Healthcare Reform

Healthcare reform: More raw deal than New Deal

We need universal, citizen-based healthcare. It doesn't look like Obama and Congress are ready to give it to us

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Healthcare reform: More raw deal than New DealPaul Osgood (L) and David Quinly (R) stand among a group of picketers pushing for healthcare reform outside U.S. Senator Sam Brownback's office in Overland Park, Kansas, July 9, 2009. Supporters of President Obama's healthcare reform efforts held more than 150 such rallies in communities across the United States on Thursday aimed at influencing Congress as it debates reform measures in Washington.

In 2001, Ted Halstead and I published a book titled “The Radical Center: The Future of American Politics.” Though I’m not sure we always succeeded, the goal we set for ourselves was to think freshly about how the legacy of the New Deal could be revised and updated for the 21st century. We decided that when it came to benefits our guiding principle should be a “citizen-based social contract.” We chose this phrase, not to discriminate against non-citizens, but to express two ideas: first, that benefits like healthcare ought to be not a privilege but rather an entitlement of all citizens in our democratic republic, and second, that all benefits should be detached from employers and follow individuals through their lives. In thinking about healthcare, we rejected various options that would not move us toward a citizen-based social insurance system. Unfortunately, the health plan being promoted by Obama and Congress is based on one of those bad options.

The present social contract or benefit system inherited from the 20th century is a mix of citizen-based and employment-based benefits. Social Security and Medicare are classic citizen-based entitlements — federal programs for individuals that are linked to a history of employment but not to any particular employer. The employer’s role in Social Security is the purely administrative one of collecting the payroll taxes. (Most economists argue that the “employer portion” of the Social Security payroll tax is actually passed on to be paid by the employee.)

Our healthcare system, by contrast, is predominantly employment-based. Most employees get health insurance through their employers. The employer-based health insurance system was not designed by anyone. It simply evolved over time. During World War II, federal wage and price controls inspired some firms to offer tax-sheltered health benefits to lure workers in the tight domestic labor market. After 1945, the unions in the heavy industry sector of the economy made tax-favored employer-provided health insurance one of the objects of collective bargaining, and the practice spread to other businesses. But employer-provided health insurance has never been universal, because many small businesses and contractors do not offer it to their employees. As a result, more than 40 million Americans lack health insurance.

Back in 2001, Halstead and I used the ideal of a portable, universal, citizen-based healthcare system as a criterion by which to evaluate different healthcare options. Five major alternatives to the present patchwork system had been discussed during the healthcare debates of the 1990s: single-payer; individual mandate; pay-or-play; a universal employer mandate; and health savings accounts. In practice there are only four options, because health savings accounts are a crackpot libertarian idea that would not work in practice.

A single-payer system is one like Social Security or Medicare, in which the government pays for basic medical care out of taxes. (Depending on the design, a single-payer system can pay private doctors and hospitals, as Social Security and Medicare do, or can be joined to a single-provider system with public doctors and hospitals; conservatives and libertarians dishonestly equate all single-payer systems with single-provider “socialized” systems.)

An individual mandate system, like that in Switzerland and the one adopted in Massachusetts in the last decade, requires all citizens (and legal immigrants) to purchase private health insurance, while subsidizing some or all of the purchases. A highly subsidized individual mandate system would essentially be a system of government vouchers given to individuals to purchase health insurance.

A pay-or-play system is one that would maintain the existing employer-based system for most Americans, but compel employers that do not provide health insurance for their workers to pay into a fund that would be used to purchase health insurance for non-covered workers.

Finally, a universal mandate system would require all employers to provide health insurance for their workers.

Of these four options, two were citizen-based, that is to say, universal and portable — single-payer and individual mandate — while two were tied to employers, pay-or-play and universal mandate. If our goal is a citizen-based social contract, then the best approach would be a universal, single-payer system, which could be compatible not only with private doctors and hospitals but with private health insurance, on top of a basic plan. Judging that single payer was not politically feasible in the near future, Halstead and I supported an individual mandate system.

