Presidential Candidates Present Their Healthcare Reform Plans in New England Journal of Medicine

With the nation's attention riveted on Wall Street, government bailouts, and housing foreclosures, another issue of prime concern to Americans in this election year has been shoved out of the spotlight: Sen. Barack Obama's and Sen. John McCain's positions on healthcare reform.

The New England Journal of Medicine invited both the Democratic and Republican candidates for president of the United States to outline their plans for healthcare reform, with commentary on each provided by observers from the opposite end of the political spectrum. Outlines of the candidates' plans and the critiques were published online September 24 and will appear in the October 9 (plan outlines) and October 16 (critiques) print issues of the journal.

There isn't much that the candidates agree on in other areas of public policy. But in side-by-side columns with color-coded headings — blue for Sen. Obama and red for Sen. McCain — the senators lay out their strategies for providing universal access to affordable, high-quality care.

However, their strategies outline fundamental philosophical differences, with Sen. Obama embracing a more public solution and Sen. McCain endorsing a more market-based approach.

The Obama Plan

Sen. Obama, who favors a mix of public and private participation, outlines 3 broad healthcare reform goals:

- Equal access to high-quality, affordable health care for all Americans.
- Elimination of wasteful spending, including "layers of bureaucracy that serve no purpose, duplicative tests and procedures that are performed because the right information is not readily available, and doctors providing unnecessary care for fear of being sued."
- Emphasis on disease prevention and health maintenance.

According to Sen. Obama, patients who like their insurance will be able to retain it with no changes, except for lower costs. Uninsured or underinsured patients would be offered a choice of affordable plans, and he calls for establishment of a national health-insurance exchange for small businesses or people without employment-based insurance; the plans would offer policies at rates similar to those offered through large companies, although Sen. Obama does not specify how this would be achieved.

"To promote competition among insurers, we will also give patients a new public-plan option, providing the same coverage that is offered to members of Congress and their families," the Democratic candidate writes.

Sen. Obama's plan also calls for:

- Mandatory acceptance of enrollees by insurers without regard to medical history.
- Tax credits for families to increase affordability.
- Expansion of Medicaid and the State Children's Health Insurance Program (S-CHIP) to cover all children without private coverage.

Sen. Obama says that the expanded programs will be paid through elimination of waste and through repeal of the Bush administration tax cuts for Americans with the highest incomes. He notes that he opposes taxes on employer-based health insurance.

Reimbursement, Medical Liability Changes

"We also need to change the way we reimburse for patient care," Sen. Obama writes. "We should start paying adequately for care coordination, case management, and innovative care-delivery models, such as team-based care and electronic communication. Doctors should be paid fairly by private insurers and by Medicare. Payment reform should improve patient outcomes and should lower overall costs by removing incentives for unnecessary care and rewarding the right care, provided at the right time, for the right reasons"

Sen. Obama states that his administration will offer incentives for physicians in training to enter primary care, and he emphasizes renewed support for biomedical research. He also proposes to reduce malpractice insurance burden through information systems, decision support technology, and patient-safety initiatives aimed at reducing medical errors.

"I will also support legislation dictating that if you practice care in line with your medical societies' recommendations, you cannot be sued," he writes.

"Too Audacious to Be Believed"

In an editorial critical of the Obama plan, Joseph R. Antos, PhD, a scholar in healthcare and retirement policy at the American Enterprise Institute, a conservative think-tank in Washington, DC, says that the Obama plan is "too audacious to be believed."

"The Obama plan offers a host of policy proposals that, in the main, address the symptoms but not the underlying disease that afflicts the health care system," Dr. Antos writes. "We surely could use some symptomatic relief. However, failing to address the perverse incentives that drive health care spending inexorably upward, making insurance unaffordable for millions and shaping (or misshaping) the practice of medicine, will leave us worse off than we are today."

The "perverse incentives" Dr. Antos refers to include a "play or pay" option, similar to that currently in place in Massachusetts, under which employers that do not provide health insurance coverage pay a per-worker surcharge that is used to finance a publicly funded healthcare system.

"A play-or-pay policy probably would not be effective in expanding employer-sponsored insurance," Dr. Antos writes. "Employers who already offer generous health benefits would not have to change their compensation structure. Other employers would choose to 'pay' rather than 'play' unless the new tax were more expensive than the cost of paying the mandated amount for insurance, which is politically implausible."

Dr. Antos also claims that the non–group insurance plans offered to uninsured families under Sen. Obama's plan must of necessity either offer a wide range of benefits and be costly or offer more narrow but less costly basic plans with high out-of-pocket costs.

"A generous plan requires premiums that would be unaffordable to many of the uninsured unless there was also a generous subsidy from taxpayers," he writes. "A more basic plan would have more affordable premiums, but beneficiaries would face higher out-of-pocket costs if they became seriously ill. Lower premiums and skimpier benefits are not what the Democratic political base thinks it has been offered."

The author is also critical of the Democrat's proposed health insurance exchange, saying that it would limit the market-based competition, and adds that Sen. Obama's plan to regulate health insurers more closely "substantially increases the risk of government failure and regulatory gridlock."

