Viewpoints : Who Should Pay for Health Care?

For years, the concepts of universal health insurance and public funding for health care were the sole province of the left. But with the cost of care skyrocketing--with rates for some types of insurance rising as much as 50% per year--business leaders such as Chrysler Chairman Lee A. Iacocca as well as conservative politicians have begun to join such liberals as Sen. Edward M. Kennedy (D-Mass.) in calling for a national health - care program.

In California, Gov. George Deukmejian is the latest conservative leader to take up the cry, proposing last month that employers should be required to provide health insurance for their workers and that government should lend a hand. An estimated one in five Californians lacks coverage.

For a debate on national health policy, free-lance journalist Sharon Bernstein interviewed a leading proponent of health - care reform, Walter B. Maher, director of federal relations for Chrysler’s human relations office. Interviewed for the opposing view was Devon Blaine, head of the California chapter of Small Business United, a national organization of small firms. In separate interviews, they responded to the same questions and were allowed to rebut each other’s views.

* Do California and the nation need a coordinated health-care policy?

Maher: Yes. We have never established any type of policy. We have a very fragmented system, totally uncoordinated, and the result is just an appallingly high rate of expenditures. Even the medical academics agree with this.

The U.S. spends 40% more per capita for health care than the second most expensive country, Canada. Not 40% more than the average country, 40% more than No. 2. Were we to get our costs in line with our wealth, we would be spending over $100 billion a year less than we are currently spending, and that makes this peace dividend pale by comparison.

Blaine: I don’t think we need anything beyond what we have. There are some things to be resolved, but I’m not sure what is possible, and I like to see as little government intervention as possible.

* If there is to be government intervention in health care, what form should it take?

Blaine: Government certainly cannot afford any additional burden, so looking at them providing care or paying for it is not an alternative. If anything, it should look at ways to control costs, such as limiting awards in malpractice suits or defective-product suits.

Perhaps the government should intervene in those hardship cases where people truly cannot afford insurance and have the need.

Maher: The government can establish standards for public and private programs so that everybody is playing by the same general rules. And when setting rules, part of the objective should be to keep the costs of health care reasonable.

In the public sector, that would mean that Medicaid should pay fairly, and no less than a private-sector program pays for a hospital stay. Otherwise, that unpaid cost gets shifted to people using private-sector plans. Also, Medicaid should be expanded to cover all of the poor. We should have uniform Medicaid programs nationwide. And we can expand Medicaid or some of the other publicly funded programs to permit the nearly poor to buy into that program on some sort of a subsidized basis. It may make sense to consider having these public programs available for anybody who wants to buy into them.

If they’re not going to do that, then the only role for government is to assume a more dominant posture in the administration of health care, such as you see in Canada or France. In those countries the government, either centrally or in partnership with provinces, directly administers the program. I don’t see any other choice if we are to address the cost-control end, the need to provide access to care for all citizens while maintaining quality of care.

* Should businesses be required to provide health care for employees?

Blaine: Small business does not need one more financial burden. Cash flow is extremely tight.

Let’s assume that it is required. How is it going to be policed? They’re going to have to have lots of people checking up on employers. It’s expensive to implement, and if it’s not implemented, then it’s a meaningless law. In the state of California it’s required that drivers have automobile insurance, but we all know that not everyone does.

For some of us, requiring health benefits will do nothing because we already provide it. A lot of enlightened employers realize that providing benefits such as group medical insurance is one of the ways to be competitive where hiring is concerned. On the other hand, there are a number of companies that do not have a policy of providing health care for their employees. If they are required to do so, that could result in a financial hardship that could result in loss of jobs.

Maher: Sure, companies can reduce their health-care costs by laying off employees. But California and the U.S. government can’t put a bunch of people on boats as a way of reducing our health-care costs; at least we shouldn’t do that.

Under any system that the country ends up with, business is going to be a major contributor. In Germany and Japan, business is a major contributor. It’s just not appropriate for American companies to wash their hands and expect some kind of government fairy godmother to take care of the problem.

Blaine: I believe in people assuming responsibility for themselves. Buying one’s own insurance is an option if the employer doesn’t provide it, and there already are government programs to help people who can’t afford that. And some employers are giving employees money to use for health plans. Some use it to buy insurance, and others just keep the extra money.

Assuming this is mandated, what’s next? If employers are asked to be Mama and Papa or Big Brother by providing health insurance, what will we be asked to do next for our employees?

I also think government needs to run the government well before it attempts to run other businesses. And I also am not a supporter of the government competing with privately owned businesses.

* All of the proposals for universal health insurance involve some sort of government expense or subsidy. Where will the money come from?

Maher: Obviously there will be a need for some dollars. Government-run programs don’t pull money out of thin air; they collect it from people.

In France, they have a centralized program. The taxes are collected predominantly by employers and employees in the form of a payroll tax. In Canada, the system is supported through income and sales taxes. Either way, business is a major contributor.

* Is it really necessary to do something about this now? What’s the next step?

Blaine: It’s not a crisis. It’s an issue of grave concern. I really believe there is a need to thoroughly study the issue. I have not heard of a study that has thoroughly explored it. I think we need to look at history to indicate how we got to where we are today and how to correct it.

The government ought to conduct the study. They’re masters at conducting studies. I would probably suggest that whoever is working on this issue go back five or 10 years and look at what was occurring then and how it differs from today. This was not a major issue 10 years ago.

Maher: We’ve been working at this problem for all of the ‘80s--actually, before that. We’ve been able to do a lot of analysis. We’ve been able to implement a lot of policies. But we are still far away from containing these costs.

This problem is so insidious. It has crept up over 30 years. It’s obviously impacting the costs of goods and services. It’s impacting taxes. It’s impacting the fact that government is strapped for money and unable to pay for schools and infrastructure. It’s impacting our standard of living. Companies don’t have the money for pay raises, so people feel it that way.

And there’s a distressing amount of apathy. For example, in the State of the Union message, the very last issue addressed by the President was health.

It gets to the fact that most people are still pretty well off in this country and just aren’t really raising holy hell about health care. And unless there’s some holy hell raising on the other side, why irritate the doctors and hospitals and providers, all of whom are big powers? We’ve got to educate the public as to how important this is.