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The Great (Health-Care) Divide


The New Physician October 2004
Health care has become a driving force in this year’s presidential election. A July ABC News/Washington Post survey of 1,200 voters found that given the choice among the economy and jobs, the Iraq war, education and health care, 12 percent of respondents said health care would be the deciding factor when they go to the polls Nov. 2.

Harvard University health policy and management professor Robert Blendon says although the effects of the terrorist attacks on Sept. 11, 2001, the war in Iraq and the federal deficit are voters’ primary concerns, health care is important. “In real life, the country is quite divided here. Half would like to do something big, and the other half has absolutely no interest,” he says. But here’s the hook: “If the election is close, [health care] could have an effect, because there is a share of the voters who want something done now,” he predicts. This year’s election is looking just as close as 2000, when 47.87 percent of the votes went to George W. Bush and 48.38 percent went to Vice President Al Gore, and health care could be a deciding issue.

So, where do the candidates stand on some of these issues? Let’s take a look at Bush’s and Sen. John F. Kerry’s (D-Mass.) proposals.


Democratic strategist Celinda Lake and her Republican foil Bill McInturff sit on opposite sides of the dais during a Washington, D.C., policy conference nodding their heads in blue–red, bipartisan agreement: Health-care coverage is shaping up to be a major campaign issue.

“Health care comes out when you ask [voters] about ‘personal concerns,’” McInturff says, placing the issue directly behind national security and Iraq in importance to Americans. Lake cites a poll by the Service Employees International Union that found 35 percent of voters are what she calls “anxious insured”—those who can’t afford to lose their health coverage benefits. With all this agreement, it makes one wonder how the candidates can be so far apart on the issue of how to provide coverage to the country’s 45 million uninsured.

“There isn’t much that [Bush and Kerry will] agree on, in terms of policy,” says Chris Jennings, a Kerry policy adviser. “But I think we will agree on one thing, that there couldn’t be a bigger contrast between domestic policy priorities than the issue of health care in this campaign. I think it’s a really interesting issue in terms of not just overall investment, but also policy structure and the approach each side has taken to address an undeniable need.”

For first-term successes, Bush points to his 2000 campaign promises for health savings accounts (HSAs), which he signed into law as part of the 2003 Medicare reform bill; an expansion of Medicaid and the State Children’s Health Insurance Program (CHIP) eligibility guidelines; as well as a tax credit for health care in the 2002 trade bill to help displaced workers.

In this election, he maintains his support for association health plans, which would group small businesses into larger pools, offering them better health insurance buying power, and a refundable tax credit to individuals who purchase their own coverage instead of receiving it as an employment benefit.

According to Emory University health economics professor Kenneth Thorpe, Ph.D.—who worked in the Clinton administration but is looked to by many observers to offer a fair interpretation of the candidates’ proposals—Bush’s plan would cost $90.5 billion over the next 10 years and would extend coverage to between 2.1 million and 2.4 million previously uninsured.

While Megan Hauck, the Bush campaign’s deputy policy director for health care, disputes Thorpe’s numbers—saying the president’s plan would actually cover 6 million to 10 million uninsured at a cost of $69 billion—Thorpe stands by his analysis. “I would take campaign estimates at what they are: campaign estimates,” he says.

For his part, Kerry would offer a refundable tax credit to small businesses for up to 50 percent of the costs to cover their workers. The four-term Massachusetts lawmaker also proposes states expand CHIP to include all uninsured children who are ineligible for Medicaid coverage and some low-income adults. In exchange, the federal government would pick up the entire tab for kids on Medicaid, a cost normally shared with the states. Like Bush, his plan also provides for an association-type pool in which businesses and individuals could buy into based on the Federal Employees Health Benefits Program.

The cost of all this, according to Thorpe, is $653.1 billion over the next 10 years—which Kerry says he would pay for by rolling back the tax cuts to those earning more than $200,000—and would insure 26.7 million additional people.

