Universal Health Insurance: Reaching The Tipping Point?

Are CEOs about to join in the call for universal coverage?

| Tue May 9, 2006 2:00 AM EDT

Article created by the The Century Foundation.

Can fundamental health care reform happen in (relatively) ordinary times? Short of “a major war, a depression, large-scale civil unrest, [or] a national health crisis, such as a flu pandemic,” to quote health experts Victor Fuchs and Ezekiel Emanuel, what would light the fuse?

First of all, the problem of being uninsured, or underinsured, would have to affect the middle-class and become a voting issue. The squeeze on the middle-class is well underway. Last week, for instance, the Commonwealth Fund released an important new study on the uninsured. In 2001, researchers found that 28 percent of Americans with annual incomes between $20,000 and $40,000 were uninsured for at least part of the year. By 2005, 41 percent of this income group fell into that category.

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This new middle-class face of the uninsured is, potentially, the basis for an explosive political reaction. Polls still tend to show that most Americans are satisfied with their own coverage, although big majorities deplore the existing health care system and call for fundamental change. The Bush administration is trying to capitalize on unease about rising health costs by pitching health savings accounts and association health plans for small businesses. Even their most enthusiastic supporters, however, are hard-pressed to show that these programs amount to much more than putting a Band-Aid on the problem of the uninsured.

Public attention, outrage, and electoral impact are necessary for getting to national health insurance. They aren’t, however, sufficient. (A steady 70 percent of Americans, it is worth recalling, thought all Americans should be covered straight through the rise and fall of the Clinton plan.) At least another shoe, or two, needs to drop. One already has—states that are concerned about their rising numbers of uninsured. The recent passage of a universal coverage bill in Massachusetts is the most high-profile activity on that front, but other states such as California, Oregon, New Mexico, and Arizona also are debating universal coverage proposals.

Employers are the wild card. Universal coverage, potentially, could lower costs for business and get them out of the hassle of administering health benefits. On paper, employers ought to be leading the charge. But they aren’t—yet. Why not? Some answers emerged from the recent World Health Congress in Washington, which I attended. This conference, which is co-sponsored among others by the Wall Street Journal, Accenture, and PriceWaterhouseCoopers, is a great barometer of industry trends.

Many employers feel that “consumer-directed care” will save money for their companies and forestall the need for systemic reform. They have cast, or will cast, their lot with health savings accounts and high deductible insurance products. Some CEOs, such as Bill McGuire of the health insurance giant UnitedHealth, made a thoughtful case that individual choice and responsibility can lower health costs. For others, offering HSAs clearly has more to do with offloading the risk of rising costs onto employees. Ideology and convenience drive the appeal of savings accounts. Ivan Seidenberg, the CEO of Verizon, predicted that “the real magic will come from the market.” He offered few details. One health benefits manager told me that because HSAs are a product that can be marketed and sold to employers they get their attention regardless of their merits.

Apart from pinning their hopes on medical consumerism, there are other reasons CEOs and big employers run scared from endorsing the goal of national health insurance, at least in public. Many instinctively distrust government and the political process. They believe that any reforms, no matter how couched, will turn into expensive employer mandates when politicians get involved. Some don’t want to jeopardize relationships with the current administration by getting out front on this issue. Most current CEOs are focused on quarterly or annual earnings; they are loath to focus on anything that might improve the bottom line even a few years out. More than likely, health care reform won’t happen on their watch, and backing it won’t help them make their numbers and edge their immediate competition right now.

Some business leaders are more open-minded about major reforms. GlaxoSmithKline CEO Jean-Pierre Garnier, in his opening keynote address, made a carefully-hedged call for national health insurance managed by the private sector. Michael Critelli, the CEO of Pitney Bowes, thinks that health reform ought to start by having employers promote a culture of good health in the workplace. His company features on-site medical clinics and financial incentives for employees to get and stay healthy. Critelli acknowledged, however, that his brand of corporate paternalism isn’t winning converts: “We’re unusual. We’re hitting the wall.”

The main reminder that dramatic change isn’t inconceivable came from outside the central huddles of big employers. Health leaders from Japan and Taiwan, for instance, spoke matter-of-factly about their universal coverage systems and—in Japan’s case—the country’s recent adoption of universal long-term care. It may well be true, as Humphrey Taylor, the longtime head of Harris Interactive polling, commented, “There’s no conceivable way to change the U.S. health care system to be like other countries. We will almost certainly do it our own way.” There are many ways, on paper, to get to universal coverage in the United States. What is needed are some champions from among the captains of industry.