US health care struggles, witnessed by an insider

Stuart Altman's new book is 'Power, Politics and Universal Health Care'

Stuart Altman, the Sol C. Chaikin Professor of National Health Policy in Brandeis’ Heller School for Social Policy and Management, is an internationally recognized expert in health policy.

His new book, “Power, Politics, and Universal Health Care,” authored with longtime collaborator David Shactman, traces the long-running health care debate in the United States historically and through Altman’s personal experiences and observations as a Washington insider in the process.

Altman served as a deputy assistant secretary of the Department of Health, Education and Welfare in President Richard Nixon’s administration and was an architect of Nixon’s plan for universal health care. He was chair of the commission overseeing the way Medicare paid health care institutions for 12 years under Presidents Ronald Reagan, George H.W. Bush and Bill Clinton. He also served on President Clinton’s transition team and was a member of the president’s Bipartisan Commission on the Future of Medicare. He was a member of the health policy team for Barack Obama’s presidential campaign.

Altman also has served as dean of the Heller School and as interim president of Brandeis University.

His next course offerings will be in the fall semester 2012, when he will teach the undergraduate course “American Health Policy” and the graduate course “Issues in National Health Policy.”

BrandeisNow: Let's start with what you're trying to do with this book.

Stuart Altman: What this book intends to do is to trace the history of U.S. attempts to create universal coverage, going back to Teddy Roosevelt. It is written so that nonprofessional, non-academic readers can follow the crazy quilt history. We tried hard to minimize the use of jargon. My coauthor forced me to make sure there were no complicated charts or graphs. And it’s written using vignettes and stories, several of which are about my involvement with the healthcare industry. Beginning in 1971, I worked directly or indirectly with five presidents -- Nixon in a major way, Carter, Reagan, Clinton and then Obama. We also trace the long history of the passage of Medicare and Medicaid under President Johnson. We hope the readers will enjoy our analysis of why certain things happened, and equally important, why some important activities didn’t occur.
 
Do you think this long struggle is over with the passage of Obama's bill, that it’s a done deal that won’t come undone?

No, not at all. When we started this book, we had two titles. “Failure Again” was one of them. I would say half the book was written with an eye to the likely possibility that it was going to fail again. It was an attempt to write a history for the American people of how we got to where we are, regardless of where that would be. I wanted this book written for future students of healthcare policy. Five years from now, this will all be history. Few will remember or have heard about the huge political battles that led to the passage of each major expansion of coverage. It also was fun to trace the history of my involvement in changing health policy. Over the years I’ve had more than a few people say to me, “you have to write this down before you can’t remember what happened.”
 
When you started in this area, was there such a thing as a professor of national health policy?

I was trained as a classical economist, with no training whatsoever in healthcare. There was a very small group of healthcare economists, going back to the 1930s.
 
When did it explode?

The major growth in health policy occurred after the passage of Medicare in 1966. When I came to Washington in 1970 you could count the major health policy players on your fingers. In the late ‘70s, 15 of us came together to form an association to promote health policy research. Now, we run our own meeting, and we have thousands in attendance. Under Clinton in the 1990s it just exploded.
 
Is this in line with the old adage "follow the money"? Why did it explode?

I think that’s a good adage. Clearly healthcare has changed a lot in the last 40 years and has become a lot more expensive. In 1971, the United States spent $75 billion on healthcare services and that equaled 7.5 percent of the U.S. GDP. Last year spending exceeded $2.5 trillion and that equaled 17.5 percent of GDP. With the growth in the cost of health services, the federal government expanded the amount of health research funding. This has enticed thousands of new entrants into the health policy and research community. What’s also interesting, as we describe in the book, many of the ideas and the structure for the Obama plan and the Romney plan passed in Massachusetts were designed when I was in the Nixon Administration in 1973.
 
Looking at the stereotype today, it’s that the Democrats are gung ho for universal care, but when you run through who have made major contributions or major efforts, you mention a lot of Republicans. So is it a difference between the Republican Party as a political entity and Republican presidents? Or do the Republican presidents just get a bad rap?

