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LIVING with, AIDS 2 yrs 5 NO THAWS 70 W MR R AGM Health Policy Advisory Center ince its inception in 1968, the Health Policy Advisory S Center also known as Health / PAC has progressive served as a unique progressive voice for changing consciousness on domestic and _ international health priorities. Through the Health / PAC Bulletin and the books Prognosis Negative and The American Health Empire, and in its outreach to a national network of grassroots activist groups, Health / PAC con- tinues to challenge a " medical- industrial complex " which has yet to provide decent, affordable care. L'H / PAC BU INTHIS ISSUE ASSESSING THE REAGAN YEARS Frozen in Ice: Federal Health Policy During the Reagan Years Geraldine Dallek reviews the Reagan administration's record on health care....... .4 re. Refuting Arguments Against a National Health Program Vicente Navarro deflates common arguments against a national health program. .15 Aiming So Low We Hit Our Own Feet: The Limits of Incrementalism David U. Himmelstein and Steffie Woolhandler argue against incrementalist approaches to expanding health care............. 20 Budget Crisis at Pine Ridge: An Indian Reservation Struggles for Decent Care Joshua Lipsman recounts how mismanagement is threatening the health of an American Indian reservation... .22 Vital Signs The candidates on AIDS, needle exchange, the Massachusetts universal insurance legislation, and more... .29 LVING with AIDS 22yr5s 5mm counting! NO THANKS TO YOU MR REAGAN Health Policy Advisory Center 17 Murray Street New York, New York 10007 212 267-8890 / Health / PAC Bulletin Volume 18, Number 2. Summer 1988 Design Maggie Block, Three to Make Ready Graphics Typography local 1199, Drug, Hospital & Health Care Employees Union Printing Print - Rite Press Illustrations Timothy McCarthy Front Cover Photo Person with AIDS, Mark Fotopoulos, at 1987 ACT UP demonstration in New York City. Rick Reinhard / Impact Visuals. Back Cover Photo Dr. John Gantz examines infant at Pine Ridge Indian Hospital, Wounded Knee, South Dakota. Tom Casey photo. Board of Editors Tony Bale, Robert Brand, Robb Burlage, Anjean Carter, Robert Cohen, Celestine Fulchon, Judy Golding, Sally Guttmacher, Feygele Jacobs, Mark Jobson, Louanne Kennedy, David Kotelchuck, Ronda Kotelchuck, Arthur Levin, Cheryl Merzel, Patricia Moccia, Regina Neal, Tammy Pittman, Hila Richardson, Pam Sass, Herbert Semmel, Hal Strelnick, Ann Umemoto, Richard Younge. Executive Editor Joe Gordon Assistant Editor Bill Deresiewicz Staff Editor Ellen Bilofsky Interns Anne McDonough, Caren Teitelbaum Volunteer Loretta Wavra Associates Carl Blumenthal, Pam Brier, Ruth Browne, Des Callan, Michael E. dark, Mardge Cohen, Debra De Palma, Susan Edgman - Levitan, Barry Ensminger, Peg Gallagher, Kath- leen Gavin, Dana Hughes, Marsha Hurst, Mark Kleiman, Sylvia Law, Alan Levine, Judy Lipshutz, Joanne Lukomnik, Steven Meister, Kate Pfordresher, Susan Reverby, Leonard Rodberg, Alex Rosen, David Rosner, Judy Sackoff, Diane St. (Hair, Gel Stevenson, Rick Zall. 1988 Health / PAC. The Health / PAC Bulletin (ISSN 0017-9051) is published quarterly in the spring, summer, fall, and winter. Second Class postage paid at New York, N.Y. Postmaster: Send address changes to Health / PAC Bulletin, 17 Murray St., New York, N.Y. 10007. The Health / PAC Bulletin is distributed to bookstores by Carrier Pigeon, 40 Plympton St., Boston, MA 02118. Articles in the Bulletin are indexed in the Health Planning and Administration data base of the National Library of Medicine and on the Alternative Press Index. Microforms of the Bulletin are available from University Microfilms International, 300 Zeeb Rd., Dept. T.R., Ann Arbor, MI 48106. (ft MANUSCRIPTS, COMMENTS, LETTERS TO THE EDITOR, AND SUBSCRIPTION ORDERS should be addressed to Health / PAC, 17 Mur- ray St., New York, New York, 10007. Subscriptions are by $ 35 membership for individuals. Institutional subscriptions are $ 45. 2 Health / PAC Bulletin Summer 1988 These Rotten Years hen Ronald Reagan leaves the White House, he will leave behind a bitter legacy of impoverished, embattled lives and shattered dreams. One can- not overestimate the disastrous impact his administration has had on working people, the environment, and our most vulnerable citizens - and a great many people living in Central America and elsewhere who have suffered the terror of the Reagan foreign policy. Clearly, no matter who wins in Novem- ber, it will take years to recover the monumental losses we've experienced since 1980, even under the best po- litical circumstances. In these times of people living under cardboard roofs, of epidemic hunger and medical indigency, of height- ened racial tensions, and the continuing lack of federal commitment to battling AIDS, the need for progressive health policy solutions has never been greater. The cen- terpiece of this Bulletin is a detailed look by Geraldine Dallek at the impact of Reagan's policies on health care. Dallek, a California health policy analyst, reported on Reagan's health care cuts for the Bulletin during his first two years in the White House (Vol. 14, No. 1). Now, five years later, after considerably more damage has been done, she presents a detailed survey of the causes and effects of his policies to help us comprehend the enor- mity of our health care losses. We also include our own reporting on the destruction Reagan has wrought on health care labor organizing. - no other recent president has more ruthlessly violated workers'rights to organize or protect their unions. What conclusions can we draw from this decade's struggles and defeats? Here Dallek moves onto more controversial grounds, particularly in her advocacy of in- cremental change. " The job before us, " she contends, " " is to shore up what we have and build from there. In another article, David U. Himmelstein and Steffie Woolhandler take direct aim at this conclusion. They ar- gue that " some progressive health activists, demoralized by the long winter of Reaganism, are setting their sights too low. " According to these Boston physicians, noth- ing short of a full fledged - national health program, as- suring universal comprehensive coverage, is what we should be advocating; the piecemeal approach of the in- crementalists, they charge, is self defeating - . On the subject of achieving a national health program, Vicente Navarro, one of this country's leading Marxist social analysts and a health care advisor to the Jackson RONNY RE PEACEKE IM FOR WO WIDE, ETE PEA Visuals REAGAN: WORLD TERRORIST Impact /Reinhard Rick Anti Reagan - demonstrators, Washington, D.C. presidential campaign, refutes two key arguments fa- vored by the detractors of a national health program. We offer these articles in the hope of stimulating the debate over future directions and strategies. There's much to do- do- and look forward to - L as we take stock of our gains and losses and continue working to build a health and civil rights coalition that assures the health care rights of all our citizens.D - The Editors Summer 1988 Health / PAC Bulletin 3 Frozen in Ice Federal Health Policy During the Reagan Years GERALDEME DALLEK Government can err, presidents do make mistakes, but the immortal Dante tells us that divine justice weighs the sins of the blooded cold - and the sins of the warm- hearted in different scales. Better the occasional faults of a government that lives in a spirit of charity than the constant omission of a government frozen in the ice of its own indifference. - President Franklin Roosevelt Acceptance Speech, June 1936 resident Reagan came to office in 1981 with Y' a specific health care agenda. He claimed he would cut federal programs without harm- ing the " truly needy, " transfer responsibi- lity to the states and voluntary sector, control health care costs, and eviscerate federal regulations while giving competition free rein. After seven and a half years of the Reagan presidency, it is time to look back and assess how well he succeeded; the changes wrought because of, or despite, the Reagan agenda; and where we stand today as we look forward to the post Reagan - era. The Reagan years have been marked by a government that cared little about the basic needs of its people, one " frozen in the ice of its own indifference. " As a conse- quence, the nation has lost ground in its efforts to build a more decent health care system. Yet, despite the loss- es under Reagan, the people of the United States con- tinue to believe in the idea of health care as a right. The goal for the post Reagan - years will be to make mat idea a reality. numbers of Americans lost access to medical care. After the early Reagan years, Congress and the states lost their appetite for more Medicaid cuts. Nevertheless, today state Medicaid programs cannot adequately meet the needs of the poor for medical care. When the Washington - based Health Research Group of Public Citizen released a report in December 1987 ranking the performance of the 50 state Medicaid programs in terms of eligibility, services, and reimbursement policies, no one was more surprised than advocates in California to learn that their state had one of the best Medicaid pro- grams in the nation. After all, they had just sued the state for inadequate services. If best is inadequate, then worst (Mississippi) is dismal indeed. State Medicaid programs ration care for the poor in subtle and sub not - so - & e ways. Historically, rationing is hidden behind low reimbursement rates or utilization controls. At least one state - Oregon - though, has a written policy of denying transplants to Medicaid beneficiaries and using the money saved to increase prenatal care. This tradeoff makes sense from a Medicaid perspective. However, by making explicit what had been implicit, this policy brought the rationing of care to public attention as a serious ethical issue. Unlike FEDERAL PROGRAMS The Poor In the first flush of its perceived mandate to cut government fat, the Reagan administration successfully slashed health care programs for the poor. The Omni- bus Budget Reconciliation Act of 1981 cut 25 percent from the budgets of most categorical health programs. It also set in place a rolling reduction of federal Medicaid match- ing funds - 3 percent in 1982, 4 percent in 1983, and 4V - 2 percent in 1984. Moreover, a 10 percent decrease in AFDC (Aid to Families with Dependent Children) cover- age for the working poor in 1982 led some 700,000 chil- dren to lose their Medicaid coverage. States, hard pressed by the 1982 recession, responded to federal Medicaid cuts with cuts of their own. As a result, large McCarthy Timothy Geraldine Dallek is a health policy consultant in Los Angeles who writes widely on the problems of the poor and the elderly. 4 Health / PAC Bulletin Summer 1988 these Medicaid recipients, privately insured children and adults are not denied life saving - operations; nor, as has happened in Oregon, are they forced to launch media campaigns - become television beggars - - to raise thou- sands of dollars, or to leave their homes in search of a state with a more generous Medicaid program. " After the 1981 budget cuts in Medicaid and categori- cal health programs, Reagan hit a solid brick wall of con- gressional and state opposition to further reductions in health programs for the poor. Remember the Medicaid " cap "- t- he proposed 3 percent reduction in states'fed- eral Medicaid reimbursement- and attempts to make Medicaid co payments - mandatory? Probably not how ( quickly we forget our victories), as Reagan's later efforts to slash federal health care programs arrived in Congress with small chance of survival. As Medicaid celebrated its 20th anniversary in 1985, the program seemed to have become sacrosanct - off limits to both Rudman Gramm - and budget cuts. Moreover, Medicaid underwent a dramatic broaden- ing of its base when Congress, in the Omnibus Budget Reconciliation Acts of 1986 and 1987, severed the pro- gram's link with welfare. No longer is income eligibility for welfare the measure by which Medicaid coverage is granted. States now have the option of providing Medicaid to infants and pregnant women with family incomes up to 185 percent of the poverty level, as well as to children under 5, the aged, the blind, and the dis- abled with incomes up to 100 percent of the poverty lev- el. Congress has not backed away from the fundamen- tal promise of Medicaid - as an entitiement program for the poor. Unfortunately, Medicaid's promise is meaningless for the millions of poor and near poor - who do not qualify for the program. The continuing commitment to the pro- gram and Medicaid's projected $ 50 billion price tag for 1988 do not buy enough health care for the nation's under served - population. Reagan has steadfastly maintained that his policies would not harm the " truly needy. " Yet, through sins of commission and omission on the part of the govern- ment, the poor among us have been harmed. The Rea- gan administration has watched passively as the health care fortunes of this group plummet. Today, Medicaid covers significantly less than half the nation's poor, down from 63 percent in 1975. Over 37 million citizens (17 per- cent) have no health insurance and little access to health care. 6 A survey by the Robert Wood Johnson Founda- tion documents the dramatic decline in access to care among poor and minority populations between 1982 and 19867 - years during which Reagan promised no harm would come to the " truly needy.'" The United States does not provide for even the sim- plest and most fundamental health care need - prena- tal care. A recent study by the General Accounting Office found that 59 percent of women on Medicaid and 67 per- 8 cent of uninsured women get insufficient prenatal care. Since 1979, the number of babies born to mothers who received inadequate prenatal