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The Political Divide In Health Care: A Liberal Perspective
U.S. health policy has been consumed by an ideological divide between conservative and liberal viewpoints. The liberal philosophy, based on both moral principles and utilitarian arguments, attempts to balance the needs of the individual with the concerns of the entire population. Elements of the liberal health care perspective include a belief that health care is an equal right of all people, the implementation of that right through a social insurance system that provides universal health coverage, equitable financing of health care, and a commitment to equality in health care.
Red or blue. Republican or Democrat. Conservative or liberal. The media delights in separating the United States into two sharply divided camps. To a considerable extent, these irreconcilable divisions exist, although numerous bridges span the red-blue chasm. In the realm of health policy, a similar division is evident, with a wide gap splitting liberal from conservative opinion. This intellectual and policy gap is important because it affects legislation (or the lack of it) that would affect health care for the entire population. This paper explores the liberal perspective, at times contrasting it with the conservative viewpoint; it is an explanation, not a defense, of liberalism in health care. Because my interpretation encompasses only one of many strands in the liberal tradition, not all liberals will agree with the presentation. After all, internal disagreement is what liberalism is all about.
Liberalism. Classical seventeenth-century liberalism, a response to autocratic monarchies, promoted the freedom of the individual. The concepts of equality and the rule of law were added to classical liberal doctrine in the eighteenth century, as expressed in the Declaration of Independence and the Bill of Rights.1 Eighteenth-century liberalism also advocated a universal humanitarian morality: "It is the goal of morality to substitute peaceful behavior for violence, good faith for fraud and overreaching, considerateness for malice, cooperation for the dog-eat-dog attitude."2 These precepts, also in the writings of world religions, are best expressed in the Golden Rule, "Do unto others as you would have others do unto you."3 In the nineteenth century, the excesses of unbridled capitalism created a change in liberal doctrine, which began to view government’s role not only as protecting individual liberties but also as regulating business and assisting the poor. John Stuart Mill introduced the utilitarian idea that societies should be responsible to provide the greatest happiness for the greatest number of people. A corollary to this argument was that governments should provide for the overall welfare of the population—a communitarian rather than individualistic strain of liberalism. Liberalism and conservatism went separate ways, with most conservatives advocating that government restrict itself to ensuring individual liberties. The nineteenth century also saw the growth of social democracy, a brand of liberalism arguing that the market cannot supply certain human necessities: a minimum income to purchase food, clothes, and housing, and access to health services; governments are needed to guarantee those needs. A conservative government in Germany, hoping to coopt socialist movements, instituted the first widespread social democratic reforms. Many other European countries followed. In the United States, a partial melding of social democracy and liberalism took place during the New Deal of the 1930s and the Great Society programs of the 1960s. In an influential modern liberal treatise, philosopher John Rawls argued for social justice: If a person did not know his or her financial position, race, religion, or state of health, what would that person, whose judgment is not clouded by knowledge of his or her personal interests, view as a just society? Rawls deduced that a just society would guarantee personal freedoms as long as they did not impinge on the freedoms of others, would promote equality of opportunity, and would allow inequality only if it would benefit the least advantaged in society. Recently, a neoliberal movement has moved away from New Deal liberalism, partially returning to the classical liberal belief that the free market is the best way to handle societal needs. Neoliberals join conservatives in supporting smaller government and privatization of some New Deal programs. The Clinton administration was a contentious amalgam of New Deal liberalism and neoliberalism. In the health care arena, many liberals feel that governments (although they can be and often are corrupted by power and money) are the only social institutions that can implement the balance between the needs of each individual and those of all individuals—that is, the community. Protecting people’s right to equally receive essential services—police and fire protection, education, and health care—is a legitimate function of a civilized society. The modern architects of the liberal health care perspective are the founders of Western European health insurance laws of the late nineteenth and early twentieth centuries and, in the United States, New Deal health policy thinkers of the 1930s.4 Later, the liberal perspective was advanced by leaders who conceived Medicare and those who tried to expand Medicare to the