Rx for Health Care

VOTERS in November won't have a choice between clearly defined programs to reform America's troubled health-care system. Both major candidates have sought to identify themselves with health-care reform, but neither President Bush nor Gov. Bill Clinton has proposed a health policy in thought-out detail. This isn't surprising, since the nation's health-care and political communities are still far from reaching any consensus on the ways and means of delivering affordable health care to all Americans.

The candidates have been particularly evasive when it comes to suggesting how much it's going to cost the nation to improve the health-care system and how they propose to pay the bill.

Nonetheless, voters will have a choice between two distinctly different approaches to health-care policy, and the outcome of the election is likely to determine which approach will have priority in government deliberations.

Mr. Bush, as in other areas of policymaking, favors unleashing competitive market forces to improve the efficiency of health-care services. Mr. Clinton envisions an expanded role for government in managing the delivery of health care. Unlike some of his rivals in the Democratic primaries, though, Clinton has not proposed a nationalized health system such as Canada's.

The debate over health care can be broken down into two principal issues: people's access to affordable care and controlling runaway costs.

* Access. Most Americans enjoy some health-insurance coverage through their jobs or through Medicare and Medicaid. However, more than 33 million Americans have no health insurance; these include workers in small companies that can't afford health benefits, the unemployed near poor, and poor people who don't qualify for Medicaid.

Bush proposes tax deductions or refundable tax credits whereby individuals can purchase their own coverage directly or through competitive group providers. Supporters of such a system say that it provides "portable" coverage that won't be lost with a layoff or job switch, and that it avoids the creation of another federal bureaucracy.

Skeptics of tax-code solutions, however, say that deductions and credits in the amounts generally discussed are not large enough to make an adequate basic health-care package affordable to lower-income Americans.

Clinton, in contrast, favors some form of a "play or pay" system. Employers would be required either to provide health insurance for their workers or to pay a payroll tax into a public fund that would cover both uninsured workers and uninsured people outside the work force.

Critics regard "play or pay" as a camel's nose for nationalized medicine. But the payroll tax could be set high enough to deter employers from using the public fund as an insurer of first resort (with some relief for small companies), and the public fund itself could provide coverage through private carriers.

* Cost containment. Health-care costs in America are rising like a shuttle launch. The reasons include expensive new medical technologies and the lack of incentives for care providers and insurers to improve efficiency. The nation's economic prosperity depends in part on controlling those costs.

Under Bush's free-market approach, costs would be contained by heightened competition among group insurers and among such providers of "managed care" as health maintenance organizations (HMOs). Improved competition is certainly needed, but many experts doubt that it holds the whole answer. The market in health care works imperfectly, they say, partly because consumers lack information.

Clinton would try to hold down costs through fee restrictions on health-care providers. He would probably establish a national cap on health expenditures (so-called global budgeting), to be applied to doctor and hospital fees by state commissions. Critics claim that global budgeting will lead to health-care rationing.

Ultimately, America's health-care reform ought to include both new competitive and regulatory elements. But voters this year will have a chance to nudge the debate in the direction of one fundamental vision or another. They may also make their choice on the basis of which presidential candidate apparently will bring the most energy to achieving consensus on this complex issue.