NEWS AND PERSPECTIVE

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Introduction

nnals News and Perspective explores topics relevanto emergency medicine, in particular those in whichur specialty interacts with the political, ethical,ociologic, legal and business spheres of our society.

partment (ED) needs a primer on the problems associated

6 Annals of Emergency Medicine

anagement will be rare. By design, it will not be a‘breaking news’’ section with the latest (andndigested) developments, but instead a reflectivenvestigation of recent and emerging trends. If youave any feedback about this section, please forwardt to us at feedback@acep.org.

Discussion of specific clinical problems and their

0196-0644/$-see front matterCopyright © 2006 by the American College of Emergency Physicians.

MODELS FOR UNIVERSAL HEALTH CARE:HOW TO FIX A BROKEN SYSTEM

Eric BergerSpecial Contributor to Annals News and Perspective

The dream of universal health care in the United States died12 years ago, when the Clinton health care plan failed amid araucous debate in Congress. The plan’s demise followed afurious year of activity in which the President presented the planto much hope, only to see it destroyed after conservativessuccessfully depicted the plan as anti-middle class and overlybureaucratic. The iconic image of the campaign remains thefamous Harry and Louise ad in which a middle-class coupledespaired over the plan.

After that staggering, embarrassing attempt at reform, thefederal government has not since seriously considered a majorpush to broaden health care coverage. However, several newefforts indicate that change is coming. In his State of the Unionaddress earlier this year, President Bush broached the topic ofexpanding health care coverage to all Americans. Earlier, in2004, the Institute of Medicine released a comprehensive reportcalling for universal health coverage by 2010. It sought toinitiate discussions and move the process forward. Then, a yearago, Dr. Ezekiel J. Emanuel, Chair of the Department ofClinical Bioethics at the National Institutes of Health (NIH),and Stanford University economist Victor Fuchs proposed ahealth care voucher plan that further stimulated discussion.And, finally, just a few months ago, the architect of the OregonHealth Plan, former Governor John A. Kitzhaber, launched anew national initiative to extend coverage to most, if not all,Americans.

A RISING TIDE OF SUPPORT“Health care reform is not something that’s going to happen

overnight,” said Emanuel, of the NIH. “But I think we’rebeginning to see more support for it.”

No emergency physician who works in a crowded emergency

with this country’s uninsured, but the numbers are nonethelessstriking. Nearly 50 million Americans lack health insurance. Asa result, the 2004 Institute of Medicine (IOM) report foundsome 18,000 unnecessary deaths occur each year. Poor healthand early deaths of uninsured adults cost the United States $65billion to $130 billion annually. And Americans are saving littleby failing to insure every sixth person in the country. The IOMreport found that tax dollars paid for 85% of the estimated $35billion in unreimbursed care provided in 2001. These numbers,of course, say nothing of the stress that comes with livingwithout the promise of health care, and the misery when illnessstrikes.

The flaws in the current system, in which employer-basedinsurance covers about 55% of Americans, Medicaid about16%, and Medicare about 13%, are legion, too numerous tolist. The principal failure is the 16% with no coverage at all;patients left to find care to widely varying degrees by apatchwork of state and local government systems.

HSAs TOO LITTLE, TOO LATE?President Bush made expansion of affordable health care a

centerpiece of his annual State of the Union address.“Keeping America competitive requires affordable health

care,” Bush said. “Our government has a responsibility toprovide health care for the poor and the elderly, and we aremeeting that responsibility. For all Americans -- for allAmericans, we must confront the rising cost of care, strengthenthe doctor-patient relationship, and help people afford theinsurance coverage they need.”

Although not a call for universal health care, Bush’s planseeks to give consumers more control of their medical plansthrough health savings accounts, a tax-free pool of money saved

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by a person for medical costs. Approved as part of a Medicare

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News and Perspective

bill in late 2003, about 3 million Americans have since createdHSAs. By adding enticements for individuals to create HSAs,such as enhancing their portability, providing tax credits to low-income families and offering individuals the same tax benefits asthose with employer-sponsored insurance, Bush hopes toincrease enrollment by 50% in the year 2010. One goal ofHSAs is that, with their own money at stake, enrollees will bemore judicious with their health care expenditures.

But some critics say the proposals offer a convenient taxshelter for wealthy citizens and are likely to do little to addressthe nation’s uninsured problem.