care grew by nearly 10 per- cent. As a result, the nation's high infant mortality rate continues to haunt us. The number of underinsured individuals who lack adequate protection from catastrophic illness is also 10 growing and, in all likelihood, will continue to grow in the years to come. According to a survey by the Bureau of National Affairs, 27 percent of employers plan to eliminate or reduce employee health insurance cover- age during 1988.11 Some programs and providers serving the poor - community and migrant health centers, maternal and child health programs, and WIC agencies have done fairly well, given federal budget limits. Other major sources of care - notably inner - city and rural public and private hospitals - are in serious financial trouble, often unable to provide their patients with a minimal level of services. Thus, the poor and the health care institu- tions on which they depend fared badly during the Rea- gan years. The Elderly No federal health program underwent a more dramatic change during the Reagan years than Medicare. PPS, DRG's, " participating physicians, " and CMP's were all added to the Medicare lexicon as the federal government experimented with ways to control Medicare costs. The jury is still out on what the various changes in Medi- care reimbursement will ultimately mean for the elderly and those who care for them. Although anecdotal evi- dence suggests that at least some elderly patients were discharged " quicker and sicker, " studies have found no systematic evidence of in appropriate discharges. Moreover, given past overutilization of hospital care it is also likely that the prospective payment system result- ed in less unnecessary care. There is no question, however, that the elderly lost The truly needy have been hurt and hurt badly. ground on a number of other fronts during Reagan's term of office. Twenty - five percent of the elderly popu- lation have incomes below 150 percent of the poverty level. According to the Commonwealth Fund's Com- mission on Elderly People Living Alone, two thirds - of poor elderly Americans are not covered by Medicaid and are spending nearly a quarter of their income on health care. Although policymakers have finally recognized that lack of long term - care insurance posed a financial catas- trophe for the elderly, they did little but talk about the problem. As out pocket - of - costs increased both for serv- ices covered by Medicare as well as those not covered, the administration and Congress came close to passing a catastrophic insurance program. However, the proposal, awaiting likely enactment at the time of this writing, may not give enough bang for the buck; it ig- nores coverage for long - term care and contains a fund- ing mechanism based on a means test that could ulti- mately undermine the program's broad political support. Summer 1988 Health / PAC Bulletin 5 Perhaps the most troubling feature of Reagan's Medi- care proposal, a voucher system, never got off the ground. Medicare HMO's and competit15i ve medical plans (CMP's), however, made a shaky and, in one in- stance, criminal debut; 16 and a new program of MIG's (no, not Soviet fighter planes, but Medicare Insured Groups) holds as many pitfalls as promises. 17 Overall, the government seemed to have tread the Medicare waters, obsessing about expenditures and recognizing unmet need, but unable to deal effectively with either. AIDS Sometimes individuals and governments can make up for past mistakes. The AIDS epidemic is not one of those instances. The $ 1.3 billion federal budget for AIDS pro- posed for fiscal year 1989 cannot buy back the years lost while the federal government did precious little to ad- dress the worst epidemic of our time. An unwillingness to spend federal dollars, coupled with homophobia, stu- pidity, and denial, has left us with an estimated one and a half million individuals infected with the AIDS virus, continued ignorance and misconceptions about the dis- ease, and inestimable pain and suffering. The Reagan administration's apathy and inaction during the early years of the epidemic only fanned the flames of the con- tagion. See [" Ignoring the Epidemic: How the Reagan Administration Failed on AIDS, " Vol. 17, No. 2.] The Budget Deficit and Public Opinion Along with the early indifference to the AIDS epidem- ic, the Reagan budget deficit will haunt us for years to come. Ronald Reagan is the biggest, freest spender we have ever had in the White House. His tax cuts and mili- tary expansion leave us with a debt that future genera- tions will struggle to repay. With 20 percent of total federal spending going for in- terest payments on the $ 2.2 trillion national debt, and with a budget deficit sure to exceed the Office of Management and Budget's projected $ 128 billion for 1988, the Reagan years have changed the way we think about new entitlement programs. Now it's strictly pay as you go, and general revenues are off limits. Although Congress is still willing to respond, albeit inadequately, to the most dramatic of domestic needs (research and education on AIDS and support for the homeless), any new entitlement program must rest on a specific funding source if it is to have a chance of success. Thus, no matter how great the need or desire for change, the nation will find it harder than ever to enact a national health insurance program. Moreover, the budget deficit will further limit the government's spending options when the next recession comes, as it surely will. A counterweight to the negative effect of the budget deficit is the overwhelming and widespread support ex- pressed by the American people for a more equitable health care system. That support is found not just in liberal places like Massachusetts, where a statewide poll in April 1987 found that 89 percent of those surveyed believed that access to health care is a basic human right and 79 percent were willing to pay higher state taxes to 6 Health / PAC guarantee that right. It is also found in Orange County, California, one of the most conservative, bedrock Repub- lican communities in the nation. A September 1987 poll found that 75 percent of those surveyed supported na- tional health insurance, and 72 percent were willing to pay h19i gher taxes to insure that the poor get necessary care. No matter who does the polls, the results are consis- tent. A nationwide poll sponsored by Hospitals magazine found that 69 percent of the population would pay higher taxes to provide health care for the indigent, while 70 percent of Californians polled in in a 1988 survey regard access to health care as a right. 21 And, in the guns butter - and - debate, military spending is now on the defensive; 71 percent of the public would rather see a reduction in the nation's defense outlays than cuts in federal expenditures for health. 22 Cost containment - efforts during the Reagan years largely failed. Americans'support for an expanded health care sys- tem may not be as solid as these polls indicate. The pub- lic continues to view Medicaid at least partially as a wel- fare program, making it vulnerable to future cutbacks in economic hard times. 23 In addition, U.S. citizens do not consider health care among the most important problems facing the nation, and so may not be willing to put their money where their mouth is when it comes to increased taxes. Nevertheless, the American people Summer 1988 the state of Washington is soon to pilot a state subsidized - program for the uninsured working poor. States, of course, did not operate in a monolithic fashion. Some states, most notably California, cut back on programs for the poor, especially in the early part of the decade. Others misused the new flexibility and adopted Medicaid case management programs helter skelter, without adequately protecting access to care and quality of services. But, looking back over the years, it is fair to conclude that Reagan was at least partly right in this regard. States used their new flexibility well. With- in the limited confines of their budgets, they attempted to fill the void left by the federal government's inaction. Moreover, in a number of instances when states were unwilling or incapable of addressing a major problem, Congress stepped in. A case in point is the 1986 Omni- bus Budget Reconciliation Act. By acting to regulate hospitals through tough anti dumping - penalties in the Medicare Act, Congress further advanced on territory traditionally left to the states. Likewise, federal require- ments that employers offer continuation and conversion insurance policies encroached on what had heretofore been an area of state authority. McCarthy Timothy remain committed to providing health care for those in need, and the administration's efforts to undermine sup- port for government involvement in the financing of health care have failed miserably. TRANSFER OF FEDERAL RESPONSIBILITY The States Along with reducing federal health care programs, the Reagan administration repeatedly proposed giving more responsibility and flexibility in administering these pro- grams to the states. Generally, efforts to transfer respon- sibility - labeled the " new federalism " - failed when states realized that they were a ploy to cut federal spending. Yet, acting on their own, states assumed increased responsibility and used it well. After 1981 and 1982, the states'flexibility in administering Medicaid was used almost exclusively to expand rather than reduce cover- age. Fears over how the states would use and misuse the 1981 block grants were also unfounded. During the Reagan years, as the aftermath of the 1981 federal budget cuts and 1982 recession became visible, over 25 states studied the problems of the uninsured, and many enacted small but significant expansions of state programs. States increased medical services for low- income pregnant women, taxed insurers to pay for un- compensated hospital care, and established high - risk pools for the " uninsurable " population. Massachusetts passed " health care for all " legislation in April 1988, and The Voluntary Sector Reagan claimed that the voluntary sector - that is, pri- vate charitable organizations- would fill in any holes left in the safety net by federal and state governments. The president was partly correct in his assessment. Although it was specious to maintain, as he did, that private money and effort could replace the federal government's role in providing care for the needy, it was nonetheless true that the voluntary sector mobilized to serve those in greatest need. Activities of organizations serving the homeless or people with AIDS are only two cases in point. Even the more traditional charitable organizations took on new projects to meet new problems. For example, the Robert Wood Johnson Foundation moved from its seemingly knee - jerk funding of large teaching hospitals and medical schools to support innovative community organizations serving the homeless and experimental programs to insure the uninsured. And finally - a lthough Reagan didn't have this in mind when he spoke of the voluntary sector- health advocacy grew during the 1980's. At the national level, the Villers Foundation, the National Health Care Cam- paign, and Citizen Action joined already established health advocacy organizations such as the Children's Defense Fund, the Gray Panthers, and the American As- sociation of Retired Persons to push for change at the federal and state levels. Statewide organizations have also begun to flex their muscles. The Massachusetts Health Action Alliance was a major force in the passage of the state's new health care legislation. Health Access in California and the Health Care For All Campaign in New York have also set their sights on statewide health care cover- age. And new programs for uninsured pregnant wom- en in a number of states (Massachusetts, Minnesota, South Carolina), were enacted only after long and ardu- ous community campaigns. Summer 1988 Health / PAC Bulletin 7 Foxes in the Henhouse Health Care Organizing under Reagan In May 1, 1987, the professional em- ployees at Fountain Valley Hospital in Fountain Valley, Ca., voted in favor of joining a union (the United Nurses As- sociation of California). To this day, thanks to the Na- tional Labor Relations Board, there is still no union at Fountain Valley. " When we filed for an NLRB elec- tion, " says Chris Majors, a registered nurse at the hospital, " little did we know we were handing our employers a loaded gun to turn against us. When Ronald Reagan came to power, he was faced with a dilemma. Health care workers were making impressive gains in improving their low wages and poor working conditions through unionization. So the Reagan administration did what comes naturally for them: they used a federal agency to attack the very rights it had been created to protect, in this case the NLRB. Reagan appointees achieved a majority on the board by 1982, and that year pushed through a crucial change in its definition of an " appropriate bargain- ing unit "_ that group of workers in a hospital or other health care facility permitted to negotiate on its own behalf. The old standard, which required that such a group constitute a " community of interest, " kept the units fairly narrow - nurses with nurses, clerical workers with clerical workers, and so forth. But in the infamous St. Francis II decision, the Reagan - ruled board stood the old standard on its head, requiring health care workers to bargain in one of two ponderous categories, professionals and non- professionals, unless they could prove a " disparity of interest. " The pro management - board put itself in the position of telling health care workers whom they may unionize with, explains Bob Muehlenkamp, director of organizing for the National Union of Hospi- tal and Health Care Employees / 1199. In the age of Reagan, organizing drives now in- volve a separate legal