Defining an 'adequate' package of health care benefits.

• Author: Kalb, Paul E.
• Position: The Law and Policy of Health Care Rationing: Models and Accountability

America's health care system is in a state of crisis. We spend far more per capita on health care than any other nation, yet almost 15% of our population lacks health insurance, and even larger percentage has coverage that is insufficient to protect them in the event of serious illness. Although in fundamental disagreement over how to resolve this crisis, academics, policy-makers, and the American public appear to agree on one central goal of health care reform: At a minimum, all members of our society should be provided with an "adequate" package of health care benefits.

Despite this common goal, little attention has been paid either to the meaning of "adequate" health care or to the content of an "adequate" package of health benefits, in large measure because of a prevailing sense that "adequate" care-and hence "adequate" coverage--cannot be defined. This prevailing sense is misguided. We most likely can develop an actual, ethically justifable "adequate" minimum package of health benefits, and we should initiate serious efforts to do so. Developing such a package would provide us with both a clear objective for health care reform and a standard against which to measure the success of reform efforts.

1. THE HEALTH CARE CRISIS AND THE PROPOSED SOLUTIONS

   In 1991, we spent $738 billion on health care, almost 14% of our Gross National Product,(1) and approximately 34% more per capita than any other country.(2) Despite this massive outlay, an estimated 31 to 36 million Americans have no health insurance,(3) and tens of millions of others are "inadequately protected against the possibility of large medical bills."(4)

   Substantial evidence now supports the intuitively obvious links between inadequate health care coverage, poor health care, and poor health. Many uninsured are denied care altogether;(5) many others, concerned about cost, voluntarily delay seeking care.(6) Even when they gain access to the health care system, the uninsured frequently receive less intensive care than equally ill patients with insurance.(7) And several studies now demonstrate the correlation between inadequate care and poor health. Uninsured newborns, for example, have a higher incidence of adverse outcomes than insured newborns,(8) and those who have lost their Medicaid coverage as the result of state cutbacks have higher mortality rates than those who retained coverage.(9)

   In the absence of systematic reform, the health care crisis will undoubtedly worsen. Health care costs, driven in large measure by technological development and an aging population,(10) will likely continue to rise as they have for the past several decades. In response, self-insured companies and private insurers will continue to seek ways to avoid insuring individuals who are likely to require intensive health care.(11) In addition, public funds will likely become increasingly scarce, particularly in the absence of significant economic growth. Neither the federal government, facing an unprecedented budget deficit, nor the states, facing unprecedented budgetary problems of their own, can increase significantly their outlays for health care without cutting their outlays for other critical services.(12)

   To remedy the (apparent) shortage of health care resources in this country, we ration resources--i.e., we allocate resources among competing individuals--through an ad hoc combination of market mechanisms and bureaucratic rules. Individuals who can afford insurance, who work for employers who provide insurance as a benefit of employment, or who qualify under certain byzantine rules(13) for various governmental benefits programs have reasonable access to health care services. Others for the most part struggle for access to decent care--often in emergency rooms and understaffed public hospitals--and hope to avoid financial ruin.

   Despite agreement that our health care delivery system is in many respects arbitary and inequitable, there is, as this symposium demonstrates, substantial debate about how best to reform it. Some suggest that the key, at least in the short term, lies in eliminating waste. They argue that we already devote adequate (indeed, more than adequate) resources to health care, but that we use these resources inefficiently. They argue further that the savings generated by efficient use of these resources would easily cover the cost of providing insurance for all those who are currently uninsured.(14) In support of their argument, advocates of this view point most notably to exorbitant administrative costs(15) and the widespread use of technologies that are unsafe, ineffective, or non-cost-effective.(16) As Professors Blustein and Marmor point out in this symposium, however, both defining "waste" and identifying and eliminating "wasteful" practices are technically complex processes fraught with difficult ethical and policy judgments.(17) Thus, "wasteful" practices, although inviting targets in the abstract, cannot easily be eradicated.

   Others, either in search of a more immediate solution or skeptical of attempts to eliminate waste, focus on the question of how to redirect some of our health care resources to those with inadequate coverage. At one end of the spectrum, Professor Blank advocates more aggressive centralized administrative planning.(18) Professors Havighurst and Anderson, among others, advocate greater reliance on individual choice, contractual solutions, and the free market.(19)

   This spectrum of academic views is reflected in the array of practical proposals for health care reform placed on the public agenda during the past several years. Those who favor greater centralized planning and control, particularly over funding, advocate the adoption of a "Canadian" style health care system, in which the federal government would insure all Americans and take advantage of its monopsony power to control costs.(20) Market advocates look to create incentives to join managed care programs and favor tax breaks for individuals who purchase their own health insurance.(21) Centrists favor broader access to existing governmental health care programs (or to a new unified government health plan) and requirements that all employers with more than a minimal number of employees "play or pay," i.e., either provide their employees with health care coverage or pay a surtax to a fund earmarked for health care benefits.(22)

2. COMMON GROUND: "ADEQUATE" HEALTH CARE COVERAGE

   Beyond their differences, the proposed solutions to the health care crisis appear to share a common, though often unstated goal: to provide all Americans with access to an "adequate" level of health care services, i.e., a package of health care benefits that is in some sense reasonable or sufficient. These plans for the most part do not define the content of "adequate"...