Final Paper: Public Health Care Policy
Todd Saunders
SOC 320 Public Policy &
Social
Instructor:
Vahik Ovanessian
01/20/2013
__________________________________________________________________________
Public Health Care Policy
The public policy process usually begins with an issue identified as a
public problem. The issue then must find
its way through many competing interests and participants onto a narrow agenda
of issues where, in whatever way it chooses, government decides how to deal
with the issue. It enters into the
‘would be’ process of problem solving.
The outcome can then range anywhere from having little to no effect,
partially or completely solving the problem, or making the matter even worse. This paper will take a comprehensive look at
the health care policy problem here in the United States as well as the
policy-making process itself. It will do
so by looking at the scope, nature, and evolution of the health care policy-making
process. At the same time it will look
at the actors, institutions, and political concerns involved, as well as some
of the approaches they used in formulation, adoption, and evaluation of health
care policy. It will then analyze public
opinion and its impact on the process, and close with a look at present health
care policy, its direction, and its potential future.
Early in this countries history there was
no formal health care system. Government’s involvement in the health care
enterprise was generally limited to sporadic charitable provisions for the
relief of the poor. Beyond that, public
health care was the headed up by religious groups and charitable organizations
relying on patronage from the wealthy. The
beginning of our current system of health care may have begun in 1739 with
public funding of the Pennsylvania general hospital in Philadelphia, the first health
care facility in America. The young
physician with the idea had been impressed with a health care movement in
Europe and the famous French hospital, the Hotel-Dieu in Paris.
From this period, the U.S. health-care system is said to have
begun evolving upon entrepreneurial principles. Government would assist in
informing society about activities that would improve general health. Financially, it would come to the aid of the
destitute as well as people who were economically or physically
disadvantaged. To a growing extent,
society at large was acknowledging that good health was intrinsic to not only human
welfare but economic prosperity as well (Theodoulou & Kofinis, 2012. 11:1).
Then, not too long after the expansion of state responsibilities came a
number of scientific advances in the 20th century. The number of preventive public health
initiatives then began to rise. Governments
began to increase their role in curative care through regulation, funding, and
the provision of care itself (Theodoulou & Kofinis, 2012. 11:1).
If we fast-forward ahead to now, the U.S. health system has blossomed
into a sprawling giant. A bewildering
complexity of institutions, barriers, programs, contradictory requirements, and
red tape (Portes,
Light & Fernández-Kelly, 2009. pp.
487). It attempts to serve at least two well-established
needs. One is economic prosperity, and
two, is health. Research demonstrates a direct
link between the health of a society and its economic prosperity. Societies need healthy populations to
function. Healthy populations are more
productive than unhealthy ones, and productivity means economic prosperity (Theodoulou & Kofinis, 2012. 11:1). Economic prosperity is what most
governments desire. But health care in
this economy is itself a commodity which you cannot get unless you pay for
it. So it appears to be the age-old
tension of, “You have to spend money to make money”. But how much does a
society then spend? And what exactly
does it get spent on? And then, a common
related question is whether access to basic health-care is a ‘commodity’, or a
‘right’? These and other questions must be debated and analyzed. That is no easy thing. Not only is the process toward sound public
health-care policy a problematic, complex, and often contentious process, but
it is said that nowhere has the discussion in the policy arena been more
contentious than in that surrounding the adoption of health-care policy reform
(Theodoulou & Kofinis, 2012. 11:1).
On that note, let us move on to where the health care problem reentered
public and political awareness and how it managed to stay there until the
process resulted in adoption of groundbreaking reform. It was during the 2008
presidential election that the problems were again singled out. They were rising health-care costs and the large
number of uninsured Americans. Maybe we
should first recap the history of these two health care policy concerns.
Out of concern for the uninsured, President Harry S. Truman proposed
replacing private insurance with a national system. That proposal was defeated in Congress by
lobbying from American Medical Association (AMA) and insurance interests
((Theodoulou & Kofinis, 2012. 11:2).
Shortly after that, health care once again returned to the national
institutional agenda. President Kennedy
expanded health care with a
program called Medical
Assistance for the Aged, and by extending insurance to those who qualified for
Social Security. After him, through the
War On Poverty reforms, President Johnson introduced the Medicaid and Medicare
programs. Rising
health care costs into the 1970’s destined
the federal government to become more involved with both Medicare and Medicaid
at the expense of the private sector. Next,
the introduction of the managed-care system and the Health Maintenance
Organization (HMO) through the 1970’s and 1980’s could not succeed in
controlling costs. It simply shifted the
burden further onto the private sector.