The individual mandate system is far inferior to single payer, in my view. But it is less bad than the other options, or so it seemed to me at the time. Pay-or-play would maintain a two-tier labor market, divided between those with employer healthcare and those without it. A universal employer mandate would eliminate the two-tier labor market, but at the price of further burdening corporations with welfare-state duties that the government rather than business should undertake. 

Flash forward to 2009. The evolving Democratic healthcare plan seems to be a hybrid of three approaches. There is a public plan (single-payer), and an individual mandate (individuals must show they have healthcare coverage by their employers or purchase their own). Essentially, however, the plan looks like a version of pay-or-play, in which most Americans will keep their employer-provided health insurance, while those who aren’t offered insurance by their employers will be compelled to purchase it.

I am not a healthcare expert and can’t say whether a plan like this, if it is passed, would accomplish goals like reducing unsustainable rises in costs and ensuring universal coverage. And a flawed reform is often the price of progress. Politics is the art of the possible, half a loaf is better than none, the perfect is the enemy of the good — supply your own clichés, if you don’t like these.

Nevertheless, if a reform like this is enacted, then it seems to me that we are no closer to the ideal of a citizen-based social contract than we were before. Progressives hope, and conservatives fear, that the public plan over time will absorb more and more American workers, eventually becoming a de facto single-payer system. But until the baby-dinosaur public plan eats up private health insurance in the U.S. and grows up, there would be a patchwork system in which more Americans would be covered (a good thing) but in which most Americans would continue to obtain their health insurance through their employers (a bad thing, both from the point of view of individual mobility and economic growth).

My own views on this subject have changed since Halstead and I wrote about it in 2001. I still believe that single-payer would be best — and I still believe single-payer is politically impossible in the U.S. I would now put more weight on eliminating a multi-tier labor force that allows businesses to game the system — for example, by outsourcing some tasks to private contractors, in order to avoid paying health benefits to full-time workers. A universal employer mandate would prevent this problem. An employer mandate might raise the costs for small businesses — but then, it might not, if government provided subsidies to reduce the costs to employers of employer-based health insurance for all.

Another argument for a universal employer mandate is the resistance of much of the public to the loss of their existing employer-based benefits. In the words of Hilaire Belloc: “It’s always best to cling to nurse/ For fear of finding something worse.” Those of us who argued for non-employer-based systems underestimated the fear of change on the part of the public. Politicians haven’t made that mistake. Both President Obama and Congress have assured the voters that they will not be forced to lose their existing employer-based healthcare, if they have it. In light of this political reality, keeping existing employer-provided healthcare while mandating it and subsidizing it for all employees of all companies might be more feasible than moving to an entirely different system.

For what it is worth, my own thoughts on this topic continue to evolve. In 2001 my order of preferences looked like this: single-payer, individual mandate, pay-or-play, employer mandate. In 2009, my order of preferences looks like this: single-payer, employer mandate, individual mandate, pay-or-play. If avoiding a two- or three-tier labor market, with different classes of workers with different rights, should be a goal as well as portability and universality, then maybe a government-subsidized universal employer mandate would be the second-best system if single payer remains politically out of reach.

Unfortunately, the Obama administration and Congress appear intent on giving us a version of pay-or-play, which, though it might solve some problems, from the point of view of advocates of a citizen-based social contract is the worst strategic option for healthcare. The status quo, modified slightly by a baffling Rube Goldberg scheme for covering the uninsured, is not what New Deal liberal proponents of universal healthcare have dreamed of since the 1930s. Sometimes half a loaf is worse than none, if the half is moldy and stale. 

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Michael Lind’s new book, "Land of Promise: An Economic History of the United States", will be published in April and can be pre-ordered at Amazon.com.

