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Gail R. Wilensky, PhD

What are some of the dangers we're facing now?

Gail R. Wilensky, PhD
Gail R. Wilensky, PhD

John M. Olin Senior Fellow Project HOPE Chair,
Medicare Payment
Advisory Commission

It's pretty clear right now that the problems that we're facing are not going to correct themselves. The fact that we've seen the number of people who are without insurance grow, in part, reflects the problem we have relying on employer-sponsored insurance in an era when that may not make much sense for at least all of the under 65 population. We have an aging population. Seventy-eight million Baby Boomers are going to start to retire at the end of this decade. That'll put enormous stresses on the pension and Medicare system. We need to think about what makes sense for the 21st century, whether or not it's what made sense for the 20th century. And we keep having advances in medical technology and ways to keep people alive longer, so that raises a whole set of questions that we haven't dealt with.

Are there opportunities inside this crisis?

There are peculiarities in how we have insurance coverage today that we probably wouldn't duplicate. It may be possible that we can evolve into a more sensible strategy over time. It's important to have an idea about where you want to go, what you would like health care financing delivery to look like. It's just how you get there and whether you attempt to displace or destroy what you have now, which works pretty well for large numbers of the population. That's something we're not inclined to do, as opposed to making gradual steps and improvements to try to get to a better type of delivery system.

Do ethics play or should they play a role in
health care policy?

Ethics will always play some role for the individuals who are involved. Ethical decisions get raised in hospitals on a daily basis, in the life and death decisions that are involved between the physician and a patient. The real question that people frequently mean is, should ethical issues be a part of national health policy? It's a hard question to answer, but I believe they really won't be in the sense in which people generally use the term. And I think that because we are a very different, heterogeneous population, very different background ethnically, religiously, racially, very different views about the appropriateness and efficacy of medicine. And I think it would be very difficult for us to have a single uniform policy with regard to rationing of health care, that is, limiting on an official policy health care that the medical system thought was beneficial. I don't see that we would be able the do it.

Talk about your ideas on government assistance.

When I look at the issue of social obligation or a sense of responsibility, it seems to me we are clearer for some populations. I believe most people would agree that the poor, and there are a lot of discussions about exactly who you put into that category, will need some or a lot of help in terms of financing their own health care. When it starts becoming more difficult is as people rise up the income scale, should they be paying for their own health insurance coverage or do they need some subsidy, some help? And should there be the same amount of assistance no matter how wealthy or how poor those individuals are? For my own values, I wish we would start with the lowest income. It seems to me that is an area in which there is widespread agreement, and one of the great frustrations I have is in the '93-94 period, both Republicans and Democrats included legislative proposals that at least included everybody below the poverty line and frequently substantial subsidies for people up to 150 percent of the poverty line. And yet there wasn't a willingness to say, "Even if we should do more, let's at least make sure we do this," because it had been, as far as I can remember the first time, that both political parties were on record as saying there should be a minimum benefit package for at least the very poorest. To my mind, it was just shameful that we let that period slip away. These opportunities come along, we ought to take advantage of them, make progress and then come back to the table.

Why is maintaining the status quo bad?

There are some problems we can see right now, mostly for the individuals, some stresses and pressures for the provider community, but they seem to generally be able to take care of themselves pretty well, as we can see from this last give-back of $16 billion in refinements to the Balanced Budget Act. But there are some individuals who are clearly at risk. Whether or not it will be an issue will depend on what else happens, where they live, whether they actually get a major illness. People without insurance coverage are at risk. They may only have routine expenses and if they're not poor or very poor, they should be able to take care of routine expenses. Even if they're middle or upper middle class, if they start having a serious medical illness, that can present some real financial problems. So those individuals are at risk and some number of them will have real problems. The aging of the population's going to have a lot of repercussions. We have this bulge in the age distribution of the population, the people who were born between 1945 and 1965 who are aging and beginning to edge near retirement, and we need to think about how to sensibly pay for the pension and health care needs of an older population. I think it's going to cause us to re-think whether or not we're serious about social insurance.

Talk about Medicare.

