Staff Background Paper

HEALTH AND MEDICAL CARE REFORM IN THE UNITED STATES: ETHICAL QUESTIONS AND CONCERNS

by Thomas W. Merrill, Ph.D., David G. Miller, Ph.D., Joseph A. Raho, and Ginger Gruters

The reform of health and medical care in the United States has been a topic on our national agenda for decades now, certainly long before a previous national bioethics commission, the President's Commission, issued a report on access to health care in 1983.¹ In the two and half decades since, there has been mounting concern about the problems of health and medical care in America and, at present, we seem to be witnessing a remarkable coalescence—of the public, health professionals and organizations, and policymakers—around the conclusion that the American “system” of health and medical care is ailing. Three problems—of access and coverage, of quality, and of cost—are usually cited as the signs and symptoms of this increasingly worrisome state.

Beyond this general agreement, however, there is persistent controversy about the magnitude and significance of these problems and about their specifically moral import. And, the difficulties spawned by contested diagnoses are only compounded by disagreements over the most appropriate therapy. Reform of health and medical care in the United States —that is, effective solutions to the problems of access, quality, and cost—is thus an exceedingly complex matter. For a national forum in public bioethics, there is, as well, an additional difficulty: competing approaches to defining and solving the problems of health and medical care entail differing responses to the sorts of questions that are fundamental to debates in bioethics:

• Questions about human goods, needs, and aspirations : for example, questions about health as a human good and about the nature of the human needs engendered by illness, disease, and injury; and questions about medicine, as a profession organized around the human need for healing;
  
• Questions about the roles and responsibilities, as well as the obligations, of individuals, families, and the larger collectives in which they live, that is, communities as well as state and federal governments : for example, questions about the division of responsibilities for health and for health and medical care between individuals and families, on the one hand, and these larger collectives on the other; and, questions about the obligations of communities and societies toward their members;
  
• And questions about the significance of American political and ethical ideals —such ideals as liberty, equality, and justice—for our contemporary debates about the problems and the reform of health and medical care in the United States.

These (and related) questions are the focus of this inquiry by the President's Council on Bioethics. The Council has neither the expertise nor the desire to enter into the controversies over what is wrong with health and medical care in America or over the most appropriate course for therapeutic policymaking. Poised at the intersection of the conflicts about problems and solutions, however, the Council does wish to raise and explore the ethical questions generated by these matters—in part, because these questions are often blurred, lost, or overwhelmed in the policy debates. This wish is rooted in the firm conviction that such questions—and their answers—offer a moral compass, critical for use in charting the way forward through this as well as any other complex matter of bioethical significance, for every citizen and the nation at large.

These questions are not marginal to the skirmishes among policymakers over the number of uninsured Americans, the significance of geographical variations in the quality of health care, or the causes of health care cost growth. They arise, instead, in the midst of these disputes, which are disputes about what is good, right, or just with respect to the health of individuals and the larger collectives of which they are parts. To pose these questions properly, these disputes must be entered into and understood, if only in broad outline. Thus, in Part One (below), we offer a purely descriptive account of the problems of access, quality, and cost, in order to illustrate their complexity and to draw out their implications for ethical questioning. In Part Two, we turn to three of the principal proposals for treating and resolving the ills of American health care: single payer national health insurance, mixed government and market reforms, and revisions in the tax code. And finally, in Part Three, we explore the ethical questions and concerns that arise in the various approaches to diagnosing and treating the ills of health and medical care in the United States.

PART ONE

DIAGNOSING THE ILLS OF HEALTH AND MEDICAL CARE IN AMERICA : THE PROBLEMS OF ACCESS, QUALITY, AND COST

I. The Problem of Access to Health and Medical Care

In 2006, according to the Current Population Survey of the U.S. Census Bureau, 47 million Americans were uninsured. This statistic is often cited in ways that suggest that it—and it alone—constitutes the whole of the problem of access to health and medical care in the United States . In this section, our focus will be on analyzing the dilemma of the uninsured: this oft-cited statistic will be subjected to careful scrutiny and the salient demographic characteristics of Americans who lack insurance, an essential component of access to health and medical care, will be described. There are other dimensions to the problem of access. The underinsured, who have some coverage but are inadequately protected against high out-of-pocket costs, are the subjects of a growing literature.² Difficulties with the supply and geographical distribution of health care professionals, along with some types of health care facilities (for example, emergency rooms), are also constituents of the problem of access. Our focus here, however, is on the uninsured.

Indeed, among the more prominent voices in contemporary debates about health and medical care reform are those arguing that reform is a moral imperative, arising, in the main, from the dilemmas of the uninsured. The uninsured tend to have less access to health care than do the insured and tend to pay more for health care when they get it. Despite the complexities of the relationship between health status and insurance status, the claim that the uninsured tend to have poorer health outcomes than the insured seems plausible, especially with regard to those who are poor and very sick and those who go without insurance for long periods of time. According to one estimate, some 18,000 premature deaths per year in the United States (as well as a number of other serious health conditions) could have been prevented by better access to health care.³ To be sure, the uninsured do have access to emergency room care (thanks to the Federal Emergency Medical Treatment and Active Labor Act (EMTALA)⁴, but care through this source tends to be less than optimal. Conditions are often treated only when they have become very serious. Moreover, the use of emergency care by the uninsured exacerbates the burdens placed on often strained emergency rooms and centers, many of which have closed in recent years. These outcomes are deplorable, both for the uninsured and for the hospitals and health professionals who treat them. Those hospitals and professionals incur costs that eventually lead to higher charges for the insured or to increasing outlays of federal and state funds for uncompensated care, estimated in recent years at 30 to 35 billion dollars per year.⁵ For all of those reasons and more, Americans of various political persuasions are concerned about the uninsured. To assess the merits of that concern, however, it is critical (1) to analyze key statistics about the uninsured and (2) to review some of the more salient demographic characteristics of those who lack this pivotal component of effective access to health and medical care.

A. The Uninsured: How Many and For How Long?

Note has already been made of the most commonly cited statistic, but it bears repeating: in 2006, the uninsured numbered 47 million, according to the Current Population Survey of the U.S. Census Bureau—or, to put it in a broader context, approximately 15.8 percent of a total population of roughly 299 million persons in the United States were uninsured in that year. Because all persons over the age of 65 are insured by Medicare, this percentage should be immediately revised: of the population in the United States under the age of 65, 18 percent were uninsured in 2006.⁶ Additional analysis is required, however, to gain a more concrete perspective on the magnitude of this aspect of the problem of access. The figure of 47 million indicates nothing more and nothing less than this: that this was the number of the uninsured at a given moment in 2006. The Current Population Survey that yielded that figure for that year is a cross-sectional survey and, as such, it does not indicate how long, over what periods of time, the counted individuals lacked insurance. That figure, therefore, obscures the degree of flux within the population of the uninsured.⁷

Other surveys, however, do shed light, for example, on the number of individuals who are uninsured at any time during the year and on the number of those who lack insurance for an entire year or longer—for example, the Survey of Program Participation (SIPP), the Medical Expenditure Panel Survey (MEPS), and the National Health Interview Survey (NHIS). Although those surveys use different methodologies and provide sometimes widely varying estimates, a roughly consistent picture can be gleaned from them. According to a 2003 Congressional Budget Office analysis of three of those surveys, the number of individuals who were uninsured at any given time during the survey period, whether for one day or one year or some period of time in between, totaled approximately 60 million—considerably more than the 47 million figure.⁸ As for those who were uninsured for a whole year or more, the SIPP, MEPS, and the NHIS yield different and not strictly comparable, but nonetheless useful estimates, all considerably less than the 47 million total:

• According to the SIPP, some 22.9 million persons in the United States were uninsured for the entire year in 2002.
  
• According to the MEPS, roughly 36.6 million were uninsured for the entire year in 2005.
  
• And according to the NHIS for the first nine months of 2007, 31.2 million reported being uninsured for more than a year at the time of interview.⁹

A statistical brief based on MEPS and examining the period between 2002 and 2005 yields estimates of the number of individuals who lacked insurance for periods of two or more years: 26.1 million persons were uninsured for two full years and 17.4 million were uninsured for the four previous years.¹⁰

Based on these rough estimates, the magnitude of the dilemma of the uninsured can be described as follows. A fairly large number of persons in the United States —perhaps between 60 and 80 million persons—go without insurance at some point in a given year. The number without insurance on a given day is smaller and somewhere in the neighborhood of 47 million persons. Some of the individuals in this count lack insurance for relatively brief periods of time, but a significant number—around 30 million—lack insurance for a whole year or longer. Those who lack insurance for two years total perhaps 25 to 30 million, while the number of those who remain uninsured for four years is somewhat less than 20 million— i.e., around 17.4 million.

Illness or injury can strike an individual at any time: neither youthful age nor the particularities of one's circumstances or way of life can provide fail-safe immunity to the misfortunes of disease or trauma. Thus, from this arguably objective perspective, to lack insurance for any period of time is to be vulnerable. ¹¹It is the persistence of this state of vulnerability over time, for two years and beyond to four or more years, for at least 17.4 million and as many as 26.1 million people in the United States that prompts some to argue that the plight of the uninsured presents a difficult moral problem that, as a nation, we are obligated to solve.

B. The Uninsured: Who Are They?

What are the distinguishing demographic characteristics of the individuals who share the condition of lacking health insurance? We turn, again, to the 2006 Current Population Survey by the U.S. Census Bureau for answers to this question, but we begin with this observation: the uninsured are very heterogeneous. No single characteristic is reflected by the group as a whole, other than this shared condition, which appears, on the basis of this survey, to have numerous causes. People lack insurance for multiple reasons and due to various problems in their lives—a fact that should be borne in mind in contemplating effective ways to surmount this particular barrier to effective access. To “flesh out” this generalization about the heterogeneity of the uninsured, we turn now to a brief review of statistics regarding age, poverty and wealth, race and ethnicity, geographical location, and immigration status.

Age : Individuals between 18 and 34 years of age are most likely to be uninsured. Out of the almost 47 million uninsured persons counted by the Census Bureau in 2006, 19 million or about 40 percent were in this age range—which means that between a quarter and a third of all of the individuals in this age range were uninsured in the United States in that year. The next most likely age groups to be uninsured were those between 35 and 44 (totaling about 8 million or 17 percent of the uninsured) and those between 45 and 64 (totaling about 10 million or almost 23 percent of the uninsured). To put these statistics in relation to the age-segmented population at large: 18.8 percent of the individuals between 35 and 44, and 14.2 percent of those between 45 and 64, were uninsured. By contrast, children under 18 and senior citizens over 65 were less likely to be uninsured: some 18.4 percent of the uninsured were below 18 (or 11.7 percent of the population below 18) and about 1 percent of the uninsured were above 65 (or 1 percent of the population above 65).

Figure 1: ¹²

Poverty and Wealth: Based on the Census Bureau data, one can conclude that the poor are more likely to be uninsured (in comparison to those who are not poor) but that an uninsured person is not necessarily poor. Out of the almost 47 million uninsured persons counted by Census in 2006, some 13.9 million of those had household incomes of $25,000 per year or less; 15.3 million had incomes between $25,000 and $50,000; and 17.7 million had incomes over $50,000. Roughly speaking, that means that less than a third of the uninsured had household incomes of less than $25,000 per year; about a third had household incomes between $25,000 and $50,000; and more than a third made more than $50,000 per year. As reference points, it is helpful to remember that in 2006 the federal poverty line for a family of four was $20,000 per year, and median family income was $48,201.