Origins of a healthcare lie

The unknown history of the argument against the individual mandate

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Origins of a healthcare lie (Credit: Reuters/Jonathan Ernst)

Professor Michael McConnell, the distinguished constitutional theorist, has weighed in, to my knowledge for the first time, on the healthcare reform case pending in the Supreme Court. He writes in a recent Wall Street Journal op-ed that “[t]he drafters and defenders of the health-care law have only themselves to blame for this mess.” This is because “they did not take seriously their obligation to legislate within the limits set by the Constitution.”

Prof. McConnell’s essay includes some uncharacteristically sloppy statements, as Sam Bagenstos points out. But he asks a good question: Why didn’t the Democrats see this trouble coming?

I’m now working on a book on the constitutional objections to the Affordable Care Act, which will be published in the spring of 2013 by Oxford, and I’ve been researching this very question. What I’ve found may be surprising.

The constitutional limits that the bill supposedly disregarded could not have been anticipated because they did not exist while the bill was being written. They were invented only in the fall of 2009, quite late in the legislative process.

The first exploration of Congress’s authority to enact a mandate was a paper by Mark Hall, which he posted on SSRN in February, 2009. (I have not been able to find even a hint of the constitutional objection before Obama’s election, even though mandates have been proposed, mainly by Republicans, since the early 1990s.) He concluded that the mandate easily followed from existing commerce clause jurisprudence. His piece is extensively footnoted, but it cites no authority to the contrary. Republicans had no constitutional objections. Senator Charles Grassley said in June 2009, “I believe that there is a bipartisan consensus to have individual mandates.”  (He later changed his mind.)

The first published claim of unconstitutionality that I have been able to find is a July 10, 2009, Federalist Society paper by Peter Urbanowicz and Dennis G. Smith. They created the now notorious action/inaction distinction, declaring that “Congress would have to explain how not doing something – not buying insurance and not seeking health care services – implicated interstate commerce.” But they made only a modest effort to rebut the obvious response based on text and precedent, and their bottom line was that a mandate “might be susceptible to an ‘as applied’ challenge from individuals who (1) never access the health care system or (2) are able to pay for their health care without using insurance.” Not only does this not suggest a facial challenge of the kind that the Court is now considering — even they weren’t that bold — but the hypothetical individuals are fanciful.  No one who is not a multimillionaire can know for certain that they will be able to pay for all their future healthcare needs out of pocket.

On July 14, the House committees generated a unified healthcare bill, and the next day the bill passed the Senate Health Committee. On July 24, a Congressional Research Service memo, determinedly evenhanded, declared that the power of Congress to require the purchase of a good or service was “a novel issue.”  It, too, developed no substantive argument for unconstitutionality.

An August 17 blog post by Rob Natelson offered a litany of briefly stated constitutional objections, most of which were never heard from again. It was quoted sympathetically, but without elaboration, by David Kopel on the Volokh Conspiracy blog – the first post on that blog to suggest that there could be a constitutional issue. (The importance of the Volokh blog to the healthcare issue has already been noted, here.) On August 22, David Rivkin and Lee Casey wrote a Washington Post op-ed declaring that “[t]he federal government does not have the power to regulate Americans simply because they are there.” There were some follow-up posts on Volokh Conspiracy by Jonathan Adler and Ilya Somin, both of whom reluctantly concluded that the bill was clearly authorized by current law. (Both later changed their minds and will now tell you that the mandate is obviously unconstitutional!)

On Sept. 18, Randy Barnett entered the fray for the first time, with a post on Politico and a follow-up on Volokh. Suddenly the meme went viral. On Sept. 21, CBS News reported that, “In the last few days, a new argument has emerged in the debate over Democratic healthcare proposals.” CBS observed that the O’Reilly Factor and Fox News had picked up on the story. Suddenly there was an outpouring of pieces, on Volokh and elsewhere, developing the constitutional objection. But even at this point it was a soundbite, not a legal argument.

The bill passed the Senate Finance Committee on October 13, and the full House of Representatives on November 7.

