Cures for an Ailing System

Ensure That Every American Has Health Insurance
Everyone in America should have health insurance that covers at least a basic level of care. This would give them access to medical services and ensure that health-care providers are paid. Improving access to care this way would actually slow the growth in health-care spending because people who become seriously ill—who have a heart attack, for example—wind up receiving costly medical care, subsidized by society, even if they are uninsured. Preventing that heart attack by removing barriers to health care not only improves health, it saves money.

A strong economy will not get us to universal care; the robust economic growth and tight labor markets of the late 1990s did not substantially reduce the number of uninsured. And we cannot expect significant numbers of the uninsured to pay for insurance on their own—just over half of the uninsured today have family incomes below $30,000, and premiums for self-purchased family policies are typically $10,000 or more. Many of the uninsured will need highly subsidized insurance. On the other hand, three out of 10 uninsured have incomes (above the median household income of $48,200 in 2006) that put them in the middle class. Most of these people might buy private coverage if they could find affordable policies.

The presidential candidates differ in the levels of detail about what they would do to reduce the number of uninsured, but they all assume that employer-sponsored health insurance will continue to cover a majority of Americans (currently 60 percent). The problem with this basic strategy is that globalization is forcing American companies to become more competitive in what they pay for labor. Employers increasingly resist paying more than a defined amount for health care; most cannot continue to pay health costs that have doubled in the last decade. In just the last seven years, the fraction of employers sponsoring health insurance has declined from 69 percent to 61 percent, and those that continue to provide it are asking employees to pay an increasing share of medical costs. We need to create a new financing structure that includes employers, before a majority pull out of paying for health insurance altogether.

A strategy worth examining is that of the Netherlands. Two years ago the Dutch created a new system that uses a combination of premiums and taxes to finance health insurance for everyone. People have a choice of 33 health plans, each of which shares a common set of health services. Each adult pays a modest annual premium (about $1,500) that depends on which health plans he or she chooses. Everyone also pays an income-related premium tax, so low-income people are subsidized and all children are covered. The income-related tax is reimbursed by workers' employers. Some of the tax revenues are used to adjust payments to health plans that enroll people likely to have higher medical expenses—thereby reimbursing plans for higher-cost indi-viduals and ensuring that they receive quality medical care.
—Katherine Swartz, PH.D.Professor of Health Economics and Policy at Harvard School of Public Health

Eliminate Racial Disparities
As a practicing physician, I know firsthand that health care can work wonders for those who need it. Equal opportunities for good health are among the greatest benefits society can provide. Many research studies have found, however, that African-Americans, Latinos and American Indians often do not receive these benefits, for treatments ranging from primary care of diabetes to high-tech heart surgery.

For African-Americans, current disparities in health have deep roots in slavery and segregation. Even as overt discrimination in health care has been largely extinguished, the embers of inequality smolder and reignite. In Chicago, for example, death rates from breast cancer were nearly identical for white and African-American women in 1996. By 2003 these death rates fell 35 percent for white women but actually rose 12 percent for African-American women.