Social Health Care in the U.S.

Health Care in the United States: History, Issues and Possible Solutions

One of the biggest problems facing the United States today is the lack of a form of socialized medicine that will continue to serve the people. Medicare and the funds that feed it may be dealt a final deathblow in a few years after the baby boom generation begins to utilize its benefits in full force. This country, if indeed it is a country for the people, must create a logical, well-working plan for socialized medicine that will prevent fraud and abuse (as well as allow prosecution for such), at the same time providing excellent medical services to the people, regardless of income and without delay.

This research paper will examine a brief history of social health care in the United States, and examine the fundamentals, pros and cons, of the health care systems of Canada and France. The reasons for choosing these two countries as examples are that Canada is located on the same continent and shares the same basic standard of living that the U.S. does while France has the best-rated health care system in the world at the present time and may very well provide the standard toward which this country may strive. The health care platforms of the leading Democratic and Republican presidential candidates will be examined and then a brief pair of logical suggestions for a more solidified health care program for this country will be presented.

The idea of a socialized program of health has been discussed for over a century in this country. In the 1800s hospitals, generally located in the large cities, were funded by donation and were almost exclusively in operation for the poorer classes of people. Middle and upper class groups saw doctors in the patients' homes. As technology improved and inflation rose, the costs of operating a hospital surpassed the amount of monies received. In the 1920's, third-party payments came into existence to ease the problem.

The first inklings of a governmental health plan were seen in the early 1900s, sponsored by the Socialist Party. Theodore Roosevelt's Progressive Party, founded before the 1912 elections, supported national health insurance in its platform. Later, the American Association for Labor Legislation (AALL), predominately interested in workman's compensation and medical care for victims of industrial accidents and diseases, sponsored a bill in 1912 based on Britain's National Health Legislation and another in 1915 based on the earnings-related German system. Both bills went nowhere.

In 1917, the American Medical Association (AMA) started working with AALL, but immediately reversed its position, and so began a long history of the AMA opposing a national health plan. Large insurance companies joined the opposition, as did the American Federation of Labor (AFL), supposing that workers would depend less on the unions if socialized health care came about (the unions played a very large role in Industrial America). Yet another hindrance during this period of history was World War I; domestic issues not only took a back seat, but the thought of having a system modeled after anything German was none too acceptable.

During the early 1930s, Franklin Roosevelt appointed the Committee on Economic Security (CES) to study the development of social insurance, mostly in response to the Great Depression. Again, the plan ended in failure as the committee was rushed; the findings were controversial and met with much opposition.

Finally, in 1935, in spite of opposition, the Social Security Act was passed. After the success of this legislation, Roosevelt created a committee that made yet another proposal for a national health program. A consensus was reached in 1938 as far as the principles were concerned, but the failure came with a lack of agreement about splitting costs between the Federal and State governments. The Wagner Bill, 1939, was an amended version of this consensus that was never voted on due to the ever-increasing influence of the AMA and other professional groups. Later, in 1965, the Wagner Bill would be rehashed and folded into the Medicaid legislation, albeit in a less comprehensive form.

In 1948, the AMA began an advertising campaign to thwart any results of then President Truman's campaign promise to produce a health program. From that point on, the AMA analyzed the possibilities of delving into politics with the formation of a Political Action Committee, which came to be known as the American Medical Political Action Committee (AMPAC) when President Kennedy, a strong supporter of health legislation, was elected. AMPAC began heavy political opposition to congressional hopefuls who supported such legislation. Nor was the AMA alone in its fight; the American Hospital Association, Blue Cross Association and the National Association of Blue Shield Plans joined in opposition.

Medicare, the program of health insurance for the elderly, was established in 1965. This was accomplished by the passing of the Social Security Amendments Act, which also provided for Medicaid, allowing medical assistance for low-income, non-elderly populations. In 1977, the Federal Health Care Financing Administration was created to run the Medicare and Medicaid programs. In 1988, the Medicare Catastrophic Coverage Act was passed to cover Medicare patients against rising costs of health care and to expand Medicaid coverage.

Since the 1980s, Health Maintenance Organizations (HMO s) and Professional Provider Organizations (PPO s) have come into existence. Although good ideas in concept, in practice, they are in business to make a profit, and the people subscribing to such organizations sometimes find them a bit restrictive for the amount of money subscribers must pay.

Generally, a person will pay about $200 a month for a PPO or HMO; a family will pay about $600 monthly. An example could be made of a single-worker family with four children. If the breadwinner makes $36,000 annually, he or she will pay a combined monthly amount of $210 for Medicare and Social Security. Add in $600 for health insurance and the total bill comes to $810 monthly, which is 27% of the family's income. A single person with the same wage can expect to pay $410 monthly.

It is discouraging to realize that, since the conception of the idea to produce some sort of plan for the health care of the nation, the organizations most in opposition are the ones which have too much political influence via monetary means to allow the nation's citizens a voice. Further discouraging is the realization that the American Medical Association, which is the only authorized accreditation organization of our medical doctors, has played a heavy role in not allowing affordable medical treatment across the board.