entire population through Sen. Edward Kennedy’s (D-MA) legislation of the early 1970s.5 The liberal perspective is not limited now to the New Deal thinkers’ single-payer position; it stems rather from both the single-payer systems of the United Kingdom and Canada and the regulated multipayer programs of Germany, France, and Japan. Conservatism. Conservatism, like liberalism, comes in various strands. Social conservatives believe in traditional values. Fiscal conservatives demand a balanced budget. Economic conservatives, like classical liberals, promote a laissez-faire economy with minimal government intervention. Libertarianism harks back to anti-monarchist classical liberalism, believing that governments are by their nature autocratic and that individual liberty is the paramount value; libertarians often agree with economic, but not with social, conservatives. Neoconservatives believe in an aggressive U.S. foreign policy with a strong military, at times placing them at odds with fiscal conservatives. Most conservatives support small government and low taxes and oppose progressive and corporate taxes, believing that economic health is best guaranteed by wealthy individuals and corporations having money to invest in job creation. The Bush administration attempts a balancing act among these strands of conservatism and has focused on the concept of the "ownership society," which would transfer public programs to individual private ownership, particularly Social Security and health insurance. The ownership society exalts individual freedom and responsibility and eschews public, population-oriented approaches. Health care as an equal right. The liberal health care manifesto begins with the belief that health care should be an equal right of all people. "Right" means that the government guarantees something to everyone. Rights come in two categories: individual freedoms and population-based entitlements. Some conservatives, and classical pre-nineteenth-century liberals, support only the former category, while modern liberals espouse both. Entitlements require that the government either appropriate money for a service or mandate another entity to pay for the service—for example, the right to education or to health care.6 "Health care" refers to medical services, but not to a healthy state of being. The right to health care is distinct from the right to health. The latter requires a far broader guarantee than the right to health care because health care is only one determinant of health. The right to health, for example, involves the elimination of economic inequality because personal income is highly associated with overall health.7 In this discussion I refer to the more limited right to health care. The liberal belief in health care as a right is based on two varieties of liberal thinking, as noted in the discussion of liberalism above: (1) the social justice argument advanced by Rawls that anyone unaware of his/her position in society would agree with health care as a right because it promotes equality of opportunity and is of the greatest benefit to the least advantaged members of society; and (2) the utilitarian view that guaranteeing health services increases the welfare of the greatest number of people.8 Western industrialized democracies were originally based on classical liberal principles of individual freedoms. The rights by which governments entitle their citizens to certain benefits came with the nineteenth-century changes in liberal thought.9 Many countries include the right to health care in their constitutions.10 The preamble to the Constitution of the World Health Organization (WHO) asserts the right to both health and health care.11 The Universal Declaration of Human Rights, adopted by the United Nations General Assembly in 1948 with the United States as a signatory, states that everyone has the right to medical care. The International Covenant on Economic, Social, and Cultural Rights, signed by the United States in 1977, also proclaims the right to health care. Health care as a human necessity. A dividing line between those who support and those who oppose health care as a right is the question of whether health care is a human necessity. If health care is just another commodity, it can be supplied by the market; if a necessity, the market is not adequate.12 Few would endorse the right of everyone to purchase a DVD player, and no newspaper headlines would trumpet the case of a poor person’s being refused a BMW because of inability to pay. A similar person experiencing a refusal of needed medical care, in contrast, provides fodder for a 60 Minutes segment or for testimony at a legislative hearing. U.S. public opinion. In contrast to most developed countries, the United States offers no constitutional or legislative language assuring the right to health care.13 Yet for many years, public opinion surveys have found that 65–86 percent of U.S. respondents support a government guarantee of health care for everyone who needs it.14 According to Robert Blendon and colleagues, "Americans feel so strongly about universal coverage that they will endorse almost any alternative to the status quo."15 A January 2005 Pew Research Center poll of U.S. adults found 60 percent stating that providing health insurance to the uninsured should be a top federal priority, with an additional 30 percent stating that it is important but a lower priority.16 A 2004 Opinion