struggle, as management, armed with the new standard, challenges the bargaining units workers put forward. Julie Fry Gibson of the American Nurses'Association tells how efforts typically involve years of litigation, forc- ing delays that sap the energy that drove the initial push to unionize. The NLRB, faced with the chaos St. Francis created, reopened the matter for review last year. A final ruling should be handed down within a year. The impact on organizing, however, was immedi- ate. Gerry Shea, head of the Health Care division of the Service Employees International Union, describes how health care professionals, a work force that's nor- mally reluctant to unionize, will often lose their appe- tite for collective bargaining entirely if forced to un- dertake it with others who don't share their specific professional concerns. With the NLRB on their side, hospitals have effec- tively stymied unionization. No single union has the resources to take on the " big four " for profit - chains, and a combined effort is unlikely in the foreseeable future. When organizing has been successful in the voluntary sector, it has almost always occurred in hospitals where some workers were already unionized - " breakthrough " contracts are rare. The voluntaries have also excelled at union busting. In the few cases where breakthroughs occurred, nurses led the way. The nursing shortage is largely responsible for this, creating intolerable working con- ditions on the one hand, and, on the other, forcing management to become more receptive to nurses'dem- ands. The shortage is also an important example of how changes in the way care is delivered affect health care workers first and most. Another is the rise of cost controls. As Medicare's DRG system empties hospi- tals, jobs are shifting to nursing homes and clinics. Unions have organized hundreds of the former, and prospects for future victories look good. Efforts in din- ks, dialysis centers, drug rehabilitation - programs, and the like have been much scarcer. With one health care job in eight now found in such settings, Mueh- lenkamp says, the unions will have to do better. he changes sweeping the industry have T gotten more doctors talking about organiz- ing. " There's enormous potential and a lot more interest among salaried physicians for unionization, " according to Janet Friedman, presi- dent of the Committee of Interns and Residents, a union in the Northeast. But, again, the NLRB saves the day for management: while interns and residents in public hospitals are defined as employees and may unionize, those in voluntary hospitals are considered students - voluntaries need not recognize them. What does the future hold for the millions of non- unionized nurses, clerical and maintenance workers, nurse's aides, physicians, and others? The answer largely depends on the outcome of the struggle over bargaining units. Whatever the decision, organizing should become easier with the curtailing of manage- ment's opportunity to cause delays through litigation. A return to the old standard, of course, would be a tremendous boon to health care workers, allowing them to resume closing the gap in wages that separates them from the rest of the nation's work force, and to improve working conditions that have steadily deteriorated during the Reagan years. D - Bill Dereskwicz 800 Health / PAC Bulletin Summer 1988 50/0 F F D D HOSPIta OPHORE CLOSED a - _ - a ay T) AUTON vil TT PT CUTAN nvataravee "i in manampala Local advocacy organizations such as Staying Alive in Boston and the Committee to Save Cook County Hospi- tal in Chicago have survived the 1980's, maybe not stronger, but as committed as ever to saving their pub- lic hospitals. Legal services, against all odds, also made it through the Reagan years. And, finally, progressive health advocacy organizations remain a symbol for ad- vocates who have kept the faith that this nation will have a more just, equitable health care system. COST CONTAINMENT Only one item on the Reagan agenda garnered widespread support t- h e need to control health care costs. Unfortunately, cost containment - efforts during the Reagan years largely failed. In 1981, we spent 9.4 per- cent of the gross national budget - $ 287 billion - on health care. By 1987, spending had reached half a tril- lion dollars (499 $ billion), 11.2 percent of the GNP. In each year of the Reagan administration, health care in- flation far exceeded inflation in other areas of the economy. The most dramatic of the president's efforts to con- trol costs was Medicare's prospective payment system. Alan Sager of Boston University calls these jerking lurches to reform our health care system " policy_by policy_by spasm. " In 1984, we suddenly found ourselves inundat- ed by a plethora of new acronyms and a basically un- tested scheme for reimbursing hospitals in the Medicare program. Prospective payment systems (PPS's) and diagnosis related groups (DRG's) may have kept Medicare expen- ditures below what they otherwise would have been. Not even this is certain, though, as early DRG payments were excessive, and outpatient and ambulatory care costs went through the roof. 24 Moreover, Medicare Part B physician payments continued to increase at a 17 per- cent annual rate. And hospital and physician costs show few signs of abating: a recent survey of 1,863 hospitals found that hospital charges increased 19 percent in 1986. 25 During that same year, physicians'incomes jumped 6.5 percent. 26 Insurance rates, too, are increasing at a phenomenal rate. At the beginning of 1988, insurance companies generally raised their premiums between 12 and 25 per- 27 cent. As we began the decade with a " crisis " in health care costs, so will we end it. We are today spend- ing more money than ever, yet providing care to fewer Americans. We may have controlled payments to some providers, but we haven't controlled costs. Today, we spend ap- proximately 6 percent of our GNP on defense and 5 per- cent on hospital care. Efforts during the Reagan years, Summer 1988 Health / PAC Bulletin 9 planted in infertile soil, have borne little fruit. Without doubt, the vertiginous heights to which health care spending has risen since 1981 are a major failure of the Reagan administration. COMPETITION AND DEREGULATION Reaganites who came to power in 1981 believed there was only one way to control health care costs - mar- ketplace competition. An early spokesman for this view, David Stockman, wrote that the " liberal national health care policy " was built on a number of erroneous assump- tions, including beliefs that the health care sector " can be efficiently and effectively regulated by government agencies and by bureaucratic mechanisms " and social that " health care is unique " - a " sort of spiritual or social or collective good. " Rather, Stockman argued, health care should be treated as an economic good " so that we can bring into play those self regulatory - , economizing, effitiency producing - mechanisms that we rely on in all other sectors. " Stockman offered a simple prescription for the ills afflicting our health care system: " Enfranchise consumers " through cost sharing - , provide fixed rather than open ended - federal subsidies, encourage " risk at - " for profit - enterprise, promote a competitive " retail mar- ket " for health care, and build the entire health care sys- tem on a " laissez - faire " foundation " where government specifies nothing. 128 Certainly, the Stockman cure has not worked. A grow- ing number of HMO's and new preferred provider or- ganizations (PPO's) did begin to compete with each other, but without any discernible overall savings in the health care system. 29 For profit - hospital chains were the darlings of Wall Street in the first part of the decade, only to see their fortunes plummet after 1986. Today, few would argue that the growth of for profit - health care led to greater 30 efficiency and lower costs. 50 Hospitals did compete, but not on the basis of price. Facilities, not profit - for - and for- profit alike, continued to expand and purchase the latest, most technologically advanced and expensive equip- ment, resulting in gross overcapacity. Predictions by the likes of Stockman that such anti competitive - behavior would lead to bankruptcy now seem simplistic. The hospitals that closed in the 1980's were generally small, undercapitalized, inner - city and rural hospitals that served the poor, not the overcapitalized giants. 32 Moreover, to the extent that hospitals did compete for business during the 1980's, this competition had a num- ber of negative by products - : first, private insurers were less willing to subsidize the costs of caring for the indi- gent; second, the amount of money spent on advertis- ing and marketing instead of patient care was vastly ex- panded; and, finally, hospital controlled - inpatient serv- ices and procedures were moved to the less regulated outpatient sector to make up for lost inpatient revenues through higher outpatient profits. As one economist put it, " The competitive market is an opponent, not an ally, of cost containment. When capacity increases, advertis- ing and marketing increase, the boundaries of the sys- tem are expanded, duplication of costly services is en- couraged, and the public is pushed to consume more health care services than it needs. 133 The unwillingness of Medicare and private insurers to continue to subsidize hospital care for the poor has had particularly negative consequences. In Los An- geles, for example, the lack of reimbursement for emer- gency care provided to the uninsured poor has led a number of hospitals to opt out of the city's trauma sys- tem and close or limit their emergency rooms, resulting in a crisis for the entire community. Despite the failure of Reagan's broad agenda to in- crease free market competition, the way health care is organized has changed. The rapid growth of prepayment and managed care has transformed the health care land- scape in ways that could not have been predicted in 1981. HMO's and their brethren hold promise for curbing overutilization and perhaps controlling costs. Further, the move away from the open ended - fee service - for - reim- bursement system, with its incentives to provide un- necessary services, can only be viewed as positive. Although prospective payment and capitation have their own set of problems, the existing situation was no longer tenable. The deregulators had some successes during the Rea- gan years, but these were few and far between. Early in the Reagan reign, 22 categorical health programs were combined into four block grants, and over 300 pages of regulation were eliminated from the Federal Register. However, Congress strongly resisted other efforts to slow down the regulatory machine, making almost year- ly admonitions to a reluctant Department of Health and Human Services to issue congressionally mandated regu- lations. The administration simply got around these mandates by shoddy enforcement of regulations that did exist. Reaganites became regulatory hypocrites. A second major success of the anti regulators - was the final elimination of federal health planning, with the failure to reauthorize funding for the Health Planning and Development Act of 1974. Although the program was not always successful in controlling the prolifera- tion of the high - tech medical armamentarium, its demise has resulted in an orgy of hospital and nursing home expansion in a number of states. Health planning was also a useful tool to obtain concessions from providers to serve the poor. Despite the anti regulation - rhetoric, the administration has not been averse to using federal regulation to suit its own purposes. Its attempts at price fixing of hospi- tals ', and, lately, physicians'fees in the Medicare pro- gram are a far cry from the laissez - faire medical care sys- tem where " government specifies nothing, " envisioned by Stockman. If anything, Reaganites became regula- tory hypocrites with their repeated attempts to use regu- lations to implement their own social agenda, especial- ly in the matters of abortion, family planning, and pro- 10 Health / PAC Bulletin Summer 1988 09880 tection of newborns with serious birth defects. The most ardent of free market - advocates might ar- gue that competition was not given a fair chance during the Reagan years. They would be right. Congress, and by extension, the American people, were not willing to go the competition route. Reagan proposed a revolution- ary restructuring in our health care system. Americans, generally happy with their health care (although not the 36 costs of mat care), were not willing to support this revolution. It appears that the American people do not believe that medical care should be a commodity and are unwilling to eliminate many of the anti competitive - underpinnings of our health care system. 