Insurance model follows American medical tradition

Monday, May 12, 2008

WASHINGTON -- Call it Obamacare or call it Clintoncare. But don't call it "socialized medicine."

And don't think that the health-care systems that Barack Obama and Hillary Clinton have promised to put into effect if they get into the White House would be anything like the universal health coverage offered in Great Britain or Canada.

Last week, Sen. John McCain, the likely Republican nominee, described his challengers' health-care plans as a "move closer to a nationalized health-care system." But that's a stretch. To nationalize means to transfer ownership or control to the government. There's still a vast distance between what the Democratic candidates have proposed and nationalized health care.

Clinton and Obama aren't proposing government hospitals or government doctors. They want people to have health insurance, and they want people to be able to choose from a variety of policies. The menu would include private plans as well as an option similar to Medicare. Tax breaks would help lower- and middle-income people pay their monthly premiums.

Employers, except for small businesses, would also pay into the system if they don't offer coverage to their workers. Wealthier people would pay too because their taxes would go up. Both candidates have promised to discontinue income tax cuts passed in President Bush's first term for those households with incomes exceeding $250,000. The revenue generated would be used to help pay for more health coverage.

The biggest difference in the two candidates' plan is who would be required to get insurance. Clinton says everyone should be. Obama says only children must have coverage.

Such a system would continue the split system that the U.S. has when it comes to health coverage. The elderly, poor, disabled and many veterans would continue to get care paid for primarily by the government. Others would get coverage from private companies, usually through their employer, or through the Medicare-like option.

"Their approach is not taking any other country's system. It's building on what we have in the U.S," said Karen Davis, president of the Commonwealth Fund, which conducts health research.

The candidates say the Medicare-like option they include in their health-care plans offers additional competition that would benefit consumers.

Still, the mix of private and public coverage bears little resemblance to Canada or Great Britain, two nations that Americans might think of when it comes to universal health insurance.

Consider, for example, that in Canada, all medically necessary services are paid for by the government. Each province determines what's medically necessary, but surgery, prenatal care and visits to a doctor's office for an annual health exam are typical examples. Private insurance is basically limited to dental care, vision care and prescription drugs.

In several Canadian provinces, patients are prohibited from using private insurance to pay for services covered through that nation's Medicare program. The prohibition stems from the fear that some people could use private insurance to get to the front of the line, thereby undermining access to publicly insured services.

Advisers to each candidates dismissed such restrictions.

"We don't eliminate the employer-based side of the equation. We don't dismantle private insurance," said Heather Higginbottom, policy director for the Obama campaign. "We still have competition and choice and all the things that would lead to adequate supply and good care."

Even for those people who select the government-managed plan, nothing will preclude them from buying additional coverage, just as older people today are free to buy insurance to fill gaps in their Medicare coverage, said Neera Tanden, the policy director for the Clinton campaign.

"She wanted to build on the system we have rather than radically reshape it," said Tanden.

Private insurance is also little used in Great Britain. About 11 percent of the population has it. Many use private insurance to escape waiting lists for elective services. But, the great majority of care is paid for by the government.

There are pluses and minuses to the single-payer system that those two countries have. Among the pluses, health care expenditures in Great Britain come to about $2,724 a person. Canada spends $3,359 per resident. Meanwhile, the U.S., spends about $6,401 per resident, according to worldwide figures compiled by the Organization for Economic Development.

Many doubt that the U.S. is getting good value for all that spending. It also makes it harder for U.S. companies to compete internationally.

"That's why it costs less to build a car in Canada than in the United States because you've got a bunch of money tied up in health insurance," said Steven Lewis, a Canadian health consultant.

The high costs also translate into greater difficulty in obtaining care. About a quarter of adults in the U.S. say they did not visit a doctor when sick. About the same percentage said they skipped medical tests or treatments recommended by their doctor. By comparison, only 3 percent of people in Great Britain skipped care recommended by their doctor and only 5 percent did so in Canada, according to a survey conducted by the Commonwealth Fund last year.

But there are disadvantages to the single-payer systems as well. A different Commonwealth Fund survey showed the following percentage of patients who waited more than four weeks to see a specialist: Great Britain, 60 percent; Canada, 57 percent and the United States, 23 percent.

The same survey showed that wait times for elective, non-emergency surgery were longer in the single-payer systems: Great Britain, 41 percent; Canada, 33 percent, and the U.S., 8 percent.

Citizens of the three countries do have one thing in common: They're not big fans of their nation's health care systems. Eighty-two percent of adults in the U.S. believe the health care system needs either fundamental change or to be rebuilt completely, the Commonwealth Fund found. In Canada and Great Britain, 72 percent of adults felt that way.

"Everywhere, everybody hates their health care system, said Michael Tanner, director of health and welfare studies at the Cato Institute.

That's likely to be true under Obamacare, Clintoncare -- and McCaincare, too.

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