Strategic Compromise – The Pathway to Universal Healthcare

It has often been said that the United States is the richest country in the world. However, it is also the only wealthy nation that does not have a universal healthcare system that covers all its citizens.  Healthcare in our country should be a right and not a privilege.  It should be something that every American can count on when they need medical care.  In the current political environment, universal healthcare appears to be unattainable, however we can achieve what every other democracy in the world has achieved by building a strategic compromise to make healthcare a reality for all Americans.

Two years ago, we began our book, Healing American Healthcare, with the famous Winston Churchill quote from 1941 when he said, “Americans will always do the right thing in the end, but only after exhausting all other possibilities”.  He said this during a contentious cabinet meeting as his cabinet members repeatedly voiced their concerns about the success of German U-boats in shutting down the North Atlantic shipping lanes at the beginning of World War II.  Their concern was that the United States had not yet joined World War II as a British ally.  Today, his observation about America in the early stages of the war could also aptly describe our nation’s struggle to develop a universal healthcare system. This has been a national challenge for an awfully long time.

The first national healthcare system was invented by the Prussian Chancellor, Otto von Bismarck, in 1883 as a part of his effort to unify Germany.  Teddy Roosevelt became interested in this approach in 1910.  He began calling it the German Plan.  He felt so strongly about it that he made if part of his platform when he ran for President on the Progressive ticket in 1912.  Since that time, 110 years ago, at least ten presidents have declared their interested in universal healthcare or making much needed improvements in our healthcare system.  There were many presidential and congressional initiatives to improve healthcare from Teddy Roosevelt’s time to the present day, however only President Johnson and President Obama were successful in introducing major programs that expanded health insurance coverage for large segments of our population.  President Johnson succeeded in passing Medicare and Medicaid legislation in 1965 and President Obama was successful in passing The Affordable Care Act (ACA) in 2009.  Today these programs provide health insurance for almost 140 million Americans.

As President Obama points out in his book, The Promised Land, the legislative process for healthcare reform is extremely challenging.  Healthcare is almost 19% of our GDP.  As a large segment of our economy, When change is actively being considered by the administration and the Congress, in a large segment of our economy,  there will be many  interests that come forward to  defend the status quo and its importance to their success.  As a another new approach to healthcare is proposed and begins its way through Congress, every health provider, medical device manufacturer, pharmaceutical company, private health insurance company and related trade associations will send their lobbyists to Congress to defend the importance of their positions in our healthcare economy.

I advised medical societies during the many debates on the ACA before its passage.  At that time, the Wall Street Journal reported that more money was spent on lobbying efforts during the three months before the passage of the ACA than any three-month period in history.

As 2021 begins the political landscape is  more complicated than it has ever been.  Our nation suffers from the political miss management of the pandemic.  The Republicans and Democrats have been unable to compromise in a timely way on major legislation to help Americans who are suffering medically and economically from the pandemic.  As a result of the Tax Cut and Jobs Act of 2018 and the pandemic driven recession of 2020 our national debt is larger than it has every been and will likely grow larger this year.

To bring universal healthcare in the United States to fruition, while keeping in mind our history in healthcare over the last 110 years, we need to forge a strategic compromise that most of our House of Representatives and Senate can embrace.

Where do they stand today?  The progressives support Medicare For All.  The moderate democrats support Obamacare.  President-elect Biden wants to expand Obamacare to provide coverage for all those Americans living in red states who currently do not qualify for Medicaid.  He also wants to increase the Obamacare subsidies to lower the cost of insurance for anyone whose income is below $110,000 per year.   The Republicans do not currently have a comprehensive plan although they have made more than 50 attempts to repeal or limit Obamacare over the last ten years.  With the passage of the tax cut in 2018 they were able to repeal the mandatory coverage penalty of Obamacare.  This has provided a legal pathway to the Supreme Court for them to advocate against the ACA hoping to have it to declared to be unconstitutional.  It is anticipated that the arguments for this case will be heard this year.

What would a strategic compromise look like?  The progressive democrats what universal healthcare, however it is very unlikely that Medicare For All would get through both houses of Congress as it is currently proposed.  It would replace the private insurance industry and as a result eliminate between 1.5 and 2 million jobs at a time when the economy is trying to recover from the job losses caused by the pandemic.  It would dictate the operational management of all American Hospitals by “rolling down” operating budgets from the federal government to each state and hospital.  It could also dictate physician and nursing staffing levels at all 5,000 hospitals in our country.  The program’s cost estimate has been hard to arrive at, however it could increase our health insurance costs by as much as $3.2 trillion.  If it became law, Medicare For All could also eliminate choice in healthcare that surveys have shown Americans want to keep.  It would also eliminate choice for employers who would likely be taxed to pay for this healthcare system.  President-elect Biden’s proposal would cost $850 billion over ten years and would expand coverage to approximately 97% of all Americans.  This would still leave approximately 9 million Americans without coverage.  Historically Republicans prefer programs that reduce the deficit.

 If the United States were to adapt the German System as a model to deliver universal healthcare in America, all employers would have to provide healthcare to their employees.  To make this new market more competitive and to support the position of progressive democrats, we should also develop a public option based on Medicare.  We estimate that this public option could be as much as 30% less expensive than private insurance is today.  Employers could be self-insured, provide private insurance or the new publica option for their employees. It is likely that private insurance providers will work very hard to meet this new competitive threat because 90% of their business is with employers.   Individuals could also purchase the public option for their health insurance coverage. 

Prior to the pandemic, 16% of Medicaid beneficiaries were employed.  If their employers would now be required to provide health insurance for them, the federal expense for Medicaid would be reduced by more than $200 billion per year.  By creating the competitive pressure that a public option could provide, employers could save as much as $250 billion a year on insurance costs, and they could retain choice in coverage for their employees and discretion over their operating budgets.

This is the strategic compromise.  The Democrats get universal healthcare for America, and the Republicans get reduced federal and state expenses for Medicaid.  Liberals and conservatives would get  victories in areas that they  care about.  More importantly we would significantly improve our healthcare system and improve healthcare outcomes for all Americans by making healthcare a right and not a privilege.

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