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Abstract
Around 10 years ago,White, a native of Tennessee, developed systemic lupus erythematosus- unarguably a serious condition, but one that is treatable to the extent that 80% of American sufferers live a normal life span.Her illness caused her to lose her job, at which point she became one of an estimated 45 million Americans without health insurance. Because of her lupus diagnosis, she was denied coverage by every for-profit insurance company she approached.
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The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care, rev. ed. By T. R. Reid. London: Penguin Books, 2010. Pp. 290. $16 (paper).
For going on 40 years,T. R. Reid, a Washington Post correspondent and a regular contributor to National Public Radio, has suffered from pains in the shoulder he injured during his naval service. In The Healing of America, he engagingly recounts the efforts of health services around the world to heal his condition and, in the process, he explains with impressive clarity the variety of ways in which health care can be organized, the informing principles on which the various health systems are based, and the historical and cultural contexts in which they have evolved.
Instructive and entertaining as all this is, Reid's main purpose is the deadly serious one of exposing what he sees as the scandal of health care in America. Reid believes that the failures of American health care are wholly intolerable precisely because they are demonstrably avoidable.With an easy and comfortable fusion of anecdote and comparative policy research, he successfully dismantles many of the misconceptions that damagingly constrict the scope of the American health-care debate, and he highlights those elements from overseas healthcare experience that suggest ways in which America can achieve a more socially just and cost-effective health system.
The exposure of scandal is by far Reid's easiest task, and it is fully accomplished in the book's opening sentence, which asserts that "If NikkiWhite had been a resident of any other rich country, she would be alive today" (p. 1). Around 10 years ago,White, a native of Tennessee, developed systemic lupus erythematosus- unarguably a serious condition, but one that is treatable to the extent that 80% of American sufferers live a normal life span.Her illness caused her to lose her job, at which point she became one of an estimated 45 million Americans without health insurance.
Because of her lupus diagnosis, she was denied coverage by every for-profit insurance company she approached. Under Tennessee's version of Medicaid- America's health-care safety net for the officially poor-she was not able to obtain the necessary specialist care.Then rule changes aimed at cost reduction disqualified her from Medicaid, and she was forced to end her drug treatment. She made numerous attempts to re-enroll in Medicaid, and to declare herself disabled in order to qualify for help from the Department of Social Security. But this Kafkaesque entanglement in bureaucracy achieved nothing, andWhite was eventually admitted to an emergency ward from which she could not be turned away, and at which she died several weeks later, aged 32.Clearly, it was not lupus but the lack of health insurance that killed her, and it continues to kill over 20,000 Americans each year.
America's failure to achieve universal coverage is not its only negative distinction in international health-care comparisons. Tens of millions of insured Americans turn out to be under-insured, and Reid cites a joint study by Harvard Law School and Harvard Medical School, according to which an annual total of 700,000 people in America go bankrupt through medical costs.Reid's own findings are that in Britain, France, Japan, Germany,The Netherlands, Canada, and Switzerland, the number of medical bankruptcies each year is zero.
Reid also demonstrates that American health care is "mediocre by global standards" (p. 31).The Commonwealth Fund ranks the United States last among 19 developed countries in terms of avoidable mortality. American diabetics, for example, die younger than diabetics in any other wealthy country. Life expectancy is lower in the United States than in most European countries and in Japan,Taiwan, and Singapore. On the more specific benchmark of "healthy life expectancy at sixty," the United States is tied for last in a study of 23 countries. There is a similarly bleak picture at the other end of the life span.According to the Organisation for Economic Co-operation and Development (OECD), there are 2.4 deaths per thousand births in Sweden, whereas in the United States the figure is 6.8. Meanwhile, America tops an international league table of nine developed countries for deaths through surgical and other medical errors.