37 David Kin- zer of the Harvard University School of Public Health makes this point: " If and when our nation's political est- ablishment responds to public sentiment about univer- sal access to medical care, it should be obvious that more law and regulation are the inescapable corollary. Where citizens'rights are involved, only government can guarantee them, " 38 QUALITY OF CARE Although the anti regulatory - , pro marketplace - ap- proach of the Reagan agenda was rejected, its empha- sis led to a new interest in quality of care. Advocates of competition argued that if consumers were to make informed and rational decisions in the medical care mar- ketplace, they would need information on quality as well as price. This competition - driven move to inform the medical care consumer, combined with a concern that capitated systems have incentives to skimp on needed care, a hope of saving money by reducing inappropri- ate care, and an awareness of the recurring medical mal- practice crisis, sparked a new interest at the federal lev- el in quality of care. During the 1980's we made some progress in figuring out how to define and measure quality. Peer review or- ganizations (PRO's) replaced their weaker brothers, professional standards review organizations (PSRO's) as the government's lead agencies to monitor the quality of care for the elderly. The Health Care Finance Adminis- tration (HCFA) released data on mortality rates of Medi- care patients, despite furious opposition from the hospi- tal industry and others who argued that the data did not adequately adjust for the varying types and severity of cases handled by the different hospitals. Although still in their infancy, research attempts to measure quality and government efforts to use informa- tion about quality of care hold promise of a more rational and safer medical care system. THE REAGAN BALANCE SHEET Where have seven and a half years of Reagan's efforts to transform the health care system left us? The nation's health care system provides less for the poor and elder- ly today than it did when Reagan became president. The truly needy have been hurt and hurt badly. To the ex- tent that they were tried, competition, deregulation, and Summer 1988 Health / PAC Bulletin 11 for profit - medicine failed to control costs. State and voluntary efforts are not viable substitutes for federal health care programs and money. And Reagan's bud- get deficit may well slam shut the door to an expanded, more equitable health care system. Yet, as we look forward to the post Reagan - years, there is cause for hope. Perhaps more than ever, Americans favor expanding health care to the poor and near poor; the elderly are mobilizing to fill in the substantial gaps in insurance coverage left by Medicare; insurers are mov- ing away from an open ended - funding system that dear- ly did not control costs to, we can hope, something bet- ter; health care advocacy by states and community or- ganizations is paying off in more care to the uninsured; and the nation has finally recognized the AIDS epi- demic for what it is - a plague that threatens us all. Unfortunately, the Reagan administration has also left us without a workable plan for the future. The nation is without a clear vision of where it wants the health care system to go, and, just as important, how to get there. The Reagan administration has left us without a workable plan for the future. Thus, with the post Reagan - years upon us, we must take cognizance of the lessons of the Reagan era. First, a health care revolution is not in our future. Policy in this country changes slowly, step by incremental step. As the American people rejected the Reagan health care revolution, so will they reject any proposal that does not build on foundations previously laid, weak as they may be. The job before us is to shore up what we have and build from there. Second, we must face the issue of health care ration- ing. If we hadn't realized it before Reagan, we certainly know it now: rationing of health care exists in its most insidious and inequitable form -- based on income and race. Yet, we cannot afford to provide all that medical science is capable of. As ethicist James Callahan posits in his 1987 book, Setting Limits: Medical Goals in An Ag- ing Society, it is time to begin the soul searching - process of deciding how much and for whom. A continued emphasis on quality assessment will make that search much less difficult. This is the third lesson from the Reagan years. We must find a way to control the explosive growth of expensive high - tech machines and procedures that are of questionable value. A recent RAND Corporation study showed that 32 percent of carotid endarterectomies, an extremely high - risk and very expensive procedure, were inappropriate. 39 Such findings again underscore the need to regulate the in- troduction of new medical and surgical procedures and technology, much as we do drugs. We also need quality assessment to prevent underutili- zation of medical resources. The increase in prepayment and managed care systems during the Reagan years raises new ethical dilemmas for physicians and hospi- tals by allowing them to make more by doing less. We now have the worst of all worlds for quality of care - where incentives to do too much and too little exist side by side. Fourth, we must control costs if we are to expand care. It may be that, as HCFA predicts, Americans by 1990. will spend not4 0 11 percent but 15 percent of our GNP on health care. If for that extra 4 percent and $ 200 bil- lion dollars we get better care for more people, the ex- pense will be worth it. If, however, the nation spends those extra billions only to end up with the same sys- tem we have today, the American people will have been cheated. Although many of us may disagree with how the Reagan administration proposed to control costs, one could well argue that its emphasis on the issue was well placed. Fifth, even as we turn our attention to federal efforts to expand health care, we must continue to pursue ad- vocacy at the state level. Fears that granting states greater flexibility in setting health care policy would prove dis- astrous were not realized. The states have become our laboratories for experiments on the best way to provide health care for the most people. Only a few of these ex- periments need to be successful for us to learn the best approaches to reforming the federal system. Finally, it's important to remember that individuals and organizations working for a more humane and de- cent health care system make a difference. There would be far less care for the poor and elderly today had advo- cates not fought hard against the worst excesses of Rea- gan policy. We have survived the Reagan years. Unfortunately, the next few years do not look promising for reshaping our health care system. Costs are out of control, the number of uninsured seems likely to grow, the graying of America will make it even harder to address the needs of the elderly, and the specter of death and disease from AIDS haunts the nation. Yet, as we look to the 1988 elec- tion and a new presidency, anything is possible. If we keep working at it, America will have one day a " government that lives in the spirit of charity " and a health care system for all.D 1. DaDek, Geraldine, " Who Cares for Health Care? The First Two Years of Reagan Administration Health Policy, " Health / PAC Bulletin, January February - 1983: 14 (1), pp. 11-14. 2. Erdman, K., and S. Wolfe, Poor Health Care for Poor Americans: A Ranking of State Medicaid Programs, Washington, D.C.: Public Citizen Health Research Group, 1987. 3. For example, Alabama will pay for only 12 hospital days per year, three outpatient hospital visits per year, 12 physician days per year, and eight well child - screenings from birth through age 21, includ- ing only one visit during the first year of life. 4. Kolata, Gina, " Increasingly, Life and Death Issues Become Money Matters: Who Gets Bone Marrow Transplants? " New York Times, March 20, 1988, p. E6. 5. Egan, Timothy, " Oregon Cut in Transplant Aid Spurs Victims to Turn Actor to Avert Death, " New York Times, May 1, 1988, p. 12. 6. Employee Benefit Research Institute, March 1987 Current Popula- tion Survey. 12 Health / PAC Bulletin Summer 1988 McCarthy Timothy 7. Freeman, Howard, et al., " Americans Report on Their Access to 18. For a description of the Reagan administration's AIDS policy, see Health Care, " Health Affairs, Spring 1987, pp. 7-18; Access to Health Care in the United States: Results of a 1986 Survey, Robert Wood Shilts, Randy, And the Band Played On: Politics, People, and the AIDS Epidemic, New York, St. Martin's Press, 1987. Johnson Foundation Special Report, No. 2, 1987, p. 10. 19. Peterson, Susan, " Poll: 75% in OC Favor National Health Insur- 8. Prenatal Care: Medicaid Recipients and Uninsured Women Obtain Insuffice, " Orange County Register, September 22, 1987. cient Care, Washington, D.C.: General Accounting Office, 1987. See 20. " Indigent Care: Public Wants Government to Pay, " Hospitals, Oc- also " Child Health: America's Next Challenge, " Medicine & Health Perspectives, October 19, 1987. tober 5, 1987, p. 152. 21. Parachini, Allan, " AIDS is No. 1 Health Issue in State Poll, " Los 9. Facts on Infant Mortality, National Commission to Prevent Infant Mor- Angeles Times, March 29, 1988, Part V, pp. 1-2. tality, 1987. 22. Shriver, J. (Ed.), " Federal Budget Deficit, " Gallup Report 1986, pp. 10. Farley, Pamela, " Who are the Underinsured? " MiWank Memorial Fund Quarterly / Health & Society, 1985: 63, pp. 476-501. 11. 1988 Employer Bargaining Objectives, Bureau of National Affairs, 1988. 244-245, cited in Blendon, Robert, " The Public's View of the Fu- ture of Health Care, " Journal of the American Medical Association, forthcoming. 12. " Public Hospitals Struggle to Stay Afloat, " Medicine & Health Per- spectives, November 23,1987; Richards, Bill, " Many Hospitals Feel Financial Strain as More of Their Patients Need Public Aid, " Wall 23. While polls show significant support for health care spending for the poor, they also show very limited support for welfare. Forty- one percent of the public believes that the nation spends too much Street Journal, May 3, 1988, p. 31. See also Dallek, Geraldine, with on welfare. Thus, to the extent that Medicaid is tied to the welfare E. Richard Brown, The Quality of Medical Care for the Poor in Los An- - system, it remains vulnerable to the anti welfare - bias and to cut- geles County's Health and Hospital System, June 1987. backs. See ibid. 13. Medicare's Poor, The Commonwealth Fund Commission on Elderly People Living Alone, 1988. 24. Kramon, Glenn, " Outpatient Strategy Fails to Cut Health Costs, " New York Times, March 8, 1988, pp. 1, 35. 14. " Poor Elderly Uninsured, Report Says, " Medicine & Health, 41 44 (), 25. " Latest Survey Shows Hospital Charges Increasing Dramatically, " November 9, 1987, p. 2. Health Lawyers News Report, February 1988: 16 (2), p. 2. 15. At the end of 1987, 29 of 158 HMO's serving 80,000 Medicare beneficiaries on an at risk - basis terminated their HCFA contracts. 26. " Physician Income Up 6.5 Percent in 1986, " Medicine & Health, November 30, 1987, p. 2. " Medicare Loses 80,000 HMO Enrollees, " Medicine & Health, 41 44 (), 27. Health Lawyers News Report, February 1988: 16 (2), p. 4. November 9, 1987, p. 1. 28. Stockman, David, " Premises For a Medical Marketplace: A Neocon- 16. Medicare and HMOs: A First Look, With Disturbing Findings, Minori servative's Vision of How to Transform the Health System, " Health ty Staff Report, Select Committee on Aging, U.S. Senate, April 7, Affairs, 1981: 1) (1, pp. 5-18. 1987; Iglehart, John, " Second Thoughts About HMOs For Medi- 29. Ginzberg, Eli, " A Hard Look at Cost Containment, " New England care Patients, " New England Journal of Medicine, 316 (23), June 4,1987, Journal of Medicine, 316 (18), April 30, 1987, p. 1152. pp. 1487-1492. 30. Ibid., p. 1153; Renn S. C, C. J. Schramm, D. M. Watt, and R. Der- 17. Under the MIG program, employer - based plans are paid a capitat- ed rate to provide health care benefits to Medicare beneficiaries af- zon, " The Effects of Ownership and System Affiliation on the Eco- nomic Performance of Hospitals, " Inquiry, 1985: 22, pp. 219-236. filiated with the employer's retirement plan. HCFA has contracted 31. Although generally we have far too many hospital beds, in a number for several MIG demonstration projects.. of communities, most notably New York City, as well as in large Summer 1988 Health / PAC Bulletin 13 urban public hospitals, there are too few resources to meet com- munity needs. See Lambert, Bruce, Hospital " Shortages Hurt Pa- tient Care in New York, " New York Times, March 22, 1988, p. 1. 32. Richards, Bill, op. tit. 33. Ginzberg, Eli, The " DestabOization of Health Care, " New England Journal of Medicine, 315 (12), September 18, 1986, p. 760. 34. Spiegel, Claire, " Three More Hospitals in L.A. Act to Cut Emer- gency Care, " Los Angeles Times, May 4, 1988, Part 2, p. 1. 35. Kinzer, David, The " Decline and Fall of Deregulation, " New Eng- land Journal of Medicine, 318 (2), January 14, 1988, p. 113. 36. Btendon, op. tit., pp. 6-7. 37. For a description of mkroeconomic theory applied to the econom- ics of health care, see Newhouse, Joseph, The Economics of Medical Care, Addison - Wesley, 1978. 38. Kinzer, op. at., p. 113. 39. Chassin, Mark, et al. " Does Inappropriate Use Explain Geograph- ic Variations in the Use of Health Care Services? A Study of Three Procedures, " Journal of the American Medical Association, 258 (18), November 13,1987, pp. 2533-2537; " Study Finds Overuse of Sur- gery Intended to Prevent Strokes in the Elderly, " New York Times, March 24, 1988, p. 13. 40. " Health Care Spending: Growing Through the Year 2000, " Medi- cine & Health Perspectives, June 22, 1987. 14 Health / PAC Bulletin Summer 1988 Refuting Arguments Against a National Health Program VICENTE NAVARRO he tenor of the debate on a national health poli- cy in this country has undergone a dramatic change during the last 15 years. While the theme of the 1970's was the expansion of the federal role in health care through a national health program - a nationwide federal system that would be universal, comprehensive, and funded primarily with general tax revenues and / or payroll taxes X - the dis- cussion in the present decade has concentrated on devis- ing ways to reduce that role. The possibility of a national health program has all but disappeared from discussion, not only in Congress, but also in political circles, academia, and the media. Moreover, when voices are raised in support of that so- lution, as they are by only a few groups, they are drowned out by a huge wave of messages and counter- arguments, all presented as scientific and reasonable, against the advisability and feasibility of such a plan. In attempting to reframe the debate to include, once again, serious and wide consideration of a national health pro- gram, this article will analyze two of these counterargu- ments, and the evidence that supports them, to see whether they are really scientific or just plain ideological. 