Research Corporation survey of U.S. adults found 76 percent agreeing that access to health care should be a right.17 In a 2003 Pew Forum on Religion and Public Life survey, 72 percent of U.S. adults, including 51 percent of Republicans, agreed that the government should provide universal health care even if it meant repealing most of the Bush administration’s tax cuts. Sixty-one percent of those who supported health care as a right viewed it as a moral as well as a political issue.18 At least eight more polls between 1981 and 2000 found similar levels of support for health care as a right, to be guaranteed by the government.19 One caveat concerns the impact of taxes on public opinion. A 1994 survey found that fewer than half of respondents would pay more taxes to finance universal health insurance. A 1993 survey found that 64 percent were willing to pay more taxes for that purpose. Many respondents balked at paying even the tiny sum of $100 per year.20 Lawrence Jacobs and Robert Shapiro contend that when respondents were informed of the benefits the taxes would finance, support for tax increases of $40 per month reached 41 percent. If respondents were told that increased taxes reduce out-of-pocket health care payments, more than half were willing to pay an additional $1,000 a year.21 Prevailing opinion holds that liberalism is on the decline in the United States. The strength and consistency of support for health care as a right demonstrate that, at least in the health care realm, liberal values retain their powerful roots.
Since the right to health care requires a major infusion of resources, what is the best way to finance that right? For the intellectual giants of the New Deal, their postwar descendants, and some current thinkers, the answer to the question is "social insurance." Although the Democratic Party formerly endorsed social insurance, the current Democratic Party is divided on this point. Universal social insurance is a liberal concept but not a Democratic platform plank. Insurance has two major branches: private insurance and social insurance. Both pool risks throughout a large or small population. Both involve payment of premiums (private insurance) or contributions (social insurance), and people have the right to benefits only if they (or someone on their behalf) make these payments. Private insurance is voluntary; social insurance is compulsory. Social insurance contributions are often paid to a public institution.22 Social insurance evolved to support people’s income during times when income is interrupted: retirement, disability, unemployment, or industrial accident. In 1883 Germany pioneered an additional social insurance benefit: payment for the cost of health services. Germany mandated payments from employers and employees, but the destination of these payments was the sickness funds, not the government. Western European countries followed the German example, legislating obligatory contributions into social insurance systems, including payment for health services. In many cases, the contributions went to governments rather than nongovernmental institutions. In the early twentieth century, workers’ compensation laws were the first U.S. social insurance experiment. The New Deal leap of 1935 created the Social Security system, with employers and employees obligated to contribute a portion of wages to cover income loss because of old age and unemployment. The 1943 Wagner-Murray-Dingell bill represents the first attempt to add medical care benefits to the social insurance framework. After repeated failures to pass this legislation, social insurance advocates turned to the more limited goal of a social insurance program for the elderly, culminating in the Medicare law of 1965.23 Social insurance is not public assistance. As a branch of insurance, social insurance limits eligibility to people who make contributions. Public assistance does not require contributions to receive benefits but bases eligibility on an income or means test. Some countries merge the social insurance and public assistance modes into one program, combining employer-employee social insurance contributions with tax revenues to finance health coverage. In 1965, in contrast, Congress separated the social insurance program (Medicare) from the public assistance program (Medicaid). For social insurance, those who contribute also benefit; for public assistance, those who contribute (taxpayers) often do not benefit, and those who benefit might not contribute.24 Liberals tend to favor social insurance as an entitlement, while conservatives often prefer public assistance as a charity program. Another distinction between social insurance and public assistance is that contributions to the former are earmarked, while tax payments for the latter go into governmental general funds. People might be more willing to make obligatory payments if they know that they will benefit from those payments. Universal health coverage. How would a universal social insurance program for medical services look? The New Deal (social democratic) liberal approach calls for a "single-payer" system with employer-employee and general tax payments going to the government and a melding of social insurance and public assistance features. (It should be noted that unemployed people do contribute through sales taxes and property taxes passed on to renters by landlords.) A liberal approach that favors reliance on the