The Right Prescription

America’s Policy Graveyard

Will healthcare reform again be America's Afghanistan?

By 6.23.09

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Afghanistan is the graveyard of empires; healthcare is the graveyard of policymakers. Yet Washington reformers are massing again at the healthcare frontier. Like their predecessors, they will march in with flags unfurled, bands blaring, and intentions good. And like their predecessors, they believe they have it right this time – the country's receptivity, the politics, and the policy. Without predicting today's outcome, it is worth pausing to survey the past and terrain. 

Today's healthcare reformers face a tall order, not only in shaping policy but facing history. Both Afghanistan and America's healthcare system have been most unforgiving to those seeking to affect change on their respective landscapes.

Afghanistan is called the graveyard of empires for good reason. Since Alexander, the invader can only hope to reach accommodation with the indigenous. Rulers who have left their names indelibly in the history books, have left barely a trace in that country. 

It could well be argued that Afghanistan was the final undoing of the USSR. A failure in crafting domestic policies for its citizens, the USSR held one claim of insuperability: its military might. It had defeated the Nazis and still could protect Mother Russia. When after ten years futility in Afghanistan, its military might had been transformed into military myth, no justification remained for the Soviet state itself. 

The U.S. healthcare system has been no more welcoming to those policymakers seeking to remake it. The case could well be made that the failure of healthcare reform in its first year essentially undermined the Clinton administration for the remainder of its time in office. Truman and Nixon also tried to create a national healthcare system without success. In contrast, the list is also notable for its absences. FDR and LBJ, authors of the expansive New Deal and Great Society programs, both knew to leave well-enough alone, despite having ambitious agendas and overwhelming political majorities. 

Like Afghanistan's rugged and inaccessible frontier, the U.S. healthcare system has evolved into a similarly perplexing inaccessibility. Its most prominent feature, the ability of employees to receive health insurance tax-free from their employers, is the product of attempts to circumvent WWII's price controls. As a result, the private healthcare system is largely comprised of beneficiaries and providers with third party payers between the two. This creates a bizarre dynamic separating customers from cost, helping fuel America's health cost spiral.

American healthcare is also pockmarked with government-run healthcare systems. Medicare and Medicaid at the federal level pay hundreds of billions of dollars annually to provide healthcare to tens of millions of individuals. Independent state systems also abound. And finally, relatively straightforward customer-provider relationships exist in areas such as eye and dental care, where cost increases have been restrained and quality is highly.

As odd as this mix-and-match payment-provider system is, Americans are attached to it in large part and easily can become opposed to change of it. 

Because of the healthcare system's complexity and immensity -- it comprises almost 18 percent of the nation's GDP -- it is dauntingly hard to placate all the sectors and stakeholders in it when it comes to reform. And it is correspondingly easy to assemble a coalition resistant to change. 

Reformers too are bedeviled by their own plans to bring order to disorder. A pride of lions pales in comparison to a pride of authorship. Reformers find it hard to alter their approach to rationalize the healthcare system to accommodate parts of the system's prevailing irrationality. 

For these reasons, no other area of U.S. public policy has proven so difficult to reform. Tax, energy, agriculture, trade, finance, and a host of other policy areas have all been overhauled -- usually multiple times -- in the time since reform of the healthcare system was attempted back in the Truman Administration. Instead, the healthcare system at most has had additional layers added to itself without appreciably reordering the underlying layers. The onion has gotten larger, but it is still an onion. 

None of this is to say that America's healthcare system should not be reformed. It should. Or even to say that it cannot be. It can. It is just a reminder that it has not been…at least up to this point. Despite the best of intentions and some thoughtful policy proposals, reformers have repeatedly marched out of America's healthcare system much the worse for wear from when they marched into it. It will be interesting to see if in today's attempt, the reformers make a bigger impression on the healthcare system, or if the system makes a bigger impression on the reformers. And if either impression is positive.

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About the Author

J.T. Young served in the Department of Treasury and the Office of Management and Budget from 2001 to 2004 and as a Congressional staff member from 1987 to 2000.