A health reform headache

A health reform headache

December 26, 2009 21:13
richard saltman 248.88

richard saltman 248.88. (photo credit: Judy Siegel-Itzkovich)


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Israel's health system was reformed exactly 15 years ago by the National Health Insurance Law - and even though it enfeebled the country's general labor federation, the Histadrut - it was passed by the Knesset without much rancor. Ownership of the health funds was wrested from two political parties, and all Israeli residents were given automatic entitlement to a generous basket of health services in exchange for health taxes. It's not perfect, but it is much admired. YET IN THE United States of America, where most health services are private and there is no universal health insurance system, a series of proposed reforms have been raised and rejected over decades and numerous presidential administrations. Now, after almost a year of intense national argument, the complex and expensive plan proposed by the administration of Barack Obama suddenly seems likely to pass the Senate despite strong opposition by 60 percent of the adult population. The hard-fought legislative process now going on in the US is almost incomprehensible to Israelis. Prof. Richard Saltman, an expert in health systems at Emory University in Atlanta, Georgia, explained to The Jerusalem Post what was going on back home while attending the triennial international conference of the Israel National Institute for Health Policy Research in Jerusalem. Saltman, who in 1998 cofounded the European Observatory on Health Systems and Policies and continues to visit Europe once or twice a month for conferences and research projects, said he is unhappy with the Obama reform, along with the majority of his fellow Americans, who fear it will increase already too-high premiums (up to $23,000 per year for a family of four) and reduce their quality of care. "Voters are also aghast at the financial implications - a huge new entitlement program with real cost estimated at $2.5 trillion over the next decade." THE BILL and its enormous new spending has so angered voters that new polls show 41% of adult Americans now look favorably at reductions in all federal spending, supporting the so-called Tea Party activists who led the opposition to the proposed health legislation in US town meetings last summer. Saltman, who described himself a "former lifelong Democrat," believes this trend holds real dangers for Democrats in the next election. "Since there is no consensus between the two political parties, and the health bill is opposed by a majority of voters, the Democratic Party will have to do a lot of political repair work around this issue before the looming mid-term election in 2010" said Saltman. "Obama's party will have even bigger problems because the new health bill frontloads new taxes in 2011 but will have to wait for four years after passage to provide many of the benefits, including most of the new coverage for the over 30 million Americans lacking health insurance." Unlike Israel, Scandinavia, Southern Europe, Australia and other countries, the US provides health insurance policies through employers, but not in all jobs. In addition, pensioners get generous coverage through the federally run Medicare program, and some of the unemployed and poor get free healthcare from Medicaid, which is run on state-federal joint funding. Those without insurance sometimes can get urgent care only if they go to hospitals when they are very sick, and even then often have to wait for hours. The real flashpoint in the current debate, said Saltman, may well come over Obama's enormous budget deficit ($1.4 trillion dollars in 2009) and the rapidly growing national debt. "The Democrats need to authorize a massive increase in the national debt ceiling ($2 trillion dollars more) by March 2010, and trying to pass that measure only eight months before an election could unravel the Democratic Party's majority in both the House and the Senate. Overall, the political environment is still very volatile, and the outcome could still shift before either final passage in 2010 or actual implementation in 2013." Saltman said that although he is unhappy with much of the administration bill, he agrees with the need to introduce substantial reforms in the US, as 17% of its Gross Domestic Product is spent on healthcare, compared to less than 8% of GDP in Israel, which has universal coverage (excluding dental care and adequate chronic care in geriatric institutions). The US spends more on healthcare - $7,290 per capita in 2007 - than any other country. Israel offers very good primary care, and the vast majority of Israelis are satisfied; although permitted to change their health funds twice a year, only a small number actually do. The US suffers from less available primary care, and preventable hospital admissions for asthma and diabetes are twice what they are, on average, in the OECD. Saltman believes that Obama's bill creates more problems than it solves. Among its flaws is that it is set up to raise money for 10 years but in effect will cover only six years of services, since it will not immediately offer coverage. "Not only is this dishonest bookkeeping, but you can't leave people without health insurance for years." Moreover, Saltman argued, "the time is over for this type of big public-spending program. The Obama administration lives with the 1960s in their heads, eager to create a European-style welfare state. But the world has changed. We are in the midst of a Third Industrial Revolution, after the first launched by steam and the second by electric power. We are now in the world of computers and electronics," noted Saltman, "and the US is not the only country to do well in this." He said that many European nations are doing everything they can to reduce state expenses,"but in the US, we want to increase taxes dramatically on both individuals