Nonetheless, it remains the case that one is far more likely to lack insurance if one is poor: the rates of being uninsured are higher, far higher, for people at the lower end of the income scale than they are for people closer to the top. In 2006, almost a quarter of persons with household incomes of less than $25,000, and more than a fifth of persons making between $25,000 and $50,000 per year, were uninsured, while less than a sixth of those making between $50,000 and $75,000, and less than a tenth of those making more than $75,000, were uninsured.

Figure 2: ¹³

Race and Ethnicity: African-Americans and Hispanics are both more likely to be uninsured than either Caucasians or Asians. Recall that the rate of uninsurance across the entire U.S. population in 2006 was 15.8 percent. Again, according to the Census data, 10.8 percent of the Caucasian population (not including Hispanics) was uninsured, as were 15.5 percent of Asians. The equivalent percents for African-Americans and Hispanics were 20.5 percent and 34.1 percent, respectively. Of course, given the size of different ethnic groups in the larger population, there are still far more Caucasians (again, not including Hispanics) and Hispanics in absolute numbers who are uninsured than either African-Americans or Asians.

Figure 3: ¹⁴

Geographical Location and Immigration Status : The uninsured are not distributed evenly across states, and there is wide variation in the rates of uninsurance from state to state. Rates of uninsurance are considerably higher in the South and West, at 19 percent and 17.9 percent respectively, than in the Northeast and Midwest , at 12.3 percent and 11.4 percent, respectively. Persons who are not citizens or who are naturalized citizens are more likely—in the case of those who are not citizens, far more likely—to be uninsured than are citizens. According the Census data, the rate of being uninsured for citizens is 13.2 percent; for naturalized citizens, 16.4 percent; but for those who are not citizens, 45 percent. Moreover, persons who are not citizens make up a sizeable fraction of the whole number of the uninsured—more than a fifth of the total number.

C. Summary

The preceding review of statistical data underscore one conclusion: the situation of the uninsured in the United States is a complicated one, far more so than the oft-cited figure of 47 million reveals. As this review has shown, that number does not capture how long the uninsured lack this essential component of access to care, nor does it provide important information on who the uninsured are. The number of individuals who lack insurance for a year or more is lower than 47 million—probably somewhere between 30 and 40 million. Nor is it the case that the uninsured are all poor and thus unable to purchase insurance. More than one-third have household incomes above the median national income. Moreover, about a fifth are not citizens; for that population, their problems with health care are bound up with their problems with immigration status, as well as the kinds of jobs they are likely to have.

None of these qualifications ultimately blunt the magnitude of the dilemma of the uninsured in the United States . The data reveal that a substantial group of Americans go without insurance for lengthy periods of time, perhaps as many as 26 million uninsured for two years or more, and as many as 17 or 18 million uninsured for four years or more. Although considerably smaller than the more familiar number of 47 million, these numbers point to a significant, severe problem. It is also noteworthy that the rates of uninsurance are higher among the poor and among African-American and Hispanic communities. Again, although it is true, as previously noted, that an uninsured person is not likely to be poor (at least by the definition of the federal poverty line,,currently set at $20,000 per year for a family of four), it is also true and worth repeating that a poor person is more likely to be uninsured. More generally, the near poor are also far more likely to be uninsured. According to some studies, almost 70 percent of the uninsured have household incomes under three times the poverty line ( i.e., $60,000 for a family of four).

II. The Problem of Health Care Costs and Financing

Just as few, if any, would dispute the fact that there are many millions of uninsured Americans, so too would few take issue with the claims that health care costs in the United States are high compared to other industrialized nations and that these costs are increasing in seemingly unconstrained ways. These facts are cause for concern on a number of fronts. Such broad measures of population health as infant mortality and life expectancy, for example, indicate that the U.S. does no better, and in some cases does far worse, than similar countries that spend less on health care: we may not be getting good value for our money. Moreover, rising health care costs inevitably put pressure on the budgets of families and governments. In the case of private citizens, rising health care costs seem to be one reason why some families are dropping insurance; according to one source, the fastest growing portion of the uninsured are individuals and families making more than $50,000 or $75,000 per year. ¹⁵ In the case of state and federal budgets, rising health care costs compel sometimes difficult decisions about displacing public spending on other state services. In the case of mandatory programs like Medicare and Medicaid, the rising cost of health care is a significant contributor to what certainly appears to be a looming budgetary crisis. Finally, for both private citizens and governments, the current situation is made more worrying still by the historical trends in the growth of health care spending. (It is worth noting that this is growth in excess of the growth expected from the aging of the population.) According to some estimates made by the Congressional Budget Office, if current trends continue, health care spending could rise to almost 50 percent of total Gross Domestic Product (GDP) by 2082. (See Figure 4.) Similar CBO estimates suggest that federal spending on Medicare and Medicaid could rise to a percentage of GDP equivalent to our entire federal budget today; other, more pessimistic, estimates see Medicare and Medicaid reaching that level as early as 2039. ¹⁶

Figure 4: ¹⁷

There is much controversy, of course, over the causes of those increases and the ways we might address those causes. ¹⁸ Here, we simply lay out some well-known facts about health care spending in the United States : as a portion of GDP and per capita; as it affects employees and employers; and as it affects federal and state budgets.

A. Health Care Spending in the United States

Today, the United States spends about $2 trillion per year on health care, which amounts to 16 percent of GDP and about $6,700 per person. Of course, compared with the poorer nations of the world, all of the wealthier nations spend a greater proportion of their income on health care. The United States , however, spends more on health care—both on a per capita basis and as a percentage of its GDP—than any other nation in the world. (See Figure 5.) Moreover, health care spending in the United States , measured in real (inflation-adjusted) spending per capita, has grown every year for the past fifty years. National spending on health care as a share of GDP increased from about 5 percent in 1960 to our current level of about 16 percent today and is projected to continue to grow. (See Figure 6.) In the decade from 1995 to 2005 alone, real national spending per capita on health care increased 77 percent (while real average income increased by 19 percent). ¹⁹ On average, since 1970, average health care expenditures in the United States have increased 2.5 percentage points faster than GDP. The cumulative effect of those growth rates is this: The United States has experienced a twenty-fold increase in health care expenditures—a four-fold increase over the consumer price index over the same period. (See Figure 7.) Not surprisingly, rising costs have long been an object of concern for both policymakers and the general public.

Of course, the rising share of health care as a portion of GDP may not necessarily be cause for concern. As mentioned above, as countries become wealthier, their citizens tend to spend more money on health care, and there is no way to determine a priori what the “appropriate” level of spending on health care may be. Moreover, the percentage of GDP representing health care also depends on the size and character of what happens in other sectors of the economy. Above all, the costs by themselves do not tell us anything about the quality or value of the care being provided, a question to which we turn in the next section on the problem of health care quality. Nevertheless, as the cost of health care rises so quickly relative to growth in GDP, it cannot fail to strain private and public budgets and to make it ever more difficult to solve or ameliorate other problems—for example, such problems as access and the plight of the chronically uninsured.

Figure 5: ²⁰

Figure 6:²¹

Figure 7:²²

B. The Effect of Increased Health Care Costs on Employers and Individuals

For individuals, rising health care costs lead to increased premiums and to insurance plans that attempt to restrain their costs by using higher deductibles, co-pays, and the like. Because individuals and families in the United States tend to get their insurance through their employers, who choose and purchase coverage from an insurer, those employers are often in the middle between the insurance companies and their employees who actually use the insurance. For this reason, employers are often the parties that complain most loudly about rising costs. They also tend to look to devices for holding down costs through cost sharing and the like. In 2007 the average cost of insurance (including both the part of the premium paid by the employer and the employee) was $373 a month or $4,479 per year for an individual and $1,009 a month and $12,106 per year for a family.²³ The rate of growth in premiums in the past ten years has been significant but also fairly variable, as can be seen in Figure 8.

Figure 8: ²⁴

As noted above, it is likely that rising premiums encouraged at least part of the growth in the ranks of the uninsured in recent years. But rising health care costs have another, less obvious effect as well, insofar as they help depress wages or keep wages from growing as quickly as they might otherwise have done. Most economists argue that, despite appearances, employers are not really paying the insurance premiums of their employees. Rather, the insurance premium is simply part of the total compensation package for the employee. Because of the tax exemption for health insurance, it makes sense for an employee to take part of their compensation as (untaxed) health benefits. For most Americans, our employer picks the insurance company, chooses the plan, and sends in the check, but the employer does not bear the final cost of the insurance premiums. That comes out of whatever the total amount of compensation the employer is willing to pay to the employee. In times of rising health care costs, that means that more of the total compensation has to go to insurance and less can go to increased wages, as Emanuel and Fuchs argue:

This is not a point merely of economic theory but of historical fact. Consider changes in health insurance premiums, wages, and corporate profits over the last 30 years. Premiums have increased by about 300 percent after adjustment for inflation. Corporate profits per employee have flourished, with inflation-adjusted increases of 150 percent before taxes and 200 percent after taxes. By contrast, average hourly earnings of workers in private nonagricultural industries have been stagnant, actually decreasing by 4 percent after adjustment for inflation. Rather than coming out of corporate profits, the increasing cost of health care has resulted in relatively flat real wages for 30 years. That is the real health care cost-wage trade-off. ²⁵

Again, the mere fact that costs are rising is not enough to tell us, by itself, whether or how those costs are a problem. That depends on whether or not the money is well spent. But this fact does, in and of itself, explain why health care costs are the cause of worry to both employers and employees.

C. The Effect of Increased Health Care Costs on Federal and State Spending

Increased health care costs also put a burden on federal and state governments, primarily through Medicare and Medicaid. Medicare and Medicaid together accounted for about 4.6 percent of GDP in 2007, and public funds, including Medicare, Medicaid, Veterans health care, and other programs account for about 45 percent of total health spending in any given year. ²⁶ For the governments that pay for these programs, rising health care costs mean some hard choices: reducing benefits, restricting eligibility, cutting other public programs, raising taxes.

For the states, health care costs are already the single largest part of state budgets, according to Emanuel and Fuchs, and those costs have risen and are projected to rise significantly, and far more than state tax receipts have risen. Not surprisingly, states have tended to respond by cutting other programs, most commonly funding for public higher education. Emanuel and Fuchs conclude that: “. . . the increasing cost of Medicaid and other government health care programs are a primary reason for the substantial increase in tuition and fees for state colleges and universities.” ²⁷

For the federal government, rising health care costs suggest that America will face equally hard choices on the national level. The Congressional Budget Office predicts that Federal spending on Medicare and Medicaid will rise from 4.6 percent in 2007 to 5.9 percent in 2017. By comparison, Social Security is projected to rise only from 4.2 percent of GDP to 4.8 percent. Again, the primary driver of these projected increases is not the aging of the population, but rising health care costs. And these increases could threaten to swamp the budget. As Peter Orszag writes, “If costs continued to grow at the same rate over the next four decades [as they have done in the last four], federal spending on Medicare and Medicaid would reach about 20 percent of the GDP by 2050—roughly the same share of the economy that the entire federal budget accounts for today.”²⁸(See Figure 9.)

Figure 9: ²⁹

D. Conclusion

Health care costs in the United States have been growing faster than inflation, gross domestic product, and wages. The results have been all too evident:

• a steadily increasing percentage of federal and state budgets is devoted to health care expenditures at the expense of other public programs and the future trends for this spending are ominous;
  
• costly, ever-increasing insurance premiums are now charged to employers and employees, with the ripple effects of stagnant wages;
  
• mounting out-of-pocket expenses are born by both the insured and the uninsured; and
  
• rising health care costs make solving the problem of the uninsured considerably more difficult than it might otherwise be.

