and co-chairman of the study. "Although interest in universal health insurance has grown, the majority of our panelists still say universal insurance will not exist by the mid-1990s."
'Incremental' Changes
Still, those surveyed said they did expect some changes in the way health care is delivered. Three quarters said they expected to see national health care for children and the unemployed within five years, and there were widespread expectations of changes in the Medicare payment system.
"There's an incremental movement for change, starting with some deprived groups, and that will probably spread," said Peter Weil, director of research and public policy at the college.
According to the AMA, spending on medical costs now totals over $500 billion per year, or 11% of total U.S. gross national product. Some estimates are even higher. The Office of Management and Budget figures health-care spending accounts for 12% of total U.S. output.
Medical costs are claiming an increasing share of the nation's resources and adding month in and month out to inflation, despite the slowdown in price increases that has accompanied the recession. While the consumer price index prepared by the Labor Department has slowed to an annual rate of 2.9% in the last six months, medical care costs advanced 8.1%.
State and local government officials also are deeply involved in the health-care debate. Medicaid costs constitute the biggest factor in driving up state budget deficits, which are now escalating to new heights from the recession. According to the National Governors' Association, Medicaid spending by states is projected to more than double in fiscal 1990, to $66 billion from $31.4 billion.
There also is a greater focus on the idea of universal health coverage. All together, more than 33 million Americans -- about 13% of the population -- have no private insurance or access to public assistance. Millions more lack adequate protection. As a result, many of the proposals to overhaul the system call for taking greater care of the poor and unemployed.
Meanwhile, those with jobs and their employers find they are paying more in insurance and out-of-pocket expenses. According to the American Hospital Association, the average annual premium in existing employer plans is now about $2,290, of which the employer pays about 75%, or $1,720. For many smaller businesses, the costs are higher.
"The situation is reaching a crisis," said Terry Hill, a spokesman for the National Federation of Independent Business, which represents 550,000 small-business members. "The awareness level is growing pretty rapidly, and you have a presidential campaign, so everyone is scrambling to get on the righft side of the issue."
The hospital association introduced a comprehensive reform plan approved May 1 by the board of trustees that attempts to provide universal coverage while containing cost increases. The plan seeks to build on the existing health-care system in the belief that it essentially works -- despite all the flaws.
At the heart of the AHA proposal is a "pay-or-play" requirement for employers to provide a basic package of benefits to employees using private insurers or to pay into a single public program run by the tederal government. The public plan would combine existing Medicare and Medicaid programs and provide some expanded services, especially long-term care and prescription drugs.
In the first stage of implementation, self-employed individuals and small business owners would be allowed to step up deductions on insurance premiums from 25% to 100%, the same as large businesses. In addition, employers would be required to pay at least 50% of health-care coverage costs for full-time employees and their dependents, as well as a prorated amount for part-time workers and their families.
To help contain costs, the plan calls for creating a commission of public and private members that would define basic benefits for individuals and advise Congress in setting spending limits on the public program.
Vague as to Financing
Medical treatments found to be ineffective would not be covered. Hospitals still would be allowed payments for reasonable costs but would be required to disclose information on their costs and performance to help prospective patients choose where they wish to receive care.
Association executives who crafted the plan are deliberately vague on the financing, saying only that they favor broad-based tax measures, such as payroll taxes or income taxes. Over all, the program would require an estimated $55.9 billion in federal outlays. But state contributions to Medicaid would be phased out. And with some savings to households from a reorganized system, the net cost is estimated at $23 billion -- an increase of about 4%.
The strategy for the plan emphasizes that it is a set of working proposals that association members are willing to modify as the political process unfolds.
"We recognize that we don't have all of the answers, but we think we have some of the answers," said C. Thomas Smith, chairman of the association's board of trustees and president of Connecticut's Yale-New Haven Hospital. "We've submitted our proposal and labeled it as a starting point for debate."
The most prominent current piece of legislation, which also relies on the pay-or-play concept, was unveiled July 5 by Senate Democratic leaders. They vowed to win passage by the end of next year. The bill was introduced by Senate Majority Leader George Mitchell of Maine, along with Sen. Edward Kennedy, D-Mass., Sen. Donald Riegle, D-Mich., and Sen. J. Rockefeller, D-W.Va. A companion measure has been offered in the House by Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce subcommittee on health.
Other proposals conentrate on trying to reduce paperwork and administrative expenses generated by the array of insurance providers with which health-care providers do business.
To some critics of the current system, a single national health service modeled after the one in Canada makes sense and would save money -- enough to cover people who are uninsured.
Rep. Pete Stark, D-Calif., chairman of the House Ways and Means subcommittee on health, has introduced several bills designed to provide coverage for the uninsured. One proposal would entitle all Americans to insuance for a basic package of health care paid for by higher payroll taxes and personal income taxes. House Energy and Commerce Committee Chairman John Dingell, D-Mich., favors legislation to create a national health insurance system financed by a 5% value-added tax.
The obvious constraint -- and the big political hurdle -- is finding a way to pay for reforms without adding too much to the federal budget deficit. Economists say this year's budget gap could be around $270 billion and that an additional flood of outlays to pay for the savings and loan bailout will keep the defict high at least through next year.
Plans offered by the Democrats and others recognize the costs and typically suggest higher payroll or other taxes, but the 'T' word remains political dynamite.
Still, there seems to be a lot of public support for expanded health insurance coverage, as well as a willingness to pay for it with higher taxes. A Gallup Organization poll commissioned by the Americna Medical Association and conducted last January found 31% of those surveyed said they would favor "a substantial increase" in taxes to provide coverage for all Americans at the same level of care. Another 58% said they favored a more limited approach and would be willing to pay a smaller increase in taxes to provide basic health care to those who are now uninsured.
At the White House, officials of the Office of Management and Budget are said to be studying the idea of reforms, but nothing has been unveiled in public. A task force of Senate Republicans working on the issue also has not come forward with anything concrete. But some members have already made clear they oppose the "pay-or-play" approach on the grounds that it would mandate additional costs for many businesses, especially small firms.
Complicating the situation is the fact that some major groups involved in the debate are struggling to find common ground among their own members. In the case of the AFL-CIO, for example, a 16-member panel of leaders split 8 to 8 on whether to back a single-payer insurance plan like the one in Canada or what it called "employment-based" coverage. In the end, a statement adopted by the organization in February compromised by reasserting its longstanding support for a national health-care program while accepting an employment-based system as an interim approach.
Business groups themselves are also split. Small businesses remain adamantly opposed to any reforms that would take a mandatory approach saddling them with extra costs and paperwork. Some large businesses, such as the airlines and automobile makers, with generous benefits favor the idea of a basic federal program, seeing an opportunity to cut costs. According to the American Hospital Association, many businesses would come out ahead by having cost-containment features and getting rid of charges for the cost of uncompensated care provided to the poor and other uninsured people.
Many say there are problems galore in finding a system that is fair for all types of business. "The more you learn about this, the more you realize you're going in a circle," said Sharon Canner, director of employee benefits for the National Association of Manufacturers.
How long debate will continue over current proposals for health-care reforms remains to be seen.
"This is something we'd like to achieve in this Congress," said an aide to Sen. Mitchell. "It remains to be seen if that is possible."
"The consensus is starting, but it can take years before a great new program is created," said another House aide.
