NARRATOR: In 1965, President Lyndon Johnson came to Harrys Trumans home town Independence, Missouri, to sign two historic pieces of legislation. The Medicaid bill boosted federal aid to state medical programs for the indigent. Johnson also signed the Medicare bill.
NEWSREEL: The new bill expands the thirty-year-old social security program to provide hospital care, nursing home care, home nursing service and outpatient treatment for those over sixty-five.
NARRATOR: He credited former President Harry Truman with planting the seeds for Medicare twenty years earlier. By and large, Medicare has been a success story for Americas senior citizens. But more than thirty years after its inception, some think Medicare is out of step with modern medicine. Tommy Giardina had a heart transplant nine years ago under Medicare.
TOM GIARDINA: Tarawa was a mile long and 1500 yards wide, but they were so well fortified that it took about three days to conquer that little island. There was only one Japanese that we took prisoner. But at the (unintell). you didn't have a chance.
PINKY GIARDINA: Heres his Purple Heart. "For military merit," it says.
TOM GIARDINA: We had a misfire, a hangin' fire. So now the show -- you know, when the mortar, it looks like a stove pipe.
TOM GIARDINA: I had my heart transplant in '91. Medicare paid me for, ah, my, ah, operation on my heart and, ah, also paid for one year of my medication. And after that one year, I was on my own to get, ah, medication. So, naturally, I -- I tried to get it through the VA. And, ah, I was refused.
PINKY GIARDINA: And it is a very expensive medication. About, what, 13 -- $13,000 to $15,000 a year it would come to if you have to pay for everything.
THOMAS MURRAY: There are lots of bizarre inconsistencies in American health care, but one of the strangest is what we do with organ transplants, say heart transplants. We may pay to have the transplant done and then we'll pay for a brief period, one year, maybe up to five years, for the drugs that are absolutely necessary to keep that transplant going. Our body tries to reject the transplanted organ as a foreign object all the time. So you have to keep taking immunosuppressant drugs to keep that organ alive. Ahm, if we bought a fancy new car and didn't maintain it and then the car's engine blew up after a year, that would be really stupid, but to put in a new organ, which costs at least as much as that fancy car, and then not to take care of it with the drugs that are absolutely needed to keep it going is not just crazy, but, it seems to me, morally perverse.
MARCIA ANGELL: Medicare was designed to pay for everything. But in those days, there weren't very many good drugs. Now we have wonderful drugs, but that's not covered by Medicare simply by historical accident, because in 1966 we didn't have a lot of good drugs. So yes Medicare pays for heart transplantation, but it doesnt pay for drugs. I think we ought to go back and look at the benefits covered by Medicare.
NARRATOR: Tommy Giardina suffers from another historical accident. Veterans Administration hospitals are federally funded, but states interpret the guidelines in different ways. In some states, the VA has decided to pay for drugs for transplant patients, but not in New Jersey.
TOM GIARDINA: From what I gather, some fellows in the outfit, they were gettin' medication from VA hospitals in Virginia or, ah, Pittsburgh or Brooklyn. Now if them other places can dish out Sandimmune, I -- I can't see why we can't. I didn't fight for just Jersey. When I fought, I fought for the whole United States.
TOM MURRAY: We Americans are very good at denying the connection between our most deeply held ethical values and our public policies. We need to connect those in the realm of healthcare. Weve always tended to focus our concern about healthcare, and healthcare insurance, on what goes on in the doctors office and what goes on in the hospital. In fact, theres always been a considerable amount of care that goes on afterwards, goes on at home. Whats happened in the past decade has been an increasing off-loading of care, sometimes very complicated and demanding card from the hospital to the home.
TOM MURRAY: We've tried to get people out sicker and quicker. That's the saying. And then the care falls largely on the family.
GRACE HIXON: My mom is on oxygen 24 hours a day. She went into the hospital in October for renal failure. From that, she got pneumonia. From the pneumonia, she had a heart attack and open heart surgery. When she came from the hospital, because of the trach, she has to be suctioned for, ah, phlegm build-up that builds up in -- in her air passage and, ahm, the hos-- the insurance company just said, you know, "It's time to go and you're just out of here."
NARRATOR: Many senior citizens like Carrie White have switched from traditional Medicare to Medicare HMOs. These privately-run programs offer an attractive drug package, and smaller co-pays. When Carrie became seriously ill, she discovered unforseen trade-offs.
KATHY DAMICO: She was having a low grade temperature, low grade fever. She had fluid in her lungs. She was barely walking. She was having large amounts of secretions. She was having mucous plugs and the insurance company was then, on the 18th, giving us a reduced rate to keep her in this hospital. They, at that point, felt that it was time for her to leave the hospital and go to an alternative setting.
