Health Policy in the United States

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HEALTH POLICY IN THE UNITED STATES

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Issues of health and healthcare are rather similar across countries, and there are many commonalities in the ways that governments deal with them through health policies. All industrialized nations, for instance, have public health programs and license and regulate healthcare providers to some extent. But there are many differences among their health policies as well—policies that both address and raise issues of justice. Much of the variation in approaches can be traced to the histories, ideologies, and institutions of respective political systems. The relatively unique character of the American political tradition is an essential context for understanding the distinctive aspects of health policies in the United States and their bioethical implications.

Impact of Liberal Ideology

Compared with other industrialized nations, the political ethos of the United States emphasizes the importance of the individual rather than the collectivity (see Gøsta Esping-Andersen). U.S. political ideas, institutions, and behavior uniquely reflect a virtually unanimous acceptance of the tenets of seventeenth-century English political philosopher John Locke, whose liberal philosophy was in harmony with the laissez-faire economics subsequently propounded by Adam Smith in The Wealth of Nations (2000 [1776]). As Locke propounded in Of Civil Government, Two Treatises (1924 [1690]), the individual should be much more important than the collective, and one of the few important functions of a limited state is to ensure that the wealth that individuals accumulate through the free market is protected. The framers of the U.S. constitution, strongly influenced by the atomistic individualism of Locke's philosophy and his views on the sanctity of private property, took pains to limit the power of government. The constitutional rights they established for American citizens are largely protections for the individual and his property from governmental actions.

This ongoing ideological tradition helps to explain an important distinctive feature of the American political system's approach to health policy. Although U.S. governments intervene a great deal in the health arena, on some matters they are more inclined to rely on the individual and the free market than most other industrialized nations.

Unequal distribution of access to healthcare is a prime example of the effects of this approach. Most industrialized nations, for instance, use the power of government to assure health insurance coverage for virtually 100 percent of their citizens. The rate of government-assured health insurance in the United States, however, is only 33 percent, by far the lowest among industrialized nations (Anderson and Poullier), because the expectation is that most financing of personal healthcare is the responsibility of individuals and their employers (some exceptions are discussed below). Consequently, in 2000, 14 percent of Americans, nearly forty million persons, had no health insurance (U.S. Census Bureau). Lack of insurance, of course, limits access to care, and has been documented by researchers such as David W. Baker, Joseph J. Sudano, Jeffrey M. Albert, et al., (2001) as increasing the risk of poor health.

Impact of Power Fragmentation

Even as the framers of the Constitution were enamored of Locke's political philosophy, they and many other early Americans were heavily influenced by French philosopher Baron de Montesquieu's The Spirit of the Laws (1949[1748]), in which he urged that the powers of governments should be separated in order to thwart the development of tyrannical states. Accordingly, the framers divided the very limited powers of the national government they established into executive, legislative, and judicial branches—each with the power to check the actions of the others. This structure, of course, made it difficult for government to act and thereby interfere with individuals and their property.

The separation of powers exacerbated what was already a characteristic of the American political system, the endemic fragmentation of power in a federal form of government. Not only did the state governments retain most of their power in the federal system but, reflecting the influence of Montesquieu, the powers in each of them were also separated. The fragmentation of governmental power in the United States is astounding: Altogether, there are some 80,000 governments—including counties, municipalities, special district governments, and independent school districts, as well as the state and national governments—and the powers of each of these are usually separated, and even further fragmented. Therefore, generally speaking, government intervention of a sweeping nature is difficult in the American political system. Health policies and other policies tend to be incremental rather than systemic or comprehensive.

One consequence in the health arena, for example, is that various American presidents since the 1920s have failed in their efforts to secure national health insurance, including President Bill Clinton who declared it the prime legislative goal of his first term (1992–1996). One of them may well have succeeded if he had been the head of a disciplined ruling party in a parliamentary system of government, with no separation of powers. Another consequence is that many important health policies are carried out in disparate and uneven fashions throughout the nation because they are primarily the responsibility of state and local governments. These responsibilities include: public health; regulation of hospitals, nursing homes, home health agencies, hospices, and other healthcare provider organizations; licensing of healthcare professionals; and regulation of private health insurance plans. Still another and related consequence is that it is difficult to establish national standards for healthcare.

Government Health Insurance and Direct Care

Despite a political culture that emphasizes individualism and the free market, about three-fifths of all U.S. spending on personal healthcare is financed, directly or indirectly, by governments (Woolhandler and Himmelstein). About 25 percent of this amount is used to support the employer-sponsored system of private health insurance through tax subsidies and public employee benefits. About 20 percent of it is spent on direct government provision of healthcare to veterans and members of the armed forces (and their dependents), and to Native Americans (under treaty obligations). Almost all of the remaining 55 percent is spent on Medicare and Medicaid, two government health insurance programs for selected groups of Americans that have been politically legitimized as especially deserving of collective help. A central rationale for the establishment of these two programs has been "market failure"—the fact that employer-sponsored private insurance does not tend to reach these particular groups.