1986, 16 percent of the population (38 million people) had no form of coverage whatsoever, and another 6 per- cent (13.5 million people) did not receive medical care for financial reasons. Among the uninsured, 13 percent did not receive needed care because they could not pay for it. In no other developed nation, furthermore, do peo- ple still pay such a high percentage of health costs out of their own pockets. Patients absorb 27 percent of the cost of health care in the United States, compared with 5 percent in Great Britain, 8 percent in Sweden, 12 per- cent in West Germany, and 20 percent in Canada. The campaign to reduce the deficit is really a campaign to reduce social spending. Spending on health care in this country is much higher than it should be. A national health program would push it even higher. The first part of this argument is true. The United States spends more per capita on health services than any other country - nearly 11 percent of our GNP. This is expected to increase to 14 percent by the year 2000. Despite these huge expenditures, the United States still Why do we see this diminishing return on increased costs? Another look at the international picture provides the answer. The United States is the only major indus- trialized nation (besides South Africa) where most of the money for health care is drawn from and most of it spent through the private sector. The overwhelming majority of industrialized nations fund their health services with faces problems without parallel among other industrial- ized countries. Although the amount of money we spend on health care has grown unchecked during the 1980's, people are receiving less and poorer health care than in the past. The number of visits to physicians and the number of hospitalizations recorded in this country have declined, while the percentage of people who had not visited a physician during the preceding year jumped from 19 percent in 1982 to 33 percent in 1986. The proportion of the population without a regular source of care has also increased. Moreover, the segment of the population lacking health insurance has also grown. In public revenues. In 1983, the U.S. government spent 4.5 percent of the nation's GNP on health, while the Swed- ish government spent 8.8 percent; the British, 5.5 per- cent; the West German, 6.6 percent; and the Canadian, 6.2 percent. At the same time, no other country has a larger for- profit health sector than we do. Forty - four percent of all spending for health care here went to private, for profit - institutions and contractors, compared with 17 percent in Sweden, 26 percent in the United Kingdom, and 42 percent in Canada. No other country spends such a staggering amount on profits and administration, either in absolute numbers or as percentages of health expen- Vicente Navarro is Professor of Health Policy at The Johns Hopture, and these figures have increased during the kins University. Reagan years. The profit margin for hospitals has bal- Summer 1988 Health / PAC Bulletin 15 looned 19 percent in this period, for example, far larger than the 7 percent growth in profits for the economy as a whole. Look to the North We can look to Canada for a relevant comparison to the United States'approach to funding health care. The countries had similar rates of growth for health expen- ditures until 1968, when Canada established a national health program. Since then, the percentage of GNP go- ing to health has remained almost constant in Canada; we already know what's happened here. Furthermore, Canada now provides more comprehensive and univer- sal health benefits than were offered before 1968. Canada covers hospital and ambulatory care for the country's entire population, while public programs in the United States cover only 40 percent of the popula- tion for hospital care and 25 percent for ambulatory 9 care. In the course of the Reagan administration, as we have seen, market forces and profit interests have expanded their influence on the management of health care. Free- market competition has failed to reduce costs, broaden coverage, or improve access to care. People are increas- ingly dissatisfied with the delivery of health care serv- ices. Seventy - five percent of those polled in one survey - an all time - high - said they want to see fundamen- tal changes in our system of funding and delivering health care. 10 The strategy of unlimited competition has been successful only in increasing the profits of the cor- porations that dominate the health care industry. The solution to these problems of growing costs and limited coverage lies in a larger, not smaller, role for govern- ment, and in a concomitant reduction of the private sec- tor's role in the funding and organization of health serv- ices. Now on to the second argument. The large federal deficit is one of the major reasons for the economy's poor performance. A national health pro- gram would require larger expenditures that would in- crease the deficit. This is one of the arguments most frequently used against the establishment of a national health program. The size of the deficit needs to be reduced, according to this line of thinking, before we can consider enlarg- ing the federal role in health. Otherwise, the economy is going to get worse, and we will all suffer. Over and over, leading figures in the political and medical estab- lishments reiterate these beliefs. People as unlikely as the national leadership of the AFL - CIO and Senator Ed- ward Kennedy have also embraced this argument to ex- plain why they backed away from supporting a nation- al health program in favor of mandated employer - paid coverage. The argument hinges on a misrepresentation of the federal deficit. Contrary to public perception, today's budget deficit was created by the current administration with the support of Congress, primarily through the fed- eral tax cuts of 1981 and by the unprecedented growth of military spending during the Reagan administra- tion. 12 It was, moreover, deliberately created to force reductions in social expenditures, including spending on health, now and in the future. As David Stockman put it, " The plan was to have a strategic deficit that would give us an argument for cutting back the programs that weren't desired. " 13 16 Health / PAC Bulletin Summer 1988 The administration's proposed budget cuts for the years 1981-84 showed clearly what those undesired pro- grams were. The proposals included reductions of 60 percent in non mea-n ste s-t ed programs, 27.7 percent in means - tested programs, and 11.4 percent in social in- 14 surance entitlements. Health programs were among those federal initiatives that would have suffered the greatest reductions. Medicare, for example, which represents 7 percent of all federal expenditures, account- ed for 12 percent of proposed reductions during mis peri- od. In Reagan's budget for 1987, 36 percent of the pro- posed cuts were to have been made in health programs. The huge campaign orchestrated by the Reagan ad- ministration to reduce the deficit has actually been a cam- paign to reduce spending for social and health programs. As J. Peter Grace and other leading business people who support and finance this anti deficit - adver- tising campaign recognize, " We are not concerned about tmheen td esfpiecnidti,n gwe. a#r'e1 6c oAnncde r"n edg oavbeoruntm etnhte slpeveenld ionfg g"o viesr na- code name for social expenditures. Security Means Strength The origins of our economic problems cannot be reduced to the federal deficit or rapidly growing social expenditures. If this were the case, we would expect those countries with larger deficits, greater public spend- ing for social programs, and higher rates of growth in these areas to do worse economically than the United States. They don't - they do much better. In 1986, the federal deficit constituted 4.8 percent of the GNP in the United States. Sweden's deficit in the late 1970's was three times higher (15 percent of the GNP), and remains higher even today (7 percent). The rate of growth of social spending, including spending on health, in Sweden from 1975 to 1982 was also higher than that in the United States. 17 During these years Sweden had lower unemployment, lower inflation, and faster economic growth than the United States. Health expenditures continue to grow while people get less services. Japan, Austria, and Norway have deficits comparable to ours, and the rate of growth1 8 of their social expendi- tures is larger than that here. Again, these countries have lower unemployment, higher economic growth, and lower inflation than we do. Not coinridentally, all Summer 1988 Health / PAC Bulletin 17 these nations have well established - and growing national health programs. And all of them have greater public expenditures for health, and a higher rate of growth of these expenditures, than the United States. No other country has a larger profit for - health sector than the U.S. Thus, a national health program is not the economic drain that its detractors portray. In fact, the evidence shows that unless a country's working population has the social supports, including health and social services, needed to cushion the impact of changes in the economic structure, it is unlikely to cooperate with the technolog- ical and social changes that may be required for the suc- cessful development of the economy. For example, no other country has as many robots per capita - a sign of technological advance - or more labor flexibility than Sweden, in part because of the economic security that grows out of its universal social and health benefits. In contrast, one of the major reasons workers in the Unit- ed States resist changing jobs is their fear of losing health benefits. The expansion of coverage, comprehensiveness, and universality of social and health supports is a con- dition of, rather than a handicap to, the successful eco- nomic performance of our country. In the last eight years, a conservative ideological avalanche has all but buried the country by transform- ing political issues into economic ones. The issue of a national health program, however, is clearly political, and the arguments brought to bear against it are not logical, but ideological. Once they are dissected, it becomes clear not only that the country will benefit from a national ap- proach to health care, but that its citizens have wanted such a program for some time. As the Reagan era draws to a close, we have the opportunity to reverse the de- terioration in health services experienced by large seg- ments of our nation and to rescue the issue of a nation- al health program from obscurity. Despite the attempts of the Reagan administration and its supporters to bury the idea of a national health program, reports of its death are greatly exaggerated.!!] 1. " Criteria for Assessing National Health Proposals, " American Public Health Association Public Policy Statements, Washington, D.C.: APHA, 1986, p. 7734. 2. Freeman, Howard, et al., " Americans Report on Their Access to Health Care, " Health Affairs, Spring 1987, p. 13. - BANG- -BANG- -BANG- GOTCHA! HELP HOMELESS AIDS N AIDS 18 Health / PAC Bulletin McCarthy Timothy Summer 1988 3. Maxwell, R., Health and Wealth: An International Study of Health Care Spending, Lexington, Mass.: Lexington Books, 1961, Table 4-1, p. 61. 4. " Measuring Health Care 1960-1983: Expenditures, Costs and Performance, " OECD Social Policy Studies, No. 2, Organization for Economic Cooperation and Development, 1985, p. 12. 5. Maxwell, R., Health and Wealth, p. 68. 6. Himmelstein, D. U., and S. Woolhandler, " Socialized Medi- cine: A Solution to the Cost Crisis in the Health Care of the United States, " International Journal of Health Services, 1986: 16 (3), p. 339. 7. " Profits in Hospitals, " New York Times, March 29, 1987. 8. Evans, R. G., " Lessons from Cost Containment in Norm America, " Journal of Health Politics, Policy and Law, 11 (4), Figs. 1 and 2, pp. 588 and 589. 9. Measuring Health Care, 1960-1983. 10. Schneider, W., " Public Ready for Real Change in Health Care, " National Journal, 1985: 3 (3), pp. 664-665. McCarthy Timothy 11. Kosteriitz, J., " Kennedy's New Task, " National Journal, March 14, 1987, p. 608. 12. " Strategic Deficit, " in Center for Popular Economics, Economic Report of the People, Boston: South End Press, 1986, p. 140. 13. Quoted in Wicker, T., " A Deliberate Deficit, " National Journal, July 19, 1985. 14. Heclo, H., " The Political Foundations of Anti Poverty - Policy, " in S. Danzdger and D. H. Weinberg, eds., Fighting Poverty, Cambridge, Mass.: Harvard University Press, 1986, Fig. 13.2, p. 339. 15. " The Reagan Budget, " The Economist, June 10-16, 1987, p. 20. 16. Quoted in Ferguson T., and J. Rogers, The Decline of the Democrats and the Future of American Politics, New York: Hill & Wang, 1987, p. 193. 17. Therborn, G., and T. Roebrock, " The Irreversible Welfare State, " International Journal of Health Services, 1986: 16 (3), p. 328. 