private sector (a version of neoliberalism) might keep the social insurance and public assistance functions separate, with compulsory employer-employee contributions going to private insurance institutions (the employer mandate approach) to insure those who contribute, with permanently unemployed people receiving tax-supported public assistance. In the European approach to the latter scenario, those supported through employer-employee contributions and those receiving public assistance are enrolled in the same plans, to ensure equal treatment. U.S. liberals do not generally favor "socialized medicine," meaning government ownership of health care delivery institutions; social insurance of the single-payer variety is socialized insurance but not socialized medicine. Does the compulsion inherent in social insurance conflict with individual rights? These apparent opposites can be unified by the understanding that rights and obligations are two sides of the same coin. The right to a public education involves the obligation to attend school. The right to health care entails an obligation to pay for it. A pure social insurance system mandates that everyone pay. There are no free riders and no free lunch. Unemployed people who have not participated in employer-employee payroll contributions would make payments through a tax or premium earmarked for health care. Liberal doctrine argues that social insurance unites the entire population into a single risk pool. The 80 percent of the population that incurs only 20 percent of national health spending pays for the 20 percent who account for 80 percent of spending. Younger people pay for older people; healthy people for sick people. Social insurance recognizes people’s long-term self-interest, since the young will one day become old, and the healthy will fall sick. Social insurance can assist younger generations who are now paying twice—once for their own health insurance and again for the health insurance of the elderly and unemployed. In a social insurance system, everyone pays once; the young and healthy pay more than they benefit so that when they become old and sick, they can benefit more than they pay. Another attribute of social insurance systems is income redistribution, a concept derived from the liberal belief in equality. Individual private insurance has no redistributive mechanism. Employment-based insurance redistributes funds from the healthy to the sick. Social insurance redistributes money from the healthy to the sick, from the young to the old, and—if financed by proportional or progressive payments (see below)—from the rich to the poor. Finally, social insurance redistributes income from a person during his or her working years to the same person in the event of unemployment, disability, or retirement. Equitable health care financing. Different methods of financing health care place differential burdens on people earning different incomes. Payments are classified as progressive if they take a rising percentage of income as income increases, regressive if they take a falling percentage of income as income increases, and proportional if the ratio of payment to income is the same for all income classes.25 The liberal perspective holds that programs should be financed by progressive or proportional payments since lower-income people use most or all of their earnings for necessities while higher-income people have plenty left after purchasing necessities and can easily afford higher tax or Social Security payments. The health care system is now financed in a regressive manner. Out-of-pocket payments (about 15 percent of health care spending) consume more than 10 percent of the income of families in the lowest income quintile, compared with about 1 percent for families in the wealthiest 5 percent of the population.26 Private health insurance is also a regressive method of financing health care because employer-paid insurance premiums are generally considered deductions from wages or salary, and a premium represents a higher proportion of income for lower-paid employees than for those with higher pay.27 Moreover, the tax deductions for employer coverage benefit the higher-income. Social Security contributions that finance Medicare Part A are roughly proportional because people pay a fixed percentage of their employment income in Social Security taxes targeted for Medicare. The federal income tax is generally progressive, but sales and property taxes are regressive, which makes the combined burden of all taxes that finance health care roughly proportional.28 In 2002, 52 percent of health care services were financed through out-of-pocket payments and premiums, which are regressive, while 44 percent were funded through government revenues, which are proportional. The sum total of health care financing is regressive. In 1999 the poorest quintile of households spent 18 percent of income on health care, while those in the highest income quintile spent only 3 percent.29 The liberal perspective, based on equality, would likely substitute proportional employer-employee contributions and progressive taxes for regressive insurance premiums and out-of-pocket payments. A commitment to equality. If health care is an equal right, to what level of medical services is the population entitled? This question presents a dilemma. Since the distribution of income and wealth in the United States is highly unequal, and if only limited