There are a number of problems with Medicare. Let me say first as somebody who's formerly Director of Medicare, it's a very popular social program and it has accomplished the major objective that it was set out to accomplish, which was to make sure that seniors had access to medical care. So when I criticize it, it's almost in a friendly benighted way rather than as a major criticism. But it's a peculiar program, because it doesn't provide any catastrophic protection. That's a very odd insurance program. It doesn't now cover what we regard as part of mainstream coverage, that is, outpatient prescription drugs. And even more importantly, the level of coverage is not enough for the poorest and probably more than needs to be for the wealthiest among the seniors. I don't see us willing to publicly finance a program that covers for all seniors what the poorest seniors need. I don't want to turn it into a welfare program. I think there are good arguments for losing the support of mainstream population if you make it into a welfare program. But I think you can have a sliding contribution that the government makes as people's incomes increase. We do it all the time in the tax system, so this is not a new concept .

We pay twice as much for healthcare as any other country. Why?

There are lots of reasons. We're an inpatient population. We're very keen on new technology and procedures, and we don't have to want to wait for them or have to travel long distances. I think we will always spend substantially more relative to our Gross National Product than other countries. And as a wealthy industrialized country, there isn't any reason why we ought not to allow ourselves to do that. The question that we ought to ask is whether or not we think we're getting our money's worth. Do we have good incentives built into the decision-making about spending on health care. I think that's the much more important. Much of what we buy in health care has very little to do with life and death at the moment. It has a lot to do with convenience, information, assurance for the worried well or the worried sick, and a lot about quality of life

Where do you see this going in five to ten years?

I think we are going to actively struggle early on with the issues of the uninsured and the role of employer-sponsored insurance in the 21st century. It is going to be very difficult to avoid this. Even in our prosperous economy we see the number growing. If we at some point have a slow-down in the economy, let alone anything as serious as a recession, those numbers are likely to jump up in a substantial way. We have to think about what makes sense for people who aren't offered employer-sponsored insurance because they're part-time workers or full-time entrepreneurs. What is the appropriate responsibility and obligation of the individual? Do we want to try to encourage employers to offer insurance who now tend not to, such as small employers, low wage employers? Or is it something that we want to try to make available to individuals through some mechanism? What are we going to do for people who are primarily low income? Are we going to continue what we've started with the children's health insurance program that is part of the states' programs? Are we going to let some people go without insurance coverage if they choose to go without insurance coverage? Do we need something for catastrophic care available? I think we're going to start, once again, to look at these issues. We did it in 1993-94. I just hope we're a little more honest with ourselves about what we really are willing to pay for and for whom.

We're in the most prosperous time in the nation's history and yet the number of uninsured has doubled in the last ten years in this country.

Well, the issue of doing away with a mechanism that provides health insurance to large numbers of the under-65 ought to be approached very gingerly. I don't know very many people who would today advocate starting an employer-based insurance system. Economists, such as myself, believe that the employer contribution is just part of the compensation package which would otherwise go to the employee. So it's really the employee's money that the employer is spending. They do so because of tax provisions that encourage part of the compensation to be provided as this kind of fringe benefit. It tends to have the employee think it's free and not care about what happens.

The question about why the numbers of uninsured have increased during this time of prosperity also need to be thought about in terms of the income groups that are affected. There are some individuals who are transitioning off welfare who are not on Medicaid now and going into jobs that do not provide insurance coverage as part of their job. Now some of these individuals actually could continue to be on Medicaid, but for a variety of reasons have chosen not to do that. For some other individuals, we're beginning to see something that had not been present in the 10 or 20 years before. It's not a large number, although it might be as many as 20 percent of the working uninsured, of people who were offered insurance employer-sponsored coverage and said, "Thanks, but no thanks." Presumably, their contribution was larger than they were able or willing to spend in terms of buying insurance coverage.