GRACE HIXON: She falls in that in between range in income and so there's really not much care that can be given to her except from family and friends. My daughter and her three children live here. My son lives here and we take turns. If I have to go out, they help. My sister comes during the day and stay with her. Ah, she drops her off at dialysis and I pick her up in the evening.
KATHY DAMICO: Grace really wanted the help Carrie, but Grace also needed to earn a living. And with many of my families up on the geriatric floor, many of the families in our community, they have to work in order to survive. So the patients are often left at home by themselves trying to manage.
GRACE HIXON: If she had kept regular Medicare, she would have been able to at least get six weeks of service if the visiting nurse deemed it so, at least six weeks of home health aide service would have been here. And because of the HMO and them having to okay everything, theyre saying, "No, she doesnt need it."
GRACE HIXON: Once before she was ill, and that was about probably 30 years ago. Until '72, she's been fine. She's been doing for herself, taking care of herself, cooking, driving.
CARRIE WHITE: Its really kind of hard for me to look to somebody else because Im so used to doing for myself.
NARRATOR: Medicaid would pay for Carrie to go to a nursing home, but she would have to surrender the few thousand dollars she has saved. And she would lose her own rented apartment, which she hopes to return to someday.
ROSEMARY STEVENS: Families are always going to have to carry some responsibility for people in those families who are sick, (Background Action) but we could do a much better job on sustaining families who are under great stress. That may mean more home care for some people, respite services so a care taker, can -- can get out, go to a movie, go shopping. As family policy, we've really ignored the burden on families with a seriously ill, ah, individual. (Background Action)
TOM MURRAY: What is it that we really care most about when it comes to healthcare. I think youll find a concern for ministering to genuine needs, youll find a concern for giving families opportunities to have good lives and some medical, emotional and financial security. Youll also find a concern for individual liberty, Americans like to be able to choose their doctor, they like to be able to choose which plan or hospital they go to. Youll have a balancing of these values, and it wont be easy you because therell be trade-offs that will have to be made at the margins.
PRESIDENT NIXON: Forty-five years ago, my oldest brother contracted tuberculosis. In those days we did not have the new methods of treatment which handle tuberculosis very effectively and very quickly.
NARRATOR: Throughout his presidency, Richard Nixon pushed for healthcare reform.
NIXON: There are still too many Americans who lack health insurance protection. Let me give you some of the numbers, you probably know them, but its good for the national audience to hear them. One out of every ten Americans has no coverage at all, either public or private. I believe that comprehensive health insurance is an idea whose time has come. I believe that some kind of program will be enacted in the year 1974.
NARRATOR: Six months later, in the face of the Watergate scandal, Richard Nixon resigned. Since then, the number of uninsured Americans had doubled, and continues to rise at a rate of one million each year.
NARRATOR: This extraordinary rise is due in part to the unraveling of our employer-based insurance system.
CHARLIE NIELSEN: I've been working here for 42 years. When I first started workin' here, we had Blue Cross/Blue Shield insurance. You could go to any doctor, any hospital. It didn't matter. You just presented your card and everything was paid for. Through the years, everything has changed. You can't afford total coverage anymore, no matter where you go, I don't care who it is, how big a company, because everybody is downsizing.
THOMAS MURRAY: Almost all Americans who have private health insurance have it through their employer. That's an historical accident. In the 1940s, during the Second World War, wage and price controls were placed on American employers. And in order to compete for employees, they could offer health benefits. In those days it was -- it was cheap.
ROSEMARY STEVENS: I think the employer-based insurance system is falling apart. The market has changed. We've got a lot of small businesses who find it difficult to afford health insurance.
RICHARD BING: We originally started out paying a hundred percent for the employee and their family. We've gone to a scheme where the employee pays 25 percent of the premium cost and we pay the rest. Health benefits were climbing at such a rate where some of my competitors just dropped 'em and they hire, ah, Id say, part-time employees.
ROSEMARY STEVENS: We've got a lot of people doing contract work, temporary work, several part-time jobs. And at the same time, the cost of insurance has reached such a pitch that some employers have been cutting back on their employee -- on their employee benefits. So the -- I don't think the -- the -- the employment-based system is sustainable.
NARRATOR: During the 1990s, the fastest-growing segment of the uninsured was the working poor.
BRUCE C. VLADECK: This is as good as the labor market gets in the United States. What is scary about the current phenomenon is that this is really the first time since people have been keeping the numbers on this since the end of the second world war when the number of uninsured people has increased when unemployment is low. That is what is really scary about the present situation.
THOMAS MURRAY : If you as an American want to buy health care insurance, the worst situation to be in is to be unemployed, self-employed, or to work for a small employer. In those cases you're going to have to look for the most expensive and difficult to find forms of health care coverage.