The first sustained legal argument was published by Barnett and two coauthors in a Heritage Foundation paper on Dec. 9, 2009. This was no casual blog post. It carefully engaged the cases and the literature and closely tracked the argument that eventually was brought before the Court. Barnett deserves the credit he has gotten: Like so much of his work, the argument was witty, sophisticated, creative and clever. There had been nothing like it before. But it had little basis in existing law, and its flaws came to light almost immediately. Rivkin and Casey made a similar argument (which didn’t add much, on the crucial commerce power issue, to their earlier op-ed) in a piece (undated) on the Pennsylvania Law Review’s web edition. Jack Balkin wrote a devastating reply, to which Barnett posted a link and response on Dec. 11.

None of these writings said much about the most powerful basis for Congress’s authority: its broad power under the Necessary and Proper Clause, which has been well established since 1819. Barnett’s paper was a work in progress. By the time he wrote his Supreme Court brief in February 2012, he implicitly acknowledged this unfinished business by struggling for more than 30 pages with the problem.

The bill passed the Senate on Dec. 24. The rest of the story is familiar: On January 19, 2010, Scott Brown surprisingly won the special Senate election in Massachusetts, depriving the Democrats of their filibuster-proof majority. It took some time for them to figure out how to respond, but the legislative obstacles were surmounted, and the bill was signed in March 2010.

The Democrats might, I suppose, have jettisoned the mandate. Certainly by early 2010 they knew that constitutional arguments were being made. McConnell suggests that “the drafters of the legislation should have stayed within the generous bounds of authority established by prior precedent.” But that’s just what they did do. As Balkin noted in July 2010, Barnett was trying to shift the boundaries of what counted as an off-the-wall argument.

Dropping the mandate also would have defeated one of the law’s primary purposes. A Congressional Budget Office report indicated that eliminating it would raise the uninsured population in 2019 by 16 million, with insurance rates rising by 15 to 20 percent for those who bought insurance individually. McConnell thinks that the Democrats have only themselves to blame, because they did not toss these people over the side as soon as there was a whisper of a constitutional issue. As the oral argument made clear, the case against the mandate requires a remarkable degree of callousness, obsessively focusing on the minor burden imposed by the mandate while determinedly ignoring the fact that the unavailability of insurance kills thousands of people annually. Now we are told that the Democrats were unreasonable because they did not immediately capitulate to their opponents’ newly crafted assumption that this callousness is written into the Constitution.

To say that the Democrats have only themselves to blame for not anticipating these newly minted constitutional claims is like saying John F. Kennedy had only himself to blame for not getting a second term as president because he should have anticipated Lee Harvey Oswald.

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Andrew Koppelman is John Paul Stevens Professor of Law and Professor of Political Science at Northwestern University.

Healthcare’s worsening crisis

Costs have risen dramatically during the Great Recession -- but one solution could make a huge difference

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Healthcare's worsening crisis (Credit: lenetstan via Shutterstock)
This article originally appeared on AlterNet.

The greatest rip-off in the world is getting worse. According to a groundbreaking study released last week (PDF), the cost of employer-based health insurance – which covers a majority of the population — has risen at twice the rate of inflation during the Great Recession, even while Americans have come to use less medical services.

AlterNetIt is a tragic irony that even as Washington debates whom to screw over to cut the Phantom Menace of our federal deficit, it has so far failed to address the single most important factor driving those deficits over the long term (if we paid the same for healthcare per person as the 30-plus countries with longer average life expectancies, we’d be looking at budget surpluses). It’s a problem that also leads to tens of thousands of unnecessary deaths annually, creates some of the worst health outcomes in the developed world, makes American firms less competitive in the global marketplace and contributes a great deal to wage stagnation for the middle class and the working poor.

