Now, I am not about to distill the Clinton plan into 1,000 words or argue that the health-care debate is utterly simple. But I will dispute the growing feeling of resignation that “only the experts can understand this.” It’s both wrong and dangerous. It is wrong because health care is such a vast subject that even the best-informed experts have huge gaps in knowledge. It is dangerous because the impending debate can succeed only if guided by common-sense assumptions that everyone can grasp.
“We cannot do everything for everybody,” writes Willard Gaylin, head of The Hastings Center for bioethical research, in the current Harper’s magazine. That is the nub of the issue. Health care is constantly being redefined to include new ailments, physical and mental. What we once called senility is now Alzheimer’s. New medical technologies and treatments constantly proliferate. As Gaylin says: “if you promise everyone access to whatever medical care he or she needs or wants, you will enormously increase the total amount the nation spends on health care.”
We need to find some basic principles that will force us to face the uneasy choices. These are ethical as much as economic, because spiraling health spending means we are diverting resources from other uses–schools, police, private consumption–that may be more compelling. Let me suggest three propositions that ought to frame our debate:
We can’t provide lots more care for lots less money. The president has come close to saying that by emphasizing “waste” as a huge source of savings. Of course there’s waste. But the health system has also, in many ways, become more efficient. To take one example: much surgery that once required extended hospital stays is now done on an outpatient basis. Even so, health costs continue to rise because the population is aging and because high-tech medicine is often very expensive.
We can’t insure the uninsured for nothing. Many of today’s 37 million uninsured often get expensive emergency-room care, and some savings might occur if they got routine care sooner. But these savings would be offset by new spending because the newly insured would see doctors and use hospitals far more often than now. William Custer, head of research for the Employee Benefit Research Institute, puts the extra cost at $25 billion annually. Other estimates are higher.
Moreover, Clinton’s “basic” insurance is more generous than most private insurance, according to the consulting firm KPMG Peat Marwick. If you make optimistic assumptions about “waste,” it may be possible to provide universal insurance and temper cost increases–but not if the universal insurance is hugely generous. Health costs can’t be controlled if we impose heaps of new costs.
Most of us don’t know what our health costs are. Consequently, we’re more concerned with maintaining benefits than limiting costs. One survey found that only 25 percent of workers with company-bought insurance thought their firms paid more than $2,400. In fact, these policies cost companies $4,000 or more.
One way to make us more aware of costs is to end the tax exemption for employer-paid insurance. Consider a married worker with wages of $50,000 and a company insurance policy worth $4,000. The insurance is income, but the worker isn’t taxed on it. Imposing the normal tax rate (28 percent in this case) would mean an additional $1,120 in taxes. The Treasury now loses $43 billion from the tax exemption. By ending it, we would all see and feel-on our pay stubs and tax returns -the reality of runaway health spending. If Congress doesn’t want to raise taxes, it could use the $43 billion to cut other taxes.
If the public wants new benefits, it should be willing to pay for them. The constant flouting of this principle is one reason we have huge budget deficits. Clinton would continue to flout it. He proposes a number of new federal benefits: subsidies to employers to insure low-income workers; Medicare coverage for prescription drugs; more long-term health care. These programs are to be financed heavily by projected “savings” in Medicare and Medicaid. The savings are mostly hypothetical. If they occur, let them reduce today’s budget deficit. Above all, don’t spend them before they occur, as Clinton proposes.
So there are the principles: acknowledge conflicting goals; expose costs; pay for new programs. The worst thing we could do is to pretend that we can easily expand the health-care system while also reducing its costs. This is a simple idea that the president has yet to state clearly; neither have advocates of rival proposals. The common temptation is to disguise costs and indulge in hopeful assumptions. With proper ground rules, we can have a reasoned debate about whether to adopt Clinton’s plan, a Canadian-like model or something else. Lax ground rules may give us a program that promises more than it can deliver.
The notion that only the experts can grasp health care fosters the illusion that brainy technocrats can fashion painless solutions to genuine dilemmas. They can’t. No expert knows precisely how any program would work in practice. There will be unintended consequences and mistakes. The trick is not to compound them with wishful thinking. Our debate will succeed only if it clarifies and disciplines our choices while creating an understandable framework for modifying them in the future, as we inevitably will.