The preceding review of the problem of health care costs in America yields one conclusion: there is, indeed, much cause for concern.

III.  The Problem of Health Care Quality

In light of the fact that the United States spends much more on health care than other countries, it is reasonable to ask: are we getting good value for the money?  But with respect to the question of the quality of our health care, we find significant division between, on the one hand, those who cite the technological marvels produced in America and the outcomes in the treatment of complex diseases and, on the other hand, those who look to various aggregate measures of population health and find significant defects.  This latter group points to evidence that the overall outcomes in America are not significantly better than other countries and are, in some cases, worse, despite the sums of money spent. Other scholars cite evidence that seems to show that a significant portion of care in the United States is inappropriate, or without much real benefit, and conclude that we are not getting our money's worth.   Of course, these seemingly opposed arguments are not mutually incompatible:  America could produce the world's best technologies while also failing to provide the right care in many routine instances, not to mention the problems of the uninsured.  And so we ask:  what do we know about the quality of American health care?

On the one hand, it is true that by many measures of population health, the United States does quite poorly: infant mortality rates are higher in the United States than in many other comparable nations, and life expectancy rates are also low compared to other industrialized nations. A study by the World Health Organization (WHO) found that the United States ranked 37 th out of WHO's 191 member states, behind many other industrialized nations, all of which, as we have seen, spend far less per capita on health care than the U.S. does. Similarly, a Commonwealth Fund study compared the United States to the United Kingdom, Australia, Canada, Germany, and New Zealand, and found that the U.S. ranked sixth out of these six countries in an overall ranking of quality, access, efficiency, equity, and healthy lives, and ranked fifth (see Figure 10 below) in terms of our rate of mortality amenable to health care. ³⁰

Figure 10: ³¹

Yet there is controversy over these facts. Some scholars argue, for example, that the cross-national comparisons fail to take into account differences in the underlying populations in different countries. They suggest that if we control for factors like homicide rates and car accidents—both of which are higher in the United States than in other countries—the measures of population health begin to look more similar to other nations. They also point out that rates of survival after the diagnosis of various serious ailments like cancer tend to be higher in the U.S. than elsewhere.³² Moreover, defenders of health care in United States point to the medical technologies and innovations developed here: the United States has produced more winners of the Nobel Prize in medicine than any other country and four of the six most important new medical technologies in the past twenty-five years were developed in the U.S. Additionally, the U.S. spends far more of its public and private monies on biomedical research and development than does the European Union. ³³ Thus, defenders of U.S. health care argue that we cannot evaluate the level of quality of health care in the United States without keeping in mind the increased quality of the technologies used in health care.

As is often noted, Americans tend to be strongly attached to medical innovation and new medical technologies, more so than citizens of other countries. ³⁴ And there is a respectable body of literature which argues that the benefits of new technologies far outweigh their costs (as heavy as the latter may be). The economist David Cutler has tried to quantify those benefits by measuring how many additional “quality-adjusted life years” or QALYs result from various new technologies. So, for example, Cutler and colleagues find that the cost of treating a heart attack has increased by some $10,000 in the 1990s, but that life expectancy after heart attack also rose by about one year. (See Figure 11.) The treatment for low-birth weight infants presents a similarly positive picture. Cutler and colleagues conclude that “technological changes have proved to be worth far more than their costs. ³⁵

Figure 11: ³⁶

Of course, it is entirely possible that the United States produces many of the best new technologies and that the level of care given on a routine basis is often of uneven quality. After all, even the best technology cannot help very much if a particular patient does not have access to it—or does not have timely access.

Nevertheless, with respect to three different indicators—patient safety, receipt of recommended care, and variations in the intensity and outcomes of treatment—evidence suggests troublesome inadequacies in the quality of health care in America .

Patient Safety : Marked and seemingly widespread deficiencies in patient safety were the focus of the Institute of Medicine 's To Err Is Human , a report published in 2000. ³⁷ According to the IOM, as many as 98,000 deaths are the result of medical error each year in the United States . That is more deaths from medical error than from motor vehicle accidents (around 45,000 deaths annually), from breast cancer (also around 45,000 deaths annually), or from AIDS (around 16,000 deaths annually). ³⁸ Years after the IOM's report, there have been gradual improvements in patient safety: for example, there are fewer deaths associated with the accidental injection of concentrated potassium chloride, fewer patients have had complications from warfarin, and new safety practices are being implemented by hospitals. ³⁹ However, it has been difficult to see the overall impact of these attempts, and the inherent fragmentation of care remains the most difficult barrier to reducing errors and ensuring patient safety. ⁴⁰

Receipt of Recommended Care : In the last few decades, professional societies along with such government agencies as the Agency for Healthcare Research and Quality have sought to develop and promulgate clinical practice guidelines and clinical pathways that stipulate the evidence-based recommendations for the most effective diagnosis and treatment of a wide range of diseases and disorders, from childhood asthma to adult hypertension. Nonetheless, in the first national, comprehensive study on quality of care for adults in the U.S., McGlynn and colleagues examined whether clinical practice guidelines were being followed and found that patients received the recommended care only 54.9 percent of the time.⁴¹ This percentage was similar for receipt of recommended preventive care (54.9 percent), recommended acute care (53.5 percent), and recommended chronic care (56.1 percent). In a recent study on the quality of care delivered to children in the U.S. , the authors found similarly troubling results: indicated care was received only 46.5 percent of the time. ⁴² As McGlynn has recently testified before the U.S. Senate, “We spend nearly $2 trillion annually on health care and we get it right about half the time. That may be the best in the world, but I think you would agree that we can and should do better.” ⁴³

Variations in Intensity and Outcomes of Treatment: , A substantial body of evidence also supports the finding of wide variations of the amount of money spent and of treatments performed between different areas of the country, but without any corresponding variations in health outcomes. In fact, the evidence seems to suggest that geographical areas that spend more actually have lower levels of quality of care. Researchers at Dartmouth led by Jack Wennberg and Elliott Fisher have shown, for example, that the amount of money spent per capita on Medicare recipients varies widely between different areas of the country, by almost as much as a threefold difference, even after controlling for differences in age, race, and sex. But, as Elliott Fisher argued in a presentation to the President's Council in March 2008, the correlation with quality is low (for one example, see Figure 12). Many researchers have concluded that increased spending does not translate into better outcomes—in fact it may translate into worse outcomes. Wennberg and Fisher contend that much of the health care spending in Medicare, perhaps as much as 20 percent to 30 percent, does not bring added health benefits and that there may well be a similar proportion of private spending on health care that does not bring better outcomes. Economists suggest that in many cases Americans may be at the “flat of the curve,” that is, at that place in a cost-benefit analysis when further resources may not only bring added benefit but may, in fact, bring less benefit. ⁴⁴

Figure 12: ⁴⁵

Summary Thoughts on Quality : The evidence from the Dartmouth studies leads some observers to conclude that there is a large amount of health care spending in the United States that is inefficient or wasteful. Peter Orszag, director of the Congressional Budget Office, has recently written: “With health care spending currently representing 16 percent of gross domestic product (GDP), [Wennberg and Fisher's results] would suggest that nearly 5 percent of GDP—or roughly $700 billion each year—goes to health care spending that can't be shown to improve health outcomes.” ⁴⁶ Of course, as Orszag observes, trying to figure out how to reduce inappropriate or unnecessary care is no easy task.

II. PART TWO

TREATING THE ILLS OF HEALTH AND MEDICAL CARE IN AMERICA : THREE PROPOSALS FOR REFORM

Over the last century, several major initiatives have been launched to reform American health care—in the main, to extend insurance to the uninsured, especially to such vulnerable populations as children, the unemployed, and the elderly. But, since the establishment of Medicare and Medicaid, there has been little in the way of fundamental change and, given the additional complexities generated by the problems of quality and cost (which are, now, equally troubling), one could easily argue that today's would-be reformers confront an even more formidable challenge. For, if one concedes that the problems of access, quality, and cost all demand therapeutic action, then the aim is one of achieving significant improvements on not just one, but on multiple fronts.

Despite this daunting challenge, there has been no shortage of proposals for how the United States can best tackle and make progress in health care reform. From among a multiplicity of proposals for change, we have selected three approaches for description and analysis—and, more to the aims of our inquiry, as points of departure for identifying and ultimately exploring certain ethical questions and concerns: (1) the proposal for a single payer national health insurance system, (2) the proposal for reform through mixed government and market mechanisms, and (3) the proposal for revisions in the tax incentives that shape choice and behavior with respect to health care. All have occupied—or continue to enjoy—a prominent place in our national debates about health care reform, but each also offers a strategic advantage for the purposes of this inquiry: these solutions, as well as the problems they seek to solve, both raise and answer certain basic ethical questions and concerns. We turn, now, to brief summaries of these proposals and from there, in Part Three, to the questions and concerns that are at the heart of this inquiry.

I.  A Single Payer National Health Insurance System

A brief overview of the American health care system is important as a backdrop for describing a single payer national health insurance. Health care funding flows from public and private sources and through a variety of intermediaries between patients and health care professionals—for example, through health insurance agencies and health maintenance organizations. The primary rationale for insurance is to spread, among the insured, the risk of serious financial hardship posed by the possibility of unexpected and catastrophic illness. With the expansion of insurance coverage (for example, to fund preventive care and early diagnosis), these intermediaries have sought to minimize costs by negotiating reduced fee schedules, contracting with preferred provider networks, and other measures. To reduce their own financial risks, insurers seek to maximize premiums collected from participants while minimizing the number of high-risk participants covered, minimizing the number of claims paid, and minimizing the amounts paid to providers. Moreover, for-profit insurers also seek to maximize dividends for investors. And, to achieve those ends, the health insurance industry employs increasing numbers of people. In fact, over the past decade (from August 1997 to August 2007), employment in the health insurance industry grew by 55 percent. Over the same period, employment by health care providers and support staff grew by 26 percent, and employment in the overall economy grew by 12 percent. ⁴⁷

A.  The Elements of a Single Payer National Health Insurance System

Those who advocate a single payer system ⁴⁸ seek to eliminate the intermediaries by having a single payer, the government, collect funds and pay expenses. When coupled with a national, public health insurance system, the advocates argue, a single payer would eliminate the cadre of intermediary administrators employed by insurance agencies to evaluate claims, procedures, and claimants as well as the support staff employed by health care providers to negotiate with multiple insurance agencies with multiple sets of regulations. The end results, they claim, would be two-fold: First, we would have a health care system that is driven by care rather than profits; ⁴⁹ and second, because the risk pool would be unalterable with no incentives to “cherry-pick” plan participants, there would be a reduction in the costs associated with the proliferation of health insurers–not only the “cost” of profit for investors, but also administrative, marketing, and complex, overlapping, and redundant paperwork costs.