One of the lessons that I really learned when I was running Medicare and Medicaid is the different attitude toward government that exists around the country. I grew up in the Midwest and I have spent much of my adult life in Washington and in the Northeast, and in both those places people tend to not be quite as mistrustful of the government as they are in other parts of the country. When I would go out to places like Wyoming or Montana or South Dakota, I was really surprised to find out for many of the individuals in the provider communities, how much they basically thought the problem was the federal government and that if I would get out of their way, they could resolve their problems on their own, thank you. It's not a question of whether that's right or wrong. It's important to remember that we are a very big and diverse country with very different attitudes toward social responsibility and government responsibility and the appropriateness of government in various spheres of our life. And if we ignore that when we're trying to resolve these very difficult social issues, the chances are they aren't going to get resolved.

The President of Humana stated back in the '80s that he wanted to have health care as consistent as a McDonald's hamburger.

There are a lot of issues that we need to deal with. Making sure that good outcomes are the expectation and the result, lowering medical errors, reducing complications because of inappropriate use of pharmaceuticals or drug interactions is very important. I don't know that most people would necessarily feel comfortable with the notion of the McDonald analogy to health care, but the idea that you ought to feel pretty comfortable that you will have a good product or service reliably provided each and every time you go is not a bad goal for health care.

Are things in health care better now than
they were 25 years ago?

I think things are much better in many dimensions now than they were 25 years ago. Our romanticizing Marcus Welby ignored the fact that house calls made sense when there wasn't very much you could do anyway and so allowing people to stay in the comfort of their houses made a lot of sense. When you have somebody who's really sick now, you want them in an emergency room environment or an intensive care environment where there are many things that can really make a difference that you're not likely to be able to pick and carry with you into someone's home. But we have some problems. I think we would do well not to always flagellate ourselves with our problems and remember some of our successes, but to get serious about what we're willing to do to resolve some of the problems with regard to the uninsured, especially the poorest uninsured. Let's start with them first. Think about what we want to do with the aging Baby Boomer population, and then worry about long-term care. And if I had my druthers, I'd do it in that order.

Bruce Vladeck said that if you're rich, you get healthcare, if you're poor, you don't. What do you think about the two-tiered system approach?

I think if you're rich, you get care. Some of it's very good. Some of it probably isn't, but you get a lot of it. I believe if you're poor, you are usually able to get, a fair amount of care, a lot of care in some cases, some of which is very good, some of which is not. Some of the lower middle class probably are at the most risk. They may not have insurance or their insurance may not be as complete and they're not easily eligible for assistance. That's probably our biggest problem, the lower-middle income working uninsured population or maybe even underinsured population.

Vladeck also described the Medicare industrial complex. Can you comment on the trillion-billion of health care in this country.

$225 billion being spent on Medicare and the provider community wonders why the government is bothering them. It's a lot of money. Much of it is well spent. Some of it is not. It is reasonable and appropriate to go after fraud and abuse. It's a very complicated program, enormous amount of regulations. It frustrates a lot of people. One of the concerns I have had is even when run by well-meaning, hard-working people, is it really possible to have the federal government decide on the appropriate price for each unit of service, and whether the quality with which it occurred was appropriate? This goes to the issue about what we want Medicare for the 21st century to look like. But being vigilant about making sure that what the government is funding is really provided and was needed and was provided at an acceptable quality level is an appropriate role for government even if it irritates some of the people on the other side.

To the extent that the health care system makes it possible, should the child of a gas station at attendant have the same chance of dying of particular illness as a child of a corporation executive?

It may depend a little bit on what the risk is being caused by. And let me share that with you. We ought to be making sure that people, particularly the lowest income among us, have basic coverage. Doesn't necessarily mean that it has to be government funded, but we ought to make sure of that. I am less concerned about multi-tiers as long as what we're providing for the lowest income is acceptable to us as a country in terms of what it provides and the quality of care with which it is provided. There will be some areas of illness where in order to try and resolve that illness will involve taking great long shots using technology that is at the cutting edge or still in experimental stages that will involved even therapeutics that are the equivalent of hail-Marys in medical care. And I think it is not reasonable to say we won't let a rich person spend their money that way, if they want to. I think it is unreasonable and unlikely that we would do that for every individual in our country. And if we get too hung-up on that issue, we'll never resolve the fact that we a have a third of our uninsured population who are at or very near the poverty line. That's something surely we can fix.

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