Medicare, enacted by Congress in 1965, provides national health insurance for about forty million persons. One group covered by the program is all persons aged sixty-five and older who are eligible for Social Security benefits (or Railroad Retirement Benefits)—over 99 percent of Americans in this age range—about thirty-five million people at the turn of the twenty-first century. The political threshold for legitimating older people as a special deserving group worthy of collective assistance had already been crossed during the Great Depression when the Social Security Act of 1935 created government-funded old-age retirement benefits at the age of sixty-five. The rationale for establishing Medicare was that older persons, retired from employment, had no way to obtain group health insurance. Comparatively few had employer-sponsored retiree health insurance. Moreover, most older people could not afford the comparatively steep premiums charged for individual insurance policies, and many could not obtain them because of preexisting medical conditions.

Medicare coverage was extended in 1973 to another select group, younger individuals who become eligible after they have received Disability Insurance (DI) benefits from the federal government for at least two years; about five million such persons were covered at the turn of the century. These are persons who, due to a medically certified physical or mental impairment (but not other circumstances), are unable to engage in any kind of substantial employment (earning $500 monthly or more) for at least a year. They have been politically legitimized as deserving of Medicare coverage because without employment they cannot obtain group health insurance or afford it on their own. Until the year 2000, DI recipients who were able to return to substantial employment lost their Medicare coverage after two years. However, in recognition of the fact that many employers of former DI recipients do not provide health insurance, this disincentive to work was attenuated by the Ticket to Work and Work Incentives Improvement Act of 1999. It enables DI recipients who become substantially employed to participate in the Medicare Program for an additional four and one-half years.

The Medicaid program, established by the federal government along with Medicare in 1965, is a jointly-funded cooperative venture between the national and state governments that provides healthcare insurance coverage for some poor Americans. But Medicaid policy does not fully equate poverty with deservingness. Federal law only requires states to provide coverage for specific categories of deserving groups among the poor that, in their nature, are unlikely to be able to obtain employer-sponsored insurance through the market. Although the list of these requirement categories is long and detailed, the principal eligible groups are children, adults with dependent children, disabled persons (who are not eligible for federal DI benefits), blind persons, and older people (to cover their long-term care costs and certain other expenses not covered by Medicare). Persons within these categories are eligible for Medicaid if their income and financial assets fall below thresholds determined by each state (within minimum federal guidelines). Poor working age men generally do not qualify for Medicaid; the vast majority of those who are eligible in the "adults with dependent children" category are single women. Altogether, the program covers over forty million persons.

Because state governments have considerable latitude in setting income and asset thresholds for Medicaid eligibility, there are substantial interstate inequalities in program participation by persons within the categorical groups designated in federal legislation. An example is the range of low-income thresholds used by states to determine whether infants are eligible for Medicaid. At the most generous end of the range of low-income thresholds used by states in 1999 was Tennessee's 400 percent of the federally-established poverty line; at the other extreme were eight other states with a threshold of 133 percent (Ku, Ullman, and Almeida).

Federal Regulation

The federal government's Food and Drug Administration has long played a role in protecting consumers through regulation. The agency is responsible for ensuring that medicines, medical devices, blood supplies, and certain experimental medical treatments (e.g., gene therapy) are safe and effective, and that foods and cosmetics are truthfully labeled and not harmful. It is only since the late 1980s, however, that the federal government has entered the broader arena of regulating healthcare providers and health insurers, traditionally the bailiwick of state and local governments. It has done so principally to address bioethical issues.

Some policies have been enacted to compensate for perceived inadequacies in state regulation, such as measures in the Omnibus Budget Reconciliation Act of 1987 established to reform the quality of nursing home care. Others have responded to new developments in thinking about ethical patient care. For instance, in the context of growing concerns about protecting patient autonomy, the federal Patient Self-Determination Act was enacted in 1990. It requires healthcare organizations to immediately inform new patients of their rights to refuse medical and surgical treatment and to execute written legal documents, called advance directives, regarding their preferences in this regard.

In 1996 alone, the federal government enacted three regulatory laws intended to protect consumers by addressing ethical issues. The Mental Health Parity Act of 1996 responded to inequities in coverage for mental healthcare by requiring that if a group insurance plan covers mental health, the annual and lifetime benefits available must be equivalent to those available for medical and surgical services. The Newborns' and Mothers' Health Protection Act of 1996 addressed perceived issues in quality of care by mandating minimum inpatient stays for mothers and their newborns following deliveries and caesarean sections. And the Health Insurance Portability and Accountability Act of 1996 made obtaining group health insurance easier for individuals with pre-existing health problems and disabilities or previous illnesses, and for those who lost their coverage because of changing jobs or job termination.

The role of the federal government in addressing ethical issues through regulatory policy is likely to expand continually. Technological and biomedical discoveries and innovations inevitably generate questions of fairness and equity that lend themselves to the possibility of government intervention, such as whether genetic tests should be used as screens to exclude applicants for private insurance, whether or in what circumstances stem cell research should be allowed, or how scarce societal resources (e.g., organs for transplantation) should be distributed.