A single payer national health insurance system would cover all U.S. citizens and would be funded by combining current Medicare and Medicaid funds with funds derived from modest payroll tax increases, earmarked income taxes, or compulsory employer contributions:

The simplest way to think of this proposal is to imagine Medicare extended to cover all age groups…[with the added benefits of] dental services, long-term care, prescription drugs, and more comprehensive mental health care…. Copayments and deductibles would be eliminated or held to a minimum. Hospitals would be funded by an annual budget, fixed in advance…. The global budget for the national health insurance program would be set at approximately the same proportion of GDP as the year preceding its establishment…. It is the simplest, most straightforward way of achieving universal coverage. ⁵⁰

A single payer national insurance system differs from “socialized medicine”—for example, from the British system or the Veterans' health care system in the United States—in that physicians and other health professionals are not employees of the state. Instead, they are either independent contractors, paid on a fee-for-service schedule, or salaried employees employed by a health care facility or other capitated group practice under contract with the national health insurance system. Advocates of national health insurance contend that such a system actually increases patient choice. In today's system, insurance plans restrict choice in various ways: by restricting the care givers one can choose, by reducing benefits or reimbursement rates for out-of-network care givers, or by requiring pre-screening and referral before a plan participant may see a specialist. In fact, although most regulation (for example, of care givers) in the American health care system occurs through private insurance companies, the United States “…arguably has some of the most intrusive regulation of physician behavior of any industrialized country.” ⁵¹ It is unclear whether physicians and other health professionals could opt out of the national health insurance system altogether and provide services privately or through private insurance plans. Presumably, private medical transactions would be permitted, although caregivers would have to commit, as caregivers in Canada do, either to participating in the system or to practicing in private—rather than being allowed to have mixed, public and private practices and payments as the British system allows. Individuals could forego the use of the national health insurance services and facilities, but no one could opt out of paying the taxes that would fund the system.

The proposal for a single payer national health insurance system is informed by several ethical principles:

1. Access to comprehensive health care is a human right. It is the responsibility of society, through its government, to ensure this right. Coverage should not be tied to employment.
   
2. The right to choose and change one's physician is fundamental to patient autonomy.
   
3. The pursuit of corporate profit and personal fortune has no place in care giving. Such a pursuit generates waste and introduces perverse incentives into clinical decision making and the provision of care.
   
4. In a democracy, the public should set health policies and budgets. Personal medical decisions must be made by patients with their care givers, not by corporate or government bureaucracies. ⁵²

In deference to these principles, implementing a single payer national health insurance system would require a phasing out of all investor-owned facilities including hospitals, nursing homes, and clinics ⁵³; the owners would be compensated by the new system. Capital spending for construction of new facilities and the purchase of expensive equipment would be allocated and overseen by regional health planning boards based on geographic and demographic needs, rather than on the potential for a profitable return to investors. Regional planning boards would require “…rigorous evaluation, needs assessment, and active participation by providers and the public.” ⁵⁴ Such organizations are intended to make health care planning more responsive to local needs and conditions; their reliance on participation by providers and the public is intended to help isolate planning boards from larger lobbying interests and political pressures.

B.  Projected Effect on the Problems of Access, Cost, and Quality

National Health Insurance and Access: Solving the problem of access is, perhaps, the driving aim of a single payer national health insurance system. Whether such a system would provide care to non-citizens (with or without visas) is an important detail. Public health initiatives (for example, immunizations), however would be provided to everyone without requiring documentation. The system rests, first and foremost, on the principle that citizens are entitled to receive health care, regardless of employment status.

It is unclear whether such a system would spawn an “underground” or secondary “system” of private providers, institutions, and insurance plans. There would, indeed, be private providers and, perhaps, insurers for services that would not be covered by the system (for example, cosmetic surgery), but it is not clear whether a two-tiered system would emerge. To establish and sustain the system, however, citizens could not opt out of paying the requisite taxes.

National Health Insurance and Cost: Paul Krugman and Robin Wells contend that a large body of “…evidence clearly shows that the key problem with the U.S. health care system is its fragmentation.” ⁵⁵ Not only does the proliferation of insurance companies create administrative “black holes,” the decentralization of payers is a barrier to realizing efficiencies and economies of scale. This is especially the case with prescription drugs:

Residents of the United States notoriously pay much higher prices for prescription drugs than residents of other advanced countries, including Canada . What is less known is that both Medicaid and, to an even greater extent, the Veterans' Administration, get discounts similar to or greater than those received by the Canadian health system. ⁵⁶

According to Krugman and Wells:

…[T]he available evidence suggests that if the United States were to replace its current complex mix of health insurance systems with standardized, universal coverage, the savings would be so large that we could cover all those currently uninsured, yet end up spending less overall. That's what happened in Taiwan , which adopted a single-payer system in 1995: the percentage of the population with health insurance soared from 57 percent to 97 percent, yet health care costs actually grew more slowly than one would have predicted from trends before the change in system.⁵⁷

The Connecticut Coalition for Universal Health Care notes:

The costs of health care as a percentage of GDP [in Canada], which were identical to the United States when Canada changed to a single payer, universal health care system in 1971, have increased at a rate much lower than the United States…. ⁵⁸

Today, the percentage of gross domestic product (GDP) dedicated to health care in Canada is approximately 10 percent compared with 16 percent in the United States . ⁵⁹ Granted, there are real problems with international comparisons—of economic systems, health care systems, health spending, and population health status. Nonetheless, such comparisons can provide a point of departure, both for identifying, analyzing, and solving systemic problems.

If government payments for public employees' private health coverage and tax subsidies for private insurance are included in the total of government expenditures, these expenditures now account for approximately 60 percent of total health spending in the United States. ⁶⁰ The critical question is: would more efficiency, greater productivity, and less expense be the results of a restructuring of the American health care system—a restructuring that (1) consolidates citizens into one risk pool with one administrative body to insure the entire populace against health risks, that (2) negotiates with providers and suppliers without having to generate profit for investors or salaries for multiple layers of regulators for multiple payers, and that (3) creates and exploits efficiencies and economies of scale? Advocates of a single payer national health insurance system argue that such a system would be more cost effective and, citing the experience of other countries, they buttress this argument with another claim: that such a reformed system would produce similar if not higher levels of subjective satisfaction and better outcomes.

National Health Insurance and Quality: We have already noted the controversy that surrounds international comparisons of health care quality. For many, these comparisons are problematic because there are so many factors, other than medical intervention, that can affect treatment outcomes. Nevertheless, it is worth repeating the findings of the 2007 Commonwealth Fund report that compared the United States to five other nations—Australia, Canada, Germany, New Zealand, and the United Kingdom. In that report, the American health care system came in last or second to last on five dimensions of what was defined as “a high performance” health system: quality, access, efficiency, equity, and healthy lives—despite the fact that American health care spending per capita was 90 percent higher than the next highest spending nation and almost three times higher than the country that spent the least. That finding is consistent with earlier Commonwealth Fund assessments and with assessments by other independent agencies. ⁶¹ In terms of subjective reports of satisfaction with health care in the United States, polls have shown that Americans have been consistently satisfied with the health care services they are provided.

Some have voiced concerns that an NHI program would increase wait times for treatment, but another Commonwealth Fund report projected a different and perhaps more reassuring picture of this facet of patient need and satisfaction:

There is no systemized collection of data on wait times in the U.S. That makes it difficult to draw comparisons with countries that have national health systems, where wait-times are not only tracked but made public. However, a 2005 survey by the Commonwealth Fund of sick adults in six nations found that only 47 percent of U.S. patients could get a same- or next-day appointment for a medical problem, worse than every other country except Canada…. [The only category in the study in which]…the U.S. was first by a wide margin: 51 percent of sick Americans surveyed did not visit a doctor, get a needed test, or fill a prescription within the past two years because of cost. No other country came close. ⁶²

Even if wait times increased somewhat and quality of care remained unaltered under a national health insurance system, many observers contend that health outcomes would surely improve.

II.  Health Care Reform Through Mixed Government and Market Mechanisms

Critics of a single payer national health insurance system often contend that such a system is neither desirable nor feasible. First, they argue that the money saved in administrative costs will be a one-time savings and that such a system will not actually affect the root causes of health care cost inflation. For these critics, the assumption that these administrative costs are simply wasteful is a flawed one, based on an implicit belief that there is no value in consumer choice among various insurance plans; there is value, they claim, but it is a value that will inevitably generate costs (for enrolling new customers, advertising, etc.). Second, critics of single payer systems often assert that there are other ways of achieving or moving toward universal coverage—for example, individual mandates plus subsidies—without taking the drastic (and very possibly politically doomed) step of doing away with the insurance industry. Although many believe that the plight of the uninsured is morally troublesome, they argue that such ethical judgments do little to settle either the question of which system would work best or the question of whether government regulation or market competition would control costs more effectively.

Thus, a pivotal question about a single payer system is whether we have good reason to think such a system would control costs in a socially acceptable and efficient way. There are, in the minds of critics, several reasons to be skeptical on this score. They point out that Medicare, which has essentially the same fee-for-service payment scheme as much of the private sector, has not done such a good job in controlling costs over the past thirty years. Indeed, the fact that fee-for-service has been entrenched in Medicare may have played a significant role in encouraging the rising costs that make health care reform so challenging. Second, the prospects for restraining the costs of Medicare (as we know it now) do not appear promising. It is likely that a Medicare-like single payer system would institute health maintenance organization (HMO)-style utilization reviews, but such restrictions proved extremely unpopular among Americans during the 1990s, despite the fact that they seemed to have controlled costs without great harms to overall health. It is likely that a similar, or, at best, lukewarm reception awaits the imposition of such limits.

There is also the danger that a single payer system, with the sort of centralization it will entail, will become more politicized and more subject to special-interest lobbying by various powerful groups. Some fear that Congress, in an exaggerated sense of beneficence and lobbied by the promoters of various new treatments, will tend to override weak evidence and demand that the system pay for things it probably should not fund. Put simply, the critics of single-payer proposals argue, the centralization of a single payer system would likely bring the ills of political involvement and biased decision making.

A.  Reform Utilizing Mixed Government and Market Mechanisms: A Descriptive Overview

For those reasons, some health care reform advocates have asked whether there are ways to utilize government mechanisms to ensure, or at least move toward universal coverage and markets to control costs and improve quality. Varying proposals that aim to do just this have been advanced in recent years. One was the ill-fated Clinton health care reform plan of the early 1990s, which sought to impose a mandate on employers to help pay for the insurance of their employers—a provision that garnered stiff opposition, especially on the part of small businesses. That opposition may or may not have been justified, but most contemporary reformers have abandoned employer mandates to solve the problem of coverage. Several reasons are usually cited. For one, critics of employer mandates argue, the employer cost of insurance that individuals buy through their employers is not borne, in the final analysis, by the employer. That cost is actually part of the employee's total compensation package, which, largely because of the tax code, employees end up taking as health insurance rather than wages. That money comes out of the value the employee brings to the firm and not out of the firm's profits. Employer mandates obscure this basic fact and thus contribute to confusion in the minds of employers and employees alike about who, in the final analysis, bears the cost of health insurance. Employer mandates also help solidify and entrench our employment-based insurance system and do not by themselves address the problems of the unemployed uninsured or the root causes of lack of insurance in small companies.

Thus, the more prominent proposals for reform through mixed government and market mechanisms look to some combination of strategies to improve health care, including:

• individual mandates;
  
• tax credits, subsidies, or vouchers to purchase insurance;
  
• novel forms of insurance-pooling for those seeking insurance outside of employers; and
  
• improved efforts at technology assessment to help contain costs from treatments of low or dubious value.

