New faces in Washington confront some old problems in health MILAN KORCOK There may be new faces and "a new spirit" in Washington these days, but there are still some old, imponderable problems to test the endurance of legislators and lobbyists alike. And one of the oldest has to do with national health insurance. Will this be the term that some form of NHI is finally enacted? That depends on whom you listen to. In the 93rd and 94th Congresses, spanning the last of the Nixon years and the tenure of President Ford, there were well over a dozen national health insurance bills introduced, reintroduced, modified and ultimately ignored. Now there is a president who has time and again vowed to bring some form of national health insurance into being during his reign, but again it does not appear as if this is an especcially high priority - at least not in the early, palmy days of Jimmy Carter's Washington. Recently, Dr. Peter Bourne, special presidential assistant on health issues, assured this reporter that Carter was not about to neglect national health insurance as a priority, and that he hoped "the basic national health insurance plan would be implemented fairly quickly... hopefully sometime this year... But, having learned the need for political escape clauses, Bourne emphasized that "given the implementation period, by the time it (the bill) gets passed and so on, you are probably talking about 2 years from now at the minimum. Well that's cautious enough, but as some American Medical Association Congress-watchers see it, Bourne is whistling in the wind if he thinks his boss is going to move that quickly on an issue that has kept food on lobbyists' tables for generations. A Washington-based AMA spokesman told CMAJ that national health insurance at this time is "a sleeping issue. There is no activity whatever."
None the less the AMA has wasted no time in bringing forward its Comprehensive Health Care Insurance Act of 1977 (an update of its 1975 version), which AMA claims is "a forthright approach to national health insurance... (that) would extend health insurance to every American at a cost the nation could afford." The Comprehensive Health Care Insurance Act of 1977 was introduced into the Senate in January by Republican Senator Clifford P. Hansen of Wyoming and in the House of Representatives by Republicans Tim Lee Carter, Kentucky, and John J. Duncan, Tennessee, and Democrat John M. Murphy of New York. An AMA spokesman told CMAJ that the association decided to move early in introducing its bill, before there was any deluge, so that it could be given a clear, fresh hearing. It seems that the people interested in bringing in their own pet bills are now gauging the wind, testing out the sorts of options likely to gather favour or displeasure. Besides the AMA proposals, there are a couple of other bills worth watching. There is one from the Health Insurance Institute (which like the AMA bill leans heavily on private insurance participation), and there is the Health Security Act, sponsored by Democratic Senator Edward Kennedy of Massachusetts, to which the AMA is deathly opposed and which, of all the proposals, would most closely resemble the English-type NHS. The AMA is extremely wary of the Kennedy proposal as it would totally restructure the system of health care delivery. The program would be administered by the federal government and would be financed through new social security taxes and general revenues. All health services would be furnished by practitioners, institutions and others under contracts with the federal government. Under this scheme an indivi-
dual would enrol with a primary physician who in turn would be paid by capitation. He would receive an annual amount for each individual enrolled. There would be ways a physician could elect fee for service, but a lot of leverage over such actions would still seem to be exercised by the regional and local advisory councils which would have grassroots administrative powers. The AMA's Comprehensive Health Care Insurance Act should be of particular interest to Canadian physicians because of its clear resistance to government monopoly and its refusal to submerge physicians' powers. For example, the AMA act says that state governments would regulate insurance within the state, subject to federal guidelines established by a 15member health insurance board. The composition of this board is interesting. It would include the secretary of health education and welfare, the commissioner of internal revenue, a doctor of dentistry, a doctor of osteopathy, four members of the general public and seven practising doctors of medicine. Another feature on which the AMA stands pat is the sanctity of fee for service. There would be no meddling with that principle. Individuals or groups could go out and get the best deal offered by the various private insurers across the country, but when it comes to having the physician paid, the fees would be devised according to the "usual and customary or reasonable charges" that are in effect in that community. These fees vary from region to region, according to the cost of living, costs of practice etc, and the private insurers go along with these variations. This would continue, says the AMA. There would be no fee schedules; there would be no specific fees for service listed throughout the regions; payments would be made, as they have b.en in the past, according to "usual CMA JOURNAL/MAY 21, 1977/VOL. 116 1173