President Clinton made a promise to address health care reform during his presidency. Although the study seemed to go nowhere, one of the health care systems examined by the administration as a model was the Canadian system, due to the similar social and demographic aspects shared by the U.S. and Canada.

Canada began its push toward national health insurance during the Great Depression, but bills introduced to the Parliament were shot down as unconstitutional; the bills would have infringed on the powers the provinces hold. Saskatchewan quickly enacted legislation then to provide for mandatory hospital insurance to be funded by a flat tax levied on the citizens and from provincial revenues. Hospital expenses for every resident were paid by this plan. The other provinces followed suit. Later, the Canadian Parliament passed a law allowing the federal government to share in the cost of hospital plans that were insufficient or weak. Finally, in 1961, comprehensive in-hospital coverage was provided for all residents of Canada.

That same year, Saskatchewan initiated a plan to provide physicians' services coverage to its residents. After a strike and a negotiation of reimbursement plans, the program met with success and led the Canadian government toward paving the way for the other provinces to follow suit by creating the Medical Care Act, through which the government would match approximately 50 percent of provincial programs that supported comprehensive doctor coverage. By 1972, all provinces had such programs in place. The provinces have a considerable amount of control over their particular health care plans, and they do differ. Private insurance is allowed to exist as long as it doesn't duplicate the coverage offered by the government; examples of such private programs include worker's compensation, some dental and optometry services, home nursing care and inpatient mental health care.

Generally, choice of doctors and clinics is left up to the individual as well as the frequency he or she requires medical care. There are no deductibles or co- payments for physicians' services or hospitalization. Most of the provinces fund health care by revenues from sales and payroll taxes, but British Columbia and Alberta charge their citizens premiums (British Columbia charges $54 monthly for a single person and $108 for a family of three or more. Alberta charges $44 and $88 respectively).

Although it may seem like a negative side to the socialized health care solution, Canadian doctors are paid on a fee schedule. U.S. doctors, by comparison, make more than twice as much money. However, the reality of this is that physicians in the United States have to pay malpractice insurance and administrative costs among other charges, leaving their net pay only about a third more than the Canadian doctors make. Malpractice suits in Canada rarely happen because patients cannot sue for punitive damages and lawyers are paid on a fee basis, not by percentage of settlement.

Canada's centralized health system saves on administrative costs, is able to set and enforce budgetary guidelines, and is able to eliminate duplication of services and technology, which means that Canada pays less, per person, in medical costs than does the U.S.

Perhaps the biggest drawback to Canada's health care system, one that wouldn't set well with citizens of the United States, has been the wait for surgeries or certain other specialized services. Although waiting lists have been highly publicized, some authorities claim that they are of minor concern and are only found occasionally, in certain locales and for certain procedures (Brown 53).

In 2000, the World Health Organization (WHO) produced a report citing France as having the best health care system in the world. This is, in part, indicated by a perception of the French population of not having their health services rationed as well as the indicators of high health status and customer satisfaction.

The history of the National Health Insurance (NHI) shows a steady evolution into universal coverage starting in 1928 and finally reaching its full extent in 2000. There were, of course, political battles along the way, but the benefit of incremental increases in health care service prevented the shock of a sudden reform.

The NHI provides for universal coverage and makes use of public and private hospital care. France's expenditures for health care in 2000 were the equivalent of 9.5% of its Gross Domestic Product (GDP), yet the health care offered is quite comprehensive. The United States spends the equivalent of 13% of its GDP for healthcare; an estimated 40 million people have no health insurance.

Fee-for-service, when using ambulatory care and public hospitals for acute care, dominates the health system, but those fees are reimbursable by the NHI. Enrollment in the NHI is automatic and mandatory. Health insurance funds, run by private organizations, are what fund the NHI. There is a single fund which manages pensions and family allowances, while health insurance and workplace accident coverage are funded by the Caisse Nationale d'Assurance Maladie de Travailleurs Salariés (CNAMTS) for salaried workers, Mutualité Sociale Agricole (MSA) for farmers and agricultural workers and the Caisse Nationale d'Assurance Maladie des Professions Indépendentes (CANAM) for the independent professions. There are also seven smaller funds for workers engaged in specific occupations and their families. These funds, although private, are supervised by the government and have networks of local and regional offices that provide reimbursement and watch for abuse and fraud.

Although the NHI covers hospital care, outpatient services, thermal spas, prescriptions, nursing homes and some dental and vision care benefits, about 90% of France's population still carries supplemental insurance to cover what is not covered by the extensive NHI.

About half of NHI expenditures are financed by employer payroll tax. The remaining half is covered by income, automobile, tobacco and alcohol taxes with a little contribution from a tax on the pharmaceutical industry and about 5% being state-subsidized. The personal income tax contribution for NHI is 5.5%.

Under the NHI, the more ill a person is, the more the insurance coverage. If a patient stays in the hospital over 30 days, suffers from a serious or chronic illness or has an income below the minimum ceiling, that patient is exempted from both co-insurance and direct payments.