18. Ibid.; and Therborn G., Why Some People are More Unemployed Than Others, London: Verso Books, 1987,.p 12. Summer 1988 Health / PAC Bulletin 19 Aiming So Low We Hit Our Own Feet The Limits of Incrementalism DAVID U. HIMMELSTEIN AND STEFFIE WOOLHANDLER This article is a response to remarks made by Ron Pollack of third1 s in every poll, support a national health pro- the Villers Foundation at Health / PAC's June 1987 conferencegram. Indeed, even most physicians, members of a " Rethinking a National Health Program in the Reagan Post - profession long a bulwark of conservatism, have come Era. " Pollack advocated an incrementalist strategy for health to favor some form of national health insurance. Un- policy reform, through such measures as extending Medicaidfortunately, politicians, responding to the powerful in- and warned against more radical approaches. terests of health insurersa ncdo rporate providers, have - D.U.H. and S.W. been reluctant to consider a national health program seri- ously. Faced with this block to progress, our " incremen- talist " friends counsel us to advocate steps more accept- ome progressive health activists, demoralized able to those in power. We think this counsel is foolish S by the long winter of Reaganism (following the none hospitable - too - autumn of Carter's reign), are setting their sights far too low. They ad- on several accounts. First, extending access without fundamentally altering the health care system would recreate the problems that vise us to mute our fight for fundamental reform of the led to Reagan's successful assault on access to care. Costs U.S. health care system, and instead to pursue more would skyrocket as private insurers and providers scram- " realistic " goals such as the extension of coverage un- bled to enrich themselves by " serving " the newly in- der Medicaid, " catastrophic " coverage, mandated em- sured, while avoiding the restraints on profit and irra- ployee coverage, and the like. To the contrary, we think the time is right to vigorously advocate a national health program assuring universal comprehensive coverage in tional behavior that a universal public system could im- pose. The oppressed would continue to be ghettoized in separate programs such as Medicaid, ripe for attack a unified public system. when the political pendulum next swings back. The fun- In the past year, debate on health policy has moved damental causes of the crisis in health care would re- markedly to the left. The issues of social justice and ac- main untouched, and when the cost crisis reemerges in cess to care have again appeared on the mainstream poli- a few years, reactionaries will again successfully blame cy agenda after a decade of debate and legislation domi- the programs of the left - forcing us once more to de- nated by cost containment. The people of Massachusetts fend Medicaid, the worst health program for the poor overwhelmingly approved a referendum endorsing a na- in the developed world. tional health program, and Governor Dukakis and the legislature have taken steps, if mainly rhetorical ones, toward universal health insurance. The rhetoric of ac- cess will play prominently in Dukakis'presidential bid. In contrast, a national health program could solve the crisis - provide universal access and contain costs. Only a universal, comprehensive public system can put teeth into health planning and eliminate the excess adminis- Legislatures in more than half the states are considering trative expense - $ 70 billion annually - needed to en- measures to extend access to care, in some cases dra- force inequality and insure profitability. The Canadian matically. Even President Reagan has been forced to en- national health program, which assures universal and dorse " catastrophic " health care protection, though the comprehensive care at only 75 percent of the per capita - proposals behind his rhetoric are, as usual, useless or cost of U.S. health care, provides proof of the feasibility worse. The next few years offer exciting opportunities and long - term economic stability of a national health pro- for progress. How can we best take advantage of these gram. Moreover, in such a univeral system the op- opportunities? pressed cannot so easily be singled out for cutbacks - The vast majority of the Amercian people, about two- as shown in the United States, as well, by the relative immunity to cuts in funding of universal entitlement pro- David U. Himmelstein and Steffie Woolhandler practice and grams such as Social Security. teach internal medicine at the city hospital in Cambridge, Mass. They are both members of the Committee for a National Health Want a Slice? Demand the Whole Pie Program. Indeed, advocating for narrow reform is not even the 2200 Health / PAC Bulletin Summer 1988 best way to win narrow reform. The best way to get a slice is to forcefully demand the whole pie - particular- ly when two thirds - of the populace supports us. Thus Medicaid was not the result of agitation for a limited pro- gram to cover some of the poor, but a response to the threat of national health insurance. The then Secretary of Health, Education and Welfare, Wilbur Cohen, has since described the process: The inclusion of Medicaid in the 1965 law evolved when Wilbur Mills asked me what his answer would be to the inevitable question... " Isn't Medicare an'entering rwye'dignes'utroa ncae bcroovaedreagre porfo gervaemry oonfe ?n a"t iIo snuwgigdees'tceod mtphualts oi-f he included some plan to cover the key groups of poor peopleM ehdei, chaei dw oeuvlodl vheadv ef rao mp otshsiisb lper oabnlsewme ra ntdo dmiiss ccursistiiocni.s m. The recent Massachusetts experience again shows the wisdom of honestly advocating what we know to be the best, indeed the only, real solution. The national health program referendum, placed on the ballot against the urgings of " incrementalist " friends, was instrumental in creating a climate for change. In this climate Dukakis has been only too happy to offer inadequate compromise measures. There will always be plenty of politicians pre- pared to make compromises for us; we needn't make them ourselves in advance. Third, there is much broader support for basic reform of health care than for minor tinkering that would sim- ply extend coverage to some, or even all, of those cur- rently uninsured. Extending coverage does nothing for the vast majority who have insurance but are dissatis- fied with our current system - because of gaps in cover- age, inadequate preventive care, horrible long term - care, or its many other deficiencies. The narrower our de- mands the narrower our constituency. for providing too little care inherent in per case - prospec- tive payment systems like DRG's or HMO's, since money not spent on patient care cannot be used for in- stitutional expansion. Similarly, the incentives for provid- ing too much care inherent in fee service - for - hospital reimbursement are eliminated. Lump - sum payment for operating expenses eliminates billing and greatly sim- plifies administration. Separate budgeting of capital facili- tates rational health planning. The system should be administered by a public or quasi public - body. Private insurance firms have an incentive to in- crease costs and bureaucracy since these result in higher income. The cost of insurance overhead and adminis- tration in private plans is three times higher than in pub- lic programs in both the United States and Canada. Health activists should advocate a realistic solution to the health care crisis. That solution is a national health program. By aiming lower we risk shooting ourselves in the feet.D 1. Navarro, Vicente, " Where's the Popular Mandate? " New England Journal of Medicine, 307, pp. 1516-18. 2. Colombotos, J. and C. Kirchner, Physicians and Social Change, New York: Oxford University Press, 1986. 3. Cohen, Wilbur, " Reflections on the Enactment of Medicare and Medicaid, " Health Care Financing Review, 1985: supplement, pp. 3-11. What is to Be Done Whatever reforms we propose we will undoubtedly face many generations of continuing struggle to achieve a just health care system and a healthful society. The question is which reforms move us forward and open up new space for struggle, and which leave the fun- damental problems untouched, condemning us to fight old battles repeatedly. There is an element of self- fulfilling prophecy to the claim that more radical de- mands are untenable. Obviously we will not get more than we demand. The following measures are realisti- cally achievable in the next decade, and are the mini- mum necessary for a viable and stable solution to the current crisis in health care: Coverage must be universal and comprehensive under a single program. This would assure access, avoid a " class two - " system of care, minimize administrative expense, and provide a firm political base of support. Allowing com- peting private insurance programs or balanced billing negates this advantage. Out pocket - of - payments should be eliminated. They are un- McCarthy popular, unnecessary, administratively unwieldy, and unfair to the sick and the poor. Hospitals must be paid on a lump - sum basis for operating expenses, with capital spending budgeted separately - as is done in Canada. This minimizes the economic incentives Timothy Summer 1988 Health / PAC Bulletin 21 Budget Crisis at Pine Ridge An Indian Reservation Struggles for Decent Care JOSHUA LIPSMAN merican Indians are one of the few groups hours (or more, if the snow is bad) to the nearest town A in the United States who have the legislated right to receive health care from the U.S. government. The right is based on the Snyder Act of 1921, which guarantees health care serv- of 50,000. Work on an Indian reservation in South Dako- ta is not attractive to physicians used to conventional amenities in their communities. Eight of the 25 poorest counties in the nation are on or near South Dakota reser- ices to Indian people. It is ironic that one of the few vations according to a 1987 United Methodist Church groups entitled to health care in the United States has study on poverty. The poorest county in the United allotted to it a smaller proportion of health care resources States is Shannon, on the Pine Ridge reservation. than any other group in the country. Another factor is the frustrating nature of the health Such a disproportionate allotment may be traced to the problems of the Sioux. The century - long legacy of nineteenth century view of the Indians as an obstacle poverty and ignorance has left the Indians plagued by to white economic development in Indian territories. In- alcoholism, violence, self neglect - , and other social "" dis- dians were not considered people - t hey were barriers eases that the average physician is inexperienced in to the expansion of American frontiers. Indigenous In- treating. dian communities could not withstand the onslaught of white colonization backed by the U.S. Army. In this cen- tury, poverty and ignorance created by the destruction of traditional Indian societies have left the Indians dis- enfranchised and ineffective in advocating for themselves American Indians get a at the federal level. The Indian Health Service (IHS) is the federal agency smaller proportion of charged with providing health care services to Indian people. It is divided for administrative purposes into a health care resources number of regional areas. The Aberdeen Area consists of 12 reservations, termed " service units, " in the upper than any other group. Midwest. The largest of the Aberdeen Area service units by far is Pine Ridge, home of the Oglala Lakota or Sioux Indians. The reservation, about the size of the state of As an employer, the IHS is not appealing to many Connecticut, is the second largest in the United States. physicians. It does not provide the psychological incen- Approximately 18,500 people (no accurate census tives that might attract physicians who would be interest- figures are available) receive services at Pine Ridge Hospi- ed in assignment to the reservation despite the absence tal (originally constructed in 1928) and at five outlying of material rewards. Always limited in funds, the IHS clinics. Historically, the quality of care delivered in Pine Ridge has been inadequate. A few good providers (doc- can hardly meet its obligation even to provide services for the Indians. tors and others) were always present, though most physi- The IHS receives $ 800 to $ 900 per capita for health, cians at Pine Ridge, until recently, were uncommitted water, sewer, and sanitation. The national average for to the people. Some came newly out of medical school all Americans is twice that for health alone. The nation- with little if any advanced training or experience, forced al physician - to - patient ratio is 1 to 1,000. In the IHS it to serve in a remote area not of their choosing to pay is 1 to 1,300. At Pine Ridge, the physician - to - patient ra- back scholarships or loans. Some were physicians bet- tio is 1 to 2,000. ween jobs or retired physicians, with little interest in long term - solutions to the health problems of the Sioux. New Leadership, New Hope AH worked long hours and many suffered from burnout. The Aberdeen Area office made efforts to substantial- The undersupply of experienced and motivated doc- ly improve the quality of care at Pine Ridge from 1984 tors is attributable to the remoteness of Pine Ridge, two to early 1987. In January 1985, a new service unit direc- tor began making important changes, from the cleaning Joshua Upsman practices family medicine at Pine Ridge, whprof the hospital to the more complex task of increas- he was recently named director of community health servicing Medicare and Medicaid collections from the U.S. 22 Health / PAC Bulletin Summer 1988 Nurse Beverly Two Bulls attends to Channing White Butterfly. government. Indian people are eligible to receive benefits from Medicare and Medicaid if they meet age or economic criteria (as most do), and the IHS may increase its revenues by billing the programs. Before 1984, less than half a million dollars were collected annually because re- quests for reimbursement were not made consistently. Aberdeen deliberately recruited better trained - physi- cians to Pine Ridge. In 1985, at any given time there were half a dozen physicians at Pine Ridge, of whom, with staff turnover, one or two usually were board certified - or board eligible - specialists. In 1987, there were a dozen physicians all but one or two of whom were specialists. Many