Through the mid-1970s
and early 1980s U.S. health costs were increasing at alarming rates. Access was becoming still more limited, and
the uninsured population was expanding quickly.
The 1974 National Health Planning and Resource Development Act (NHPRD)
had not helped the larger problems of the time. Later, during the Reagan era, higher-use rates per insured in Medicare
and an extension of the Medicaid-covered population appears to have assured ongoing
cost increases (Theodoulou & Kofinis, 2012.
11:2). During the George H. W. Bush administration from 1988 to 1992 the
need for health reform was apparent, as both costs and the number of uninsured
continued to rise (Theodoulou & Kofinis, 2012. 11:2). There were many practical proposals
forthcoming but no institutional consensus on what to enact.
By the early 1990’s, there had been widespread calls for reform due to
higher costs to both patient and provider.
This had caused a policy making shift from the systemic (public) agenda
to the institutional (policy making) agenda (Theodoulou & Kofinis, 2012.
4:3). It could likely be said that there were more stakeholders now feeling the
pain of the health-care policy status quo.
This desire for action captures the mood in congress when the Clinton administration
first came to office. The administration stepped boldly into policy change. He proposed creating a national health
insurance system that would solve both the problems of escalating medical care
costs and unequal access. As it turns
out, he tried to pass comprehensive reform too suddenly, instead of incrementally
according to tradition. The objective of
his Health Security Plan was managed competition. Its thrust was aimed at trying to shape
market forces within the structure of national health insurance. It was
perceived not only as too complex, but also as ‘too much government, too
soon’ It opened itself up to being
characterized as “socialism”, and thus a threat to individual freedom.
Next came George Walker Bush whose 2003 Medicare Prescription Drug
Improvement and Modernization Act (MMA) expanded Medicare to include
prescription drugs and allowed the individual to set up a ‘health savings
account’. He vetoed some additional
legislation on the basis that it suggested a drift toward socialism.
That brings us back to the 2008 presidential election after which Barack
Obama earned the right to be the presidential actor in the policy-making
process of the period. A year after he became president he pushed through the
enactment of the Patient Protection and Affordable Care Act of 2010. This put in place a
health-care system that covered 95% of Americans. It was a historic expansion of
health-care policy in the United States.
Let us
look now at the policy-making process that predominated. Two issues held the
main stage. The first was cost containment, an international problem faced in
all industrialized nations. The second issue, particularly in the United
States, was the growing number of uninsured.
Other factors were: changing family structure, increasing labor
force participation of women, and expanding public budgets. These trends all
have important consequences for health care systems (Quadagno, 2010). Policy analysts and
actors, health-care professionals, and advocacy group all argue the health-care
in America is in a state of near crisis, and one that is only likely to get
worse as the aging population places increasing burdens on the health-care
system (Theodoulou & Kofinis, 2012.
pp.11:2). These forces all helped
open the window of opportunity for health-care policy change.
Some of the groundwork for change had already been laid by previous
administrations. George W. Bush had made
it clear that he believed changes in health care were necessary (Theodoulou
& Kofinis, 2012. pp.11:2). The Clinton administration had generated
ideas in substance and strategy. So what
of change?
The U.S. is a welfare state. There are a variety of health care models used
by the world’s industrialized welfare states.
There are three distinct regime
types used by western nations.
There are the "Social
democratic" regimes which provide for extensive welfare benefits granted
to all as a right of citizenship, such as in Sweden, Norway, and Finland. The second type is the
"Conservative" regimes which function through traditional family and
hereditary status relationships, and are in France, Germany, Italy, and
Australia. And then, the "liberal" welfare states which are characterized
by extensive reliance on means-testing, a preference for the market over the
state, and government subsidies to encourage private welfare (Quadagno, 2010.
pp. 127). They include the United Kingdom, Canada,
Australia, and the United States.
Another typological model used to describe the United States model is
the “insurance model". Private insurance has always been an embedded actor
in U.S. national health care policy. In
the insurance model medical services are distributed through free markets, and
the state's role is limited. Even with
heavy state involvement the U.S. Medicare program does not cover all
health-related expenses, but leaves a lucrative "medigap" market for
private insurers (Quadagno, 2010.
pp. 127).
