Universal Healthcare: 10 Barriers to Success

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William Dodge, a healthcare professional, reviews the current state of the industry.

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Universal healthcare for all Americans is an admirable goal but unattainable at present. William Dodge, a former healthcare executive, examines the current state of the industry and offers his observations on how to achieve this necessary goal. The issues and special interests of healthcare in the United States obstruct a successful outcome.

Current solutions do not take a holistic approach that addresses the issues of access to care, cost, quality, and continuity of care. The United States provides some of the highest and some of the lowest healthcare quality of all industrialized countries. But U.S. healthcare costs are almost twice those in other countries. Studying a history of healthcare can give us insight how to cover the 50 million uninsured Americans.

Although Germany established the first national system of compulsory sickness insurance in 1883, it was not until the 1930's when large U.S. industrial companies, to include Kaiser Industries and Bechtel, combined personal and worker healthcare with a wellness strategy. This was the beginning of an employer-based healthcare system in the United States.

During this same time, teachers in Dallas organized one of the first health insurance models around a non-profit Blue Cross. After World War II, many U.S. industries returned to fragmented healthcare controlled by physicians and insurance companies.

In the early 1970's, cost inflation in healthcare spiraled out of control. Around this same time, a Stanford Professor named Alain Enthoven published "Consumer Choice Health Plan." The idea was to bring competition between health plans to the marketplace, but with some government controls.

The Republican Administration modified the concept. Non-profit HMO's were to complete in each market place and the U.S. government would mandate strict rations for hospital construction and for healthcare technology. But, by the late 1970's, many of these quality improvement and cost-reduction strategies were eliminated.

Beginning in the 1980's, a Federal law (ERISA), designed to protect retirees, was misapplied to allow multi-State employer health plans to be exempt from State laws. State health plan mandates in more progressive States were disallowed. Only the State of Hawaii received a U. S. Supreme Court exemption from ERISA.

The Hawaii Prepaid Healthcare Act mandated that all employers must offer a State-qualified health plan. 100% of the Hawaii population was covered with quality medical care. Costs were driven down because there was little cost-shifting and there was less inappropriate use of emergency services. Wellness was encouraged. Although the "pre-existing condition" health plan clause was eliminated, healthcare costs stood at 20% below those in California.

The U.S. government administers three different approaches to healthcare. Medicare and Medicaid are subsidized through payroll taxes that pay medical providers primarily on a fee-for-service basis. The Veterans Administration is a direct medical provider for retired military families. Federal employees and members of Congress have a choice of health plans with a fixed premium paid by the government. None of the plans attempt to control quality. Only the VA negotiates prescription drug costs.

A recent issue of the Wall Street Journal analyzed the new Dutch universal healthcare program that was implemented in 2006. In only a year, healthcare costs have gone down and quality measurements have gone up. The Dutch concept incorporates private insurer competition but mandates insurance for all. The government negotiated with generic-drug makers to cut prices by 40%. The fee-for-service incentive has been eliminated.

In 2007, a Washington, D.C. based health think-tank, Committee for Economic Development, recommended scraping the present U.S. fee-for-service medicine: the more services, the more fees. This approach would remove an employer-based health system in favor of fixed-dollar credits for every American. Competition would drive price and quality.

Today, almost 18% of Americans are uninsured for healthcare. U.S. multi-national companies are firing workers because of high costs. It would seem that this is the time to enact a meaningful national healthcare policy.

There are 10 major obstacles that must be addressed if quality healthcare at an affordable cost is to be brought to all Americans. They are:

  •      Mandate compulsory healthcare but debate employer-based, single-payer, or fixed-dollar credits. This will level the playing field by eliminating cost shifting;
  •     Decide between the present fragmented fee-for-service and a managed competition approach. The present system is broken in that U.S. healthcare costs are twice those in other countries, but quality is much lower;
  •     Remove the conflicts of interest on the part of doctors and on the part of for-profit insurers and some hospitals. Follow the money;
  • Invoke Federal controls on hospital construction, technology, and quality. Federal guidelines suggest that a community of 100,000 could support a 100 bed hospital. Under-utilization drives costs upward. More expensive does not translate into higher quality;
  •     Amend ERISA to allow State healthcare mandates. This Federal law has been mis-applied to prevent States from initiating new progressive healthcare programs;
  •     Negotiate prescription drug prices. The Veterans Administration negotiates drug prices to reduce drug costs by hundreds of percent;
  •     Publish quality outcomes of health plans, physicians, and hospitals. Let the consumer know the real story of healthcare quality and cost. Hospitals and cardiologists doing less than 50 heart surgeries per year are probably going to be more expensive but lower quality;
  •     Eliminate "pre-existing condition" health plan clauses. Health plans should be required to accept all applicants, without restrictions;
  •     Reward wellness. Statistics show that obesity and smoking account for a majority of controllable illnesses;
  •     Create a national health plan identification card and data base to assure "continuity of care." Duplication of medical services is not only wasteful, it is bad medicine. As a patient transfers from physician to physician and medical facility to medical facility, these medical records and prescription medications should also be available.

All Americans deserve quality healthcare at an affordable cost. Possibly, the debate should begin by answering the question: Is healthcare in the United States a right or a privilege?

William Dodge has published many articles on healthcare subjects. He is retired from Kaiser Permanente.

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William Dodge

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