services are included in the entitlement, then wealthy people, but not low- and middle-income people, will be able to purchase services above the basic level, a situation that violates the equality provision of the right-to-health-care doctrine. On the other hand, if everyone is entitled to all effective services, then health care costs could rise so high that other services to which people have a right, such as education and police and fire protection, would be compromised. Where should society draw the line between a basic level of care that is equally available to all and "more than basic" services purchased according to individual ability and willingness to pay? Medical science provides some help: Only clinically effective services are included in the entitlement. But does the right to health care encompass a limited basket of clinically effective services, or does it include all effective care? The liberal perspective on health care does not provide a solution to this dilemma. A consensus might be that a reasonable level of services should be accessible to everyone, that the details of "reasonable level" should be negotiated as part of the legislative process, and that people should not be required to pay large out-of-pocket costs because those costs are far more burdensome to people with lower incomes and those in poor health. Racial and ethnic disparities are another health policy concern related to equality.30 An associated and perhaps more serious disparity is that between people of higher versus lower economic class.31 With equality being a central tenet of the liberal manifesto, elimination of disparities is paramount. One source of disparities is the system of reimbursing providers. Hospitals and physicians are preoccupied with payer mix—the relative contributions of Medi-care, Medicaid, and private insurance to their revenue stream. Avoiding Medicaid is a high priority for many providers, and this reduces access to care for lower-income (who are often minority) people.32 To avoid the negative impact of unequal reimbursement rates, some liberals seek to equalize those rates through single-payer or all-payer systems. Such reforms could reduce disparities because no patient would be worth more to a hospital or physician than any other patient.
The conservative perspective, promoting individual ownership and responsibility in an "ownership society," leads to policies such as individual rather than governmental or employer-based insurance, insurance with substantial patient cost sharing, and medical or health savings accounts; these contrast dramatically with the liberal social insurance approach. The conservative "ownership society" does not pool health risks but has people paying their own way. Because many people can afford neither health care nor health insurance, conservatives might support subsidized insurance for the poor.33 A conservative mantra holds that health care costs are high and rising because people are overinsured for many services and that patient cost sharing and free-market competition can solve the problem. Physicians, hospitals, and insurance companies should be allowed the freedom to make their own decisions without being touched by government, conservatives say. Most liberals, in contrast, feel that people are underinsured and that governmental regulation is needed to contain costs. Many conservatives see the need for a health care safety net—community health centers and public hospitals—for people without insurance, whereas liberals call for everyone to receive equal treatment through universal health insurance, obviating the need for a separate (and usually unequal) safety net. Areas of agreement do exist between these largely incompatible approaches. Liberal policy analysts agree that competition among health care providers—if based on quality and access—can be a positive force. Liberals and conservatives desire widespread computerization of health care, and people of both tendencies support efforts to improve the quality of care. Most leaders of health insurance plans, hospital systems, and physician organizations—although they might personally adhere to conservatism, liberalism, or something in between—act in a pragmatic manner, making decisions that would advance their organizational objectives. It is interesting that based on more than 1,000 interviews with health care leaders in 2002–03, Len Nichols and colleagues found that many are losing faith in market forces and are looking toward government to provide solutions.34 Is the red-blue divide so deep and wide that national paralysis will continue to prevent solutions to health care’s problems of access and cost? Is the United States doomed to muddle along for years to come? I am hopeful that current policies—promoting limited insurance products tailored to the majority of the population that is healthy—will be short-lived, as insurance costs skyrocket and health care access plummets for people who are sick and middle class or poor. At that time, the government may finally act on the popular belief that health care should be a right of all people and demand a universal social insurance program that elevates the primacy of "me" into concern for "us."
Thomas Bodenheimer (TBodenheimer{at}fcm.ucsf.edu) is an adjunct professor in the Department of Family and Community Medicine, University of California, San Francisco.
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