UWE REINHARDT: It's much, much cheaper to enroll 10,000 General Motors employees. The administrative cost per enrollee is trivial. But when it has to be done one by one, something like 30 to 40 percent of your premium just goes for administration. And that is what makes it in a way a double whammy for the low-income working stiff who doesn't have employer-provided insurance. They pay this huge overhead, but it isn't that the insurance company is gouging. It costs that much to do.
BRUCE VLADECK: Take the simplest example, and people I dont think adequately understand the economics, but take someone who makes ten dollars an hour, which is not quite twice the minimum wage, whose gross salary, therefore, is something on the order of 22,000, $23, 0000 a year, before payroll taxes, before commuting costs, before many local taxes they have to pay. Um, in the Northeast, a half-way decent family health insurance policy can run anywhere from 5 to $7,000 dollars a year, and thats not the Cadillac policy, thats the Chevrolet policy. Well, you cant expect folks who are -- who are just getting by to be able to afford health insurance, nor, I think, can you expect their employers to pay what is in effect a 35 percent surtax on their wages to provide them with health insurance, The fact is, that employment even at a multiple of the minimum wage in the United States these days is not enough to provide a family with a reasonable standard of living if the family has to pay for its own health care, its just , the arithmetic doesnt compute.
PRESIDENT CLINTON: This health care system of ours is badly broken. And it is time to fix it.
NARRATOR: 1n 1993, President Clinton proposed a comprehensive overhaul of healthcare.
PRESIDENT CLINTON: So let us agree on this, whatever else we disagree on. Before this Congress finishes its work next year, you will pass and I will sign legislation to guarantee this security to every citizen of this country.
HARRY& LOUISE COMMERCIAL: The government may force us to pick from a few health care plans designed by government bureaucrats. Having choices we dont like is no choice at all.
NARRATOR: Intense lobbying from the health care industry, led by private insurers, helped derail the Clinton Plan. Less ambitious proposals to cover only the working poor were also abandoned.
GAIL WILENSKY: 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.
TOM MURRAY: We have over 43 million people without any health insurance, we have over 80 million people either without insurance entirely or with inadequate insurance. Its nearly a third of the country.
ALICIA FACCHINO: Wheres my chair honey?
ALICIA FACCHINO: I've had MS for ten years. And my kind is like progressive. So I just get worse. I really can't do anything. I don't leave my house. You know, it's hard for me to get out. There's steps in the back. My kids, they're young and they really help me. But it's hard for them. Noelle, she turned two when they said I had MS.
NOELLE FACCHINO: And he's little Mr. Taste Everybody's Food.
ALICIA FACCHINO: He was four months old, my son.
ANTHONY FACCHINO: That's just what kids are supposed to do. I mean they gotta take care of their parents.
ALICIA FACCHINO: They grew up with it, so they didn't get to do all kinds of normal things like kids normally would go and do. I think my son I did take to nursery school and then I couldn't drive. I couldn't even drive around.
ALICIA FACCHINO : That might be ...
ANTHONY FACCHINO: This is my mom and ...(overlap) get outta the house.
ALICIA FACCHINO: It wasn't really a marriage. He was just always taking care of me. And he still has to come in. I do have to be cathetered -- like I think three times now. And he'll do it like before he goes to work and after work and he's gotta check on the kids. So he's in and out, but he -- he doesn't live here. So, you know, it just -- it just got to that point. (Background Action)
NOELLE FACCHINO: I cook most of the meals and do laundry. I do like vacuuming and just stuff like that that normally she would do that I have to because she can't.
ANTHONY FACCHINO: (Laughter) I usually have to clean a lot and vacuum, but pretty much I don't cook or do laundry. I just like do the garbage.
NOELLE FACCHINO: When she falls and stuff, we're stuck like getting her up, 'cause like even when our father was here, he threw his back out tryin' to help her. So even then we were stuck getting her. And she's a lot bigger than us, so it's hard.
ALICIA FACCHINO : I know there's people that if I had to call, they would help me. But most of the time it's just me and them, (Laughs) me and the kids.
NARRATOR: Just weeks before, Alicia Facchino had developed a life-threatening infection. Because she is uninsured, her only recourse is the emergency room at her local hospital.
DR. PAREDES: When we saw Alicia in the emergency room, her symptoms had actually gotten much worse. Multiple Sclerosis is -- is a chronic disease and, ah, you know, each time as the years pass, ah, the exacerbations may get worse. Her disease may progress even more. She may need more, ah, medical assistance. Ah, she may become physically unable to even do the -- even ambulate on her wheel-- on the wheelchair.