of the physicians were attracted to Pine Ridge by the variety of professional colleagues available, by the increase in support services that came with the increased collections, and by the deliberate efforts of the service unit director to create a receptive environment. Though the majority of the physicians are still " payback, " they are better trained, more experienced, and more willing to serve the disadvantaged population. It is the brief and dramatic improvement at Pine Ridge from 1985 to 1987 that is at the heart of the current cri- sis. With die rise in the number of support staff and physicians came an expectation, a vision, of a critical mass of people and resources able to make a lasting and positive impact on the health of the Sioux. We would be able to prevent illness and make keeping people well a priority over treating them after they become sick. In fact, patient visits rose 40 percent over three years, an example of demand for services rising to meet supply. The dream is rapidly fading with the budget crisis of 1987. Cuts that Draw Blood President Ronald Reagan has no reputation as a friend of the poor. Numerous examples have been documented elsewhere of human suffering occurring as a result of the failure of Reagan's " safety net " to provide for the disadvantaged. Indian people are not excluded from the effects of cutbacks, though Reagan's cutbacks cannot be blamed completely for the budget crisis at Pine Ridge. No public report is available, but it is said that Aberdeen mismanaged several million dollars in fiscal year 1986, and service units are being made to pay for dollars lost at the area level. The good intentions of the area office from several years ago fell victim to a serious lack of management expertise, aggravated by the Reagan ad- ministration's diversion of essential funds away from human - needs programs. Figures and statistics for the Pine Ridge Service Unit are hard to tie down. They vary depending on which administrator you ask, and when. Due to an inability at the area level to manage large amounts of money, a firm budget for the service unit may not be set until the latter part of the fiscal year. Budget figures may represent reconciliation of projections with ultimate outcomes. There appear to be two major sources of funds for the hospital and clinics. The smaller source is the Medicare Summer 1988 Health / PAC Bulletin 23 Casey Tom Pharmacist Cynthia Roach examines hands of patient James Fourier. and Medicaid collections. Those totaled $ 560,000 in 1984, peaked at $ 2.9 million in 1986 (which included back col- lections), and stabilized at $ 1.8 million for each of 1987 and 1988 (expected). The larger source of funds is the IHS line item " Hospitals and Clinics, " which rose from $ 3.9 million in 1984 to 5.5 $ million in 1987. The figure has been reduced to $ 4.3 million for 1988. The budget picture is made confusing by allegations from Pine Ridge that hundreds of thousands of dollars have been taken inappropriately by Aberdeen for ad- ministrative purposes, and by allegations from the area of poor local budgeting, requiring a bail - out of the serv- ice unit of at least a million dollars. It is true that Pine Ridge was not prepared for the drop in Medicare and Medicaid collections after the peak in fiscal year 1986, though that alone cannot account for the severity of the current crisis. Area mismanagement is a major factor. In 1987, the number of staff positions at Fine Ridge fell precipitously because of the budget crisis. The process was mostly by attrition, by a few lay offs -, and by the slashing of the majority of temporary positions to half or three quarters - time. The number of physicians and physician assistants providing general medical and pediatric care fell from 20 providers to 13, a drop of 40 percent, at a time when visits were up 14 percent. In July of 1987, there were 236 employee positions at Pine Ridge, an all time - high, of which 101 were tem- porary, most of those full time -. As of October 22 1987,, there were 181 employee positions, though the figure is misleading, since of the remaining temporary posi- tions, only a small number are full time -. A more accurate number of full time - equivalent positions in October would be 164, a loss of 72 full time - positions, represent- ing a 30 percent reduction in hospital staff in three months. Pine Ridge has lost 30 percent of its staff. The effect of the cuts on hospital and clinical services is considerable. A staff pediatrician, after spending his day seeing patients in the clinic, went to make rounds on children hospitalized for lung infections. He found that because of a nursing shortage the children were not getting the breathing treatments they needed. The hospi- tal did not have enough nurses available to look after the children. On 23 days in December 1987, hospital nurse inpatient - to - ratios did not meet even IHS stan- dards. The radiology department has gone from five and one half - technicians to two and one half -. Those two and half one - technicians are supposed to provide 24 hour - X- ray coverage for 85,000 expected patient visits in 1988. The laboratory has gone from ten technologists to five. The Pine Ridge optometrist cites IHS (and professional) standards that recommend one optometrist and two 24 Health / PAC Bulletin Summer 1988 te Nurse Elayne Frazier cares for newborn at the Pine Ridge Indian Hospital. assistants per 5,000 patient population. As he and his two assistants are the only providers of eye care on the reservation, he finds a 75 percent unmet need for eye care. The eye clinic opens its books for appointments ev- ery two weeks on Friday at 8 a.m. The clinic is usually booked for the following two weeks in 20 minutes. The optometrist says that it is not uncommon for him to find a patient who can hardly see two fingers wig- gled in front of his face. When such a patient is asked how he arrrived at the clinic that day, he says " I drove myself. " The optometrist writes, " I honestly feel that poor vision, from lack of glasses, represents a significant handicap that [bears] on economics and productivity on the reservation. " The single optometrist was added in 1986, before which there was none. Pine Ridge Fights Back The budget crisis is particularly stressful, aside from the actual cuts, because of frequent miscommunication between Aberdeen and local administration and hospi- tal staff. Employees feel disenfranchised, and experience a decline in job satisfaction. One nursing administrator says, " I'm going to resign. These are my people. I can't watch them be sacrificed to a bottom line of dollars and cents. " A number of staff have left Pine Ridge out of frustration and disappointment. Rumors abound of cronyism and misappropriation of funds at all levels. It is said that additional administra- tors are being hired in Aberdeen while people who pro- vide direct patient care are let go at Pine Ridge. One as- sistant department head says, " I'm furious that they're hiring more GS 13's and 14's [paying high - positions] in Aberdeen, while the GS 3's in my department, making $ 5.39 an hour, are cut back to half time -. How can they feed their kids on that? " Some of those GS 3's went without heat this winter because they could not afford it. The reaction to the budget crisis at Pine Ridge has varied. Most employees are unwilling to speak out, many because they are from the community. With a reservation - wide unemployment rate of 85 percent, they need to be careful about protecting their jobs. The phy- sicians are less vulnerable. On November 20 1987,, they held a press conference La La highly unusual move for We must bring needed resources to this most needy population. federal employees - to publicize the crisis at Pine Ridge. At a meeting in response to the press conference, the area director offered little hope for a satisfactory resolu- tion. He said that no more funds are available and that the staff will have to scale back its expectations. A press release from the administration promises a Summer 1988 Health / PAC Bulletin 25 new hospital to start construction in 1989 or 1990, and a new free standing - clinic to be built beginning in the spring of 1988. These projects, which have been promised for some time, will hardly help the people who need services now. Tribal officials and other community members have condemned the cuts publicly and called for IHS account- ability. A tribal representative said, " It is ridiculous for the Aberdeen Area office to call for cuts. There isn't one hospital bed in the federal building in Aberdeen. They don't take one blood pressure or one temperature meas- urement, yet they require us to cut staff. " The administrations locally and at the area level have said that despite the cuts, the service unit is better off than it was before. It is true that in the past few years there have been major additions in optometry, surgery, obstetrics, kidney dialysis, maternal and child health, and communicable disease control. An experienced obstetri- There is a shortage of experienced and motivated doctors. cian and a surgeon have saved health care dollars by providing services at Pine Ridge that previously were ! > f J Tto expansion of white settlement across 3!'^ J North America did more man deprive | ^ i, American Indians of their land. It disturbed IT V'native cultures in a profound and permanent way, and with them the patterns of be- havior that kept Indians healthy. Today's American Indians, impoverished, desperate, are in poorer health than nearly any other group in the United States. In 1985, me Office of Technology Assessment pub- lished Indian Health, the most comprehensive study to date of the health status of American Indians. (In- dian people prefer to use this term, as opposed to " Native American. ") Although the study covers only those Indians who live on reservations and presents figures for mortality alone, it has much to tell us. Perhaps its most disturbing statistic is that 37 percent of reservation Indians die before age 45, compared to 12 percent of the total U.S. population. In all, the mor- tality rate on reservations is 40 percent higher man among Americans as a whole. Most of the leading causes of death among Ameri- can Indians - liver disease, digestive cancer, accident, homicide, suicide - a re related in great measure to alcohol abuse. While Indian people have lower - than- average mortality rates for heart disease, stroke, and most forms of cancer, their rates of death from alcohol- related causes are several times higher than for the country as a whole: four times higher for liver dis- ease, twice as high for homicide. The poverty of the Indian diet results in high mortality rates for diabetes and renal failure, both almost three times the nation- al average. Tobacco abuse is also widespread on reservations. According to Tom Welty, an epidemiologist with the Indian Health Service, health problems typical of the Third World - tuberculosis, high infant mortali- The Poor State ty - h ave been successfully addressed by the IHS since the mid 1950's - . American Indians are now plagued by health problems stemming from the changes in their lifestyles brought on by contact with Europeans. " Socioeconomic conditions among American Indi- ans create the kind of despair mat drives people to anesthetize their pain through alcohol, " says Ron Rowell, head of the National Native American Preven- tion Center in San Francisco. On some reservations, unemployment runs as high as 85 percent. Median family income among American Indians is 30 percent below that for the nation as a whole. And alcoholism isn't simply an unintended by product - of the displace- ment of native societies, but one of its causes. " The Europeans used alcohol, " Rowell says, " as a weapon of conquest. " Before contact with Europeans, Indian nations lived off the land, the majority of mem as farmers. " The whole idea of the reservation system, " Rowell says, " was to get Indians off the best farmland and give it to the white settlers. " By no means do reservation Indians live in a state of nature, he points out. The Navajo, for instance, were originally farmers, not the shepherds they have been forced to become. The In- dian diet, once high in fiber and low in fat, has been turned upside down. " There's little knowledge among Indian people about nutrition, " Rowell says. " They buy their food at Safeway, like everyone else. " Chronic unemployment and high - fat diets have led to obesity, triggering what public health officials be- lieve to be a genetic predisposition to diabetes among American Indians. The disease, with its related renal disorders, has reached unheard - of proportions in many areas (30-40 percent of adults on reservations in the northern plains have diabetes, 50 percent of Ari- zona's Pima have kidney disease) and its incidence is growing. 