Healthcare Reform: Is It Doomed to Fail? "Every 15 years or so, proposals to reform the entire U.S. healthcare system seize national attention," notes Brookings Institution senior fellow Henry Aaron. The cycle has been going on since President Franklin D. Roosevelt considered proposing universal health coverage as part of the Social Security Act, and it has endured through the presidencies of Truman, Carter, Ford, George H.W. Bush, and Clinton, all of whom proposed some form of healthcare reform, all of which failed. Does the current push for healthcare reform seem as likely to die as its predecessors? Aaron wonders. There are good reasons to worry about the state of healthcare in this country. The U.S. spends twice as much per capita on health care as the average of the 10 other richest countries in the world, but more than one person in six under the age of 65 is uninsured. "Business and labor leaders alike are convinced that employer-financed healthcare is undermining U.S. competitiveness." To understand what happened to all those previous efforts to improve healthcare, we have to look carefully at some of the barriers to reform, Aaron suggests. He says that: • "Elites remain deeply divided on what to do." Solid and stubborn minorities favor various options, such as enrolling everyone in a nationally administered system financed largely by taxes, or shoring up the current employer-based system, or encouraging people to buy insurance themselves. Supporters of each approach prefer the status quo to the alternatives, so nothing gets done." • The 85 percent of Americans who are insured fear change. "Yes, healthcare costs them more than they would like, and insurance red tape is a huge pain. But they regard any plan that threatens their current arrangements with suspicion, particularly if it is imposed by a Congress they distrust." • "Large-scale health reform is large-scale income redistribution, and the politics of redistribution is the politics of trench warfare. Unless healthcare spending is greatly increased—something no one wants—spending on one kind of care means cutting another. Those who stand to lose services can be counted on to invoke high-flown reasons why reform is retrograde." • "Healthcare reform involves huge financial stakes. When Clinton proposed his reform, the U.S. healthcare system spent as much as the gross domestic product of France. Now it spends as much as the combined GDPs of France and Spain." • The U.S. political system is "exquisitely structured" to frustrate action on large and controversial issues on which there is no general agreement. • And finally, because healthcare varies greatly across the United States, consensus is hard to come by. (Aaron notes as examples that in Texas, 24 percent of the population is uninsured, compared with less than 10 percent in three Midwestern states and Hawaii; and Massachusetts spends 70 percent more per person on healthcare than Utah does.) So, given all those problems, is transformation of the healthcare system impossible? Aaron asks. On the national level, he thinks, the next president can articulate a vision, "but like Moses, he or she is unlikely to see the promised land." More hopeful may be state reforms already enacted or in the planning stages, or small efforts by the U.S. Congress to relax regulations or provide modest financial support to innovations. Whatever the approach, Aaron speculates, "even politicians unable or unwilling to agree on sweeping national reform increasingly understand that the nation cannot afford to once again walk away from the healthcare mess with nothing to show for the effort." Aaron's November 6, 2007, comments are available on the Brookings Institution website at www.brookings.edu/opinions/2007/1106_aaron.aspx.
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