More states flirt with universal healthcare

Nearly a decade after President Clinton turned "universal healthcare" into perhaps the most dreaded phrase in the American political vocabulary, the topic is beginning to reemerge in states nationwide.

In the past few months, Maine has created a state board to draw up proposals for universal care. The Rhode Island General Assembly released a study on the idea. Oregon put it on the ballot, and the head of one of California's largest health-insurance companies has called for a plan to cover all residents.

The return of universal healthcare as a serious issue of debate, so soon after its rejection by Congress and the country, points to more than bad economic times, experts say. It is an indicator of how dire the situation in American healthcare has become.

Some observers suggest this year could be a perfect storm, as new drugs and technologies drive up costs, the ranks of the uninsured grow, and states slash deficits by cutting medical aid. Others suggest that the crisis hasn't yet reached the level of the early 1990s, which gave rise to the Clinton plan, spearheaded by his wife, Hillary.

This time, however, pressure for reform is coming not from the top down, but from states themselves. What happens in a handful of these states - from California to Maine - could shape the nation's healthcare discussion.

"This phenomenon is important to watch," says Diane Rowland, executive vice president of the Henry J. Kaiser Family Foundation in Washington. "If it begins to emerge as a priority in seven or eight states, it will begin to change the political dynamic."

CERTAINLY, even in these states, universal healthcare is a long way off - if it ever happens. Maine, which is the closest to such a plan, has had trouble funding its state board. Oregon voters roundly defeated November's initiative, worried about a $20 billion tab.

Yet these halting steps still represent a significant change from a few years ago. Then, with the rebuke of the Clinton plan still fresh, and with prosperity papering over many problems, there was little urgency for reform. Now, the ebbing economic tide has exposed the system as increasingly unaffordable.

The number of uninsured Americans grew from 39 million to 41 million last year. The numbers are expected to rise further.

• The average cost of healthcare benefits rose 14.7 percent in 2002 - more than seven times the rate of inflation. It was the largest increase since 1990, according to a survey released this week by Mercer Human Resource Consulting. Estimates suggest costs will increase by 14.0 percent in 2003.

• More than one-third of large companies that cover retirees' care have discontinued those benefits, or are planning to do so in the next three years, according to a new survey by the Kaiser Family Foundation.

• In a new Christian Science Monitor/TIPP poll, 54 percent of respondents reported that their healthcare costs had increased in the past year, hurting family finances.

"The fact that it has gotten worse during the past two years is behind the ... revival in discussion," says Karen Davis, who took part in a recent report on universal healthcare by the National Academy of Sciences.

MIKE Cohill has seen the situation worsen firsthand. That's why he's sitting here at Sutter Medical Center in Santa Rosa, Calif., beneath the bleak, white sheen of a sparsely decorated office.

He has a fistful of graphs with all the lines going in the wrong direction. The hospital lost $24 million last year, and he's been brought in to put things right.

His predicament is hardly unusual in California, where 66 percent of hospitals are losing money. Some pressures, such as earthquake codes, are peculiar to the state. But others are more common: emergency rooms flooded by patients with no insurance, increases in cost of care that make Medicaid insufficient.

He speaks of a new device to prevent heart problems. It costs three times as much as the old one. But when asked whether his hospital will buy it, he almost scoffs. "When a patient comes here, we're going to give him that [device]," he says. "We're not going to say, 'We're losing money, so we're going to use the old one.'"

It's a comment that cuts to the core of the dilemma. California hospitals gave out $3.5 billion in uncompensated care last year. The law requires them to care for all patients in their emergency rooms. Yet in other instances, the questions are thornier: Should price be a factor in medical decisions? Do all patients have a right to state-of-the-art treatments?

For Cohill, the answer is clear: Patients must get the best treatment. Yet to ensure that, he's had to shut down his children's intensive care unit and a senior services center.

More employers are implementing new healthcare plans that force workers to make choices - or pick up the bill. But the belief that such ideas don't go far enough has opened up space for more radical solutions.

At least three California lawmakers are expected to introduce bills next session with some form of universal healthcare. Moreover, the comments last week by Bruce Bodaken, head of California Blue Shield, proposing a universal-coverage system, have been seen as crossing a new threshold.

Says Jan Emerson of the California Healthcare Association: "It's intriguing that someone of Mr. Bodaken's stature was willing to put it out there."