In 2009, the Democrats passed a series of insurance reforms misleadingly dubbed “healthcare reform.” Many of those reforms were valuable tweaks to our private insurance system, and while many Americans are wary about the law as a whole, when asked about the specifics, most of the specifics in the law are quite popular. But Congress didn’t reform the healthcare system in a way that would significantly “bend the cost curve,” and the new study – which uses insurance industry data that was made available to the public for the first time (other studies extrapolated from Medicare payment data) – shows that the costs of medical services continue to climb much faster than the rate at which either the economy or wages are growing.

Chapin White, a senior researcher at the Center for Studying Health System Change, told Kaiser Health News that the report shows that working people covered by their employers “are paying more and getting less” because hospitals and other medical providers “just seem to be able to raise prices faster than general inflation.”

In some areas – like ER visits, outpatient surgery and mental health services – prices have increased at five times the rate of inflation.

But the study also shows that the rate of increase in healthcare costs has slowed during the downturn compared to their staggering climbs during the decade prior. If our healthcare system were growing more efficient, that would be good news, but while there is some evidence that Obamacare is in fact beginning to reduce costs to some degree, the bigger story is that many Americans are simply foregoing services.

Because while healthcare costs – and insurance premiums – continue to climb, an ever-larger share of the burden of those costs has been shifted onto the backs of working people. A recent study found that half of those respondents who had been sick during the previous year thought that the “quality of care” they’d received was a problem, and three in four identified rising costs as a serious issue.

As economist Jared Bernstein notes, “We’ve got recession-induced falling incomes bumping into faster growing prices for health services. Add in increased cost-shifting from employers to workers and you’ve got a pretty good recipe for lower overall spending.”

Compounding the madness is a push by the right – and some on the left – to roll back those insurance reforms passed after a year of bloody political combat. Forget for a moment about the lifetime and annual caps on out-of-pocket expenses, the requirement that preventive care be covered without co-pays (which should eventually result in some cost containment), the provision allowing young adults to stay on their parents’ plans, or closing the “donut hole” that requires seniors to pay a big chunk of their prescription drug costs out-of-pocket. Just consider that 10 million low-income Americans – people largely priced out of the market at present — will be eligible for single-payer public healthcare as the threshold for Medicaid eligibility goes up by 50 percent. (According to one study, 75 percent of low-income workers lack health insurance.)

Conservatives want to do away with “Obamacare” because they’re ideologically predisposed to buy into demagoguery about “death panels,” “government take-overs” and the supposed perfidy of the public healthcare systems that produce better outcomes for less in most of the rest of the developed world.

Some progressives also want to do away with it because it’s built around an individual mandate to buy private health insurance – long the signature Republican proposal for healthcare reform. (The mandate has become almost universally unpopular, but it is linked to the highly popular requirement that insurers cover people suffering from pre-existing conditions.)

Their thinking appears to be that if we revert to the status quo ante, the system’s deep dysfunctions – with skyrocketing costs and tens of millions uninsured – will exert so much pressure on families and businesses that it will inevitably lead to an outcry for a single-payer system. But there are big problems with their logic and a much better solution, one that wouldn’t leave those who do enjoy good coverage worried about their futures: Open up Medicare for everyone who wants in. And if single-payer systems are superior, doing so should eventually lead us there.

It’s true that single-payer is the only scheme that will provide universal coverage while actually decreasing overall healthcare spending. But the reality is that a large share of the population is covered – retirees by Medicare, the very poor by Medicaid and a majority of us through our jobs — and even with rising out-of-pocket expenses, they don’t face the horrors of being uninsured. Many of those who aren’t covered – young people, the working poor, the self-employed – are infamously difficult to organize.

But say the system does eventually collapse under the weight of its own inequities. There was a 15-year period between the last attempt to reform health care under Clinton and the passage of Obamacare. If it takes another 10-15 years to get a better set of reforms, there remains a lot of room for shifting more costs onto working families, denying more people coverage and causing more Americans to suffer needlessly. It is a classic case of throwing the baby out with the bathwater – just remember those 10 million poor people who wouldn’t be covered under Medicaid, a single-payer public health program, if Obamacare were repealed.