Interestingly, the birth of the insurance in the United States began in
1847 (Theodoulou & Kofinis, 2012. 11:2).
Its beginnings accompanied the emergence of medical facilities. Back then, public and private support for a
national insurance system in the U.S. was great. The U.S. Public Health Service had been
created in 1798. But as time went on, by
the early 1900’s, unlike in the industrialized nations of Europe, nationalized health
care insurance in the U.S. had lost its appeal. So
privatized public health insurance policy was the only option.
The nation’s first “prepayment” health insurance system was introduced
in California and Michigan in 1933 by the private insurance company Blue Cross. These plans then gradually spread to all
states in the union. This was a part of
the evolutionary process that helped make the private health insurance industry
a useful tool in national health care.
Part of insurance industry involvement was by the employer providing
insurance for the employee. This is the
largest single business expense for many employers (Quadagno, 2010.
pp.126). These expenses were designed to be tax
write-offs. Through the years, with the constant and disproportionate rise in
health care costs, employers have been cutting benefits and shifting more and
more of the cost to employees. This
shift was a festering source of economic insecurity for those families. Family
insurance premiums were raising by large percentages as well (Quadagno, 2010. pp.125). Between 1999 and 2008, with health insurance
premiums nearly doubling, the number of uninsured continuing to rise. Health-care costs also were becoming a major
contributor to the U.S. fiscal deficit (Theodoulou
& Kofinis, 2012. 11:3). The
business community was becoming aware of an impending crisis. The recession that began in 2008 made these
existing problems worse.
Finally, some businesses lobbied government
for a national insurance program. One
which would require all employers to pay their share of the employee’s
health-care costs (Theodoulou & Kofinis, 2012.
11:3).
In a polarized political climate, the
task of addressing an imminent health care crisis was not easy. Proposing his plan before a joint session of
a Democrat-controlled congress to resounding applause was a good public
relations strategy. His was able to begin
to define the debate and shape public interests. And with a fresh electoral mandate for a
legislative initiative to address unaffordable health care he had immense
relative power and a full arsenal of political capital. Tangible power which derived its strength
from an idea whose time may have come. It was a relative power which he could for
the moment use to compel and coerce his fellow policy actors during design,
formulation, and adoption of new policy (Theodoulou
& Kofinis, 2012. 1:1). He had
gained the upper hand politically. He
appeared to continue to hold on to it until the implementation stage. But policy enactment was not far away
now.
In
designing his proposal President Obama made an effort to work with key
stakeholders in his plan such as employers and the insurance industry. He
worked closely with congressional leaders and other key members of congress,
seeking their involvement. He met with and
involved key actors in the health system.
This involvement and compromise was key to his policy’s success (Theodoulou & Kofinis, 2012. 11:3).
His
formulation of the policy sought to build
on existing employment-based insurance,
distributing costs across the board to all employers, putting an end to some
employers’ free passes, and pooling all into a national scheme. The policy’s goals would seek to regulate the market in
such a way as to expand access to health care, stop the cost shifting, and
add greater cost containment
(Theodoulou &
Kofinis, 2012. 11:3).
This kept the insurance industry happy as
well. They could expand the size of
their employer client pool. They were
further made tractable by the ‘individual mandate’, requiring everyone to
purchase health insurance, thereby expanding their pool of paying customers who
now have government subsidies to help them purchase coverage as well.
The health care field was found by
President Obama in an amenable position.
Health care industry expenses were increasing beyond their control just
like everyone else’s. They would
participate.
To
win state governments, Obama promoted their freedom to formulate and enact
their own health-care policy and even increased their block grants to do so.
Timing
was key in the adoption stage of the ACA.
Obama pushed the proposal through the whole legislative process very
quickly. The process lasted about a
year. Public opinion actually began
growing more negative at the beginning of the implementation stage.
In public opinion, there are those who feel
medical care is a ‘commodity’, to be bought
and sold like any other market good. It
follows the market principle (Claassen & Highton, 2006). pp.
414). One weakness in this principle may
be most evident in health insurance plans which refuse to cover some diseases
and exclude pre-existing conditions entirely (Quadagno, 2010). For many people, this puts health care beyond
their reach. The U.S. might rightly be
perceived as being inconsistent to insist that a fetus has the right to be born
but not the right to keep itself alive.
