Pursuing Health-Care Reform: The Promise and the Pitfalls. 5th Annual Herbert Lourie Memorial Lecture on Health Policy

In developing health care reform proposals, it is important to recognize that our health care system has evolved over a long period of time and reflects values in which Americans believe deeply--values like pluralism and entrepreneurialism, consumer choice, limited government, and low taxation. Any major reforms will assault, or at least do some violence to, these values. Nevertheless there's a gathering consensus that reform of the fractured health care system to which Americans have grown accustomed is necessary, based on two overriding concerns: an uninsured population of approximately 35 million people, more than half of whom are adults holding full-time jobs; and medical care costs that continue to rise more than twice as rapidly as the consumer price index. These problems have festered for over a decade. The obvious change in the equation is a restive middle class, concerned about the uncertainty of its health insurance arrangements, and a new President who has staked his political future on making these arrangements more secure. President Clinton brings to this task a strong belief that federal policy should create a framework that encompasses all health insurance arrangements, not just those that are sponsored by government and financed through taxation. This represents a fundamental change in national health policy. During twelve years of Republican rule, the federal government defined its responsibility in the health care field only as far as the publicly financed programs, largely Medicare and Medicaid, without any responsibility to create a framework under which the whole system would operate. Clearly there is a direct link between public and private financing of health care through cost-shifting, which has increased over the years. The President proposes to transform the system that is today dominated by private decision-making and financing to one that places the federal and state governments in far more central regulatory roles in relation to how resources are allocated and how the system functions.