2266 Health / PAC Bulletin Summer 1988 purchased outside the IHS (the savings were absorbed by Aberdeen). An interdisciplinary maternal and child health committee has brought WIC (a federal food sup- plement program) to the reservation and is addressing the problem of infant mortality. The tuberculosis con- trol program has doubled the number of people on chemoprophylaxis. Quality assurance efforts contribut- ed to hospital re accreditation - in 1987. Those programs are becoming skeleton services with the current round of cuts. The availability of resources is returning to the unacceptable level of three years ago. What had been quietly moving ahead is falling back at an alarming rate. We are losing the resources to provide the preventive programs needed to improve the health of the Sioux. Our programs will not succeed in accom- plishing their objectives because of inadequate staffing and funding. Last year, the dream of quality care began to fade rapidly. The issue clearly is not how to maintain the status quo. The issue is the most effective means to bring needed resources to this most needy population of Native Ameri- of Indian Health Heland Phylis s bad as present conditions are, one need A only compare them with those that prevailed before 1954 to see that there has been progress. In that year, the fed- eral government first began to take seriously its com- mitment to provide health care for American Indians by moving the IHS from the Bureau of Indian Affairs to the Public Health Service. Another important step was taken in 1976, with the passage of the Indian Health Care Improvement Act. " There's a commitment now, more than in the past / Welty says, " to deal with diabetes, and alco- hol and tobacco abuse /'Many of the efforts in this direction involve programs initiated by tribes them- selves. The Zuni of New Mexico, for example, have developed a program of diet and exercise - the slo- gan is " I outran diabetes " - that is being widely reproduced. Each of the IHS's 12 areas includes a diabetes - control office, with programs that have been in full swing for several years. These efforts, however, as all the facilities and pro- grams of the IHS, face a shortage of funds. An an- nual budget of $ 700 million must be divided between 45 hospitals, 71 health centers, and several hundred health stations. The IHS must also address the deliv- ery of health services to the 60 percent of the nation's 1.4 million Indian people who live in cities and share the health problems found on reservations. Since 1976, the IHS has established urban Indian health centers in approximately 40 areas. Funding for these centers totaled $ 9.8 million in 1986 - far short of what is needed to serve all who require care. Un- accustomed to the indignity and delays involved in using public hospitals or establishing eligibility for en- titlement programs, urban Indians often end up with no health care at all. Until the federal government significantly increases its support for health services on reservations and ur- ban health centers- t he IHS estimates it needs another $ 250 million a year to provide even minimum care - t he health of American Indians will improve at a glacial pace at best. Political pressure can help ac- complish this - direct action informed by the notion that native communities have a right to health care as good as any in the country. " The IHS, " Welty says, " is like a health maintenance organization, and Indian people have already paid the premiums for their HMO - the land you're living on. " ' - BUI Deresiewkz Summer 1988 Health / PAC Bulletin 227 Casey Tom Tina Zerbe, a nurse, bandages Hobart Keith at the Pine Ridge Indian Hospital. can people. U.S. Senator Tom Daschle of South Dako- ta, who sits on the Indian Affairs Committee, has visit- ed Pine Ridge and met with physicians and tribal lead- ers to discuss the health care crisis. On his most recent visit in early May, he accompanied Senator Daniel In- ouye, chairman of the committee, who appeared respon- sive to our concerns. Letters to those officials are needed to thank them for their attention and to encourage their efforts to improve conditions at Pine Ridge. Individuals should write their congresspeople, as well as Senators Daschle and Inouye, to protest the cuts at Pine Ridge and to demand that health care resources be made available to bring the health status of Pine Ridge up to national standards. * 28 Health / PAC Bulletin Summer 1988 Vital Signs Edited by Tammy Pittman The Candidates and AIDS Ronald Reagan has been danger- ously negligent in his response to AIDS. Can we expect any change from the new president in January? Probably not. In a speech at the annual meeting of the American Association for the Advancement of Science last Febru- ary, Dr. David Baltimore, Nobel laureate in medicine and physiology, criticized the presidential candidates for their lack of leadership against AIDS. " Echoing the silence from Washington, there have been no bold or comprehensive AIDS pro- grams presented by the candidates, " he said. " We need political leader- ship, but we are given silence. " In the months since Baltimore's speech, the field of candidates has narrowed considerably, yet none of them has emerged as a leader on this issue. Jesse Jackson and Michael Dukakis both address the obvious need for improvements in AIDS education and research, in civil rights for HIV positive - people, and in treat- ment for drug users, but their promises are vague. Dukakis speaks of committing " will " and " re- sources " to the problem. According to Vicente Navarro, Jackson's health policy advisor, Jack- son is " sympathetic " to the $ 3 bil lion research proposal recommend- ed by the Rainbow Coalition, but he has not expressly adopted it. Although he has not spoken specifi- cally about funding, Jackson, unlike Dukakis, is specific about where money for AIDS would come from; it would come from the military budget. George Bush thrusts the responsi- bility for leadership and spending onto local government and the pri- vate sector. Furthermore, he is par- ticulary silent on the problems of drug abuse and AIDS. His " plan " calls for a " change of behavior " motivated by education. " Those at risk will not change unless they know of the terrible dangers they face, " he preaches. Several government groups have developed specific budgetary proposals for the fight against AIDS. The president's AIDS commission has drawn up a comprehensive plan Summer 1988 Health / PAC Bulletin with a $ 10 billion budget, $ 2 billion of which would support treatment on demand for IV drug users. The National Academy of Sciences ' research and education programs would require $ 2 billion a year in new expenditures by 1991. None of the candidates, however, has en- dorsed either of these plans or has stated how much funding he would allocate for AIDS in 1989. Perhaps political motives have si- lenced the candidates. Campaign pressures prevent them from com- mitting themselves to expensive funding proposals. Whatever the reason, the candidates will keep si- lent until we force them to talk. - Anne McDonough AIDS and the Needle Debate A year and a half is about all we have left before the AIDS epidemic will be unstoppable among in- travenous drug users, their sexual partners, and children, according to New York City Health Commission- er Stephen Joseph. With drug users now accounting for the majority of new AIDS cases in New York City, Joseph has had to battle law enforce- ment officials and resistant commu- nity groups to institute even a small- scale pilot needle exchange - program that will reach only a tiny fraction of the city's 250,000 addicts. He spoke at a recent forum organized by the Community Service Society (CSS) and the Association for Drug Abuse Prevention and Treatment (ADAPT) to debate New York City's con- troversial program to exchange clean needles for used " works. " While supporting the program, fel- low panelist Yolanda Serrano, execu- tive director of ADAPT, favored a much more activist approach, one that would bring education along with needles into the drug users ' own communities. ADAPT, a non- profit educational and outreach or- ganization, has called for needle dis- tribution in defiance of the law if necessary. New York is one of 11 states that outlaw possession of hypodermic needles without a prescription. Dr. Joseph admitted that the pro- posed program might be " too little, * 2299 too late, too timid, " and " set up to fail, " but he defended it as " all we can get in the current climate. " With inadequate federal funds available for drug treatment or education and community groups pressuring law enforcement officials to crack down on drug use in their neighborhoods, what's a health commissioner to do? Sparks flew as the vocal audience of several hundred, many of them former addicts with HIV positive - di- agnoses, criticized the city and state's long delays in approving the needle- exchange program, while at the same time deriding it as being much ado about little. Quoting Joseph's year - and - a - half target date, one former drug user and ADAPT volun- teer commented, " It might be more convenient to time yourself with the amount of people that are dying and how fast they're dying. " Another cited a proposed target of 300 need- les for 300 users in five boroughs and exclaimed, " There's that many ad- dicts on my block! " But audience and panelists alike saved their greatest scorn for panelist Arthur Diamond, Deputy Chief As- sistant for the city's Special Narcot- ics Prosecutor, the only speaker to condemn the program outright. " We do not believe that it's in the best in- terests of society in general to have the government supplying or en- couraging drug users, " he said. Faced with evidence of success from similar programs in Europe, Dia- mond argued that needle exchange - programs are doomed to fail here be- cause addicts would continue to share needles even if clean ones were available. Panelist Robert Bixler, Deputy Director for AIDS Education and Training for the Narcotic and Drug Research Training Institute (an affili- ate of the New York State Division of Substance Abuse Services) reminded Diamond that we're " fighting the battle of HIV infection, not the battle of drug abuse. " The needle exchange program will " buy time " while we work to provide treatment and education for addicts, he argued. For more information about the fight against AIDS among drug users, contact ADAPT, 85 Bergen Street, Brooklyn, NY 11201 (718) 834-9585. - Ellen Bilofsky m ^ mwmmmms ^ mmmfm ^ i A Bilofsky Bilofsky El en ADAPT outreach worker Michael Jackson asks, " What's all the fuss? " about giving out clean needles to addicts. He was one of several hundred who attended a recent forum on AIDS and needle exchange in New York City. Is the Dukakis Bill Any Good? Last April, Governor Michael Dukakis signed Massachusetts'new. Medical Securities Act, hailing it as the first universal health care law in the nation. The final version was drafted largely along the lines of a bill designed last December by State Sen- ator Patricia McGovern after a Dukakis proposal was nearly killed in the House. While hardly the kind of program that health care progres- sives would design, we in the Health Care For All Campaign, a coalition of consumer groups and other health care activists in Massachusetts, view it as a major step forward. The most controversial part of the bill is a surcharge, beginning in 1992, on businesses of more than five em- ployees that do not provide health benefits. These employers will be re- quired to pay up to $ 1,680 per em- ployee. The surcharge, together with general state revenues, will be used to broker health insurance for those who are currently without it. Beneficiaries will also be required to pay premiums on a sliding scale. Ex- emptions from the surcharge for small businesses and part time - workers raise concerns about the adequacy of the funding mecha- nisms. Numerous provisions will kick in between now and 1992. These in- clude a requirement that all insur- ance policies in the state provide well child - care; a Medicaid buy - in program for disabled adults who wish to return to work and for par- ents of disabled children; and, begin- ning in 1990, a surcharge on small. employers (less than $ 17 per em- ployee per year) to insure the unem- ployed. The program's lack of cost- containment measures for hospitals is troubling, as is the uncertainty of adequate funding for the proposed benefits. But the political reality is that systemic reform - such as mov- ing toward a program like that in Canada - is not even on the agen- da of any of the interest groups that determine health policy, Under- standing this, Massachusetts activists view the new law as a platform on which to build. - Larry Bressbur 30 Health / PAC Bulletin Summer 1988 Q: With virtually no advertising, no large donors, or foundation grants, how does Health / PA,, keep going? A: READERS. To keep going - and to continue growing - Health / PAC needs your help in reaching out to new readers. We're 20 years old this year and deeply committed to continuing our tradition of independent health care journalism. We've come this far by bringing you vital reporting and analysis of critical health care issues in a magazine that also offers hope and encouragement for the future of health care. As the massive need for care continues to go unmet... as the AIDS epidemic grows without an adequate federal response... as our decaying public hospital system is strained to new limits, and as fragile health and civil rights remain under attack, the Bulletin will continue to speak out as a voice of conscience and concern. Help Health / PAC by recommending the Bulletin to others, giving a gift of membership to a friend or colleague, or by sending a contribution. Yes, I want to become a member of the Health Policy Advisory Center and receive the Health / PAC Bulletin. * Individuals $ 35.00 * Institutional subscription $ 45 * * Students / low income $ 22.50 * I'd like to send the Bulletin as a gift to the person (s) at the address below. My payment is enclosed. _Please notify them of my gift. * I want to help Health / PAC support the fight for health care. Enclosed is my tax deductible contribution of $ 15 $ 25 $ 50_ $ 100 _other. Name City Charge: Visa Mastercard No. State Zip Exp. Date Signature. Send your check or money order to: Health / PAC Bulletin, 17 Murray St., New York, N.Y. 10007 Inside: The health crisis on the Pine Ridge Reservation page 22 Counterarguments for a national health program page 15 Why incrementalism is defeating self - page 20 Reagan's health care union busting - page 8 Health Polity Advisory Center 17 Murray Street New York, New York 10007 NOTE TO SUBSCRIBERS: If your mailing label says 8703, your subscription expires with this issue. 2nd Class Postage Paid at New York, N.Y.