Underlying this grim picture is a striking paradox: despite such problems as the uninsured, the under-insured, and poor health outcomes, U.S. health spending as a percentage of Gross Domestic Product is close to twice that of other developed countries-15.3%, as opposed to 8% in Japan, for example.Two commonly cited explanations for the high cost of medical care in the United States-high remuneration of health-care providers, and excessive malpractice lawsuits-are dismissed by Reid as marginal. Instead, he insists, the real problems are the country's unique reliance on for-profit private medical insurance, and the labyrinthine structures of health-care funding and service provision.The majority of the book is devoted to establishing this thesis through a comparative examination of countries that have placed health insurance on a not-for-profit basis and rationalized their service delivery.
In Reid's analysis, there are four basic models of health-care organization. There is the Bismarck Model, pioneered by the eponymous German Chancellor in the 19th century, but found also in Japan, France, Belgium, and Switzerland, with some Latin American approximations. Private, not-for-profit health insurance plans-jointly financed in most cases by employers and employees-pay for privately provided medical services. Both the insurance plans and the service provision are tightly regulated by the state, and no one can be excluded from coverage.
The Beveridge Model, named after the British welfare reformer William Beveridge, is what most Americans seem to mean when they talk about "socialized medicine"-health care that is provided by the state and financed through the tax system "like the fire department or the public library" (p. 18). It is the basis of Britain's National Health Service, and it is also used in Italy, Spain, Scandinavia, and Hong Kong.
The influence of both Bismarck and Beveridge can be found in the National Health Insurance Model, under which medical services are privately provided, but paid for by a government-administered insurance scheme. It is more commonly referred to as the "single payer" system and its best-known example is Canada's Medicare, though versions of it can also be found inTaiwan and South Korea.
Finally, the Out-of-Pocket Model describes the absence of a mass health-care system, and it is the situation prevailing in all but the 40 or so richest countries in the world. Its chief characteristic is that health services must be paid for by the consumer out of current income, without the assistance of either private or public insurance. Its obvious consequence is the restriction of health care to the relatively wealthy, and the complete exclusion of the poorest, many of whom will live and die without ever receiving medical treatment.
Reid is obviously frustrated at Americans' reluctance to draw on the experience of other countries. "The real problem with those foreign health care systems," he writes,"is that they're foreign.That offends the mind-set-sometimes referred to as American exceptionalism-that says our strong,wealthy, and enormously productive country is sui generis and doesn't need to borrow any ideas from the rest of the world" (pp. 12-13). But, with a nice touch of irony, Reid reveals that many so-called foreign elements are already firmly established in the American health-care system.
Most working Americans under 65 are covered by a substantially less regulated version of the Bismarck Model, under which American employers and employees- like their German counterparts-jointly pay for private insurance that is then used to buy private medical services. Native Americans, armed services personnel, and veterans, on the other hand, all have their medical services paid for and provided by the government under the Beveridge Model used in Britain and, as Reid mischievously adds, in Cuba. Meanwhile,Americans aged over 65 are covered by Medicare,which operates on the same National Insurance Model as the Canadian system, with which it even shares an identical name.As for the 45 million uninsured Americans, they are confronted with the brutal realities of the Out-of-Pocket Model more commonly associated with places like Burkina Faso and rural India.
Winston Churchill is reputed to have sent back a pudding because it had no theme, which is essentially Reid's indictment of what he terms the "crazy quilt" multiplicity of models that is the real basis of America's health-care exceptionalism (p. 41)."We are like no other country," he says,"because the United States maintains so many separate systems for separate classes of people, and because it relies so heavily on for-profit private insurance plans to pay the bill" (p. 21).
Reid is convinced that a functional health-care system must be based on the principle of "guaranteed issue," or the inability of insurers to deny coverage.This comes into conflict with the profit motive because of "adverse selection"-the practice of not buying health care until diagnosed with a serious illness. To counter adverse selection, private insurance companies must be free to pick and choose their customers, leading inevitably to the denial of coverage to those who need it most.This problem is then compounded by "rescission,"which means the cancellation of coverage when the insured person claims for a serious injury or disease that will require expensive treatment.
