Emory Health Sciences magazine

Spring 2008

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	A former adviser on health care to President Clinton, Ken Thorpe is the Woodruff Professor and Chair of Health Policy and Management in Emory’s Rollins School of Public Health.

By Kenneth Thorpe

The 2008 presidential election in the United States has again elevated the issue of health care reform to center stage. Reform proposals are proliferating in the states as well as nationally. Virtually all candidates running for President have outlined their plans for reforming health care.
     The renewed interest in health care reform reflects the continued deterioration of several key measures of the performance of the U.S. health care system. Since 2000, the nominal cost of private health insurance has doubled. During the same period, the number of Americans without health insurance has increased from 38.7 million to 47 million in 2006. Objective measures of the quality of health care provided to chronically ill patients are also of concern because such patients receive only about 56% of clinically recommended preventive health care, according to a study published in the New England Journal of Medicine in 2003.
     The problems plaguing the American health care system are not new. What is new is the flurry of activity around health care reform at the state level. In the absence of federal leadership during the past seven years, two states—Vermont and Massachusetts—recently have passed comprehensive health care reform plans. Massachusetts passed a mandate requiring all residents of the state to have health insurance. Health plans offered through the state’s insurance connector offer comprehensive benefits. People can purchase a low-cost sharing or a higher-cost sharing version of these plans (premiums differ by about $35 per month). The law contained certain exceptions for those earning more than three times the U.S. poverty level, allowing them to apply for a waiver from the requirement and remain uninsured if the state insurance connector deems the cost of insurance unaffordable.
     Vermont passed a broader set of reforms that redesigned delivery of health care to chronically ill patients, accelerated diffusion of health information technologies to primary care physicians, and created new programs on prevention and public health initiatives. In addition, the Vermont legislation required that the percentage of the population with insurance increase from 90% to 96% by 2010. Several other states—including California, Pennsylvania, and Illinois—are contemplating similar reforms.
     The health care reform proposals advanced by the Democratic presidential candidates this year differ significantly from those of the previous two election cycles. Republican presidential candidates are floating health care reform proposals as well during the primary phase. One key difference between past and present plans is that virtually all them have proposed reforms that go beyond health financing reforms designed simply to cover the uninsured. The broadened focus represents a new political strategy and direction to make health care more affordable, improve the quality of care, and reduce the number of uninsured.
     Perhaps the most important reason underlying these more comprehensive reforms concerns the strategy of how to politically proceed with comprehensive health care. More than 250 million Americans have some form of private or public health insurance coverage. Of this total, approximately 200 million receive coverage through their employer. Those with health insurance are concerned primarily with the affordability of coverage, a topic largely ignored during the past two presidential cycles. Another key consideration is that adults with health insurance vote. During the 2004 mid-term elections, 96% of voters had health insurance, leading to the recognition that 85% of Americans were already insured and their main concern was the affordability of health care. This recognition has played an important role in shaping Democratic health care proposals.
     The U.S. health care system is built to deliver health care services to acutely ill patients requiring episodic care. As a result, chronically ill patients receive only a portion of the preventive and maintenance care recommended by physicians. In light of these facts, the Democratic presidential candidates have developed specific proposals to modernize the delivery of health care to more effectively prevent and manage chronic illness. These proposals include payment reform proposals to assure that chronically ill patients receive all clinically recommended preventive services. The annual payments to primary care physicians or multi-specialty clinics would cover the expected costs of treating patients with chronic illnesses such as diabetes throughout the year.
     A second major difference in the Democratic plans of 2008 is the focus on universal coverage. Senator Clinton has called for a requirement that individuals acquire health insurance. Under her proposal, people could receive coverage either through their place of employment or by purchasing coverage through the same plans that are offered to federal workers—the Federal Employees Health Benefits Program. Senator Obama’s plan would establish a national health insurance exchange—similar to one created in Massachusetts—that would allow employers and individuals to purchase coverage with federal financial assistance for low- and moderate-income families. While Obama’s plan calls for all children to have coverage, it falls short of requiring adults to do so. Instead, his campaign proposes federal subsidies to reduce the cost of insurance, with the expectation that most uninsured people would purchase health insurance.
     The Republican plans have been more modest and moved in a different direction. None of the leading Republican candidates advocated universal coverage. Senator McCain, destined to be the party’s nominee, would eliminate the current favorable tax treatment of employer-sponsored insurance, and in its place, he would provide federal tax credits of $2,500 per individual and $5,000 per family to purchase health insurance.
     I estimate that the number of newly insured under the most aggressive Republican proposal is well under 10 million. Moreover, the thrust of these proposals expands coverage in the individual (non-group) insurance market.
     The outcome of the 2008 presidential election, along with the Congressional elections, will play a key role in deciding how comprehensive health care reform will be. We may see virtually no changes or, at the other extreme, broad structural changes in health care delivery and universal coverage. Many of the states, tired of waiting until the issue is resolved at the federal level, are going ahead with development of their own approaches. No matter the details, the push for broader, more comprehensive reforms of the American health care system is bound to continue to mount. The outcome of the 2008 elections will go a long way toward predicting how fast reform will be.