Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
PROVIDING UNIVERSAL AND AFFORDABLE HEALTH CARE
REFERENCE COPY The Richard and Hfii&fc Roserithal Lectures ' ' v PROVIDING UNIVERSAL AND AFFORDABLE HEALTH CARE NOV16'9Q y-;/< itcfii Hv- ' -.j' TV^nieif Order Nrt PROPERTY OF UZiHARY Institute o/ Medicine 1989
PA The Institute o/ Medicine was chartered in 1970 by the National Academy of Sciences to enlist distinguished members of the appropriate professions for the examination of policy matters pertaining to the health of the public. In this, the Institute acts under both the Academy's 1863 congressional charter responsibility to be an adviser to the federal govern- ment and its own initiative in indentifying issues of medical care, research, and education.
Foreword Last year an important and exciting new activity was launched at the Institute of Medicine. Through the generosity of the Richard and Hinda Rosenthal Foundation, a five-year lecture series was established to bring to greater attention some of the major health policy issues facing our country today. Each year a topic of special policy relevance is to be addressed by national leaders in three lectures held in conjunction with the Institute of Medicine Council meetings. The theme of our first series, "Providing Universal and Afford- able Health Care to the American People," focused on the critical issue of improving access, and what roles the federal, state, and private sectors could play in extending the scope of coverage for our nation's uninsured and underinsured. This volume contains the text and commentary of the 1988-1989 lectures. The Institute of Medicine was privileged to have as speakers and respondents a number of the leading thinkers and actors in this vital area. I want to extend special thanks to Robert J. Blendon for moder- ating the 1988-1989 series. In addition, I would also like to express my deep appreciation to Marion Ein Lewin, a senior staff officer at the In- stitute, for directing this effort and to her assistant Deborah Herbert for her work in carrying out the arrangements for these events. Above all, the Institute of Medicine owes a great debt of gratitude to Richard and Hinda Rosenthal: first, for their vision in recognizing the important role these lectures could play and, second, for their ongoing personal commitment and participation in the programs. Samuel O. Thier President Institute of Medicine
Contents An Introduction and Overview ix Robert]. B tendon Health Care for the Uninsured: The Federal Role 1 Senator George ]. Mitchell April 18,1988 Response to Senator George J. Mitchell 6 Rashi Fein The States' Roles and Responsibilities for Providing Universal and Affordable Health Care to the American People 10 Scott M. Matheson November 14, 1988 Response to Scott M. Matheson 28 Stanley B. Jones Response to Scott M. Matheson 30 Lawrence S. Lewin
Providing Universal and Affordable Health Care to the American People: Private Sector Perspectives 32 Robert E. Patrice Hi January 9, 1989 Response to Robert E. Patricelli 42 Karen Davis Rosenthal Lectures Contributors 1988-1989 51 Vlll
Providing Universal and Affordable Health Care to the American People: An Introduction and Overview Robert J. Blendon During the 1980s, profound changes have been taking place in the nature of our health care system and its ability to provide affordable access to health services for all our citizens. These trends have raised questions of health policy for the public and our governments that are as involved, difficult, and challenging as any other policy issues facing our society. In considering these changes, most Americans do not realize how close the United States has come to being within a stone's throw of achieving universal health insurance coverage for its population without ever enacting a government-sponsored national health program. Over the years, the absence of national health insurance has not prevented the United States from gradually adopting a policy supporting near universal access to health coverage. We have done so essentially through a two-track system: private health insurance for the employed and their families, and public insurance for the poor, disabled, and the retired. By 1980, approximately 88 percent of all Americans had some form of health coverage. For 20 percent of the population, health insurance was financed by government while private insurance covered IX
68 percent of our citizens. Almost 75 percent of all Americans had some health insurance protection against catastrophic illness. In addition, the United States has developed a "safety net" system of governmentally subsidized hospitals and neighborhood health cen- ters, coupled with a major commitment of more than 6,000 philan- thropically supported nonprofit hospitals, to provide free or subsidized care when necessary to the poor not on welfare or to the uninsured. This informal system has taken different forms across the country. In some communities it has provided access to the same physicians and hospitals for people in all income ranges; in others, separate institutions care for la 'ge segments of the community's poor and uninsured. America's piecemeal system has been neither comprehensive nor ir expensive. Still it has been a system; it continued to protect most Americans against the unpredictable costs of illness and provided access tc basic health care. However, since the mid-1980s this hybrid system has appeared to be breaking down in communities across the country. A number of forces are at work here. Since 1980, private sector concerns with economic conditions, competitiveness, and the growth of the small business service sector have led to a 25 percent increase in the proportion of Americans without health insurance. Thus, nearly two-thirds of the 37 million people without health insurance are in families with an adult who currently holds a job. Since 1975, fiscal pressure in federal and state governments has brought a decrease in the proportion of the nation's poor and near-poor covered by Medicaid. Rising health care costs have made it more difficult for the private and public sectors to expand insurance coverage. Per capita expendi- tures for health care have risen from $947 in 1980 to an approximate $1,900 in 1988. Real growth in philanthropic spending for health care has de- clined from 4.6 percent of national health expenditures in 1970 to 2.7 percent today. Real private giving is now a smaller source of revenues for the charity care offered by nonprofit voluntary institutions.
