Thursday, April 11, 2013

Jerry Voorhis: The Strange Case of Richard Milhous Nixon 3

My post today on former Democratic Congressman Jerry Voorhis' The Strange Case of Richard Milhous Nixon will focus on health care.  A while back, progressive blogger Michael Westmoreland-White said the following about Senator Edward Kennedy and health care reform:

"[Kennedy] has called the battle for universal healthcare in this country the 'cause of his life.' He did not live to see that cause come to fruition and he later regretted walking away from a Nixon plan in 1974 that was almost identical to the Obama plan, now, public option in competition with private insurers. Kennedy wanted a single payer system that expanded Medicare to cover everyone and thought he could get it–and never realized until much later that the tides were turning in the other direction."  See here.

Voorhis' book has copyright dates of 1972 and 1973, so it was written before Senator Kennedy walked away from President Richard Nixon's plan for health care reform.  At the time of Voorhis' writing, the U.S. Congress was still debating about the merits of the Kennedy plan and the Nixon plan.  I don't know to what extent Nixon altered his plan between 1973 and 1974.  My purpose in this post, however, is to talk about Voorhis' description and analysis of the health care proposals of President Nixon and Senator Kennedy.
Let's start with Voorhis' discussion of Nixon's approach to the health care issue.  According to Voorhis, in a time when there was a shortage of physicians, President Nixon supported reductions in government funding for medical schools and hospital construction.  (Nixon on page 281 of volume 2 of his memoirs laments that the federal government was still funding hospital construction, arguing that there was a surplus of hospital beds.)  Nixon also supported cutting government funding for medical research.

But then Nixon turned right around and said that he was all for medical training and research and helping out areas where there was a scarcity of medical care.  And, indeed, Nixon was for the development of Health-Maintenance Organizations (HMOs).  But Voorhis has at least two problems with Nixon's approach to HMOs.  First, Voorhis does not think that Nixon's proposals on the amount of money to spend on the development of HMOs were adequate for the task at hand.  And, second, Nixon "proposed to make federal aid available to promoters of profit-making HMO's" (page 87).  According to Voorhis, the problem with for-profit HMOs, as opposed to non-profit or cooperative plans, is that those who promote for-profit HMOs have an incentive (presumably, profits) "to provide as few and as inexpensive services as they can to subscribers and to pay professional staffs as little as possible" (page 87).

According to Voorhis, Nixon's health care proposal would not guarantee a wise use of money and medical services.  Nixon proposed an "indemnity insurance program", would would provide cash to people after they became sick, and they could either spend that money for good medical care, or they could end up wasting it within "the confusion of the prevailing 'no-system'" (page 88).  Nixon's plan would also require employers to provide health insurance to their employees----"to be paid for, after the first two years, 75% by employers and 25% by the workers, if indeed those workers chose to be covered" (page 88).  Not only would this "constitute a tremendous bonanza for the insurance companies", but it would not ensure that people are buying quality care, nor would it prevent medical providers from raising its (the insurance policy's?) cost (page 88).  Moreover, Voorhis refers to the words of Nelson Cruikshank of the National Council of Senior Citizens, who said that Nixon's Health, Education, and Welfare Secretary said that there would be controls on insurance carriers, then the Secretary turned right around and proposed that the states have the responsibility to come up with those controls.  And, according to the American Public Health Association, Nixon's proposal had a plan to encourage preventative medicine, but it would be underfunded, and the onus would fall on insurance companies to fund the endeavor.

For poor families, Nixon proposed a Family Health Insurance Plan that would replace Medicaid.  But Voorhis expresses several problems with this.  First of all, under the FHIP, the federal government would purchase health insurance policies for the poor.  Whereas Medicaid (on some level) met the needs of the poor, the Nixon plan would cast poor families adrift, as they sought to "find someone to care for them and to attempt to spend their insurance cash benefits as best they could" (page 88).  Second, the FHP would limit poor families to "30 days of coverage in a hospital" (page 88).  Third, the FHIP would leave out those poor people who were not part of a family that had children.  Fourth, Senator Kennedy argued that, under Nixon's proposal, "a worker with a $5,000 hospital expense would be obliged to pay about $1,800 out of his own pocket or 25% of his entire year's salary" (Kennedy's words, quoted on page 88).  The idea that Nixon's proposal would add costs onto consumers is also applicable to critiques of his proposal on Medicare.  Voorhis refers to the claim by Ed Murphy of the National Council of Senior Citizens that, while Nixon's plan would get rid of the $5.30 monthly charge for Medicare Part B (and, according to Voorhis, Nixon did not specify how he would pay for this), the elderly would end up paying "a substantial part of the cost of hospital care after only 13 days, plus $50 for doctor's services" (Voorhis on page 89).

That's Voorhis' description of the Nixon plan for health care.  I can't say that I understood all of it.  I notice some similarities to President Barack Obama's proposal, such as the requirement that employers provide health insurance to their employees.  I'm not sure what exactly the public option was in Nixon's plan----unless that was added to the plan after 1973.  Perhaps the indemnity insurance program was that public option (I don't know).  In any case, Voorhis argues that President Nixon's plan would inadequately meet the needs of the poor, would impose costs on the poor and elderly, and would result in a combination of stinginess and irresponsibility: stinginess because HMOs would be trying to increase their profits at the expense of medical care, and also because the elderly and poor would be less likely to go to the hospital if they'd get a huge bill; and irresponsibility because there was no guarantee that people would use their insurance policies effectively, as opposed to wasting money.

Now for Kennedy's proposal!  Voorhis talks about the Kennedy-Griffiths bill.  What would it have done?  First of all, the Kennedy-Griffiths bill would establish a two year period of preparation for "training...medical personnel", developing prepayment, HMOs, health education, and "other means of improving the delivery of health care" (Voorhis on page 90).  Second, everyone would be part of a single plan that would provide 70% of the American people's health care needs, "including personal health services, prevention and early detection of disease, hospitalization, and medical rehabilitation" (page 90).  50% of the funding of this plan would come from "general tax revenues", 30% would be from a payroll tax that employers would pay, 12% would be from a "1% tax on workers' wages and unearned income", and 2% would be from "a tax on the self-employed" (page 90).  This money would go into a Health Security Trust Fund, which would pay providers as they "rendered services", and "Patients would not be charged for covered services" (page 91).

While the Nixon Administration argued that the Kennedy plan would cost too much, the Kennedy plan's proponents argued that it would allow for money to be spent more efficiently, plus, since the Health Security Trust Fund would be paying medical providers, it could perhaps exert control over the cost and quality of health care.  That, Voorhis says, would contrast with Nixon's proposal of indemnity insurance---which (it seems to me, as I read Voorhis) simply gives people money when they're sick, without having accountability as to how they spend it in terms of their health care.

My impression is that Voorhis is critical of blanket reliance on a fee-for-service system, and he may believe that Kennedy's plan would save money on account of its encouragement of preventative care.  Voorhis here is like President Obama and also a number of conservatives, who hold that it's less costly on the health care system for people to receive preventative care, than it is for them to wait until they're really sick and end up in the emergency room.  Voorhis also may think that, if the government were paying for health care, it would have the leverage to negotiate quality care and lower costs with medical providers, as a significant consumer.  Read this article, which discusses how that works in other countries.  Also, see here, where I discuss Mitt Romney's proposal of something similar (albeit on a more limited scale).

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