Editorial: Clinton's Prescription for Disaster

IT IS TIME FOR ADVOCATES of a single-payer health care plan to stand up and be counted. The terms of the unfolding debate over Clinton's health care proposal have been set by the administration within the framework of so-called managed competition. The complexity of the plan guarantees extended discussion and endless amendment. But so far most single-payer advocates have avoided the question of whether Clinton's plan should be supported or opposed.

Single-payer critics have denounced the Clinton plan, calling it a cruel hoax. The question now is: Can the cruelty be amended out so the hoax can be transformed into a beneficial program, or is it beyond repair?

Insurance companies are a central component of the U.S. health care problem. Yet Clinton's plan would further empower the insurance monoliths, and rely on them to serve as the agents of his solution. Most critically, the Clinton program puts patients at the mercy of insurance carriers, who are required to control health care costs, but are given no way to effectively limit costs except through denial of medical care.

The plan would transform most health insurance enrollment from a group basis to individual choice. Competition for subscribers would supposedly ensure fair and responsive treatment by the insurance companies. But the opposite will more frequently be the case. Unlike most other businesses, health insurers do best when they encourage their most active cusomers to go elsewhere. Subscribers whose poor health leads to problems with their insurance are unwanted customers. Managed competition will become competition at dumping these customers. It is certain to intensify mistreatment of the subscribers who are most dependent on their insurance.

Among the other basic weaknesses of Clinton's program:

All citizens will be required to make a 20 percent contribution to the cost of health insurance. This prohibitive contribution belies the claim of the universality of the Clinton plan, since millions will not be able to afford this payment. The 20 percent contribution will be much more costly than most present employee payments to employer-provided coverage. Employers will delight at the bonanza a reduced standard of contribution provides them.
Cost projections are unrealistic, and insurance premiums entirely inadequate. The Clinton numbers just do not add up; instead, they depend on wishful projections of significant curtailment of health care spending.
Medicare is undermined by requiring far-reaching cost reductions. When Reagan and Bush cut Medicare, they caused hospitals and physicians to raise their rates for non-Medicare patients. If managed competition prevents this "cost shifting" to non-Medicare patients, hospitals and physicians will search for ways to cut their losses on Medicare patients - with the result that the elderly and disabled will receive inferior care.
Freedom of choice of doctor is maintained only as a fiction, for all but the wealthy. Those who insist on exercising their freedom of choice of medical providers will pay considerably more than 20 percent of their health care premiums, or find that they are covered for much less than 80 percent of the cost of their care, or both.
Vast new bureaucracies are established on top of the bloated administrative structures that already burden the health care system, adding new billions of pointless cost. Even more alarmingly, additional tens of billions of health care dollars will be wasted on new costs of advertising and competition for subscribers. These new costs contrast glaringly with the opportunity to cut administrative costs that a single-payer system would offer, as demonstrated by the Canadian example and the U.S. experience with the Medicare system.

The Clinton system is a prescription for disaster. The shortcomings are the essence of the program, not minor problems that can be corrected through amendment or with experience. There is every reason to expect the legislative process to further worsen the program, when efforts are made to placate conservatives and business interests in Congress.

Single-payer supporters may find comfort in the Clinton plan provision that allows states to create single-payer systems in place of the managed-care program. But the option is illusory. States are not likely to adopt single payer for the same reasons that no state has done so up to now. Apart from an inability to stand up to the overwhelming power of the insurance industry, states would be restrained by fear of the impact on their business climate.

The Clinton plan is not a step toward single payer. Its failure will discredit the concept of government control over health insurance, and could set back the movement toward a single-payer system for decades. Most importantly, Clinton's approach will take a very bad health care system and make it worse.

Given that the problems of managed competition lie at the core of the concept, and are not merely weaknesses that can be amended out, single-payer advocates need to muster the courage to call for a total rejection of this false start toward national health care. If single-payer supporters join conservatives in declaring outright opposition to the Clinton program, it can be defeated.

Single-payer advocates should attack the Clinton plan not merely as a less desirable solution than single payer, but on the basis that its inherent deficiencies are precisely the problems that a single-payer system would remedy. This approach will make it clear that single-payer supporters are not uncompromisingly demanding all or nothing, but are rejecting a false solution and offering a sound alternative.

Is this approach too harsh to the millions who are suffering from the problems caused by the present health care system? It would be only if the Clinton program could really contribute significantly toward rectifying the problems, rather than merely revising and exacerbating current difficulties.

Once Clinton's managed competition is adequately analyzed, it should become clear that it offers a cure that is worse than the present diseased system. But unless single-payer supporters are tough enough to take on the false solution of managed competition as a change that is worse than no change, all U.S. citizens may become victims of this cruel hoax.