It is also based on the ahistoric premise that once a big, new social program is enacted, that’s it – it’s locked in stone. That was hardly the case with Social Security or Medicare, both of which have been amended again and again since their original passages in 1935 and 1965, respectively.

Understanding this leads to a better approach. Instead of throwing away a decent set of insurance reforms and a new infrastructure for (almost) universal coverage, progressives should come together around a simple amendment: Open up the Medicare system to anyone – individuals and employers — who wants to buy into it. Kill the limited state-based exchanges for private insurance (or keep them) and retain the subsidies for households and small businesses that provide coverage, keep the Medicaid expansion intact, let kids stay on their parents’ plans until age 26, and maintain the caps on out-of-pocket expenses. Throw away the bathwater, but hang onto the baby.

This might fulfill the promise of the original “Hacker Plan” (PDF), with its “public option” that would pit a single-payer system against the private insurance industry in head-to-head competition. Those who believe – rightly – that a single-payer system is the only way to provide universal coverage while cutting overall health spending should have the courage of their convictions and embrace that competition. May the better system win.

It’s an approach that doesn’t alienate or frighten the millions who enjoy decent coverage from their employers. And while it might take the same 10-15 years to get to a critical mass of Americans opting into Medicare, which could later be financed entirely from tax revenues, in the interim, we’d maintain the positive insurance reforms passed in 2009.

In other words, we need to keep moving the ball forward. With Americans paying more to get less health care, the moment is ripe to open up Medicare to all comers. And talk of going backward is hard to understand.

Joshua Holland is an editor and senior writer at AlterNet. He is the author of “The 15 Biggest Lies About the Economy: And Everything Else the Right Doesn’t Want You to Know About Taxes, Jobs and Corporate America.” Drop him an email or follow him on Twitter.

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Romney pal defends Obamacare

Sen. Roy Blunt supports part of the bill his ally Mitt Romney has pledged to fully repeal

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Romney pal defends Obamacare(Credit: Reuters/ Jonathan Ernst)

Sen. Roy Blunt, R-Mo., gave a strong defense yesterday of a portion of the Affordable Care Act that allows children up to 26 years old to remain on their parents’ health insurance plans, breaking a bit from the GOP’s hard-line opposition to Obamacare.

Blunt endorsed Mitt Romney early on and led the campaign’s efforts to recruit Republican lawmakers during the GOP primary. But his comments in an interview on KTRS radio in St. Louis may give Boston some heartburn as it tries to convince conservative voters that Romney, who enacted the predecessor of Obamacare in Massachusetts, will actually repeal the healthcare law.

“It’s one of the things that I think should continue to be the case,” Blunt said of the “dependent coverage” provision, explaining that “it’s a way to get a significant number of the uninsured into an insurance group without much cost,” because young people are generally healthy.

Blunt noted that he even introduced a bill when he was in the House that would do exactly what the provision of the Affordable Care Act does now, saying, “I was for it then, and I’d be for it now.” “You’re breaking some news,” host McGraw Milhaven quipped.

While Blunt said he still favors repealing most of the health law, he would want to preserve a few sections, including the dependent coverage provision and the creation of high-risk pools for patients with preexisting conditions.

Romney has repeatedly vowed to fully repeal the Affordable Care Act, though he hasn’t spoken out specifically on the dependent coverage provision and he enacted a similar provision as governor. The provision is hugely popular, even though the overall law is not. And while Republican leaders supported the extension of coverage to 26-year-olds as recently as 2009, when it was included in the GOP’s healthcare alternative proposal, the GOP’s message today is that they’re for a complete repeal of the law, including the minimum coverage provision.

This got Sen. Scott Brown, R-Mass., in trouble after it was revealed that he takes advantage of Obamacare to make sure his daughter has insurance.