Not every proposal in this category contains all of the preceding elements and, between and among proposals, there is significant variation in emphasis and strategy. A discussion of each and every proposal is beyond the scope of our inquiry; thus, we will confine ourselves to a presentation of the main elements and of some prominent examples. ⁶³

Individual mandates : An individual mandate, as the term implies, is a government-imposed requirement that individuals secure health insurance coverage for themselves. (In some reform proposals that include mandates as a key to expanding coverage, those who lack the requisite financial and economics means for compliance would receive support in one form or the other, as described below.) Proponents of individual mandates marshal both practical and moral arguments in their favor. On practical grounds, especially in the absence (and for some, undesirability) of a single payer system, they argue that individual mandates provide the most effective path to universal coverage. They also defend individual mandates as the most faithful expression of the moral view that many, if not most Americans have of health care and health insurance. Health care is the sort of human good that no one should be without; however, to the extent possible, individuals bear responsibility for securing that good, for themselves and their dependents. That is, health care should not be conceived as a right, as some advocates of single payer systems do, but rather as a duty of the individual.

As matters stand now, some individuals go without coverage and resort to charity care, which amounts to some 35 to 40 billion dollars per year, a large sum to be funded by “the system.” At least in design, individual mandates would help to resolve this problem and would, in principle, permit a redirection of funds within the system: instead of spending these funds on uncompensated care, they could be used to broad coverage, especially of the uninsured. Thus, the moral logic of individual mandates combines the proposition that health care is a duty of the individual with the proposition that government should extend a helping hand to those who legitimately lack the means to fulfill this duty. That logic, as we have noted, is at odds with the conception of health care as a right that one can demand and compel others to guarantee, even if the amount of material aid derived from the government were the same under these differing moral views of health care.

Subsidies, Tax Credits, and Vouchers : Individual mandates also face a serious objection: it seems counterproductive, at least, and cruel, at worst, to require individuals to buy insurance if they cannot afford it (leaving aside for now the thorny question of how to define affordability). Because the growth in the ranks of the uninsured has been fueled, in large measure, by rising costs, a mandate to purchase insurance, in the absence of other changes, would do little, if anything to solve the basic problem. Thus, most proponents of individual mandates concede that these mechanisms must be coupled with a subsidy, usually targeted to the poor and the near poor and taking the form either of tax credits or vouchers. Such subsidies could amount to considerable sums of funding, perhaps between 100 and 200 billion dollars. Some of this amount might be derived from funds now spent on uncompensated care and some of it might be generated either by capping or ending the current exclusion for employment-based insurance. Neither of these sources could be easily tapped and so it is probably more realistic to expect that a significant portion of the needed funds would have to be generated from other sources. Although it is beyond the scope of our inquiry to enter decisively into the debates about which path is more affordable and attractive as a policy option for our country, ⁶⁴ it is interesting, nonetheless, to ask the question of whether an individual mandate is required if the sum required to fund subsidies were actually available. If subsidies would make it easier for the poor and near poor to buy insurance, one could argue that the most morally troublesome core of the problem of the uninsured had been solved and that those who still do not buy insurance on their own should have to contend with the consequences of their refusal. ⁶⁵ Answers to this question no doubt turn on the importance attached to universal coverage versus increased coverage.

Advocates of tax credits and vouchers, with or without mandates, often appeal to the competitive market as necessary to spur continued innovation and improvements in health care quality. Because many of the uninsured would purchase insurance as individuals rather than through their employers, however, these advocates have to contend with the question of whether individual insurance markets could do an adequate job for the now newly insured. As matters stand today, the individual insurance market is not promising: the portion of premiums that goes for loading fees—that is, not for actual medical benefits—is high compared to employer-based insurance, and insurance companies in these markets spend much more time and money trying to avoid bad risks, pre-existing conditions, and the like. Some advocates of tax credits for health insurance point out that this current limitation of individual insurance markets is bound up with the other problems of our current approach to health insurance: for example, individually purchased insurance does not have the advantages of the large tax break that employer-based insurance enjoys; those seeking insurance through individual markets tend to be sicker, because unemployed?, and so on. In brief, these advocates say, we do not know what will happen if many more individuals, currently uninsured, but now armed with tax credits or vouchers, start looking for insurance in individual markets; it may well be that those markets become much more viable than they seem now.

Novel Pooling Mechanisms : Some health care policy analysts think that the individual market for insurance is not likely to accommodate the uninsured very well at all. They point out that, although employer-based insurance has been excessively encouraged by the tax exemption, it has its merits—advantages that should not be discarded and that should be reproduced in any effort to cover those who are now uninsured. Foremost among these advantages is the pooling of risk that large employers are able to achieve. To make health insurance economically viable, the argument goes, an insurance company must have a sufficiently large and heterogeneous group across which costs and risks can be spread. And, because employees are usually hired for non-health related reasons, employer-based groups provide “ready made” groups in which risk is already widely distributed.

Thus, many advocates of reform utilizing government and market mechanisms also look to novel ways of pooling risk to supplement or replace the pooling functions of employer-based insurance. ⁶⁶ Most of these ways share a basic form in which either the federal or state government establishes purchasing pools; enrollees within these pools would be offered a menu of insurance plans from which to choose. The government would set the ground rules for the plans and administer and distribute the payment of premiums. The plans offered through purchasing pools would have to meet minimum standards, but there would be real differences between and among them and thus genuine choice for the enrollees and competition between the plans. The virtues of such an approach are several, according to proponents. For example, purchasing pools would provide genuine portability of insurance for enrollees from job to job but would also avoid the adverse selection that has been so problematic in today's individual insurance market. The best known examples of how this might work are the Connector, a key element of the recent reforms in the Commonwealth of Massachusetts , and the Federal Employees Health Benefits Program.

Technology and Outcomes Assessment : Many (although not all) mixed proposals rest on the claim that the problem of rising costs should be addressed through the application of objective evidence about the benefits, harms, and risks of health care treatments and technologies. Because a significant driver of rising costs is new technology, some observers argue that an independent and objective body, probably a new Federal agency, is needed to evaluate the effectiveness and cost of new drugs, medical devices, and tests on the basis of rigorous scientific research. ⁶⁷ Such a body might be modeled on Great Britain 's National Institute for Health and Clinical Effectiveness (also known as NICE), which researches and issues guidance on what is known about various interventions. An initiative of this sort could build upon evidence-based medicine as well as experience with physician pay-for-performance (P4P) within Medicare and other programs. The findings of such initiatives would presumably be applied to practice either through institutional methods (like HMO style treatment reviews) or through enhanced availability of information. Proponents of such ideas think that intensified research into the efficacy of various interventions, assessed by a credible and neutral agency, could help restrain the use or overuse of medical interventions of dubious utility.

B. Projected Effect on the Problems of Access, Cost, and Quality

Mixed Reforms and the Problem of Access: Reform proposals that mix government with market mechanisms differ in the ways that they combine mandates, subsidies, and other elements; most, however, share the aim of providing coverage for all—or, at least, of significantly expanding coverage. Many health policy analysts believe that it will be difficult if not impossible to achieve universal coverage without a mandate; for example, without a mandate, the level of subsidies would have to be considerably higher than with a mandate in order to get the same level of coverage. In principle, however, a mandate on individuals to purchase insurance together with subsidies to the poor and the lower middle class could move the United States much closer to universal coverage.

Mixed Reforms and the Problem of Cost/Financing: Increased coverage through mixed government and market reforms—whether through individual mandates combined with new tax credits or subsidies or through new subsidies alone—will require more public spending, perhaps between $100 and $200 billion, according to various experts. Some of these funds might come from money now spent on uncompensated care, which is usually estimated at $35 to $40 billion. Some proponents of individual mandates also argue that the infusion of additional people into the individual insurance markets could help cut down on underwriting and other administrative costs ( e.g ., Glied, 1541). But there is, as well, the possibility that the transfer of funds from uncompensated care to new subsidies will not be simple and might prove very difficult and that the newly insured may well consume more health care than they had previously.

Advocates of mixed reform proposals contend that such proposals, if enacted, will provide other means to the end of cost control. First, some proposals (for example, the proposal advanced by Ezekiel Emmanuel and Victor Fuchs) envision a system of vouchers for everyone, funded by a dedicated value-added tax (VAT)—a system that would replace the current mechanisms of funding, i.e., employer and employee contributions with tax exemptions and various government programs.

In such a system, the tax rate on the VAT would provide an overall budget constraint that could be changed only by Congress. Presumably, the American public would have to decide whether they wanted more health care services through the vouchers or a smaller tax. Either way, a dedicated tax would be a more transparent way of deciding how to control costs than we have today. Second, competition among health plans, if accompanied by risk adjustment mechanisms (which help equalize the burden of sicker patients across plans) would also help keep costs down. Rather than competing over how to avoid covering the sickest patients, plans would be compelled to compete over providing quality care. Third, any medical procedures above what are provided by the plans purchased with a voucher would be paid for with after tax dollars, so the consumer would have more incentive to spend wisely. Finally, an independent technology and outcomes assessment body would help evaluate which new technologies are most cost-effective, which are not worth covering, and which are. That would help eliminate some uncertainty about new treatments that, in some cases, leads to overuse and to higher costs.

Mixed Reforms and the Problem of Health Care Quality: Advocates of mixed reform proposals also look to competitive markets as solutions to problems with quality—especially as spurs to innovation and quality improvement. Such advocates point to Medicare as a prime example of the difficulties that large government programs encounter in this respect; they also tend to agree with the contention that some payment schemes, like fee-for-service, have been ineffective at restraining costs. They argue, however, that there are many plausible ideas for improving and advancing high quality in health care and the best way to test and identify the most practically effective ideas is through the workings of the market—rather than through misguided reliance on a government agency charged with such a task. The competitive power of the market would be unleashed if insurance companies were incentivized to compete for patients through quality innovations—rather than to avoid patients.

III. Tax Reform: Individualized Health Care

Reform proposals that combine government and market mechanisms also face their share of objections. As previously noted, the biggest practical hurdle is finding the money to expand coverage—surely no small feat in a time when budgets are under pressure from several directions and the growing costs of Medicare and Medicaid are widely seen as unsustainable. Even when these practical issues are put aside, a number of objections remain. Some commentators object to individual mandates on both ethical and practical grounds. They argue that health is or ought to be seen as the individual's responsibility (at least, primarily) and that individuals have the right to live in ways that the rest of us might think foolish. They also point out that mandates for auto insurance, often cited in support of the idea of individual mandates, are less analogous to mandates for health care than it might seem. States compel all car owners to have insurance, but usually only for liability insurance for accidents in which the driver is at fault for harming someone else. States do not require car insurance for the damage drivers might do to their own cars, or for maintenance and the like. Moreover, they point out, mandatory car insurance does not mean that all drivers do in fact have insurance: in many states the rates of drivers who defy the law and drive without insurance are quite close to the rates of individuals without health insurance. Enforcement of a mandate that fall on all individuals, for a product that is more expensive and more complicated, will present at least as many difficulties as car insurance does.

Critics of mandates also argue that seeing our health care woes solely through the lens of the uninsured mistakes the real problem: the rising costs of health care. Yet attempts to solve that problem through direct price controls, through the use of the monopsony power of a single payer health care system, or through other, similar means are likely to make things worse, not better. Many commentators suggest that one major culprit behind rising costs and uneven (and in some cases poor) quality is the pervasive use of third party payment, whether in the form of government programs or of private insurance companies. Because patients are largely or wholly insulated from the costs of their care (and because doctors working with fee-for-service payment schemes make more money for doing more), no one directly involved in care has a real incentive to say no to treatments, even when those treatments bring little or no benefit. Yet the third party payers—the insurance companies and ultimately employers—who do have some incentive to hold costs down are not trusted, for good reasons and bad, to make those decisions, as the failure of the HMOs in the 1990s revealed.