“With health savings accounts consumers will have moreskin in the game, and it could give people a reason to thinkharder about using services that might not really be necessary,”said Laurence Baker, an associate professor of health researchand policy at Stanford University. “The President’s proposal issomewhat sensible, but it’s really only a small change, and itreally won’t affect the bulk of health spending. If you want toreally reduce the number of people who lack health insuranceyou’re going to have to look for something else.”

THE IOM’S PLANS AND PROTOTYPESThe IOM panel that produced its report 2 years ago sought

to provide a framework for that “something else.” After studyingthe uninsured problem, and all of its consequences, thecommittee concluded that any solution must adhere to 5principles: 1) health care coverage should be universal; 2) healthcare coverage should be continuous; 3) health care coverageshould be affordable to individuals and families; 4) the healthinsurance strategy should be affordable and sustainable tosociety; and 5) health care coverage should enhance health andwell-being by promoting access to high-quality care that iseffective, efficient, safe, timely, patient-centered and equitable.

“In light of the adverse consequences that uninsurance hasfor individuals, families, communities, and society as a whole, itshould be painfully clear that our nation can no longer afford toignore this problem,” said committee co-chair ArthurKellermann, professor and chair of emergency medicine atEmory University School of Medicine, Atlanta. “We must find away to cover the uninsured.”

To do so the committee identified 4 different prototypes forextending coverage.

The first prototype, a Major Public Program Extension andNew Tax Credit, would make no fundamental changes to thecurrent structure of private insurance, and the role of employer-provided coverage would remain. However, insurers would haveto offer a package of basic services at a price agreed upon withthe federal government, and moderate-income families wouldthen be given a tax credit equal to the amount of the basicinsurance package. Medicaid and the State Children’s HealthInsurance Program, or SCHIP, would also merge, fundedjointly by federal and state governments. Individuals could alsoenroll earlier in Medicare, at age 55.

The second prototype, Employer Mandate, Premium

Subsidy and Individual Mandate, would require all employers to

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provide coverage for their workers, pay a significant portion ofthe premium, and also require that all workers take thecoverage. Employers of low-wage workers would receive afederal subsidy to ensure coverage is affordable to all workers.Medicare would not change, and Medicaid and SCHIP wouldmerge. The public programs would require premiums fromthose of moderate to higher incomes and some costs for all atpoints of service.

The third prototype, Individual Mandate and Tax Credit,would require individuals to provide health insurance forthemselves and their families. They would receive a federal taxcredit, possibly in advance, that would allow for the purchase ofa plan that meets federal minimums from their employer, orthrough the individual market. States would continue toregulate insurers, and they would certify which plans met federalstandards. Medicare would remain intact, but Medicaid andSCHIP would be eliminated. Low-income individuals wouldreceive larger tax credits to enable purchase of a benefitspackage.

The final prototype, Single Payer, would require coverage ofevery individual, provide comprehensive benefits and beadministered by the federal government. The benefits packagewould include coverage of all services considered necessary.There may be a role for Medigap-type policies for those seekingcoverage of nonessential services and amenities. Like withMedicare, the government would contract with privateorganizations to review claims and process payments.

LOSING MOMENTUM?One professor said he believed momentum toward universal

health care has actually regressed since the 2004 release of theIOM reports. Thomas Buchmueller, a professor of economicand public policy at the University of California, Irvine, saidfiscal pressures in recent years have forced states to cut back onMedicaid and SCHIP funding.

“In the last decade there has been some progress towarduniversal health care, though it has been very gradual andnonlinear. An argument could be made that progress that wasmade up to 2004 has eroded,” he said.

“In my opinion, the only way we can achieve close touniversal coverage is with a multi-tiered system that includespublic coverage for a significant fraction of the population.SCHIP is a good step in that direction. In implementing theprogram, states did a much better job with outreach than inprevious Medicaid expansions. Most states did not extendcoverage to parents, but with the program for kids in place, thatshould not be a hard thing to do. The issue, as always, isfinances.”

But most other physicians and economists interviewed forthis article felt the groundwork is now being laid for eventualsupport for major health care reform. As more states reduceMedicaid expenditures and employers raise premiums forworkers and cut services, systematic health care reform, someeconomists believe, is coming, and it’s a matter of choosing a

system that a majority of stakeholders can agree upon.

