Summary and Implications

Given the lengthy period of organized medicine's resistance to any sort of public provision for medical care, one hears surprisingly little debate today about whether the elderly need the help Medicare provides or whether it is morally appropriate for the state to provide such help. Instead, the debates focus on costs and cost-benefits. Perhaps even more surprisingly, the culprits with respect to cost are generally held to be private providers and their lack of cost consciousness.

In part Medicare's relatively good image derives from its kinship and similarities to social security. Among social hazards, aging has a special character: its near certainty and fixed position in the life cycle, the widespread perceptions of the elderly as worthy citizens, and the stability of its beneficiary population. And Medicare shares some of social security's popular design features—individual accounts of earned rights, most prominently.

Among Medicare's specific strengths is its criterion of effort, which imparts consistency between the program and American conceptions of distributive justice in the economic domain. And Americans, more so than citizens of most other advanced industrial societies, view medical care as part of the economic domain.^[44] As we have seen, Medicare's infringement on negative liberty is modest; its administration is as efficient as that of its private counterparts; and recipient abuse is not a problem. The program targets a population that has particularly extensive medical-care needs and exceptionally limited capacity for meeting these needs, and has carved out an important area of complementary interests in limiting the financial obligations of program recipients for episodes of acute care.

Medicare also exhibits several important weaknesses. In terms of distributive justice, its egalitarian principles of need and effort mesh poorly with the differentiating criterion of ascription by age. Large numbers of people who need assistance and who have exerted effort in the paid labor market are excluded from Medicare. Even within the ranks of the elderly, Medicare's coverage is incomplete and fails to emphasize basic goods. The program's bias toward episodic acute care covers extraordinarily expensive treatments while needs for the most mundane sorts of care go wanting. This bias also promotes economic inefficiencies that were present in the private sector before Medicare was established. Finally, although Medicare's infringements on providers' professional autonomy are modest, it has perhaps contributed to the profession's concern with economic rather than health matters.

From the central focus of the investments approach—justifying the extension of socioeconomic rights to those confronting social hazards—little about Medicare is disconcerting. Medicare recipients earn their benefits and do not abuse their access to medical care. However, Medicare cannot simply be thrown open to serve all those who need medical care and have no private insurance. The two primary obstacles to extending Medicare into national health insurance are the opposition of medical-care providers and the aggregate cost of such a program. But since other advanced industrial nations do provide universal health coverage, perhaps these obstacles are not insurmountable.

To elicit the cooperation of medical-care providers, any program for the public provision of medical care must address pro-

viders' two principal concerns: profitability and professional control. If we look at the experiences of other nations in creating systems of public medical-care provision, we find no prevailing model for compromises on these issues. But the brief history of Medicare suggests the kind of compromise most likely to work in the United States: Maintain the lucrativeness of providing medical services in return for greater public policy control over the goals and means of medical care. Indeed, since the late 1920s proponents of national health insurance have tried to persuade provider groups that this compromise is in the national interest. Providers resisted this direction forcefully and successfully for a long time, but with Medicare's passage they lost a crucial battle in this struggle. In the aftermath of Medicare's enactment it became easier for providers to accept the payoffs of the program than to continue their earlier resistance. Corporate inroads in the medical-care fields have also been based on this pattern.

To make this compromise explicit and to expedite its implementation, the federal government should create a national bargaining council whose members would represent the federal government, providers, and perhaps other relevant constituencies. This council's central task would be to hammer out a series of guidelines that would assure profitability for providers in exchange for providers' cooperation on the goals and means of medical care. These guidelines should draw on existing institutions and practices. For example, private insurance companies should not be displaced; rather the federal government should expand, coordinate, and perhaps subsidize the efforts of these companies in a national drive to extend at least minimal insurance coverage to more Americans. This insurance could be similar in many respects to Medicare, but would specify affordable out-of-pocket annual maximum liabilities for households in different income ranges.

In return for these financial considerations, providers would be asked to increasingly resolve issues pertaining to the goals and means of medical care collectively with their public official counterparts on the council. These agreements, which would be subject to periodic renegotiation, would specify the sorts of care national health insurance would cover, how that care would be delivered, and the responsibilities of providers and patients. Such agreements might also limit the responsibilities of public policy in prolong-

ing the lives of the terminally ill, or include custodial care for chronic conditions, or make public financial help for certain health problems contingent on patient cooperation in giving up health-threatening personal habits.

The details of such agreements are less important than the initiation of a collaborative process between public officials and providers. In the absence of such a process, no one should expect any broad initiatives in the area of national health insurance.