The McCain Plan

Sen. McCain favors a market-driven, privately funded approach to healthcare, although he too emphasizes basic tenets of reform, including:

- Access to high-quality care
- Choice of insurance coverage
- Affordability
- Portability

"But the road to reform does not lead through Washington and a hugely expensive, bureaucratic, government-controlled system," he writes.

Sen. McCain calls for moving Medicare toward a system that favors coordinated care and "higher quality care" for seniors, but does not specify how this would be accomplished.

The Arizona senator supports a greater emphasis on health maintenance, screening, prevention, and early intervention.

"We need to create a next generation of efforts to prevent chronic disease, early intervention programs, new treatment models, and public health infrastructure," he writes. "We need to use technology to share information on 'best practices' in health care so that every physician is up to date. We need to adopt new treatment programs and financial incentives to promote healthy habits among Americans with the most common conditions, such as diabetes and obesity, in order to improve their quality of life and reduce the cost of their treatment."

Tax Credits, Tort Reform

Sen. McCain's plan calls for dropping the exclusion of the value of health insurance from an employee's taxable compensation, and replacing it with a refundable tax credit of $2500 for individuals or up to $5000 for families.

"For the first time the credit will provide help to people who are shut out of the job-based insurance system; they will be able to choose an insurer or other health care arrangement, and the credit will be sent straight to the plan they pick in order to help pay their premiums," he writes. "An essential benefit of this reform is that it will help to change the whole dynamic of the current health care system by putting individuals and families back in charge and forcing insurance companies to respond with better service at lower cost."

Sen. McCain favors a state-based rather than national plan for ensuring access to care for people with preexisting medical conditions and "additional help for low-income individuals."

Sen. McCain points to his record of advocacy for medical liability reform legislation, emphasizing that it must be a central component of healthcare reform. He does not offer specifics on what tort reform under a McCain administration would look like.

"Health care reform is too important an issue for one person or one party to tackle alone, and I have a record of working across party lines to tackle big challenges and change the way Washington works. By starting with putting doctors and patients back at the center of health care decisions, we can reform the U.S. system in a way that protects the quality of care while making it affordable and accessible to all," he writes.

"The McCain Plan for Health Insecurity"

In his critique of the McCain healthcare reform plan, David Blumenthal, MD, MPP, director of the Institute for Health Policy at Massachusetts General Hospital in Boston, and an unpaid advisor to the Obama campaign, writes that "the McCain proposal violates the bedrock principle that major health policy reforms should first do no harm. It would risk the viability of employer-sponsored insurance and the welfare of chronically ill Americans in pell-mell pursuit of a radical vision of consumer-driven health care."

Sen. McCain's plan, he says, would increase patient out-of-pocket costs and reduce the role of insurance in healthcare. He notes that three fifths of Americans currently rely on employer-sponsored healthcare, and that Sen. McCain's plan would "increase reliance on unregulated individual insurance markets (which are notoriously inefficient), and leave the number of uninsured Americans virtually unchanged."

Dr. Blumenthal charges that by ending the exemption from federal income tax for employer-sponsored insurance, employers would likely drop the plans.

"Over the years, multiple studies have shown that as the tax benefit to employees of receiving employer-sponsored insurance declines, employers are less likely to offer it," he writes. "On the basis of these studies, economists project that 10 million to 28 million of the 160 million Americans with employer-sponsored insurance will lose it as a result."

The plan is also likely to encourage other employers to reduce benefits, thereby increasing employee costs, and would drive the newly uninsured into the more costly non–group insurance market, where administrative costs make up 30% to 50% of premiums compared with 12% to 15% of costs in employer-sponsored large group plans.

Dr. Blumenthal is also skeptical about Sen. McCain's proposal for establishment of association health plans (AHPs) that would allow groups of consumers to buy health insurance for their members.

"By joining such plans, individuals will presumably enjoy the protections that large groups, including employer pools, offer their members. However, the required AHPs don't exist now. If they did, they would be tempted to cherry-pick healthy members just as insurance companies do. Voluntary associations

of the sick and healthy do not naturally occur, and there is a good reason why," Dr. Blumenthal writes.

The author also states that deregulation of private insurance markets, as called for by the McCain plan, would eliminate some state mandates that insurance companies provide policies for all who wish to buy them, thereby allowing the companies to "cherry pick" the healthier subscribers while denying coverage to higher insurance risks.

Although Sen. McCain calls for establishment of state-run high-risk insurance pools, such pools, established in 35 states, enroll fewer than 200,000 people, Dr. Blumenthal noted.

"The reason is that states are unwilling or unable to subsidize adequately the extremely high premiums that pools charge the chronically ill," he writes. "McCain has talked vaguely of providing additional federal funds (in the range of $7 billion to $10 billion) to help states out, but he has not detailed this part of his plan. In any case, it raises a more fundamental question: What are the long-range consequences of segregating the sickest Americans into a predominantly state-run high-risk insurance system, especially in regions that have been notoriously ungenerous toward vulnerable populations?"

The full text of the plans and critiques are available online at www.nejm.org. Also on the site is a video of a presidential campaign healthcare forum presented at the Harvard School of Public Health in Boston in September.

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