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News and Perspective

One such professor, Willard G. Manning of The Universityof Chicago’s Harris School of Public Policy Studies, saidexpanding Medicare – similar to the fourth proposal by theIOM committee – probably represented the easiest way toprovide universal health care. But such a proposal would clearlybe fought by existing insurance companies and its financial costsare unknown.

Several facts are clear: everyone agrees the current insurancesystem has serious flaws, and nearly everyone who has studiedthe issue has his or her own idea how to fix the problems.Indeed, even the authors of the IOM report proposed 4different prototypes for addressing the issue.

VOUCHERS AND THE VALUE-ADDED TAXHowever, one new idea, the Emanuel and Fuchs health care

voucher program spelled out in the New England Journal ofMedicine last year, appears to be gaining support.

In short, the plan works like this: every American under 65would receive a voucher that would guarantee and pay for basichealth services from a qualified insurance company or healthcare plan. Participating health plans would have to offerguaranteed enrollment and renewal regardless of a patient’smedical history. Individuals could purchase additional servicesor amenities, including a wider choice of hospitals, with theirown after-tax dollars. A value-added tax, possibly assessed at themanufacturing stage, would pay for the vouchers. If Americanswanted a wider array of services, they would have to support atax increase. Employer-provided insurance would end, as wouldMedicaid and SCHIP. Medicare would be phased out. A federalhealth board, similar to the Federal Reserve System, woulddefine and modify the benefits package. And an independentinstitute would be established to assess effectiveness of newtreatments.

A voucher system, Emanuel argued, would drastically reduceadministrative costs by eliminating means-tests for programslike Medicaid and SCHIP.

“We’ve had a very positive reaction from people,” Emanuelsaid. “People tell us that, the more they sit with the plan andthink about it, the more they recognize its advantages.”

He added that emergency physicians would, withoutquestion, benefit.

“This completely eliminates the no health insuranceproblem, and overcrowded emergency rooms,” he said of thevoucher plan. “These hospitals would suddenly become placesthat get paid for what they’re doing. Big health plans wouldhave to begin contracting with them.”

Acknowledging that universal health care remains somewhatpolitically infeasible, Emanuel said he and Fuchs proposed thevoucher plan to stimulate discussion. When the concept ofuniversal care becomes more politically palatable, Emanuel said

he hopes to position vouchers as the system of choice.

558 Annals of Emergency Medicine

Another physician who has long studied access to health care,former Oregon Gov. Kitzhaber, said he also believes socialforces are moving toward systematic health care reform.

ARCHIMEDES’ BATHTUBKitzhaber first gained national attention in the late 1980s,

then an emergency physician and president of the Oregonsenate. Distressed by what he saw in the ED, when patients cutfrom Medicaid presented with serious illnesses that could havebeen treated at an earlier stage, he proposed a new plan thatembraced rationing of medical care. In its essence, the plan,finally launched in 1994, added 100,000 people to theMedicaid program by reducing its benefits package. Although asuccess, in the decade since many people have been droppedagain because of a recession and tighter state budgets.

After deciding not to run for a third term as governor earlierthis year, Kitzhaber launched a grass-roots movement to reformnational health care, believing that permanent, widespreadchange can only succeed from the bottom up. Dubbed theArchimedes Movement, Kitzhaber has sought to engageinterested people and physicians through the Internet to designa new system together. Already the group has raised about$200,000 to push its ideas. Not surprisingly, he believesemergency physicians should lead the movement.

EMERGENCY PHYSICIANS LEAD THE WAY“I think emergency room doctors see, probably more clearly

than anyone else, the problems inherent in the system,” he said.“They should be at the forefront for a number of reasons, notthe least of which is that they’re the providers of last resort. Ifpeople in America really knew what was happening with theirhealth care, they would be outraged. Emergency physicians arein the best position to tell them.”

Like others interviewed for this article, Kitzhaber wasencouraged by a landmark health care bill approved inMassachusetts in April. The agreement, supported byRepublicans and Democrats, seeks to phase in coverage over athree-year period to cover 90–95% of all the uninsured.

Reforms in Massachusetts and, if the Archimedes Movementcontinues to progress, in Oregon and possibly other states, willpush the federal government to review its own system, bringingthe spotlight to current inequities and inadequacies, Kitzhabersaid.

“We won’t be able to do this one state at a time, there aretoo many problems for this to be solved entirely at the statelevel,” he said. “But if a couple of states get the ball rolling, itcould lead to a national debate, and then we might have somereal change.”

doi:10.1016/j.annemergmed.2006.04.002

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