Thus, advocates of a turn to free markets in health care diagnose the woes of American health care as centering on a pervasive lack of cost-consciousness among patients, which leads, in turn, to problems with quality and cost effectiveness. And these problems are by-products of the dominant role played by insurance in American health care over the last century or so. Insurance, they say, was originally meant to protect those who bought it against infrequent but very costly risks, not against common, low level costs. But the historical fact that fringe benefits are considered by the IRS as exempt from income and payroll taxes means that American workers have a large incentive to take compensation in the form of health insurance purchased by their employer—and to take it in lieu, for example, of additional cash. Put simply, the tax exemption means that workers get more for their money if they take it in the form of health insurance than if they take it as wages and then try to buy medical services with it.

This oddity of the American tax code leads to a number of unattractive consequences, the proponents of tax reform contend. First, the government effectively supports the purchase of health insurance, but it does more for those who make more money than it does for those who make less. That is, the benefits are skewed toward the top of the income scale rather than the bottom. According to John Sheils and Randall Haught, the various tax exemptions for health insurance meant that the federal government did not collect around $188.5 billion in 2004, and about 26.5% of that amount is attributed to families with annual incomes of $100,000 or more, while 28.4% of that amount went to families with incomes below $50,000. Families making more than $100,000 a year account for about 14% of the population; those making less than $50,000, about 57.5%. ⁶⁸ Second, by linking the tax benefits to an employer who is able and willing to provide health insurance, it does nothing to help those between jobs or without jobs. Third, it strongly encourages the purchase of health insurance and it encourages the purchase of more lavish insurance policies. Rather than an insurance policy that protects only against catastrophic but infrequent risks, it encourages workers to seek policies that cover much more. Finally, by separating the decision to receive a particular kind of medical care from the obligation to pay for it, the insurance model encourages a lack of responsibility about whether the care in question is really worth the money. ⁶⁹

All of these features tend to raise the cost of insurance and to encourage various kinds of inefficiencies. Since people tend to become uninsured when the cost of insurance goes up, these features of the tax exemption also indirectly contribute to the number of uninsured. Not surprisingly, noting such concerns, some observers have focused on changing the tax code, considering it the most important reform for American health care.

A. Elements of the Proposal for Tax Reform and Individualized Health Care

Although tax reform might be implemented in different ways, the core idea is that tax code should be neutral with respect to the different ways of buying health care and health insurance. That is, the current tax exemption for the purchase of employer-based insurance should be either eliminated or replaced with some way of giving the same benefit to Americans, regardless of how they buy their insurance or health care. This goal might be accomplished in a number of ways: by capping the amount that is exempt from taxes; by expanding the deductibility of other personal health spending through Health Savings Accounts and the like; or by replacing the tax exemption with a tax credit.

Capping the Tax Exemption : Many analysts think that the tax exemption should not have been established in the first place. Our current insurance practices, however, have grown up around that exemption, and because all Americans who get insurance through their employers benefit from it, it is not likely that the exemption will be simply eliminated. Nonetheless, some analysts think that capping the exemption is a sine qua non of health care reform. ⁷⁰ Such a cap would mean that employers could still purchase health insurance for their employees with pre-tax dollars up to a certain amount. Any insurance purchased above that amount would have to be reported as taxable income on the individual's tax return. Supporters of the cap suggest that it would introduce greater cost consciousness into the choice of insurance plans and thus eventually encourage more cost containment.

Expanding the Deductibility of Other Personal Health Spending : Nevertheless, proposals to cap the tax exemption have been around a long time but have never proven very successful, probably in part because capping the exemption could easily be seen as raising taxes, which has never been a popular policy move in the United States . Other analysts have tried to approach tax neutrality from the other direction, by making out-of-pocket medical expenses deductible, thus effectively expanding the tax exemption. A prominent example of such a strategy is the Health Saving Account (HSA), which allows individuals to put part of their earnings, up to a certain amount, into an untaxed account, from which they can draw to pay out-of-pocket medical expenses. Proponents of HSAs have often proposed them in conjunction with catastrophic health insurance, which tends to have high deductibles but also fairly low premiums. Others have proposed allowing deductibility of all health care expenses for all individuals who also buy insurance that covers at least catastrophic events. ⁷¹ That would mean that an uninsured person without access to employer-based insurance would get the same tax benefit to buy insurance as well as other medical services that most Americans now get through their employers. That would make the purchase of insurance considerably cheaper for them than it is now. What is more important, argue the proponents of these reforms, is the projected effect of expanding the deductibility of other personal health spending: individuals would develop a keener awareness of the cost of health and medical care, along with a heightened concern for the value and the cost-effectiveness of that care.

Replacing the Tax Exemption with Tax Credits : Other analysts have suggested using tax credits to level the playing field between employer-based insurance and other kinds of insurance. Some have proposed leaving the tax exemption in place but extending a comparable tax credit to individuals purchasing insurance, especially or only high deductible insurance. That tax credit might be 30 percent of the cost of the purchased insurance, which is comparable to the percentage gained by individuals through the current tax exemption. ⁷² Others, like Presidential candidate John McCain, have proposed replacing the whole exemption with a flat, advanceable, and refundable tax credit of $2500 for individuals or $5000 for families for all Americans, including those that do not pay taxes.

B. The Effect on the Problems of Access, Cost, and Quality

These various approaches to tax reform differ in various way, including the ways in which they prioritize the problems of access, cost, and quality. They share, however, an advocacy of stronger incentives to induce greater cost consciousness among individuals when it comes to the use of medical resources. They also place a higher priority on consumer choice as a means to the end of promoting high value care (rather than, for example, expanding coverage). These approaches also converge on the argument that such initiatives will help to restrain cost growth and to promote quality improvements and that more competitive markets will help to make insurance cheaper and presumably easier for the uninsured to access.

Tax Reform and the Problem of Access: None of these proposals would do anything directly to achieve universal coverage. The proponents of these various reforms, however, suggest that universal coverage of the sort that most Americans have today may not be the right goal ⁷³, and that direct efforts to ensure universal coverage through government intervention may cause more problems than it solves and put an unsustainable burden on federal and state budgets. Nonetheless, there is more to be said about what might happen to access under these scenarios. To be sure, a cap on the tax exemption would leave almost all of the uninsured in the same position they are now. But by both expanding the deductibility of personal health care spending (including the individual purchase of insurance) and implementing the tax credit proposals, insurance would be made/become cheaper for those who now cannot or do not buy insurance through an employer. Tax deductibility would provide a discount on such purchases equal to the individual's total tax rate; the tax credit proposal would provide either a 30 percent discount or a flat fixed dollar amount. By themselves, those proposals would not provide individuals insurance, or even enough money or tax credits to buy an entire policy. What they would do is give those individuals buying insurance or medical services outside of traditional employer-based insurance a break roughly equivalent to the break most employed Americans get for buying insurance through their employers. It should be noted that proposals to replace the tax exemption with fixed dollar refundable tax credits (advocated, for example, by Senator McCain) would give those who do not purchase insurance a subsidy to do so; because those tax credits could be claimed even by those who do not pay any tax, many of the currently uninsured would effectively get a new subsidy to pay for health insurance.

It should also be noted that many of these proposals also envision expanding other kinds of safety net care, whether by public subsidies for persons with chronic illness to purchase private insurance, increased support for high risk pools and other forms of charitable health care. ⁷⁴

Tax Reform and the Problem of Cost: Proponents of tax reform tend to think that problems of cost and quality are more difficult and more important to resolve than the problems of access. To their mind, the tax exemption has fueled excessive consumption of medical care at the margins—that is, what economists call “flat-of-the-curve” medicine. And they argue that by leveling the playing field between health care purchased through employer-based insurance and other ways of purchasing health care, we would strengthen the incentives for Americans to think about whether they are getting value for their money. If most middle-class Americans had to consider the costs of particular treatments in the light of the expected benefits and of all of their competing needs, that would help restrain health care costs. Cogan, Hubbard, and Kessler, for example, claim that expanded tax deductibility, together with a number of other reforms, will help restrain health care spending by almost 9 percent. ⁷⁵ More generally, the advocates of these proposals point to the success of deregulated markets in providing affordable, high quality goods in other kinds of markets, especially when informed and engaged consumers are involved.

Tax Reform and the Problem of Quality: Similarly, advocates of this approach believe that restraining the apparent over-consumption of health care in the United States would itself help improve quality. If, as the work of the Dartmouth School among others, seems to show, the spending on health care varies widely between different areas without discernible corresponding variations in effective quality, the argument goes, we should be able to cut costs without harming quality and thus get better value for the money. These advocates also point to evidence from the Rand health insurance studies that increasing deductibles and co-payments did not harm the health of most participants in the study and the evidence from the HMO period in the 1990s, when costs were contained but overall health was not affected. These advocates also suggest that a market approach has helped and will continue to help encourage technological innovations, and could help fuel innovations and improvements in quality in insurance arrangements and modes of delivering care.

III. PART THREE

HEALTH AND MEDICAL CARE REFORM: ETHICAL QUESTIONS AND CONCERNS

Consider the plight of the uninsured. Although disagreement about the problems of American health care continues, there does seem to be growing support for the claim that the problem of the uninsured is a moral problem for a prosperous society that strives to provide some measure of equality of opportunity.  But this consensus dissolves when it comes to the question of how best to solve this problem. Some policy analysts argue that the most straightforward way would be for the government to provide access to insurance or care directly or through subsidies, for example, by extending the Medicare program to all or to selected segments of the non-elderly population.  This solution, however, runs into the objection that Medicare's expenses as they now stand already threaten to swamp the budget.  Thus, as many other policy analysts see it, no solution to the problem of the uninsured that involves more public funding can be sustainable unless the problem of rising costs is addressed.  With this problem, the effort to identify and disentangle its causes and to reckon with its ethical significance encounters numerous difficulties. According to some observers, one complicating concern is that restraining rising costs may have an adverse affect on quality. As our national experience with HMOs in the 1990s amply illustrates, the question becomes who has—and at least as important, who is seen to have—the authority to say that some treatments are unnecessary.  Even though the claim that American medicine produces much unnecessary treatment is often made, recognizing that in the abstract is very different from knowing which treatments in particular are unneeded, and more different still from persuading a patient—or indeed oneself—to forego those treatments. 

At one level, then, the debate over health care reform turns on whom or what will best address these inter-related problems of cost, quality, and access.  As with other areas of our common life, Americans disagree over whether governments or markets or some mix of the two “institutions” will best serve our needs.  Advocates of single payer reforms place a premium on ensuring universal access, but they also think that government will be better able to manage the health care sector than would markets.  Advocates of tax reform, by contrast, think that cost and quality are our most pressing problems and that these problems will not be solved without a greater degree of decision-making and direct payment by individuals.  Advocates of the variety of reforms that attempt to combine government action of different kinds with the competitive marketplace suggest that the right question is not “should we do everything?” or “should we do nothing?” but what combination of practical actions will mark some improvement beyond the status quo.