and customary or reasonable charges". It would remain possible for the physician to charge over and above what the insurance carrier allows for a specific service. Few do so now, says the AMA, 'but if the federal government attempted to become overly rigid in controlling fee levels, that could change. Following are some of the highlights of the AMA Comprehensive Health Care Insurance Act of 1977: Most persons would receive their health care protection under employer insurance programs. Participation would be voluntary. The employer would be required to pay at least 65% of the premium (he could pay more), and the employee would be responsible for the rest. At first, small employers might find this payout burden quite heavy; accordingly the AMA bill would entitle them to federal subsidy over a 5-year period. People on medicare would purchase supplemental insurance to bring their benefits up to par with those offered elsewhere. For people with limited resources, the federal government would provide a subsidy. Medicaid would virtually be supplanted by this program. Nonemployed or selfemployed persons would be eligible for premium assistance so long as they bought a health package that met federal standards (full diagnostic, therapeutic and preventive care in and out of hospital). Unemployed persons, or those between jobs, would be covered under a special program, fully paid by the federal government. The health benefits would cover basic needs as well as the catastrophic expenses of major illness. This basic and catastrophic bilevel coverage is complex as it involves certain coinsurance and deductible factors. But it is still somewhat simpler than AMA's previous "medicredit" proposals, which had premiums based on a sliding income-tax-liability scale. In effect, after a certain level of coinsurance was reached, depending upon ones s income, insurance would cover all remaining expenses as a complete protection against catastrophic costs. In introducing their bill in the Senate and the House, sponsors Carter, Duncan, Murphy and Hansen explained how the coinsurance would apply. Benefits would be subject to coinsurance at a rate of 20%, but the total coinsurance which a family would have to pay in any year would be limited according to income. The poor would pay no coinsurance, others would pay a maximum in any year of 10% of their income. In effect, a family of four with a
total income of $4200 would be exempt from coinsurance. At $4300 of income the coinsurance limit would be 10% of the additional $100 of income - $10. At $10 000 of income, the limit would be $580. But there would be ceilings, so as to prevent ruin of the middle classes. The absolute maximum that any individual would have to pay would be $1500; the absolute maximum for any family would be $2000 in any given year. It is this limitation on coinsurance that triggers the catastrophic expense protection. In effect, health services would be free of coinsurance when the individual's or the family's limit was reached. As for benefits, the program would be quite comprehensive. During any one policy year it would provide as a minimum: * Inpatient care in a hospital for 365 days. * Inpatient care in a skilled nursing facility for 100 days. * Any emergency or other services customarily provided by a hospital on an outpatient basis. * Any medical care provided by or under the direction of a doctor of medicine or a doctor of osteopathy, including diagnostic, therapeutic and preventive medical services (as well as emergency or other outpatient services) regardless of where such services are provided. * All home health services under the supervision of a physician. * Dental care, including diagnostic, therapy and treatment for children from 2 to 7. This age limit would be raised each year so as ultimately to include all persons under 18. It would also cover emergency dental services and oral surgery for all people. * Medically necessary ambulance service. Hospital care refers to general, psychiatric and tuberculosis hospitals. The benefits in hospitals and skilled nursing facilities would cover all services customarily furnished and that means all bed and board and nursing services, drugs, oxygen, blood and plasma (except for the first 1.5 1 furnished in the 12-month policy period), biologicals, supplies, appliances and equipment. This covers surgical, delivery and recovery rooms, intensive care units, coronary care units, rehabilitation care units, special care units and supplies, care for pregnancy and any of its complications and psychiatric care. The exclusions cover personal comfort items, custodial care, eyeglasses, hearing aids, orthopedic shoes and cosmetic care, as well as all private room accommodation (unless medically necessary) and private duty nursing.
