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Insert Comma • A Portfolio of Leigh E. Rich
America’s health system in a ‘death spiral’

The Duke serves up solutions for the underserved

By Leigh E. Rich

He knows he’s not the best person to ask about winning a presidential election. He admits he’s often been called “cheap” and even “Mandatory Mike.” And these days, his biggest public appearance seems to be as short-order cook for the 26 mouths in his grandson’s kindergarten class.

But aside from his reputedly renowned pancakes and waffles he recently made during a visit to Denver, one-time presidential candidate and former governor of Massachusetts Michael Dukakis does know a thing or two about health care.

In fact, it’s one of two obsessions, Dukakis told a filled Rainer Auditorium at St. Joseph Hospital the Thursday before Thanksgiving—health care and transportation.

And Colorado has recently made strides on both fronts, Dukakis applauded, saying he is “encouraged” that the Rocky Mountain electorate passed both Amendment 35—a 64-cent increase in the state’s tobacco tax—and FasTracks.

“States can act as you have acted,” he told a crowd of about 80, who had the opportunity to mingle with the “Duke” and wife Kitty at a reception prior to the lecture, entitled “The Uninsured: 45 Million and Counting,” sponsored by the Colorado Coalition for the Medically Underserved.

Moreover, with the Clinton administration’s unsuccessful attempt in 1993 to push forward its Health Security Act and with President Bush having just won a second term in office, Dukakis believes it is now once more up to the states to take on America’s growing health care crisis—with 15.6 percent of the population currently without health insurance and the nation saddled with the highest health care costs per capita.

According to Dukakis, despite some health care successes in states like his very own Massachusetts during the 1980s, Clinton’s plan redirected the issue to the federal level, leaving state attempts to whither by the wayside. All might have been well if the Clinton plan had passed muster with Congress. But it didn’t.

And disappointed by Sen. Kerry’s loss in the November 2004 election, the Duke says “little or nothing is going to happen in Washington in the next four years” regarding health care coverage.

Dukakis, who teaches public policy and splits his year between Boston’s Northeastern University and UCLA, even called Bush’s plans to promote tax-free health savings accounts and other “consumer-driven” health care merely euphemisms for “$5,000 deductibles” and, thus, “pure nonsense.”

“This is not a serious proposal. … The market does not work in health care. Never has, never will.”

The marketplace works if you’re buying televisions and toasters, Dukakis said—that is, when consumers have the freedom to “enter and leave” the market. Health care, on the other hand, is more akin to a public utility that needs to be both mandated and regulated.

“Intelligently,” he added.

For example, the Germans, he said, have “a very high quality system at one-half the cost (of ours). But it’s regulated.”

And the last thing America’s health care system needs, Dukakis emphasized, referring to a recent New York Times article, is more competition. What happens, for example, when someone requires immediate medical attention at 1 a.m., he asked?

“The idea that you’re going to shop around” doesn’t hold water. “How long are we going to indulge ourselves in this notion?”

Instead, Dukakis suggests an employer mandate similar to President Richard Nixon’s proposal in the early 1970s, with some exceptions for small businesses—say, those with 25 employees or less.

For those who bristle at the idea, Dukakis replies: “We (already) have an employer mandate in the United States, don’t let anybody kid you.”

But the way it works now, with only some employers offering insurance, he explained, the system is being forced into a “death spiral.”

Take two competing businesses, where one insures its employers and the other doesn’t.

When employees from the latter company “show up in the emergency room,” Dukakis said, “that cost is passed on to you”—because hospitals raise their rates to pay for this “free care,” causing insurance companies to increase their premiums, and often forcing businesses, particularly smaller ones, to stop offering health coverage.

Which, in turn, Dukakis noted, merely increases the number of people without health insurance seeking care in emergency wards.

And emergency room health care is extremely expensive, he reminded his audience, in part because these health providers don’t know the patients or their medical histories. Thus, doctors often have to order additional tests and they can’t focus on prevention—which, in the long run, would be more cost-effective.

Just look at Denver Health, said Denver Mayor John Hickenlooper, who was, in his own words, “the small, little appetizer” before the Dukakis main event.