Major Ongoing Issues

The agenda for government policy action grows larger and larger because new issues do not obliterate ongoing concerns. Perhaps the two broadest and most important ongoing issues from a bioethical perspective are: (1) how government will deal with issues of increased longevity; and (2) whether government will remedy the unequal distribution of access to care by securing insurance for the uninsured.

INCREASED LONGEVITY. One set of issues involving increased longevity is generated by the aging of the baby boom, a cohort of 76 million Americans born between 1946 and 1964. During the early decades of the twenty-first century the ranks of older Americans will swell enormously. By 2030, the population of Americans aged sixty-five and older will double, from about 35 million in 2002 to 70 million, and make up 20 percent of the population. Because of this population aging, and ongoing developments in medical technology, the nation will need to greatly increase its financial commitment to the Medicare program if it is to be sustained.

Various commentators are alarmed by this prospect. Bioethicist Daniel Callahan, for example, has described future healthcare costs of older persons as "one of the great fiscal black holes" (p. 216) and argues that these costs will pose an enormous and unsustainable economic burden for the nation and drain resources that could be used for other worthy social causes—an issue of so-called intergenerational equity. Thus, he and others maintain that rationing healthcare on the basis of old age is essential from an economic point of view. Moreover, from a philosophical perspective, Callahan regards it as inappropriate for older people to live beyond what he terms a "natural life span." Accordingly, for both economic and philosophical reasons he has urged that the Medicare program should not pay for life-saving care for anyone aged about 80 or older, and he hopes that this practice will extend to the private sector. Others (e.g., Binstock and Post) have sharply critiqued the arguments of Callahan and other proponents of old-age-based rationing on both economic and ethical grounds. It is not clear that such rationing at the age range suggested would save a great deal of money. And among the ethical arguments against it is the specter raised by the notion that a demographicallydefined group might be singled out as unworthy of life-saving care, and be the first of many groups to which such a designation might be applied.

Another dimension of longevity that raises important bioethical policy questions is the quest to slow, arrest, or reverse processes of aging. The U.S. National Institutes of Health (NIH) not only support research to understand the basic biological processes of aging, but promote efforts to substantially increase average life expectancy or the human life span. In 1999, for example, two NIH institutes convened a clinical advisory group of more than fifty scientists to set a research agenda for slowing the fundamental processes of aging and extending maximum life span (Masoro). The desirability of such a policy has been questioned from a number of quarters.

Among bioethicists, Leon Kass, appointed in 2001 as chairman of the U.S. President's Council on Bioethics, opposes such efforts. He believes that even if the human life span were increased by only 20 years, we would lose the benefits that finitude confers:

interest and engagement in life;
seriousness and aspiration;
beauty and love; and
virtue and moral excellence (Kass).

Even one of the premier biological researchers in the field of aging, Leonard Hayflick (1994), rejects the goals of substantially extending life expectancy and life span because of distributional justice issues that would arise regarding access to longevity technologies and because of various other social and economic consequences. Other biologists, however, particularly those who are engaged in efforts to slow or reverse the processes of aging, acknowledge such concerns but do not feel that they warrant a halt to their quest to achieve increased longevity (e.g., de Grey, Ames, and Anderson; Miller). And bioethicist John Harris argues that it is doubtful that coherent ethical objections can be generated against the achievement of immortality and urges that we "start thinking now about how we can live decently and creatively with the prospect" (p. 59).

INSURING THE UNINSURED. Finally, as noted above, about forty million Americans have no health insurance in the early years of the twenty-first century. Trends in the labor market suggest that the outlook for expansion of health insurance coverage through the private sector is dim for the foreseeable future. Although the percentage of employed Americans grew to its highest level in many decades during the economic expansion that took place in the 1990s, employer-sponsored healthcare benefits did not grow apace. When the economy began to flag in the early years of this century, the ranks of the uninsured grew. In the absence of a new government health insurance initiative that reaches beyond the present selected, politically legitimated groups, it is unlikely that many of the uninsured will be covered; indeed, their number could grow.

Since 1994, when Congress rejected President Clinton's initiative for national health insurance, no such policy has been on the political agenda. When and how might such an effort be renewed, and how might it have a chance of success?

The proportion of voters who are poor and members of racial and ethnic minority groups will grow sharply over the next several decades, and these groups are disproportionately represented among the uninsured. Perhaps they will be mobilized effectively in a demand for access to the healthcare that their fellow citizens are receiving.

Another possible scenario is that the swiftly changing dynamics of American healthcare will threaten profits in the healthcare industry. Government insurance for an additional forty million persons (and perhaps a larger number in the future) would be a bountiful source of revenue. Unlike the American Medical Association, which vigorously opposed initiatives to secure universal insurance during the twentieth century, the contemporary healthcare industry might appreciate what government can do for it. As Bruce Vladeck observed in 1999, Medicare financing has largely built and sustained the modern medical industrial complex. The political power of the healthcare industry, although fragmented into various interests, is substantial; it might very well carry the day for universal coverage if united by a vision of what further governmental largesse could do for it. If so, despite a political tradition that has been dominated by emphasis on individualism and the free market, the United States will be able to eliminate major inequalities in access to healthcare.

robert h. binstock

BIBLIOGRAPHY

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