Health care reform

The pressure for genuine health care continues. The good news is that Democratic candidate Barack Obama has come up with a serious approach for bringing universal health care coverage to the U.S. I'm a fan of his advisor, economist David Cutler of Harvard University. His book Your Money or Your Life is a good analysis of the American health care system and offers a route toward reform. He explodes one of the biggest myths in public policy today--and there is a lot of competition--that we can't afford universal health insurance. Rising health-care spending isn't the costly devil it's made out to be.

America is unique among the major industrial nations for not guaranteeing comprehensive coverage for essential health care and in this case American Exceptionalism is a shame. That said, for anyone like me who believes in universal health care I'd recommend reading One Nation Uninsured: Why the U.S. Has No National Health Insurance by Jill Quadagno. She's a sociology professor at Florida State University. (The book came out in 2005.) It's a cautionary and bleak tale.

There have been a number of major reform initiatives to create universal health insurance. The American Association for Labor Legislation (AALL) proposal for compulsory state health insurance in the 1910s; Roosevelt's national health insurance idea from the New Deal; Truman's Fair Deal idea; Nixon's National health Insurance Partnership and Senator Kennedy's Health Care for All Americas in ‘70s; and, of course, the notorious debacle known as the Clinton Health Security Plan. Each of these plans did affect foundered, although the "ironic outcome in each instance was federal action that entrenched a private alternative to a public program," writes Quadagno.

It's largely an ignoble history. The "socialized medicine" red scares of the American Medical Association. The racial politics of the South that stifled national health insurance between the 1930s and the 1960s. The scare tactics of the health insurance industry from the '70s to the '90s. "Across an entire century, each attempt to enact national health insurance has been met with a fierce attack by powerful stakeholders who have mobilized their considerable resources to keep the financing of health care a private affair," writes Quadagno. "Whenever government action seemed imminent, they have lobbied legislators, influenced elections by giving huge campaign contributions to sympathetic candidates, and organized 'grassroots' protests, conspiring with like minded groups to defeat reform efforts."

Still, I don't think the pressure for reform will whither this time around. The reason is globalization. In a competitive global economy, layoffs, restructurings, downsizings, reengineerings--pick your favorite euphemism--are a permanent part of management's toolkit. Globalization and free trade bring enormous benefits to the U.S. economy and society. There is no doubt about that. But it also brings job insecurity and earnings instability. What's more, in our system, when a worker loses a job, he or she loses more than an income. Their family loses their health insurance.

Business is also finding that health care is no longer a "fringe" benefit, but a growing expense. They'd much rather focus on burning the midnight oil how to boost productivity rather than how to cut back on health benefits. We want the benefits of fee trade while limiting the downside. My own sense is that the price for maintaining the genuine benefits of freer trade will be universal health insurance. But Quadagno's book brings home the message that it will still take tough political leadership and savvy coalition building to bring about universal health care.

About the author

Chris Farrell is the economics editor of Marketplace Money.

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