In the 2009 hardback edition of this book, Reid acknowledged that private insurance and guaranteed issue could conceivably be reconciled by the "individual mandate," the requirement that everyone buy health insurance. This, of course, is central to the Obama administration's health insurance reforms. So many of Reid's readers will have anxiously awaited this paperback edition and its promised afterword on "Obamacare."The Patient Protection and Affordable Care Act of 2010 will expand coverage by extending eligibility for Medicaid, by increasing access to private insurance though federal tax credits, and by requiring the creation of state-level private insurance exchanges.The Act also introduces new insurance regulations that will ban the denial of coverage to people with preexisting conditions, and finally put an end to the reviled practice of rescission.At the same time, insurance companies will be protected from adverse selection through the individual mandate. These reforms are projected to cost $940 billion over the first 10 years, and the money will be raised by tax and fee increases imposed on pharmaceutical companies, on medical equipment manufacturers, and on health insurance companies.
Reid recognizes Obamacare as "the most consequential and far-reaching health care law to emerge from Congress since the creation of Medicare and Medicaid in 1965" (p. 244). He acknowledges that it will extend health-care coverage to tens of millions, and that its Medicaid reforms would probably have saved NikkiWhite's life. But, according to Congressional Budget Office projections, there will still be 23 million uninsured Americans in 2019.The creation of a federal nonprofit insurance plan-the so-called "public option"-was discarded, though not before it had been used to pressure private insurance companies into accepting the legislation's other reforms. But Reid is concerned that the insufficient penalties set by Congress for noncompliance with the individual mandate may constitute Obamacare's Achilles heel. In any case, the whole package falls far short of the guaranteed issue principle: insurance companies will still be able to deny claims, even if they cannot deny coverage.
"The sad truth," Reid concludes,
is that, even with this ambitious reform, the United States will still have the most complicated, the most expensive, and the most inequitable health care system of any developed nation.The new law won't get us to the destination all the other industrialized democracies have reached: universal health care coverage at reasonable cost.To achieve that goal, the United States will still have to take some lessons from the other national health care systems described in this book. (p. 251)
Many American health-care reformers are prone to idealize those alternative systems, one particularly egregious example being Sicko, the 2007 documentary polemic by the filmmaker Michael Moore. Reid's comparative analysis is more sophisticated than that. He fully acknowledges, for example, the cost-control problems in Germany, and the under-remuneration of health-care providers in Japan. His British doctor simply counsels him to learn to live with his shoulder condition.And the chapter on Canada is subtitled "Sorry to KeepYouWaiting." If there is a trace of naivety in The Healing of America, it may be in the book's assumption that rational argument and empirical evidence can be inserted into America's currently dire health-care debate.The wild rhetoric leveled at Obamacare- some of it from national political leaders-is not exactly encouraging in this respect.
There is no equal and opposite shrillness in The Healing of America. But for all the gentleness of its style, the book is a devastating attack on the crass delusion that blocks health reform in America. That delusion is the insistence that the United States gets the best health-care outcomes, and that the secret of its success is its quintessentially American "free enterprise" system, the only alternative to which is an un-American "socialist" bureaucracy of one kind or another.This delusion pervades both the Republican and Democratic parties, though it is obviously more intense on the Republican side. But even among Democrats, leading health-care reformers like Hillary Clinton and Barack Obama cling to the crazy quilt of for-profit insurance as if it were a comfort blanket.
Of course, their impatient critics need to remember that all reformers always have to start from where they are. But if the boldest health-care legislation since 1965 is still going to leave 23 million Americans without insurance a decade later, then it is probably time for the United States to finally confront the central fact illustrated in Reid's book: a national, not-for-profit, guaranteed issue insurance scheme (public, private, or hybrid) is the precondition for the universality, equity, affordability, and quality that has been achieved by the rest of the developed world, but not by the United States.
Copyright Johns Hopkins University Press Spring 2011