On the
other side of public opinion you have some who hold that health care is a ‘right’. A moral issue involving the principle of
social solidarity. This principle refers
to an understanding that individuals and groups share common risks and that
citizens of a community are obligated to care for each other in times of hard
ship (Quadagno, 2010. pp. 130). “Solidarity
has three dimensions: risk solidarity, income solidarity, and scope solidarity.
‘Risk solidarity’ means that premiums should be unrelated to health risk, that
each member of the group should have access to health insurance, and that the
cost of disease and medical care should be distributed across all members. ‘Income solidarity’ emphasizes that premiums (or
contributions) should be related to ability to pay and should thus vary with
income. Finally, ‘scope solidarity’ means that members are entitled to receive
a comprehensive package of benefits” (Quadagno, 2010). The different ways
these ideas can play out is subject to the individual nation’s own creativity. Conveniently
for President Obama and his side of the debate, a focus group research
conducted for the Obama campaign found that the public responded most
positively to messages that emphasized social solidarity, and that they
rejected the idea that health care was a commodity (Quadagno, 2010. pp.131). However, the same study also concluded
that at the same time people clung to a fear of the threat of socialism and emphasized
the importance of consumer choice.
We have
seen that there are differing opinions on the role of government involvement in
health care. What is at the bottom of
some of them?
It has been seen that policy makers and the public are each bound within
a specific local reality that will influence their opinions. Yet, evidence shows that is goes further than
that. There is a relationship between
national histories and the direction of future public policy (Kikuzawa,
Olafsdottir & Pescosolido, 2008.
pp.388). The same conditions with different historical traditions will
mean differing levels of acceptance of similar public policy. It is thought
that, through a general socialization process, citizens come to view their current
government involvement in health care as the way things "should be"
and that they tend to share those beliefs together (Kikuzawa, Olafsdottir &
Pescosolido, 2008. pp.387).
Another complicating factor in public
opinion is the finding that, "When policy increases (decreases), the
preference for more policy decreases (increases)" (Kikuzawa, Olafsdottir & Pescosolido, 2008. pp.389). Too much policy, good or bad, tends to turn
people off.
Still another influence on national
health care opinion is how much one will personally benefit from national
health care. Certainly someone with a
low income, who normally could not afford certain health care, will benefit
more than someone well off. And this
will affect his opinion of national health care.
What the future may or may not hold for national health care systems is
the subject of many observers. Some
envision that aging populations and rising costs are likely to be a constant
force in the future direction of national health care systems (Kikuzawa,
Olafsdottir & Pescosolido, 2008.
pp.386).
On another note, it has been shown that the reality of globalization is
prodding national actors to look abroad at both the solutions and mistakes of
other countries and use them to avoid mistakes of their own (Stevens 2001).
Another consideration was that, in the United States, health care
currently consumes one-eighth of national resources and is the largest item in
many state budgets (Quadagno,
2010. pp.131). If the rising cost of
health care follows historic trends, that will get much worse.
Researchers are seeing that the less support among citizens there is for
government involvement in health care, the more poor health in the population (Kikuzawa,
Olafsdottir & Pescosolido, 2008. pp.). Lax vaccination programs and poor
preventative health care will be a part of that. Even with better technology, if the U.S. does
not improve in the area of education on health issues, then our low health
outcome numbers will increase and so will the burden of poor health on the
economy.
Subsequent to adoption and during implementation
of the Obama administrations ACA was a sort of counterinsurgence of the
opposition. Some did not want the policy
change so badly in the first place that they decided to obstruct the
implementation of it. This is a normal
part of the policy-making process (Theodoulou
& Kofinis, 2012. 6:3). Also, those in charge of the new policy’s
execution did not get their jobs done.
That reality could affect the future performance of the policy and make evaluation
very difficult. These things all remain
to be seen as the new policy emerges, develops and ultimately changes within
our transient society.
This paper has delved into the health care policy-making process in the
United States. It has looked briefly at
the immense scope, the problematic nature, and the promising evolution which
describes policy development and change in this country. It singled out some of the actors, institutions,
and political concerns involved, and some of the approaches they used in
formulation, adoption, and evaluation of our health care policy. It analyzed public opinion and demonstrated
some of its potential impact on the process.
It then closed with a few thoughts on the precarious state of the
present health care policy, some speculation on its current direction, and
future evolution.
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