and companies. You can't do it anymore. There are two billion more new workers in Southeast Asia and all are working hard. They want the things Americans already have. If the US can't come up with a smarter fiscal policy, these countries are going to eat our lunch!" A second problem, he explained, is that the Democrat's health strategy centralizes a great deal more power in the hands of the federal government. "The Senate bill would set up over 100 new agencies and boards to supervise the health sector. That's a huge amount of federal bureaucracy. While some new regulation is long overdue, especially to rein in private insurers, the current proposal goes way overboard." This type of federal control runs directly against the feeling of most Americans that they should be able to make their own choices about what health insurer and what doctors and hospitals they use, and makes many "really mad," Saltman added. On top of all this, "the process of writing and passing the bill has been full of dishonesty and strategic errors. The cost of buying the necessary votes to put the bill up for Senate debate was enormous." The "political chicanery in the US now makes the Knesset look like a day at the beach," states Saltman, who has visited Israel a dozen times since 1991. EXPLAINING WHAT he regards as the Obama Administration's "corruption," the respected health systems expert said "Obama bought the crucial vote of just one senator from Louisiana with $300 million dollars for projects for her home state. To get the final vote this past Sunday night, the Administration cut a special deal for Nebraska, relieving it in perpetuity of all its future joint costs for the state's Medicaid program. This is pure political corruption, as the Democrats purchased the votes they needed with huge amounts of taxpayer money. This kind of legislative logrolling will generate much higher taxes for many years at the expense of our children, who will have to pay off an even higher national debt at rising interest rates," Saltman declared. The strategic errors he cites include alienating nearly all elderly by cutting $500 billion out of the already badly underfunded Medicare program that pays for their health care. But the worst error, in Saltman's opinion, reflects the financial consequences that the new program will have on the national debt and ultimately on the country's overall solvency. Americans, he said, increasingly don't trust their own government. Those voters in the center no longer put much faith in the existing political structure. Large numbers of people at every station in life are not only rejecting the Obama Administration's hugely expensive social programs but rethinking their attachment to how politics is done in the US. The public approval rating for the Democrat's health plan has now fallen to only 39%, Obama's own ratings have been falling fast, and are now below 50% after only 11 months in office, and Congress itself has an approval rating of just 15 percent. Saltman said that "middle-class Americans look at their government and what they see is a huge national debt and deficit, with unfunded promises for Medicare and Social Security. All the money collected for these programs has been spent by Congress on other social programs, leaving nothing in the so-called 'locked box' for those who will soon need Social Security payments. People are getting fed up." The big "American middle is not attached to the Democrats any more," he insisted, "but the Republicans are not welcoming them either. They are too extreme ideologically, especially regarding social policy issues such as abortion,. This leaves a political vacuum, an opportunity for someone to come in from the outside." This new US political environment, he said, is "frightening. I blame the Democrats, not [former president George W.] Bush." The Georgia professor suggests that Sarah Palin - the former governor of Alaska and GOP vice presidential candidate - may try to fill this vacuum by becoming a populist more than a Republican. "The media portrayed her as stupid in 2008, but she is not. If things were to go badly, internationally and domestically in the US, many voters may think she stands for things they like. Who do you think bought 1.5 million copies of her autobiography in the first two weeks?" Saltman, who has been coming to Israel since 1991, said that even though Israel's national health insurance system works well in this country, it wouldn't work in the US because it has an entirely different set of cultural expectations. "There are very different national contexts that reformers have to work within and respect when they suggest change," he said. "It must be a reform that most people will accept. It makes no sense if reform legislation is passed but will be repealed after the next election." The Obama reform proposal, he emphasized again, has too many strategic and political errors that have made the middle class concerned about the cost of care, and doubt the certainty that their health insurance will be there when they need it - especially government-funded Medicare for the elderly. While Israelis are held together in the pursuit of survival, "Americans don't have the same sense of solidarity, and lack Israel's overarching sense of mission or national purpose to bind them together. The US has over 300 million residents, and is thus almost the size of the European Union. They reflect many different ethnic cultures, with the South and Midwest being quite different from the East and North," the Emory University scholar said. "Americans distrust their government even more than Israelis do, and they don't want their government to control their healthcare." Public-sector physicians in Israel work either for non-profit health funds or state hospitals. But very few Americans, noted Saltman, "want to get their care from doctors who are working for the US government."

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