Whichever presidential candidate ends up in the White House will start his term with a stack of troubles facing the nation's healthcare system, from runaway cost growth to 45 million uninsured. How President Bush and Sen. John Kerry would address those problems has become one of the hottest domestic issues in the campaign, with charges and countercharges exchanged daily on the stump.
In their third presidential debate, Bush and Kerry drew philosophical lines in the sand on health policy-Bush would employ market forces to help businesses afford coverage while Kerry has promised to cover 95% of all Americans, including every child in the country.
For hospitals, much would be the same regardless of who wins: Both candidates have pledged to reduce the federal deficit in five years, which could squeeze Medicare payments when expensive entitlement programs are reined in, as they were by the Balanced Budget Act of 1997. Bush and Kerry favor tax credits and State Children's Health Insurance Program enhancements to boost coverage. Both would make efforts to improve quality-such as promoting broader use of information technology and continuing experiments to financially reward providers who deliver superior care.
Similarities essentially begin and end there, however.
Especially on the uninsured, Bush and Kerry have sketched out widely divergent approaches, with the president's centered on shifting more of the responsibility for healthcare to individuals and the senator's focused on dramatically expanding the government's role in coverage.
Political realities may dictate which plan is feasible. If Bush wins re-election-and Congress continues to be controlled by members of his party-the president would have little trouble advancing his health agenda, which is more incremental and agreeable to Republicans.
If Kerry lands in the White House, he will likely face the opposing party in Congress and a major uphill battle gaining consensus for a healthcare plan that would cost anywhere from $650 billion to $1.5 trillion over 10 years.
"Bush is moving down the path of a consumer-directed environment and Kerry's plan I still don't understand exactly, but it certainly isn't that," said John Toussaint, president and chief executive officer of ThedaCare, a three-hospital system in the battleground state of Wisconsin. "I don't think going back to a federally managed system is necessarily going to be good for anybody."
Who will win and who will lose in healthcare after the election dust settles? On some issues and for some industry sectors, neither Bush nor Kerry represents a clear advantage. Experts said that neither candidate offers any real way to control spiraling healthcare costs, for instance. And while the consensus is that Bush's proposal to cap damages on malpractice lawsuits will save more money than Kerry's plan, many say that malpractice insurance represents such a small part of overall healthcare costs that the issue is little more than a political ploy.
Still, the outcome of the election may tip the scales on many healthcare issues. On the uninsured, for example, Kerry's plan is widely viewed as more comprehensive and substantial than the president's-but also far more expensive and heavy-handed. At the same time, Bush faces a perception among some patients and providers that he isn't doing enough to expand coverage and access.
"Kerry is putting out a proposal to cover all Americans, and that's our No. 1 issue here," said Stephanie Thomas, chief operating officer of Denver Health, an organization with a 291-bed hospital and a network of community health centers. "We're starting to see the impact of not having some sort of national leadership on this." Denver Health provided $240 million in uncompensated care last year and expects to provide $270 million this year.
"We can't sustain that," Thomas said. At deadline, Bush and Kerry were running neck and neck in Colorado, where nine electoral votes are up for grabs in a state that went for Bush in 2000.
The coverage conundrum
Though the Kerry camp argues that it would provide almost universal coverage, independent analysis has pegged the number of uninsured who would be covered under his plan at about 27 million. That, however, is still significantly higher than the 2 million to 8 million covered under Bush's proposal.
Kerry's healthcare platform builds on the current system by expanding Medicaid and SCHIP. It would also try to make insurance more affordable to employers by modeling a new plan after the one now available only to federal employees. That plan would be open to all businesses and individuals and would offer coverage at more affordable prices. Kerry would also offer tax credits to small businesses and their employees to pay up to half of the cost of premiums.
Representatives of both campaigns said hospitals and other providers would fare well under their administrations-Bush was instrumental in adding $25 billion for rural providers to last year's Medicare Modernization Act, but Kerry's team says the current administration's economic policies will eventually punish providers.
"A second Bush term is bad for providers," said Sarah Bianchi, domestic policy director for the Kerry campaign, arguing that the president's tax cuts have busted the budget and will eventually force more fiscal restraint. "When a big budget crisis comes, people look to Medicare," Bianchi said.
It would also be bad for patients, Kerry said last week from a campaign stop in Fort Lauderdale, Fla. Speaking on the topic of the flu vaccine shortage, he said, "Yet again, the Bush healthcare policy sends a clear message to Americans: Don't get sick."
Bush's strategy to reduce the number of uninsured centers on tax credits for people without access to employer-based insurance or public insurance programs. He also wants to make health savings accounts and association health plans more available. And he has proposed allowing individuals to purchase insurance across state lines.
As a whole, the Bush administration's plan would move more Americans from the group market to the individual one, a strategy that some analysts find worrisome because such a transition could lead to worse health outcomes as well as higher costs.
Though Bush says his plan would give individuals more power and freedom over their healthcare, many worry that making consumers responsible for first-dollar coverage, as health savings accounts do, will lead them to forgo necessary preventive tests and screenings, leading to more serious illnesses down the road.
Questions of cost
Megan Hauck, deputy policy director for the Bush-Cheney campaign, said that while Kerry's plan may cover more people, it would also cost dramatically more. Other Republicans view Kerry's plan as little more than an unclear, unfunded mandate for coverage.
Kerry's promise to cover all Americans "is cheap, political talk. ... It's a statement of a goal without a plan," Rep. John Peterson (R-Pa.) said in an interview last week. As for hospitals, Peterson argued, Kerry would tend to favor urban facilities over rural ones.