According to the mayor, Denver Health will confront about $280 million in total uncompensated care in 2004, up from $212 million in 2002. Combine this with the fact that in 2005 Colorado “will have 750,000 people who will go the entire year without health insurance” and about 500,000 with interrupted coverage, Hickenlooper said, and it is easy to see the “extraordinary burden this puts on, not only our health care system, but businesses and our families.”

Money that will be generated from Amendment 35’s tax hike, the mayor said, will help, but it is not the ultimate solution.

Colorado needs to “find new ways of borrowing from Peter—we don’t like to rob,” Hickenlooper told the group.

“The states cannot be the insurers of last resort” and still find means to fund public education and the like, Dukakis agreed, noting that Medicaid could soon pass K-12 to become the biggest line item in state budgets.

That leaves an opening for the business community to take the lead. And it will behoove it to do so, the Duke said.

“The employer community has a strong economic self-interest” to support a health insurance mandate, he emphasized.

According to Dukakis, “this goes right to the bottom line of these companies,” because businesses that do insure are currently subsidizing those that don’t. For example, “we impose a tax on all insurance premiums. Employers who insure are paying that tax.”

Or take McDonald’s or Wal-Mart, which like all businesses are not required to offer their workers health insurance. In the state of Georgia alone, Dukakis said, 13,000 children of Wal-Mart employees are on Medicaid.

And with half of Medicaid paid for by the federal treasury, “we’re all paying for this. … You and I are paying (more) money because Wal-Mart is not required to insure its employees and their families. I don’t get it.”

But in the midst of establishing an employer mandate with some level of contribution from the employee, Dukakis added, the bureaucratic costs of health care need to be revamped as well. As much as 25 percent to 30 percent of medical costs go to overhead—a ghastly number, particularly when compared to Medicare’s roughly 3 percent.

“The government is a hell of a lot more efficient.”

Under Dukakis’ plan, America’s system would remain privatized but would require the standardization of contractual language and reimbursement as well as the establishment of a clearinghouse, like the nation’s banking system.

Much of the current system’s overhead goes to billing, Dukakis explained, with doctors employing two or three people just to collect payments from insurance companies.

It is no wonder the current system is “driving the doctors crazy,” he said, using his cousin, a physician in a six-member practice in Florida, as an example. The six doctors have 12 employees on their staff in order to bill the 160 PPOs from which they accept patients.

Finally, once universal access is guaranteed and the costs of health care have been reduced, Dukakis said, then Medicare and Medicaid can be used to fill in the gaps.

Dukakis believes this is a feasible plan to reign in America’s runaway health system, but only if coalitions are built between the business community, health care entities and legislators.

“Key legislators have to be there (from) both parties. Look, this isn’t a partisan issue,” Dukakis said frankly, adding with a smile: “I don’t know if the governor wants to come, but invite him.”

And it is a plan that’s already proven successful, at least in Hawaii.

When the Nixon bill fell apart in 1974 because of Watergate, Dukakis explained, Hawaii’s Sen. Dan Inouye “refused to let Congress adjourn until he got a special exception” to mandate universal coverage in the 50th state.

Since then, Hawaii has boasted of reasonable costs, a 40 percent reduction in hospital stays, and some of the best health outcomes, Dukakis stated.

“This is not just a demonstration project. It’s a million and a half people.”

The Duke did admit, however, that “if we were starting all over” he’d be in favor of a national, single-payer health system, similar to what Harry Truman proposed in the 1940s.

“There has to be some kind of a mandate. Now, would I prefer single-payer? Yes, I’d prefer single-payer. … (But) for better or for worse, we have a system now.”

And “at some point, employers must insure. Otherwise, (the state goes) bankrupt.

“This is an issue that states can deal with,” Dukakis promised Colorado.

“It is within you power, if you want to.” 

Rich, Leigh E. 2004. Rich, L. E. (2004, December 3). America’s health system in a ‘death spiral’: Michael Dukakis urges Colorado to ‘sketch out a viable plan.’ The Colorado Statesman, pp. 2, 11, 13.

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