By Allen Tullos
Vol. 15, No. 2, 1993, pp. 1-4
If modern American presidents are known by the companies that keep them, this summer we are witnessing a shift from the era of military-industrial presidencies to those in thrall to the health insurance-medical industry. It’s not that the Pentagon is on the verge of withering away into plowshares and stethoscopes. Hardly. More that there is a newly ascendant hog whose presence at the trough demands notice.
Postponed for decades, but forced now because of costs that are rising more than ten percent a year in a sector that takes 14 percent of our annual gross domestic product while leaving thirty-seven million people uninsured, the debate over the national crisis in health care is sure to continue for months and years to come. Yet, at some point late in the ’92 campaign, Bill and Hillary Clinton firmly fastened on to the conservative Democratic “managed competition” strategy, a proposal that if put into practice will accelerate the pace at which this country’s health care is being turned over to insurance industry giants. When Clintonians say “Be realistic, this is the best we can hope for,” what they are really saying is “Be Prudential.”
Believers in the irony theory of history might look back to October 3, 1991 when Governor Clinton, in announcing his candidacy for President, vowed—as he would vow and vow again during the campaign—to “take on the big insurance companies” as he sought to control health care costs. The result so far, as the preacher might say, has been much like Jonah swallowing the whale. Recently, five of the largest commercial insurance companies (Prudential, Cigna, Metropolitan Life, Aetna, and Travelers), all with enormous invest-
ments in managed-care programs, formed their own lobbying group—the Coalition for Managed Competition—to help shape and promote the Clinton program.
All spring, as trial balloons floated out of the closed deliberations of Hillary Clinton’s Task Force on National Health Care Reform, you didn’t have to jog in Beltway circles to realize that the Task Force leaders remained fixed upon the managed competition framework. Although many particulars remain to be worked out, the Clinton plan would organize the nation’s population into geographic health alliances, composed of hundreds of thousands of people, each of whom will have a health security card. The health alliances would represent constituencies of households and small businesses by bargaining among competing private insurance providers for the best care available for a fixed amount of money. Financing for the system of phased-in, universal coverage would come from mandated employer and employee contributions plus new sources of tax revenue still under negotiation.
By whatever euphemism the Administration finally decides to call it, managed competition would be good news for franchised hospitals, pharmaceutical manufacturers, some medical entrepreneurs, and large health insurance companies. While it will offer a yet-undetermined range of coverage for the currently uncovered, the Clinton plan is not the cure for our failed medical care, system, but, at best, a kind of symptomatic treatment.
In recent weeks several journalists have looked into how the Clintonians came to embrace and elaborate the framework of managed competition. It is a tale of health-policy advisors with backgrounds in—and financial support from—the health care industry cozying-up long before the ’92 election in a Wyoming retreat named Jackson Hole, of Rhodes Scholar old boy connections that lead in and out of the trail to Jackson Hole, and of an appointed Task Force on National Health Care Reform that insisted upon secret sessions rather than open and representative forums to argue-out this pent-up issue.
In the meantime, what has become of serious discussion of the merits of the single-payer, Canadian-style health system? This alternative would replace the private medical insurance industry with a program financed largely by progressive forms of taxation. The government would function as the sole insurer and payer of bills. Patients could choose their physicians. Coverage for long-term
care, including mental health treatment would keep families from being driven into desperation and financial ruin. Such a plan with national standards could be administered regionally.
Under the name of the American Health Security Act (the McDermott-Conyers-Wellstone Bill), introduced in Congress in March by fifty-three sponsors, a version of the single-payer plan is still alive. Yet those who have raised this alternative with members of the President’s Task Force have risked being told in patronizing tones that an equitable, comprehensive, national program that eliminates private health insurance is, pragmatically speaking, not in the cards. It’s something the Clintonians would rather not hear or talk about. Outside of Congress, the push for a Canadian-style plan is being made by grassroots organizers such as those of Citizen Action, advocacy groups like Consumers Union and Physicians for a National Health Program, and a number of labor unions.
When evasion and defensiveness speak in the voice of American political reality, you know there are fortunes being made and empires under construction. In the $300 billion-a-year health industry a small number of very big interests stand in the way of a national program of humane care. We’re more likely to see a national network of Humana outlets. “Managed competition,” observes Ohio Senator Howard Metzenbaum, a co-sponsor of the American Health Security Act, “is the creation of the Jackson Hole Group. And what is the Jackson Hole Group? It consists of the people who are profiting most from the system as it is: insurance companies, hospital associations, drug companies.”
That big interests stand in the way of much that might be just and fair in America comes as a surprise to few Americans. Probably not even to those who voted for Bill and Hillary and Al and Tipper last November. The surprise comes if you were hoping the Clintonians might seize the moment for the challenge it offers.
Instead, the scene is now set for a major and tragic squandering that could take years to play out and might well leave the public soured on any sort of national health plan. What the Clintonians seem intent upon throwing away is the broad popular desire—measured in poll after poll, year after year—for fundamental change in the way that American health care is provided. As recently as 1990, three out of four Americans favored a government-financed national health care program. Even if it required more taxes. Belief in a Clinton-Gore commitment to comprehensive, affordable, efficiently administered medical care for all Americans was one of the major reasons for the change in White House residents.