With the preceding, we have merely pointed to the intricate tangle of considerations—ethical, economic, and political—that confront advocates of reform. The members of this Council claim no greater competence in these matters than others, and we offer no collective opinion on the most viable avenue for reform.  But we do believe that the debate over health care reform provides ample opportunity for raising up and underscoring some fundamental ethical questions: questions, first, about whether, how, and on what grounds we should help one other, especially when we are vulnerable and in need; second, about whether or how the ethical practice of medicine and the pursuit of profit in a market economy are consistent with each other; third, about when is it right and prudent to compel our fellow citizens to do things that are arguably in their self-interest but that they would not otherwise do; and finally, about how our hopes and expectations from medicine and science—sometimes referred to as the medicalization or overmedicalization of life—shape and complicate what might be expected from reform. This introductory essay is not the place to pursue any of those questions at length, although we do invite Council members to do so in what follows, appealing to the facts and arguments we have outlined in the preceding pages as they wish.  It may be useful and stimulating, however, to sketch briefly how these questions might appear at the outset. 

First, the debates about uninsured Americans undoubtedly raises question about the character and extent of our social obligations to one other.  While there seems be widespread consensus that a chronic lack of access to health care is a reason for concern, there are differences of opinion on exactly what the appropriate object of our concern ought to be.  Some speakers before the Council have argued, for example, that all persons have a right to health care, thanks to our deeper commitment to the equality of opportunity, and so that universal access to health is an ethical and political imperative.  Others think, however, that a liberal society cannot and should not promise to meet all needs of all citizens, not even all legitimate needs, and that the object of our concern should be the most needy and vulnerable among us, regardless of the degree of their personal responsibility for being in that condition.  Still others suggest that while it may be prudent, for a number of reasons, to remove unnecessary obstacles to obtaining care (by, for example, making the tax code more neutral to ways of purchasing insurance and health care), whether individuals actually get that care is largely a matter of individual responsibility.  Those differences over what the object of our concern ought to be bespeak deeper differences of opinion over the ground or basis of that concern:  is our concern rooted in a fundamental right, in this case a right to health care, and so in justice? Or is it, instead, a matter not of justice and obligation but of a sense of a larger common good?   

Second, some observers of the contemporary scene argue that doctors and other health professionals, because of their distinctive professional commitments, have an obligation to put the needs of their patients above their own, and thus that profit-making and the genuine practice of medicine are at root incompatible. And so they look, on ethical grounds, to health care reforms that minimize or restrain the effects of material self-interest on the practice of medicine. Others argue that the search for profits in the free market leads to innovation and need not be incompatible with good patient care. They also point out how difficult it would be to regulate fees for medical professionals while the rest of economy operates on largely free market principles—even though particular practices like fee-for-service may not be the best way of paying physicians. One question that arises in the health care debate, therefore, is what is the appropriate role of profit and of for-profit investment with respect to the ethical practice of medicine?

Third, much of the ethical concern about health care reform stems from the problems of the poor uninsured. But the peculiar demographics of the uninsured in America raise other ethical questions as well. What do we make of otherwise apparently well-off Americans who choose not to buy health insurance? Liberal societies tend—as a default position—not to compel their citizens to do things arguably in the citizens' self-interest that those citizens do not choose to do. Health care proposals for individual mandates and the like inevitably raise the question of when and to what extent liberal societies are justified in overriding the presumption against compulsory participation or action. Proponents of individual mandates point to the fact that we already compel all drivers to have a minimum of auto insurance (for damage to other vehicles, however, not to our own), and that bringing the many now-uninsured who can afford insurance into the market for individual insurance may well make that market far healthier and more viable than it is now, as well as (in principle) eliminating one source of the need for uncompensated care. To be sure, mandates, by themselves, would almost surely be insufficient to solve our problems. For one thing, we could not in good conscience mandate that individuals buy coverage without having some assurance that they could afford it, which is why some commentators argue that new methods of pooling individual purchasers of insurance, like the Connector in Massachusetts, would also be necessary. But making sure that insurance is affordable almost certainly means finding some way of subsidizing those poor and near poor families that cannot now afford insurance. Finding those funds and persuading lawmakers to use them to subsidize health insurance for the poor would be a challenge. Nevertheless, proposals for individual mandates inevitably pose an ethical question distinct from the problem of the uninsured: how should we think about, and what, if anything, should we do for, those of our fellow citizens who can afford health insurance but choose not to purchase it?

Finally, the rising cost of health care inevitably compels reflection on the benefits and burdens of technology and of a culture that surrounds and supports that technology. It is often argued that new technologies are the biggest single cause of rising prices, and there is reason to believe that those technologies have, on the whole, been worth it. But, according to some commentators, the companion to those advances is a culture that turns to highly technical and expensive interventions before, or to the exclusion of, less intensive alternatives, even when those alternatives are safer and of equal or greater effectiveness. Since that culture has evolved concomitantly with a system of incentives and institutional arrangements—third party payment, fee-for-service reimbursement, and the like—it would be difficult if not impossible to discern which caused the other. But many scholars have argued that the amount and kind of care that most Americans get is not always as efficient as we might hope, and in some respects does more harm than good. As we have seen, that fact is compatible with a number of views about what can or should be done about it. Leaving aside the difficult problems of designing the right policies to make American health care more efficient, however, there is a more fundamental question about what we—as patients and as citizens—expect from modern medical technology. Do we have extravagant expectations from medical science? Are we so accustomed to having someone else pay the bill that we no longer question whether a particular intervention is worth its cost? While evaluating the cost-effectiveness of various interventions or organizing the health care system to be more cost effective will not solve all of our health care problems, it may be a necessary condition of a more sustainable system that we come to see that more is not always better.

A variety of problems—access, cost, and quality—make health care in the United States an unavoidably complicated affair, and this is not the place to elaborate specific policy proposals. But we should remember that the health care system is one in which each of us will find ourselves in various capacities at various points in our lives, and the decisions we make about the various aspects of health care reflect our identity as a nation and the type of social union we wish to create and advance. How do we care, and how ought we to care, for one another? How can we care for one another in ways that facilitate rather than undermine self-respect, self-efficacy, and personal and social responsibility? What is it appropriate to expect from modern medicine and technology, how do we accept the inevitable limits of that technology, and how do we structure our health care system in light of those limits? And, in the face of difficult choices and limited resources, who should make the decisions and on what should such decisions be based? Responding to those fundamental questions will not resolve the problems of health care in America , but our responses will provide the indispensable guides and landmarks in sorting through the choices our nation must make in coming years.

_______________________

FOOTNOTES

1. For a succinct historical summary of health care reform initiatives since 1900, see Bridget Harrison, “A Historical Survey of National Health Movements and Public Opinion in the United States,” The Journal of the American Medical Association 289(9)(5 March 2003): 1163-1164. In 1983, the President's Commission issued the first and, to date, only report on health care reform by a major national commission in bioethics in the United States . See President's Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research. Securing Access to Health Care . Washington , D.C. : Government Printing Office, 1983. Available at: http://bioethics.gov/reports/past_commissions/securing-access.pdf . Accessed June 12, 2008.

2. See J.S. Banthin and D.M. Barnard, “Changes in financial burdens for health care: National estimates for the population younger than 65 years, 1996 to 2003,” JAMA 2006, 296: 2712-9.

3. See the Institute of Medicine report Hidden Costs, Value Lost: Uninsurance in America (2003). Other scholars point out, however, that it is difficult to establish clear evidence of causation (as opposed to correlation) between insurance status and health status. See Helen Levy and David Meltzer's survey of the literature on this question: “What Do We Really Know About Whether Health Insurance Affects Health?” in Health Policy and the Uninsured , ed. by Catherine McLaughlin (Urban Institute Press, 2004).

4. See http://www.emtala.com . Accessed June 12, 2008.

5. On the costs of uncompensated care, see Hadley and Holahan, “How Much Medical Care Do the Uninsured Use, and Who Pays for it?” Health Affairs , Web exclusive, February 12, 2003.

6. Compared to Census Bureau estimates of the uninsured from the last 19 years, 47 million uninsured is the highest number of uninsured in that time but not the highest percentage of the total population. Rates of being uninsured have ranged from 12.9 percent in 1987 to 16.3 percent in 1998. Since 2000, the uninsured rate has ranged between about 14 percent and about 16 percent.

7. There is another controversy about these figures that is worth mentioning here, the so-called Medicaid undercount. Experts believe that the CPS may undercount persons either on or eligible for Medicaid because the number of persons who are on Medicaid reported by CPS is considerably lower than the number of persons who show up as enrolled in the Medicaid administrative data. The CPS may therefore overstate the uninsured population by several millions, perhaps by as much as 9 million. There is controversy, however, about the size of this problem in the data, since some respondents may mistakenly report that they are enrolled in private insurance when they are in fact enrolled in Medicaid.

8. See “How Many People Lack Health Insurance and For How Long?,” a CBO paper published in May 2003, available at www.cbo.org . This paper provides a helpful and succinct discussion of the different measures of the uninsured.

9. This data can be found on the various websites of these surveys. The Current Population Survey is available at www.census.gov ; the MEPS at http://www.meps.ahrq.gov/mepsweb/ ; the SIPP at http://www.bls.census.gov/sipp/ . Also very useful is the website of the Economic Research Initiative on the Uninsured, which provides easy access to much of this data: http://eriu.sph.umich.edu/index.html .

10. See MEPS Statistical Brief #183: “The Long-Term Uninsured in America , 2002-2005: estimates for the U.S. Population under Age 65.” August 2007. Available at http://www.meps.ahrq.gov/mepsweb/Available at http://www.meps.ahrq.gov/mepsweb/ .

11. Of course, changing insurance often also makes it more likely that a person will have less continuity of care.

12. Kaiser Family Foundation, The Uninsured: A Primer , October 2007, p. 4. Available at: http://www.kff.org/uninsured/7451.cfm

13. Kaiser Family Foundation, The Uninsured: A Primer , p. 1.

14. Rhoades and Cohen, “The Long-term Uninsured in America , 2002-2005: Estimates for the U.S. Population Under Age 65,” Medical Expenditure Panel Survey Statistical Brief #183, August 2007, p. 6

15. On the rising numbers of high income uninsured, see The Uninsured in America , Blue Cross Blue Shield. For the larger claim, see Todd Gilmer and Richard Kronick, “It's the Premiums, Stupid: Projections of the Uninsured Through 2013,” Health Affairs web exclusive, 5 April 2005; and John A. Graves and Sharon K. Long, “Why Do People Lack Health Insurance?”, Urban Institute, Health Policy Online #14.

16. For these claims, see “The Long Term Outlook for Health Care Spending,” Congressional Budget Office, November 2007. Available at cbo.gov. See also Peter Orszag and Philip Ellis, “The Challenge of Rising Health Care Costs—A View from the Congressional Budget Office,” New England Journal of Medicine , 357;18 (November 1, 2007).

17. CBO, “Long Term Outlook,” p. 13.

18. For helpful discussion of this issue, see Thomas Bodenheimer's series of articles “High and Rising Health Care Costs” in Ann Intern Med. 2005;142; and Mark Pauly's “The Realities of Growth in Medical Spending,” in Power to the Patient , ed. Scott W. Atlas (Stanford, Calif.: Board of Trustees of the Leland Stanford Junior University, 2005), p.42. Available at: http://media.hoover.org/documents/081794592X_33.pdf . Accessed June 6, 2008.

19. The U.S. does not appear to be an outlier with respect to how fast health care costs are rising. See Dana P. Goldman and Elizabeth A. McGlynn, U.S. Health Care: Facts About Cost, Access, and Quality ( Santa Monica , Calif. : RAND Corporation, 2005, p. 4. Available at http://rand.org/pubs/corporate_pubs/2005/RAND_CP484.1.pdf . Accessed May 22, 2008.

