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Obama is aiming for cradle-to-the-grave, comprehensive healthcare

THE sheer scale of negotiations and of opposition still to come which make the healthcare reform mountain that Barack Obama has pledged to climb somewhat throws our own issues concerning NHS budgeting into relief.

Last night, the snappily-titled House Blue Dog Caucus, a group fiscally cautious Democrats, finally agreed to back a Congress package bill after months of negotiations provided the cost of implementing was reduced by $100 billion from the $1 trillion originally proposed.

The cost still catches the breath. Indeed, such is the scale of healthcare reform that several committees are currently at work on a number of different bills. What Obama has so far is agreement from his own party in Congress. He will need the Senate to vote on its own version of his reform proposals, before a specially-convened two-house committee will shake up a final version that will go back to the president for his approval. Optimistic Capitol Hill watchers last night claimed that the breakthrough in Congress could lead to the bill being ready to pass by the autumn.

If healthcare reform pilots a tortuous path, the statistics that prompted Obama to make it the central plank of his first term are astronomical. Some 47 million Americans – almost one in six – have no insurance for healthcare, while a further 25 million do not have adequate cover. At the same time, healthcare spending accounts for 16% of US GDP, $2.2tn in 2007, which is twice the OECD average. This is because premiums have sharply risen in recent times. Many Americans have health insurance through their employers, whose costs for such schemes have increased four times faster than wage rises, and are double what they cost at the turn of the Millennium. Over the same period, the percentage of employees with an annual deductible greater than $1,000 has increased from 1% to 18%.

Outside of the US, a less-than-dim view of how the healthcare industry conducts itself has grown and grown. Many European commentators are appalled at its conduct, pointing to its responsibility to Americans and their growing inability to pay, which they claim it ignores, before contrasting it unfavourably with the powerful lobbies that insurers, hospitals and drug companies maintain in Washington.

It has been claimed that those interests have so far spent $1.4 million a day on lobbyists whose sole task is to stop the bill. Many of those lobbyists came from government, found a Washington Post investigation, which reported that 350 former representatives and workers have been taken on to influence debate. It has worked, in some quarters. The right wing-pliant Fox News has reported plenty on troubles here with the NHS, and also on the Canadian healthcare system, similar to our own. It has found plenty of disgruntled patients who, tired of waiting for treatment, have crossed the border and paid for the privilege.

But what it and other Republican mouthpieces are not focusing on is the rank inefficiency of the system. The US spends an average of $6,402 on healthcare for every person each year, around twice as much as here, France, Germany or Japan. Yet, when it is measured using even the most basic indicators of wellbeing, such as life expectancy or infant mortality, the US has the worst results of any developed nation.

Obama has proposed tackling the healthcare system with a national health insurance programme for those who cannot pay, or who are not covered by employer or federal schemes (like those for the over 65s). When he was campaigning for election, he believed that this new public insurance could be paid for by employers who don’t run their own scheme, and through the reversal of Bush tax cuts.

He has since put those specific proposals to one side, leaving the bones of legislation to the two houses while setting out three principles that he wants to address through new law: that it must reduce costs, guarantee the right of every American to choose their own health plan, whether its public or private, and provide all Americans with quality, affordable healthcare.

The Senate’s Health, Employment, Labour and Pensions Committee became the first congressional panel to vote through a healthcare reform package. It proposes that all Americans would be required by law to obtain health insurance, known as an individual mandate, while most employers must provide their staff with healthcare coverage – an employer mandate. It would also introduce a public health insurance plan, open only to those are not eligible for Medicaid and don’t have an employer-provided plan.

Three committees in the House of Representatives have produced a similar, joint bill. Congress had proposed a 1-5% surtax on Americans earning over $350,000, but the proposal would be unlikely to pass the Senate. The Senate Finance Committee’s bill – still to come – is also expected to put forward individual and employer mandates, but would set up non-profit medical co-operatives to compete with private insurers, rather than introduce a public option. It has also talked about taxing employer-provided health benefits.

Many presidents have tried and failed to introduce universal healthcare. Hillary Clinton’s attempts were dead in the water barely a year into her husband’s first presidency. So when Obama declared it would be the signature legislative achievement of his first year in office, few had high hopes. He has paid for his promises with a sharp end to his honeymoon period. However, that has as much to do with the ongoing recession and increasing alarm among Americans over high big-spending answers to the economic downturn.

But, while the recovery remains stubbornly resistant to any kind of stimulus package, Obama has made headway with healthcare reform. If it continues on its path, commentators believe it will become the most significant change in US social policy for decades. However, the current package may not address all of his concerns. Research by the Dartmouth School of Medicine in New Hampshire has found that it is the high-spending regions of the US that is driving spiralling costs. Because insurers and the government pay set fees for every medical intervention performed, doctors in institutions in some regions that compete to become centres of excellence in high-paying fields may use unnecessary diagnostic tests, while surgeons often perform expensive procedures instead of cheap drugs, all in order to pump the price.

So while Capitol Hill concentrates on the expansion of healthcare provision, some abuses of the system may preclude the central cost-cutting principle that Obama wants. The way forward involves more side-by-side research into different tests and treatments, and more information disseminated to the public. This is likely to cure the problem because, as Shannon Brownlee, of the New America Foundation think tank, said: “When people understand, they’re less likely to choose expensive, invasive procedures.”