While most of these policies aren’t new to health-care economists, Blendon says both plans include novel approaches. For Kerry, it’s a proposal to reimburse health insurance companies 75 percent of their payouts on catastrophic claims above $50,000, the idea being that if the federal government foots the bill on the most costly aspect of insurance, consumers’ premiums could be reduced about $1,000 annually. But, “how he’s going to pay for it is kind of mushy,” Blendon says.

Jennings admits the funding in Kerry’s plan is not guaranteed, since Congress holds the power to alter the tax structure. “And [Kerry] well recognizes that, and he will be the first to reach out to Republicans when he is inaugurated into office in January,” he says.

And although Bush also addresses catastrophic coverage costs by proposing to allow individuals with HSAs to deduct catastrophic coverage premiums from their taxes, Blendon says the innovative approach in the Bush plan is to exchange those traditional catastrophic coverage plans for ones with high deductibles and low premiums. “The way [Bush is] trying to design the plans is that preventive stuff would fall outside the deductible, so there is an incentive [to get preventive care] there,” Blendon says.


Vice President Dick Cheney drove home his campaign’s position on medical malpractice liability reform while speaking to physicians and workers at the Medical College of Ohio in July: “We come at this issue with a practical point of view, which we believe is shared by the vast majority of Americans. All of us understand that when we are sick or the health of our loved ones is in question, we don’t need a lawyer. We need the experienced, trusted doctors that we’ve known and relied on for years.”

The speech was a jab at his Democratic competition, Sen. John Edwards, who made millions representing injured patients in malpractice lawsuits in North Carolina. Bush has long pushed for medical liability reform, taking the physician-friendly position that frivolous lawsuits increase health-care costs and push physicians out of business. He supports a $250,000 cap on noneconomic damage awards as well as restrictions on filing claims against multiple medical professionals, particularly those who are only marginally involved.

The problem, Blendon says, is that voters—beyond physicians and those in the business community—aren’t too concerned about the issue. “People know that it does something about rising costs, [but] there’s not an economist at Harvard that will agree to that,” he says.

The Bush camp disagrees. “I’d suggest that you go interview those women who have wandered around trying to find OB-Gyns to deliver their babies because their doctors decided that it’s too expensive to have the insurance to deliver babies,” says Republican strategist David Winston. “That has been a significant issue that has been covered and to suggest that there’s no proof—read the newspapers.”

In fact, a May Harris Interactive survey indicated malpractice reform is on the minds of voters; 55 percent of the respondents said lawsuit threats affect their care a little or a lot, and 62 percent support legal reform.

Kerry has a plan for liability reform as well. Calling it “one of the best-kept secrets in Washington,” Jennings says the plan will “make health care more predictable”—one of Kerry’s goals for his entire health-care package.

The proposal would eliminate punitive damages except in certain extreme cases, require a panel of medical professionals to review all claims and determine merit, and institute a “three strikes and you’re out” rule, to prevent lawyers from filing more than three frivolous cases. Attorneys who exceed this limit would be barred from filing another medical malpractice suit for 10 years.

“[Kerry’s proposals] really substantially address the problem, and most importantly…could be passed and enacted,” Jennings says. Congress has kicked liability reform around for several years but, largely because of Democratic opposition, has not passed any legislation.

“Edwards coming into this race is obviously going to put more focus [on] the role of lawyers within the health-care system,” Winston says. How much focus, though, still remains to be seen.


When the son of a beloved and recently departed Republican president stood before 4,353 delegates at the Democratic National Convention this summer and attacked Bush’s policy on funding embryonic stem cell research—a policy limiting federal funds to research involving 78 pre-established cell lines, many of which have proved to be useless—the fight over stem cells heated up.

Even before Ron Reagan insisted that stem cell funding must not become a partisan issue, the subject became just that, in some ways replacing a seemingly quieter discussion about abortion rights. “The stem cell thing got mixed up in abortion politics in a way I’m not sure most politicians wanted it to,” Blendon says. Because the research, which scientists claim could cure such diseases as Alzheimer’s, requires the de-
struction of human embryos, the two sides have shaken out along similar lines of pro-life and pro-choice advocates.