A fair assessment is the following. Expanding coverage has traditionally been a Democratic idea. They are much more supportive of expanding coverage to people who have medical or financial problems. Democrats are also far more comfortable with an expansion of governmental involvement in the health sector. Republicans are leery, and have been forever, about any activity that expands government actions to promote social issues. They are also more concerned about government spending and the need for new taxes. With that said, Nixon’s plan was more liberal than most any other plan pushed by future presidents. Reagan, too, wanted to expand Medicare to add catastrophic and drug coverage. After legislation was passed to add these benefits it was repealed because of a backlash from wealthy seniors who were asked to pay for the new benefits. The big increase in Medicare occurred under President George Bush. For the first time, Medicare now pays for much of the cost of outpatient prescription drugs. So you do have several past Republican presidents who attempted to expand coverage. What is happening today is very different.

Most Republicans today have signed on to the most extreme case of “let’s do nothing.” The country can’t afford it, they argue, and the Obama health reform law will lead to a government take-over of the U.S. health system. The truth, I believe, is far different. The Obama plan, rather than a radical departure from the past is a natural extension of the many changes in our health financing system made by past presidents from both parties. And while health reform will add almost a trillion dollars in new spending, much of it will be paid for by cuts in other sections of the healthcare system. The net add-on to health spending is estimated to be only about 2 percent by 2019.
 
Is the United States alone among mature, economically prosperous states that don’t have universal health care?

Absolutely correct. We are the only country.
 
And do you deal frontally in the book with why that is?

We do. In most countries, government is not viewed as the evil empire. But in America, almost from the beginning, government was suspect. So we have a long history of being very nervous about giving government too much power. That doesn’t mean there are not many in the United States who that would be perfectly happy to have government take over full responsibility for providing universal health coverage. But those opposed to expanded coverage have been able to keep the role of government limited.
 
Let’s just say there was consensus on universal coverage. In your own view, what should be private and what should be government in the health care system?

I’m a national person in a lot of ways. I don’t see evil at the federal level, and I don’t see good at the local level, or the reverse. I think the generation of medical knowledge is national if not international, and it’s really wasteful for states or communities to try to generate knowledge. The delivery of care, if it’s going to be done by government, probably should be local. I don’t see any advantages of having the federal government do it. Then we come to financing. We have three players here. Let’s make it simple. We have individuals themselves, we have employers and we have government. What the book talks about is that we’ve put together this confusing hodgepodge of having each sector play a role. While it’s probably fair to say that our multi-sector system is the least efficient and most complicated of any country, it is the only system that I think is possible in the U.S.
 
You’ve said that one thing this “hodgepodge” produces is a diversity of models and approaches. Is that good?

The answer is, yes, and maybe no. If the federal government is right and forces us all to do the same thing, we would be much better off with a simple single payer system. On the other hand, if government is wrong, and it is at times, having alternative approaches doing different things is really better. Having some diversity gives you choices, allows you to learn. So I believe complexity is not necessarily bad. I’ve grown up with the idea that where it’s possible for the private market to do a decent job, let it, but I do believe that government has a substantial role, both in making sure that the private market works and taking responsibility for those who don’t do well in the private sector. I think we’ve sort of done that. The elderly have their special problems. We have a program for the elderly. The poor have a set of special problems. We have a program for the poor. And we allow most of us to to seekassistance in the private market. If the Obama plan succeeds, we will have brought 95 percent of the U.S. population under the universal coverage tent. Before the Obama plan, we were at 85 percent. If we can go from 85 to 95 percent with our existing system, that’s a good thing.

Then the second question is, what about costs? Our existing system is very inefficient. We spend at least twice on a per person basis what other countries spend for health care and it’s questionable whether we gain commensurate value. So now we’re trying to grapple with that. But controlling costs is not easy and in many ways is far more difficult than attaining universal coverage. Americans are very concerned that if we cut spending we will cut the quality of their health care. For health providers it is a question of both their income and their life style. We have tried to rein in health spending before in this country and failed. We will see if we can make it work this time.