The amount of "free care" provided by voluntary hospitals is not sufficient to meet the needs of the growing proportion of uninsured in the communities they serve. Communities that have no municipal hospital are encountering additional difficulties. Today one-third of the nation's 100 largest cities have no public free care institution and the poor must depend on nonprofit hospitals for uncompensated care. One of the indirect mechanisms by which the nation has financed care for the poor and uninsured is rapidly changing. Historically, middle-class Americans have overpaid for their health care services, and these overpayments have subsidized care for the poor. However, because of rising health care costs, many private business and union health insurance policies prohibit the shift of the cost of medical care for the uninsured to their members' policies. This phenomena has been en- couraged indirectly by the ERISA pension legislation. These trends, when viewed together, suggest that the question of who will pay for the care of the poor and uninsured is becoming a critical issue for the nation. There are already some indications of the serious- ness of the problem. In a 1986 national study, 6 percent of those interviewed, representing approximately 13.5 million Americans, re- ported not receiving needed medical care for financial reasons. An estimated 1 million individuals actually tried to obtain medical care but were denied it. The majority of Americans experiencing these difficul- ties were poor, uninsured, or minorities. Similar findings emerge from a 1988 study where 7.5 percent of the Americans interviewed reported being unable to get the services they needed because of economic barriers. Many years of experience with these problems suggest that the public and governments throughout this country confront four broad choices in responding to the needs of the approximately 37 million Americans who are now uninsured. They can (1) leave the situation unresolved and continue the current de facto moratorium on expanding health insurance coverage until some time in the future, (2) enact some form of state or federal universal health insurance program, (3) provide direct grant funding or special subsidies through Medicare to designated hospitals and community clinics for the care of the uninsured popula- XI
tion, or (4) selectively expand existing public and private health insur- ance programs to cover all or part of the nation's uninsured population. Which of these directions should we as a nation or as individual states choose to follow? Today this question cannot be answered in isolation. Health care now involves more than 11 percent of the nation's economy. Any future decision must take into account Amer- ica's changing economic realities, with our concerns about interna- tional competitiveness, and the presence of an historically high federal deficit. Accordingly, with the assistance of a generous gift from the Rosen- thai family, the Institute of Medicine established the first lectureship series on this vital subject. The ambitious purpose of the project was to examine America's problem of providing access to health care not in a vacuum but in relation to the nation's overarching economic and political situation. In light of the broad nature of these questions, the Institute invited speakers who are highly experienced political and private sector leaders, knowledgeable not only about our health care system but also about other major issues confronting our society. Participants in the seminar series met on three occasions to discuss these difficult ques- tions. Each of the three major speakersâSenator George Mitchell of Maine, former Governor Scott Matheson of Utah, and Robert Pa- tricelli, former senior vice president of CIGNA and current president of Value Health, Inc.âpresented their views on what direction the na- tion's health policy should take if progress is to be made. Their remarks were followed by an extensive discussion by a panel of leading academic experts and health policy analysts from across the country. The hope of the Rosenthal family and the Institute of Medicine was that the many invited participants in this seminar series and the readers of the published remarksâwhether or not they concurred with the speakers' opinionsâwould be assisted to think in a more informed way about the possibilities and consequences of future action to resolve our nation's problem of providing greater access to health care. In that spirit, the Institute of Medicine is pleased to make available the remarks of these three distinguished speakers. It is hoped that, collectively, they will provide information and guidance to Americans contemplating their response to these very important issues. xii
PROVIDING UNIVERSAL AND AFFORDABLE HEALTH CARE