ALICIA FACCHINO : I'm on the beta seron, which was the first drug they approved, and they have a foundation and I applied to that and they accepted me 'cause I have no insurance. So that's how I'm getting that medicine. So ...
NOELLE FACCHINO: I have to give her that, because her hands are too shaky to give it to herself. So that's another thing I have to do. And you have to mix it and then put it in the needle and bring it and like gives her the shot. A nurse came and taught us how. And like she takes a lot of pills and stuff and I set them up for her every day. (Background Action)
NARRATOR: Alicia has been reluctant to apply for Medicaid. To quality, she must prove herself totally indigent.
BRUCE C. VLADECK: What it means is that when people really have very serious medical problems, you put them through an excruciating -- I mean the rule is, you know, again back to the Elizabethan Poor Law, it has to be so unpleasant and undesirable to get public assistance that only people who are truly desperate will seek it. That's the guiding principle. It's pretty horrible in this day and age, but that's still the basis on which our eligibility, ah, decisions are made. (Background Action)
NOELLE FACCHINO: Even if she can't get better, like with the Medicaid, if we can get that, the medicine is really expensive. And then someone to come here and help her, maybe like they could do the laundry or something, because I have a lot of homework. (Background Action)
THOMAS MURRAY : Chronic illness may exhaust the family physically, emotionally, and financially. People may find themselves unable to afford help from outside, unable even to afford the medications that they desperately need. This just doesn't seem like the response of a humane country. I think we're a better -- Americans are a better people than that. We -- we can find ways to meet the genuine deep needs of -- of our fellow citizens who -- who simply need our care and compassion.
MORREIM: We really do need to cover those other 44 and-a-half million people, who have not been brought on board yet, it really is important, and not just because its the decent thing to do in an affluent society, but also because that many people without good access to healthcare creates economic quirkiness in the marketplace, a lot of strange economic dynamics when you have that many people who dont have access to health care, and everybody else is scrambling to try and avoid being hit with the bills indirectly.
NARRATOR: Americas uninsured are putting an unbearable strain on our nations hospitals. In many states, emergency rooms are required by law to treat the uninsured.
DEL MAURO: If you look at the Saint Barnabas healthcare system and the amount of charity care that we deliver, um, in 1998 the shortfall on the charity care reimbursement was approximately 24 million dollars, in 1999, the shortfall was approximately 38 million dollars.
NARRATOR: Advances in medical technology are pushing healthcare costs upward at twice the rate of inflation. Rising costs and lowered revenues are driving the industry into crisis.
EDDY; If you talk to hospitals theyll tell you, "Not only have we reduced costs to the bone, so to speak, but were about to go out of business." Many of the so-called for-profit managed care organizations didnt make a profit at all, they functioned at a loss. Physicians are accepting lower and lower salaries. Very, very few parts of the healthcare economy, if you will, are doing well.
NAPOLI: Many physicians are struggling, many are leaving medicine and going to other fields (Background Action). The biggest HMO in the state right now, many physicians have just said, "I know youre the biggest and I know you represent 53 percent of the patients in the county, but I cant keep my door open if I continue to accept your limited reimbursement." (Background Action).
NARRATOR: The danger of this crisis of finance and morale is that good medicine itself may be at risk. Cut the drug payments and you cut drug research. Cut the hospital payments and specialists will become hard to find. Cut the doctors enough, and there will be fewer good doctors. If we want to continue with the high standard of medicine in America, we may have to be willing to spend more. Currently we spend 15 percent of the GDP, or Gross Domestic Product, on healthcare.
GLIED: Its funny when you look at historical documents, people were complaining about the share of healthcare in the GDP when it was 5 percent. They said it would be unsustainable if it hit 10 percent, and you know were going, were chugging along very strongly at 15 percent, and the economy doesnt seem to be suffering for it. It doesnt really matter what share of the GDP we spend on healthcare, just like it doesnt matter how much we spend on movies. We could spend 80 percent of the GDP on movies and that would just mean we were a wealthy society that liked to watch movies and theres nothing ethically, morally or economically wrong with that.
WILENSKY: I think we will always spend substantially more relative to our GNP than other countries, and as a wealthy, industrialized country, there isnt 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 were getting our moneys worth.
NARRATOR: We could spend more, we could also agree to spend more wisely on administration.
REINHARDT: We burn much more money on administration than any other country. I personally consider that really the scandal of this system, the enormous amount of administrative expense which, I believe, much of it is waste.
NAPOLI: The biggest HMO in the area right now, 22 percent of every healthcare dollar that you pay to them for your health insurance, 22 cents of that goes to operating expenses and profit margin. And I think its a generally held concept that you need approximately 6 percent, or 6 cents out of every healthcare dollar, to actually make the system run. So theres, theres lots of room for reducing costs.