How much the AMA's plan would cost is still something of a mystery. An estimate is due to be filed sometime this spring. Part of the problem in r.iaking this estimate is that the employer-employee premiums are not being codified on a national or even a state by state basis. To a large extent, market values and competition are going to determine that. But the bill does state that premiums for employee groups of less than 100 persons and selfemployed people are not to exceed 125% of the estimated average, in the state, of annual premiums for employee groups of more than 100. The interpretation of who may qualify as a carrier includes voluntary associations and employee organizations. Throughout the AMA bill there are many references to show that the association is not at all shy about asserting the preeminence of the physician within the scheme. (It should be emphasized that the AMA membership is far from united in respect to this or any other health insurance proposal and so anything less than a hard-nosed profile would not go down too well back home. Association spokesmen admit that many AMA members favour no bill at all, while others think the association should go no further than supporting a catastrophic bill.) Representative Tim Lee Carter, himself a physician, stressed in introducing the bill into the House that "in large measure, this proposal retains the expertise and experience of our existing private health care sector in both its administration and financing." Representative Hansen notes that it "builds on our present system rather than dismantling it and replacing it from scratch with a new one requiring the creation of a giant bureaucracy... For Canadian physicians growing increasingly restive about government involvement in such t'hings as fees and medical practice itself, there is one clause of particular interest. Titled "Prohibition Against Any Federal Interference", it rests in the section on miscellaneous items. The wording speaks for it itself: Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the practice of dentistry or the manner in which dental services are provided, or over the selection, tenure or compensation of any officer or employee of any institution, agency or person providing health services; or control over the administration or operation of any such institution, agency or person. In other words: Big brother, hands off!E
CMA JOURNAL/MAY 21, 1977/VOL. 116 1175
None the less the AMA has wasted no time in bringing forward its Comprehensive Health Care Insurance Act of 1977 (an update of its 1975 version), which AMA claims is "a forthright approach to national health insurance... (that) would extend health insurance to every American at a cost the nation could afford." The Comprehensive Health Care Insurance Act of 1977 was introduced into the Senate in January by Republican Senator Clifford P. Hansen of Wyoming and in the House of Representatives by Republicans Tim Lee Carter, Kentucky, and John J. Duncan, Tennessee, and Democrat John M. Murphy of New York. An AMA spokesman told CMAJ that the association decided to move early in introducing its bill, before there was any deluge, so that it could be given a clear, fresh hearing. It seems that the people interested in bringing in their own pet bills are now gauging the wind, testing out the sorts of options likely to gather favour or displeasure. Besides the AMA proposals, there are a couple of other bills worth watching. There is one from the Health Insurance Institute (which like the AMA bill leans heavily on private insurance participation), and there is the Health Security Act, sponsored by Democratic Senator Edward Kennedy of Massachusetts, to which the AMA is deathly opposed and which, of all the proposals, would most closely resemble the English-type NHS. The AMA is extremely wary of the Kennedy proposal as it would totally restructure the system of health care delivery. The program would be administered by the federal government and would be financed through new social security taxes and general revenues. All health services would be furnished by practitioners, institutions and others under contracts with the federal government. Under this scheme an indivi-
dual would enrol with a primary physician who in turn would be paid by capitation. He would receive an annual amount for each individual enrolled. There would be ways a physician could elect fee for service, but a lot of leverage over such actions would still seem to be exercised by the regional and local advisory councils which would have grassroots administrative powers. The AMA's Comprehensive Health Care Insurance Act should be of particular interest to Canadian physicians because of its clear resistance to government monopoly and its refusal to submerge physicians' powers. For example, the AMA act says that state governments would regulate insurance within the state, subject to federal guidelines established by a 15member health insurance board. The composition of this board is interesting. It would include the secretary of health education and welfare, the commissioner of internal revenue, a doctor of dentistry, a doctor of osteopathy, four members of the general public and seven practising doctors of medicine. Another feature on which the AMA stands pat is the sanctity of fee for service. There would be no meddling with that principle. Individuals or groups could go out and get the best deal offered by the various private insurers across the country, but when it comes to having the physician paid, the fees would be devised according to the "usual and customary or reasonable charges" that are in effect in that community. These fees vary from region to region, according to the cost of living, costs of practice etc, and the private insurers go along with these variations. This would continue, says the AMA. There would be no fee schedules; there would be no specific fees for service listed throughout the regions; payments would be made, as they have b.en in the past, according to "usual CMA JOURNAL/MAY 21, 1977/VOL. 116 1173