"The big disparity in Medicare and Medicaid is because of the clout of urban legislators from Northeastern states who have stacked the deck to help their big-city hospitals," Peterson said.
As for the price tag of Kerry's plan, Princeton University healthcare economist Uwe Reinhardt pooh-poohs the argument that it would be too expensive. Even if it were to cost $1.5 trillion, as estimated by the conservative think tank American Enterprise Institute, he said, that would represent just 5% of the $29 trillion Americans will spend on healthcare during the same 2006-2015 period.
"To call that a government takeover of healthcare is bullshine," Reinhardt said.
Neither candidate has effectively addressed the issue of healthcare quality, ThedaCare's Toussaint and others argued. In the campaign, Toussaint said, he hoped one of the candidates would voice support for a permanent pay-for-performance policy instead of continually testing the waters with demonstration projects.
"Unless we start buying healthcare on the basis of quality and cost, we're never going to get out of the spiral we're in," Toussaint said.
Others within the industry suggested that none of the solutions discussed during the campaign will meet the twin objectives of insuring more people and reducing cost growth. "Kerry's plan would certainly expand coverage and in that way is incrementally better than Bush's, but it still doesn't answer the question of how do we provide a comprehensive healthcare system that's affordable for all," said Brian Palmer, president of the American Medical Student Association.
"The Kerry plan would move America down the road toward federal control of healthcare," Bush said at a campaign rally last week in Pennsylvania, where he criticized Kerry's vision as "bigger government with higher costs." Kerry's team disputes that characterization, saying patients and doctors alike would still make the healthcare decisions if his plan were enacted.
Kerry and his aides also point to a linchpin of his proposal that would help slow cost growth-the creation of a reinsurance fund through which the federal government would pay employers 75% of an employee's healthcare costs when they exceed $50,000. That in turn would lower premiums for employers who now see major increases following any catastrophic case.
As far as the managed-care industry is concerned, neither candidate's healthcare platform represents a clear advantage. Some see the administration-backed Medicare bill as a bonanza for managed-care companies because of the financial incentives it gives private plans to enter the Medicare market.
"If you're looking for HMO slush funds, George Bush is your guy," Kerry's Bianchi said.
The managed-care lobby has not been as happy about Bush's push for association health plans, which allow businesses to band together to negotiate better contracts and rates for their members. Opponents argue that such plans would fragment the market and would be difficult to regulate. Association health plans could also cut into the business of traditional plans.
Kerry's proposal calls for a patients' bill of rights that would allow patients to see specialists as needed and set up an external appeals process for HMO decisions. A patients' bill of rights has languished in Congress for years without any success, and health plans say they have changed their policies over the years to include elements addressed by Kerry's proposal.
Last but certainly not least is the perpetually controversial matter of medical malpractice. Bush would like to see caps on noneconomic damages awarded in liability cases; Kerry does not support caps but would reduce frivolous lawsuits by taking steps such as prohibiting individuals from bringing a malpractice action unless a qualified specialist determines a reasonable claim exists.
During a campaign stop last week in Pennsylvania, Bush attacked Kerry on his record on malpractice, noting that the senator voted 10 times against liability reform. "The effects of litigation culture are real in Pennsylvania," he said. "Medical malpractice premiums are soaring."
Peterson, who met last week with hospital officials in Pennsylvania, said medical liability reform is one of the top priorities for healthcare providers increasingly practicing defensive medicine to ward off expensive lawsuits, a theme Bush often invokes on the campaign trail.
For many hospital officials, the bottom-line concern is which candidate would do more to make their lives more difficult.
"Whoever gets elected, my concern is that more federal regulation and more bureaucracy is going to crush our ability to improve performance," ThedaCare's Toussaint said. "If that's the outcome, we've got big problems."
What do you think?
Write us with your comments. Via e-mail, it's [email protected]; by fax, 312-280-3183.
This election preview issue features a special report on state ballot initiatives affecting the healthcare industry. The special report starts on p. 22. Modern Healthcare also will publish a special election impact issue on Nov. 29, analyzing what the election results mean for healthcare.
KERRY vs. BUSH
Hospitals and providers
Kerry: Bring down number of uninsured to reduce hospitals' uncompensated care; financial incentives for providers to reduce errors, improve outcomes and invest in information systems.
Bush: Continued efforts to link payment increases to quality; continued support for rural hospitals.
Kerry: Review of cases for reasonable claims before they go to trial; punitive damages awarded only upon proof of intentional misconduct, gross negligence or reckless indifference. No cap on noneconomic damages.
Bush: Cap non-economic damages at $250,000.
Kerry: Expansion of Medicaid and the State Children's Health Insurance Program; creation of a new plan modeled on federal employees' plan; creation of a reinsurance fund to pay 75% of costs to employers if a worker's healthcare costs exceed $50,000; tax credits.
Bush: Tax credits; expansion of health savings accounts and assocation health plans; allowing purchase of individual insurance across state lines; expansion of community health centers.
Kerry: Reinsurance pool to lower costs for employers; greater use of health information technology; disease management and health promotion programs.
Bush: Malpractice reform; greater use of electronic medical records; disease management and health promotion programs; increasing consumer awareness of healthcare costs.
Kerry: Reimportation of drugs from Canada and other countries; allowing federal government to negotiate prices with drug manufacturers; hastening generic versions of prescription drugs to market.
Bush: Implementation of Medicare Modernization Act of 2003 to bring drug benefits to seniors.
Source: Modern Healthcare reporting