Beyond the fundamental issue of private enterprise versus a genuine national health program, the recommendations of the Clinton Task Force provide exemptions and dodges that, if left unchanged, will result in administrative chaos and in unequal levels of care arising from the different social and class situations of Americans. The chaos is certain if each of the fifty states is allowed to pursue its own approach for covering residents. The inequalities are certain, if, in exchange for not lobbying against the Clinton plan, large employers with currently existing medical plans for their employees (often a selected population with lower risks) get to opt out of the health alliances altogether. Inner-city and rural populations will be assured some basic package of benefits as health security cardholders, but who will rush in to compete and bring quality care to these places? Why would a corner-cutting, profit-first insurer incur the extra expense required in making sure every registered member of a health alliance in, say, rural Louisiana, take full advantage of its services? What’s to keep already discriminated-against populations in relatively powerless places from becoming health care dumping sites for the currently uninsured and uninsurable?
If the government is left to pay the costs of care in only the more risky, expensive situations in which no private company can figure on profiting, these health alliances
will take on the happy features of these same locations’ distressed and underfunded public schools. Managed competition will promote a differential system of care, perpetuating many existing inequities and, from the beginning, undermining hope for a universal system that would be fair regardless of class, race, gender, or geography.
For Southerners, geography is an especially important concern. As a special report (“The Marketplace in Health Care Reform”) in the January 1993 issue of The New England Journal of Medicine has made clear, the South is one of several sections of the country which contains large areas that are too sparsely populated to support competing groups of health providers. In fact as the principal author of this report (a former proponent of managed competition) insists, over a third of the U.S. population lives in places where managed competition would not be effective.
As a bad idea, several observers with living memories have pointed out that managed competition had its beginnings in the early 1970s with Nixon Administration schemes that sought to divert attention away from proposals for comprehensive national health insurance. Out of this context came managed care reforms such as the prepaid health plans known as health maintenance organizations. When HMOs began they were non-profit group practices organized around physicians, hospitals or clinics, and patients. Nowadays, new HMOs are virtually all owned by for-profit insurance companies and the HMO concept itself has been transformed into just another insurance product line. During the last fifteen years, as U.S. per capita health care costs have become, by far, the highest in the world, managed care organizations offering pre-paid private group plans of one sort or another have expanded to cover more than 50 percent of Americans.
It’s clear by now that HMOs have not succeeded in holding down costs. A national system of managed competition will only feed the growing chains of private hospitals while promoting further mergers of ever-more impersonal and remote insurance companies. Costs of administering HMOs, like other private plans, are far higher than those for a single-payer system. In addition, managed competition could result in profit-first insurance companies telling people what physicians they may see and telling physicians what sort of care patients may receive.
That, in the 1990s, the Clinton White House would make itself home to managed competition is a reminder of just how mean-spirited and profit-crazed the Reagan-Bush era was, and how tentative, embarrassed, and equivocal Democratic policymakers have become.
It was the view of that great curmudgeon H. L Mencken, reiterated until it has become a clichi, that no one in American politics ever lost office “by underestimating the intelligence of the great masses of the plain people.” The blindness of the present moment, however, does not come from any lack of insight by the great masses, but in Bill Clinton’s reluctance to rise to one of the principal purposes of his election before we are all snowed by the intensifying blizzard of medical insurance company propaganda and advertisement. If ever there was a pent-up parade in search of a drum major to push to the front.
Hopes of pushing the Clintonians to do the right thing depend upon marshaling popular opinion and bringing to bear voter pressure, district-by-congressional district, with a pledge that constituents will vote accordingly in the ’94 elections. A bloc of as many as a hundred members of Congress committed to the American Health Security Act (the McDennott-Conyers-Wellstone Bill) could make a significant difference in the bargaining over final legislation.
In their speechifying, town meetings, and one-on-one encounters with people around the country, and in their highly-visible symbolic acts ranging from the People’s Inaugural to the White House Easter Egg Hunt, Bill and Hillary Rodham Clinton project compassion, accessibility, and a warm glow for everyday Americans. This is the genuine hospitality of the Southern welcome table that accompanies the made-for-television fairy tale of Hope, Arkansas. Who doubts for a minute that the Clinton Administration is more committed to government’s active role in bettering the health of Americans than any number of Reagans and Bushes, or for that matter, any sackful of social policy dinosaurs and Senate whiners like Bob Dole, Sam Nunn, and Phil Gramm? Still, unless the enormous popular pressure of Americans who want fundamental change in our health system can be brought to bear upon members of Congress and upon the residents of the White House, what Bill and Hillary Clinton seem willing to settle for hardly tests the limits of hope. Instead, the medical policy now in formation comes to represent the limits, evasions, and rationalizations of politicians and lobbyists unable or unwilling to distinguish what can be bought and sold in the marketplace from what ought to be the necessary public commitments of a just society.
Allen Tullos is editor of Southern Changes and, most recently, is the producer of the video documentary “Tommie Bass: A Life in the Ridge and Valley Country,” about the legendary Appalachian herbalist.