The Clinton administration has come full circle in its approach to health policy and still is searching for a path through the maze.
In 1993 Hillary Rodham Clinton designed for the president a 1,400-page bill with an amazingly complex set of changes in the way working-age Americans and their children would access medical care. But it left the Medicare system for retirees essentially untouched.
The theory was that seniors would be reassured and lend their support to a plan designed to give everyone under 65 a plastic card guaranteeing hospital and medical care. But that plan was shelved by a Democratic Congress in 1994 without even a floor vote in the House or Senate.
In the years since then, President Clinton has endorsed and Congress has passed a series of incremental changes in health care. But now, 16 months before the election and probably too late for success, Clinton has advanced another biggie. It is a major overhaul of Medicare, designed to add a prescription drug benefit and keep the program solvent until 2027, a 12-year extension. And this time, it is Medicare alone -- with no serious structural changes in the remainder of a health care system that is in even greater danger of collapse than it was five years ago.
The new Clinton proposal, like the 1993-94 plan, has many sensible features. Medicare today pays almost all of a patient's hospital bills, most of the doctors' bills but none of the outpatient drug bills. That is backward. Sound social policy would make it easy for the elderly to obtain the medicines that can keep them healthy and try to reduce the costs -- and trauma -- of doctors' visits and hospital stays. Clinton's plan moves in that direction.
It also envisages achieving economies of scale, by organizing the purchase of medicine and encouraging competition among health care providers, much as the 1993-94 plan, for the younger population, called for rationalizing the structure of the medical marketplace.
Unfortunately, the new plan also shares some of the substantive and political liabilities of the old one. In seeking universality of benefits, it risks the perverse effect of encouraging employers to drop the prescription and medical subsidies they now provide their retirees. To avoid that, the government would subsidize companies for doing what they are already doing -- a waste of scarce resources. The plan is miserly in its benefits for middle-income people and wasteful in not asking the affluent elderly to pay for more of their medical benefits.
It is also dubious in its fiscal assumptions. It projects per-patient Medicare costs declining from 4.9 percent annually to 4.3 percent. This, just a month after CalPERS, the California Public Employees' Retirement System, regarded as one of the smartest health care shoppers anywhere, agreed to an 11.7 percent annual premium increase by Kaiser Permanente, its largest contractor.
But the bigger problem is that the Clinton proposal addresses only one piece of the health care system. True, the White House is pushing for a "patient's bill of rights" in managed care companies -- an appeals process and perhaps an expanded right to sue for those enrolled in such plans.
But after the rebuff of 1993-94, Clinton has nothing on the table to deal with the growing ranks of the uninsured -- 43 million at latest count and rising. And nothing on the need for nursing-home care.
In New Hampshire and Iowa, voters are showing up at presidential candidate meetings wearing white T-shirts emblazoned with the logo of "Citizens for Long-Term Care." At a hearing called last week by Sen. John D. "Jay" Rockefeller IV, a West Virginia Democrat, congressional staffers were told that nursing home and at-home care now costs about $115 billion a year, and that number will grow rapidly as the baby boomers retire and life expectancy increases.
Today, families typically have to bankrupt themselves and turn to Medicaid -- essentially a welfare program -- in order to pay nursing home costs averaging $40,000 a year. Most politicians shrink from even discussing the problem, but as Joshua M. Weiner of the Urban Institute told the Rockefeller session, "You can run, but you can't hide" from this part of the health care problem.
And there is more. People were shocked last month when the American Medical Association endorsed formation of a doctors' union. They were dismayed a few days ago to read that Medicare HMOs are cutting off at least a quarter-million clients and will charge sharply higher rates to those who remain enrolled. But these are simply more symptoms of a system threatened with collapse.
These are not isolated events; they are part of a systemic health care crisis. Clinton offers useful, but partial, fixes. Will any of the presidential hopefuls step up and address the whole problem?