And it’s a policy on which Kerry believes Bush is vulnerable. “Kerry makes a stem cell reference in almost every speech,” Blendon says, adding it’s a wise strategy since voters are concerned about the issue. “Suddenly, it has made people say there’s something wrong with our policy. Americans love cures. They may be ambivalent about where stem cells may have come from, but they love cures.”

In fact, American Demographics reported in August that 20 percent of Bush supporters told Zogby International pollsters they’d switch to support Kerry or Nader, not vote or become undecided if Kerry announced a comprehensive plan for federal stem cell research. But Bush stands by his August 2001 policy, which made him the first president to federally fund the research, although Clinton OK’d funding in 2000 that was never appropriated.

As the summer wound down and the topic gained momentum, Bush relied on his wife, Laura, to do much of the talking. At St. Vincent’s Medical Center in Jacksonville, Florida, she agreed stem cell funding is a subject that should be discussed but chastised the media and medical professionals for giving the public the impression that breakthrough cures are imminent. “But the fact is, that’s not right…,” she said. “Embryonic stem cell research is much more preliminary than that; we’re not about to come upon a cure.”


A hot topic during the 2000 presidential election, a patients’ bill of rights has taken a back seat this time around. That’s because managed-care companies have “loosened some of the reigns that were so offensive,” making campaign advertisements about patients’ rights less persuasive, says Jack Meyer, president of the Economic and Social Research Institute, which researches health and social policy.

Still, Democrats are trying to resurrect the issue. Kerry promises to push for legislation that would guarantee patients the right to see needed specialists, provide an external appeals process to managed-care companies’ decisions and offer whistleblower protections to health-care workers who report “quality problems.”

The campaign accuses Bush of promising a patients’ bill of rights in 2000, but then reversing his position by blocking congressional efforts to pass such legislation in 2002. Bush also sent his White House counsel to argue in a Supreme Court case against allowing patients to sue their insurance companies in state courts where damage awards are often higher. The court ruled last spring that because a federal pension law supercedes state law, patients must take their complaints to federal courts.

But Hauck says that as president, Bush had to defend federal law. She says Bush still supports a patients’ bill of rights, even if the media isn’t reporting his position. “I think there’s an ebb and flow to health-care issues.”


The press and the candidates are paying great attention to the cost of prescription drugs, in particular, the recently passed Medicare prescription drug benefit and drug reimportation legislation.

“Under our plan…all Americans will be able to buy less expensive prescription drugs from countries like Canada,” Kerry said in accepting his party’s nomination in July. The Democratic candidate has maintained throughout the campaign that reimportation would lower drug costs; he uses the issue in many stump speeches.

The Bush campaign says the president supports reimportation—but it is quick to offer stipulations. While the Medicare bill allows for it, the law requires the secretary of health and human services to certify the drugs as safe, a process the Food and Drug Administration says is not currently possible. “So we have not been able to certify them as safe, and until we can, we will not support the proposal [to reimport the drugs],” Hauck says of the Bush administration’s position.

Safety concerns or not, the public finds reimportation a popular idea, forcing many Republicans to choose their words carefully. “I’m not opposed to bringing drugs in from Canada,” says Rep. Bill Thomas (R-Calif.), speaking for the campaign. Thomas, who chairs the powerful Ways and Means Committee, says he is going to work for a legislative remedy to the drug reimportation question.

“[But when] you set up a system, you better make sure that it is a safe system and that it’s as good as buying products at the local pharmacy. If we can achieve that, I have no problem bringing them in…. You don’t just go out and gin people up to the safety of this…,” he says. “[Kerry] offers a seemingly simple solution, which is difficult to achieve and would not make that big a difference.”

This is the other crux of Bush’s argument against reimportation: It won’t offer a tremendous savings to the consumer. Hauck cites an April Congressional Budget Office report that found reimportation in general would offer “at most a modest reduction” in drug spending, while reimportation from only Canada would result in a “negligible” difference.

“I think we have a real concern that we just open this up to something that…would have negligible savings, and then we have the potential to really damage the integrity of the drugs in this country,” she says.
Jennifer Zeigler is a senior writer with The New Physician. Direct comments about this article to