and customary or reasonable charges". It would remain possible for the physician to charge over and above what the insurance carrier allows for a specific service. Few do so now, says the AMA, 'but if the federal government attempted to become overly rigid in controlling fee levels, that could change. Following are some of the highlights of the AMA Comprehensive Health Care Insurance Act of 1977: Most persons would receive their health care protection under employer insurance programs. Participation would be voluntary. The employer would be required to pay at least 65% of the premium (he could pay more), and the employee would be responsible for the rest. At first, small employers might find this payout burden quite heavy; accordingly the AMA bill would entitle them to federal subsidy over a 5-year period. People on medicare would purchase supplemental insurance to bring their benefits up to par with those offered elsewhere. For people with limited resources, the federal government would provide a subsidy. Medicaid would virtually be supplanted by this program. Nonemployed or selfemployed persons would be eligible for premium assistance so long as they bought a health package that met federal standards (full diagnostic, therapeutic and preventive care in and out of hospital). Unemployed persons, or those between jobs, would be covered under a special program, fully paid by the federal government. The health benefits would cover basic needs as well as the catastrophic expenses of major illness. This basic and catastrophic bilevel coverage is complex as it involves certain coinsurance and deductible factors. But it is still somewhat simpler than AMA's previous "medicredit" proposals, which had premiums based on a sliding income-tax-liability scale. In effect, after a certain level of coinsurance was reached, depending upon ones s income, insurance would cover all remaining expenses as a complete protection against catastrophic costs. In introducing their bill in the Senate and the House, sponsors Carter, Duncan, Murphy and Hansen explained how the coinsurance would apply. Benefits would be subject to coinsurance at a rate of 20%, but the total coinsurance which a family would have to pay in any year would be limited according to income. The poor would pay no coinsurance, others would pay a maximum in any year of 10% of their income. In effect, a family of four with a
total income of $4200 would be exempt from coinsurance. At $4300 of income the coinsurance limit would be 10% of the additional $100 of income - $10. At $10 000 of income, the limit would be $580. But there would be ceilings, so as to prevent ruin of the middle classes. The absolute maximum that any individual would have to pay would be $1500; the absolute maximum for any family would be $2000 in any given year. It is this limitation on coinsurance that triggers the catastrophic expense protection. In effect, health services would be free of coinsurance when the individual's or the family's limit was reached. As for benefits, the program would be quite comprehensive. During any one policy year it would provide as a minimum: * Inpatient care in a hospital for 365 days. * Inpatient care in a skilled nursing facility for 100 days. * Any emergency or other services customarily provided by a hospital on an outpatient basis. * Any medical care provided by or under the direction of a doctor of medicine or a doctor of osteopathy, including diagnostic, therapeutic and preventive medical services (as well as emergency or other outpatient services) regardless of where such services are provided. * All home health services under the supervision of a physician. * Dental care, including diagnostic, therapy and treatment for children from 2 to 7. This age limit would be raised each year so as ultimately to include all persons under 18. It would also cover emergency dental services and oral surgery for all people. * Medically necessary ambulance service. Hospital care refers to general, psychiatric and tuberculosis hospitals. The benefits in hospitals and skilled nursing facilities would cover all services customarily furnished and that means all bed and board and nursing services, drugs, oxygen, blood and plasma (except for the first 1.5 1 furnished in the 12-month policy period), biologicals, supplies, appliances and equipment. This covers surgical, delivery and recovery rooms, intensive care units, coronary care units, rehabilitation care units, special care units and supplies, care for pregnancy and any of its complications and psychiatric care. The exclusions cover personal comfort items, custodial care, eyeglasses, hearing aids, orthopedic shoes and cosmetic care, as well as all private room accommodation (unless medically necessary) and private duty nursing.
How much the AMA's plan would cost is still something of a mystery. An estimate is due to be filed sometime this spring. Part of the problem in r.iaking this estimate is that the employer-employee premiums are not being codified on a national or even a state by state basis. To a large extent, market values and competition are going to determine that. But the bill does state that premiums for employee groups of less than 100 persons and selfemployed people are not to exceed 125% of the estimated average, in the state, of annual premiums for employee groups of more than 100. The interpretation of who may qualify as a carrier includes voluntary associations and employee organizations. Throughout the AMA bill there are many references to show that the association is not at all shy about asserting the preeminence of the physician within the scheme. (It should be emphasized that the AMA membership is far from united in respect to this or any other health insurance proposal and so anything less than a hard-nosed profile would not go down too well back home. Association spokesmen admit that many AMA members favour no bill at all, while others think the association should go no further than supporting a catastrophic bill.) Representative Tim Lee Carter, himself a physician, stressed in introducing the bill into the House that "in large measure, this proposal retains the expertise and experience of our existing private health care sector in both its administration and financing." Representative Hansen notes that it "builds on our present system rather than dismantling it and replacing it from scratch with a new one requiring the creation of a giant bureaucracy... For Canadian physicians growing increasingly restive about government involvement in such t'hings as fees and medical practice itself, there is one clause of particular interest. Titled "Prohibition Against Any Federal Interference", it rests in the section on miscellaneous items. The wording speaks for it itself: Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided, or over the practice of dentistry or the manner in which dental services are provided, or over the selection, tenure or compensation of any officer or employee of any institution, agency or person providing health services; or control over the administration or operation of any such institution, agency or person. In other words: Big brother, hands off!E
CMA JOURNAL/MAY 21, 1977/VOL. 116 1175
