Painful Remedies

No issue facing American voters this fall strikes closer to home than health care, and none is more ponderous to explain. All three presidential candidates are guilty of promising too much, specifying too little and ignoring the enormous obstacles to serious change. But then, you try discussing "managed care," "fee for service" and "single-payer systems" in a 30-second sound bite. It's no wonder the candidates prefer to trash each other's ideas and keep their own prescriptions vague.

There are two separate health-care problems, each at odds with the other. Costs are exploding while, at the same time, 36 million Americans lack insurance. U.S. health-care spending now totals $820 billion a year-approaching 14 percent of the gross national product-and that could rise to more than one quarter of the nation's GNP by 2030. This isn't just Monopoly money. All health-care dollars come out of household budgets, either directly or through taxes, insurance premiums, higher prices for products or lower wages for workers. For all this spending, however, Americans without insurance coverage are often forced to forgo needed treatment or crowd into emergency rooms, where caring for them means higher costs for everyone else. For would-be reformers, the trick is to control costs and expand access simultaneously, while still ensuring "quality care."

None of the candidates favors a Canadian-style system where the government pays most medical bills out of tax revenues. Still, their proposals reflect deep philosophical differences in how U.S. health care should operate:

This is actually the easier of the two problems to solve, particularly if you suspend disbelief about paying for it. President Bush would help more Americans buy private insurance by giving vouchers worth up to $3,750 to poor families and tax credits and deductions to middle-income people. But those amounts won't buy much coverage, particularly if a family has big medical problems. And the subsidies decline as income rises: a family of four earning $23,000 would qualify for only a few hundred dollars in credits, and they might decide to forgo coverage rather than pay the difference. Even administration officials admit that under this plan, up to 5 million Americans could remain uninsured.

Clinton goes further. He'd require businesses to buy health insurance for workers and their families, and give tax breaks to firms that couldn't afford it. The poor and unemployed would be covered through a publicly financed insurance pool. He doesn't say how he'd pay for this, or which firms would qualify for assistance. But without higher taxes, critics say, businesses would bear much of the tab (estimated at $20 billion to $37 billion a year). That could force them to cut wages or jobs.

This is a much tougher task-especially in a society that doesn't like to be told what it can and can't buy. As it is now, most consumers have little incentive to price-shop for medical care, since insurance pays the tab and providers have little to gain by holding down bills. Bush's plan would do little to change that basic system, except to require that insurers offer cut-rate "basic" coverage plans and encourage Americans to join HMOs (which is all some could afford with his subsidies). Here, too, Clinton is far more draconian. He'd put a cap on total health spending each year; a new National Health Board would design a "core benefit package" and set target budgets for states, which would have to figure out how to live within them. In short, government would have vast power to make health-care decisions,

Perot's ideas are too vague to even analyze. His "United We Stand" manifesto lists such notions as "reaching a consensus on a set of principles" and "encouraging problem-solving by everyone involved." He does call for determining a "basic benefit package for universal coverage," but he hasn't yet said whom it would cover or how it would be paid for.

Under all three proposals, the benign-sounding talk about basic benefit plans could lead to a nightmarish effort to decide which medical services are more essential than others. Coupled with the spending caps Clinton proposes, that could lead to ranking and rationing, as Oregon has tried with Medicaid (page 55). If the Oregon battle has been bloody, imagine a national debate over whether elderly stroke victims are more deserving of care than tiny crack babies, or how the needs of AIDS patients stack up against those with Alzheimer's.

In truth, no president has the power to make very much change. Reforms must pass through Congress, which is groaning with 30 competing health bills of its own. Any new laws must also run a gantlet of ferocious lobbying groups-including doctors, hospitals, lawyers, insurance companies, unions and big corporations. The few proposals Bush has sent to the Hill have gone nowhere. Clinton's plan would face more opposition, even in a Democratic Congress, because it involves more radical changes.

And then there's the T word: taxes. Princeton University economist and health-care expert Uwe Reinhardt told reporters last week that any scheme to cover low-income uninsured Americans would inevitably involve taking money from the better off. "Technically, such transfers will involve taxes, although the verbal creativity of America's spin doctors will invent for it all manner of other names," he warned. "Anyone possessed of even a modicum of intelligence can readily see through this game." Anyone with a modicum of intelligence can also see that it will be years, realistically, before the nation's twin health-care problems are cured.