Annually, charges for services are negotiated between representatives of the health professions, representatives of the three main insurance funds and the government. After negotiations, physicians must abide by those fees with the exception of specialists, who are usually located in the bigger cities and who are authorized to charge higher fees.

As mentioned earlier, consumer satisfaction with the NHI is fairly high. 41% of polled people stated that only minor changes to the system were needed. 55% of respondents said they were fairly satisfied, and 10% were very satisfied. Although these percentages seem to show vast room for improvement, they are higher than most other nations (Germany has a 12.8% "very satisfied" rate). France has a higher number of physicians per 1,000 people than does the U.S. and more available hospital beds as well.

Over 96% of the population of France receives health care entirely free. Regardless of income level, the people can choose among health care providers. Additionally, waiting lists for surgeries that seem to be a problem in other countries do not exist in France, due to the cooperation between private and public hospitals. Doctors are required by law to share medical files with other physicians and hospitals.

The middle ground between the seemingly positive and negative aspects of the French health care program and the bad part could be the number of physician office visits which is double, per capita, of those in the U.S. and the average number of days of inpatient hospital care is about double, also. There are a couple of ways to look at these facts; hence, they cannot be termed either pro or con aspects of the system. To those opposed to socialized health care, such figures would suggest possible abuse of the system; people going to the doctor for "every little scrape or bump." However, since there are more doctors and hospital beds per 1,000 people than in the U.S., the physician utilization ratio may be about equal. Additionally, per capita spending on pharmaceuticals in France is higher, but this may point to France's relatively weak preventive health program. Public education in alcoholism, suicides, automobile safety and AIDS awareness is inadequate, which gives France a higher rate of premature mortality (although French women have the second longest life-span in the world) than have the other countries comprising the European Union. With this weakness in preventive health, comes the possibility of utilizing more pharmaceuticals down the road (e.g., the cost of medication for AIDS patients).

Although France's health care system is universal, health resources are not distributed equally geographically, which leads to unequal health outcomes between social classes. Some hospitals have also been accused of delivering "low quality and even dangerous care" (Rodwin).

In spite of annual negotiations, the allowable charge for a visit to a general practitioner is only 20 euros with the average physician making only about 55,000 euros annually.

It is easy to look at the socialized healthcare programs of France and Canada and criticize the problems they are facing, whether low physician wages or possible waiting lists. However, with the implementation of any program, there will always be problems, some unforeseen, that must be worked out. The point is that all the residents of these two countries are covered by a universal healthcare plan, which is much more than the United States can say.

With the coming presidential election in the United States, many of the candidates have realized the concerns of the American public and have drawn up proposals for adjusting the healthcare problems in the U.S. as part of their running platforms. The Democratic front-runner (FOX), John Kerry, has produced a ten-page plan for making health care affordable for everyone.

One of Kerry's strongest suggestions for tackling the health care issue is utilizing a program already in place: Federal Employees Health Benefits Program (FEHBP). Members of Congress use this plan. He proposes allowing small businesses to be allowed to participate in the FEHBP, which would provide more affordable health care to their employees. Kerry also proposes changes in allowable medical lawsuits, which are reminiscent of the Canadian regulations: No awards "of punitive damages unless caused by intentional misconduct, gross negligence or reckless indifferent to life" (Kerry), a stop to malpractice action unless it is determined that a reasonable claim exists and, even so, required mediation before proceeding to lawsuit.

Another method for cost-cutting and improving service is by requiring medical records to be electronic by 2008. This would not only reduce error, but cut supply costs and processing costs dramatically. By using available technology, Kerry estimates that administrative costs can be cut by $175 billion a year.

The cost for implementation of these and other aspects of Kerry's plan will run $72 billion per year for the first five years. This plan seems like a logical step in the right direction for the nation's health care.

Although it would only seem fair to provide the Republican front-runner's views on a health care plan, President Bush has already had three years in office and has not made any remarkable improvements nor, with his determination to expand other programs such as space exploration, does it seem that he is interested in providing reasonable medical care to the population. Nevertheless, Bush did, on January 28, 2004, outline a "Comprehensive Agenda to Expand Access to Health Care." Before he even began to explain his ideas, however, he made the statement: "Fortunately, the positive news is that we've got the best health care system in the world" (Bush), which is quite different from the findings by the WHO.

Although Bush supports the market health care system as we have it now (hoping, it appears, that the tax cuts and refunds will be used by Americans to buy health insurance), he does support the regulation of medical lawsuits and the increased use of available technology to reduce administrative costs.

A major part of Bush's plan is to encourage workers and employers to buy into a normal health insurance plan, but take a high-deductible option, causing the premiums to be lower. To offset any deductibles needed, the worker would then set up a tax-free Health Care Savings Account (HSA) so that when funds are drawn from it to pay medical bills, those withdrawn funds are not taxed. This idea supposes that the normal American can and will put money aside in such an account, building up a money base.