20. Goldman and McGlynn , U.S. Health Care , p. 3

21. CMS Chartbook: “An Overview of the U.S. Health Care System Chartbook,” Center for Medicare and Medicaid Services and Office of the Assistant Secretary for Planning and Evaluation, January 2007, p. 9.

22. California Health Care Foundation, Snapshot: Health Care Costs 101, 2008 Edition ( California : California Health Care Foundation, 2008), p.19. Available at http://www.chcf.org/documents/insurance/HealthCareCosts08.pdf . Accessed May 22, 2008.

23. Employer Health Benefits: 2007Annual Survey , Kaiser Family Foundation and Health Research and Educational Trust, p. 28. Available at http://kff.org/insurance/7672/index.cfm.

24. Employer Health Benefits: 2007Annual Survey , p. 19.

25. Ezekiel J. Emanuel and Victor R. Fuchs, “Who Really Pays for Health Care? The Myth of ‘Shared Responsibility'.” JAMA 299;9(5 March 2008):1057-1059.

26. This figure does not count either the tax revenue foregone because of the tax exemption for employer-based insurance or the money the Federal government contributes to the purchase of private insurance by its employees.

27. Emanuel and Fuchs, p. 1058.

28. Peter R. Orszag and Philip Ellis, “The Challenge of Rising Health Care Costs,” – A View from the Congressional Budget Office,” New England Journal of Medicine 357(18)(1 Nov 2007):1793-5 at p. 1793.

29. Orszag and Ellis, “The Challenge of Rising Health Care Costs,” p. 1794.

30. See World Health Organization, World Health Report 2000 , p. 164, accessible at http://www.who.int/whr/2000/en/whr00_en.pdf ; and Karen Davis, Cathy Schoen, Stephen C. Schoenbaum, “Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care,” Commonwealth Fund, Publication # 1027, May 2007.

31. Davis , et al., “Mirror, Mirror on the Wall,” p. 31.

32. For discussion of the population measures, including the results of controlling for homicide and transportation accidents, see Robert L. Ohsfeldt and John E. Schneider, The Business of Health: The role of Competition, Markets, and Regulation (Washington, D.C.: AEI Press, 2006), pp. 16-26. For an opposing view, see Barbara Starfield, “Is U.S. Health Care Really the Best in the World?” JAMA , vol. 284, no. 4, July 26, 2000, pp. 483-85.

33. These are claims made in Tyler Cowen's op-ed in the New York Times of October 5, 2006: “Poor U.S. Scores in Health Care Don't Measure Nobels and Innovation.”

34. See the evidence cited in John Inglehart, “ America 's Love Affair with Medical Innovation,” Health Affairs , Vol. 20, #5, Sept./Oct. 2001, p. 6-7.

35. See David Cutler and Mark McClellan, “Is Technological Change Worth It?”, Health Affairs ,Vol. 20, #5 Sept./Oct. 2001, pp. 11-29. See also David Cutler, Your Money or Your Life: Strong Medicine for America's Healthcare System ( New York : Oxford University Press, 2004).

36. Cutler and McClellan, “Is Technological Change Worth It?”, p. 19.

37. Kohn L, Corrigan J, Donaldson M, eds. To Err is Human: Building a Safer Health System . Washington , DC : National Academy Press; 2000.

38.Institute of Medicine , To Err is Human.

39. Leape and Berwick, “Five Years After To Err is Human ,” JAMA; 2005, Vol. 293. No. 18, 2384-2390.

40. Shortell and Singer, “Improving Patient Safety by Taking Systems Seriously,” JAMA; 2008, Vol. 299, No. 4, 445-447.

41. McGlynn, Asch, Adams, et al., “The Quality of Health Care Delivered to Adults in the United States ,” New England Journal of Medicine , vol. 328: 2635-2645, June 26, 2003.

42. Mangione-Smith, DeCristofaro, Setodji et al., “The Quality of Ambulatory Care Delivered to Children in the United States ,” New England Journal of Medicine , vol. 357; 1515-1523, October 11, 2007.

43. Elizabeth A. McGlynnm “The Case for Keeping Quality on the Health Reform Agenda,” Testimony presented before the Senate Committee on Finance, June 3, 2008. Available at: http://finance.senate.gov/hearings/testimony/2008test/060308emtest.pdf .

44. See Fisher's presentation to the Council, March 2008 (available at: http://www.bioethics.gov/transcripts/march08/session3.html .) and “Variations in the Longitudinal Efficiency of Academic Medical Centers,” by Elliott Fisher, David E. Wennberg, Therese Stukel, and Daniel J. Gottlieb, Health Affairs web exclusive, October 7, 2004; and “Avoiding the Unintended Consequences in Medical Growth,” by Elliott Fisher and Gilbert Welch, JAMA, vol. 281, no. 5, Feb. 3, 1999. Also see Victor Fuchs, “More Variation in Use of Care. More Flat-of-the-Curve Medicine,” Health Affairs , web exclusive, October 7, 2004.

45. Elliott Fisher referred to this graph in his March 2008 presentation to the President's Council. The source is Katherine Baicker and Amitabh Chandra, “Medicare Spending, the Physician Workforce, and Beneficiaries' Quality of Care,” Health Affairs Web Exclusive, April 7, 2004. p. 187.

46. Peter Orszag, “Health Care and Behavioral Economics: A Presentation to the National Academy of Social Insurance,” May 29, 2008, p. 4-5. Available at www.cbo.gov.

47. Ross Eisenbrey. Economic Snapshot. Washington , D.C. : Economic Policy Institute, 2008. Available at: http://www.epi.org/content.cfm/webfeatures_snapshots_20070919 . Accessed May 15, 2008.

48. The model system described in this section is that of the Physicians' Working Group for Single-Payer National Health Insurance (PNHP). Available at: http://www.pnhp.org . See also: “Proposal of the Physicians' Working Group for Single-Payer National Health Insurance,” JAMA 290;6 (13 August 2003): 798-805. Alternative single payer systems, including some decoupled from a national health insurance system, have been proposed and will be discussed in the section on “mixed” reform proposals.

49. The PHNP ( ibid. , at 798) states it thus: “The United States alone treats health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In this market-driven system, insurers and providers compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers.”

50. Victor R. Fuchs and Ezekiel J. Emanuel, “Health Care Reform: Why? What? When?” Health Aff Nov/Dec 2005: 24;6: 1399-1414.

51. Kao-Ping Chua and Flavio Casoy, “AMSA Single Payer 101.” Reston , Virginia : American Medical Student Association, 2008, citing Jonathan Oberlander and Theodore R. Marmor, “The Path to Universal Health Care.” In Robert L. Borosage and Roger Hickey, eds., The Next Agenda: Blueprint for a New Progressive Movement (Boulder, Co.: Westview Press, 2001). Available at: http://www.amsa.org/uhc/SinglePayer101.pdf.

52. PNHP, “Proposal,” p.799.

53.Ibid. , p.801.

54.Ibid.

55. Paul Krugman and Robin Wells, “The Health Care Crisis and What do Do About It,” New York Review of Books 53;5 (23 March 2006). Available at: http://www.nybooks.com/articles/18802 .

56.Ibid.

57.Ibid.

58. John R. Battista and Justine McCabe, “The Case for Universal Health Care in the United States .” Simsbury , CT. : Connecticut Coalition for Universal Health Care, 1999. Available at http://cthealth.server101.com/the_case_for_universal_health_care_in_the_united_states.htm.

59. The Henry J. Kaiser Family Foundation, “Snapshots: Health Care Costs - Health Care Spending in the United States and OECD Countries, January 2007.” Menlo Park , Calif. : The Henry J. Kaiser Family Foundation, 2008. Available at: http://www.kff.org/insurance/snapshot/chcm010307oth.cfm.

60. S. Woolhandler and D.U. Himmelstein, “Paying for national health insurance – and not getting it: taxes pay for a larger share of U.S. health care than most Americans think they do,” Health Affairs 2002;21:88-98 as cited in Physicians' Working Group for a Single-Payer National Health Insurance, : “Proposal of the Physicians' Working Group for Single-Payer National Health Insurance,” JAMA 290;6 (13 August 2003): 798-805, at p.802.

61. Karen Davis, Cathy Schoen, Stephen C. Schoenbaum, et al. , “Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care,” New York , NY : Commonwealth Fund, 2007. Available at http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=482678.

62. Catherine Arnst, “The Doctor Will See You—In Three Months ,” Businessweek July 9, 2007. Available at: http://www.businessweek.com/magazine/content/07_28/b4042072.htm

63. Some prominent examples of these ideas can be found in the recent Massachusetts reforms. For an explanation and defense of those reforms, see Jonathan Gruber, “The Massachusetts Health Care Revolution: A Local Start for Universal Coverage,” Hastings Center Report 36, no. 5 (2006): 14-19. See also Gruber's description of how such a proposal, with some changes, might work nationally: “A Private/Public Partnership for National Health Insurance,” in Covering America: Real Remedies for the Uninsured , ed. by Jack Meyer and Eliot Wicks ( Washington , D.C. : Economic and Social Research Institute, 2001). For a somewhat different proposal along similar lines, see Ezekiel Emanuel and Victor Fuchs, A Comprehensive Cure: Universal Health Care Vouchers Brookings Institute Discussion Paper ( Washington , D.C. , 2007).

64. Some proposals seem to envision the necessary funds coming out of general revenue. Others, like Emanuel and Fuchs, propose a Value-Added Tax of 10 to 12%, dedicated to funding vouchers for health care and associated costs of administration and the like: Emanuel and Fuchs, Comprehensive Cure , p. 9..

65. Emanuel and Fuchs' voucher proposal does not include a mandate, nor does Mark Pauly's proposal for using tax credits to encourage the uninsured to buy insurance. See Mark Pauly and John S. Hoff, Responsible Tax Credits for Health Insurance ( Washington , D.C. : AEI Press, 2002).

66. For a discussion of state based purchasing pools, see Gruber, “A Private/Public Partnership,” p. 59 ff.

67. For example, see Emanuel and Fuchs, Comprehensive Cure , p. 10-11. See also the transcript of David Mechanic's presentation to the President's Council in March 2008.

68. See John Sheils and Randall Haught, “The Cost of Tax-Exempt Benefits in 2004,” Health Affairs Web exclusive, February 25, 2004, pp. 106-112. For the facts mentioned, see p. 110.

69. For a clear account of these defects, see Robert Helms, “Tax Reform and Health Insurance,” AEI Health Policy Outlook, January 1, 2005. See also David Gratzer, The Cure: How Capitalism can Save American Health Care (NewYork: Encounter Books, 2006).

70. See, for example, Helms, “Tax Reform and Health Insurance,” end.

71. John Cogan, R. Glenn Hubbard, and Daniel P. Kessler, Healthy, Wealthy, and Wise: Five Steps to a Better Health Care System ( Washington , D.C. : AEI Press, 2005), p. 33-35.

72. Tom Miller, “Improving Access to Health Care without Comprehensive Health Insurance Coverage: Incentives, Competition, Choice, and Priorities,” in Covering America II ( Washington , D.C. : Brookings Institute), p. 39.

73. For example, Miller suggests that it may be more efficient to expand safety net care than to subsidize conventional insurance coverage. Miller, “Improving Access,” p. 39.

74. For public subsidies for private insurance, see Cogan, Hubbard, and Kessler, Healthy, Wealthy, and Wise, p. 50-51; for state high risk pools and charitable health care, see Miller, “Improving Access,” p. 52-53.

75. Cogan, Hubbard, and Kessler, Healthy, Wealthy, and Wise , p. 69.