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Alex Seitz-Wald is Salon's political reporter. Email him at aseitz-wald@salon.com, and follow him on Twitter @aseitzwald.

“Birth control doesn’t matter”

A new survey reveals just how ignorant young people are about contraception and pregnancy

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(Credit: restyler via Shutterstock)

When it comes to sex and reproduction, even the most mind-numbingly intuitive conclusions can be politicized or disbelieved. So they bear repeating and resubstantiation. Take this recent Guttmacher study on contraceptive knowledge. Surveying 1,800 men and women ages 18–29, the authors “found that the lower the level of contraceptive knowledge among young women, the greater the likelihood that they expected to have unprotected sex in the next three months, behavior that puts them at risk for an unplanned pregnancy.” In other words, access to factual information helps prevent risky behavior.

I’m holding myself back from saying “duh” here, but this still has to be reiterated at a time when abstinence-only education that doesn’t provide detailed information about contraceptive use, except occasionally to emphasize its limits, not only persists but recently got a federal stamp of approval. As an Advocates for Youth report on the impact of abstinence-only education noted, “Proponents of abstinence-only programs believe that providing information about the health benefits of condoms or contraception contradicts their message of abstinence-only and undermines its impact. As such, abstinence-only programs provide no information about contraception beyond failure rates.” That’s how you get terrifying statistics like this one from the Guttmacher report: In the survey, “60 percent underestimated the effectiveness of oral contraceptives and 40 percent held the fatalistic view that using birth control does not matter.” Overall, “more than half of young men and a quarter of young women received low scores on contraceptive knowledge.” It’s also how you get figures like the one from the CDC that found that 31.4 percent of pregnant teens didn’t use contraception because they “thought they could not get pregnant at the time.”

There are two reasons to be optimistic that some dent can be made in these depressing figures, and they both have to do with provisions of the Affordable Care Act. Much has been made of the mandate that insurance policies cover all FDA-approved contraceptive methods, but there’s another aspect that’s been relatively overlooked: the fact that the same provision includes free education and counseling about sex and contraception, at least for the insured. The second reason for optimism is that the mandate will make it far easier for women to get longer-acting and more effective forms of contraception like the IUD — which are also more expensive and which studies have shown women would be interested in if they could afford them. Incidentally, the recent Guttmacher study found that women who were using long-acting or regular hormonal contraception tended to score higher on overall knowledge.

It will be awhile before we know if these changes will move the needle on the nation’s unparalleled rate of unintended pregnancy. The women’s health provisions only go into effect for new plans in August 2012, and older plans will be initially grandfathered and eventually phased out. And of course, there’s another big fat if – whether the Supreme Court overturns all or part of the Affordable Care Act. The Obama campaign and its allies are keen to point out how such a move — or, perhaps, a legislative repeal down the line — will hurt women above all. The Center for American Progress recently released a report on “Women and Obamacare” (the campaign having officially embraced the derisively intended term). It declares Obamacare “the greatest legislative advancement for women’s health in a generation,” which may be true for reasons more depressing than inspiring: There have been very few advancements partly because there has been so much political defense played.

In addition to the reproductive health benefits, the report points to preventive care recommendations for which cost-sharing has already been cut: mammograms, pap smears, prenatal care and so on. According to the report, “close to 9 million women will gain coverage for maternity care in the individual market starting in 2014,” currently not covered in 78 percent of plans sold on the individual market. It notes that women are more frequent users of healthcare services than men, that they’re likelier to make the household decisions on healthcare and that they’re more vulnerable to losing coverage because they’re likelier to be listed as dependents on a partner’s plan. The Affordable Care Act also makes it illegal to engage in “gender rating” – charging women $1 billion more than men on the individual market – and bans states from discriminating on the basis of gender identity in their insurance exchanges.

The report does acknowledge two ways in which Obamacare falls short for women who were “left out of the law — undocumented and recent immigrant women and women who need abortion services.” It claims that “political compromises on abortion coverage were necessary to ensure passage of the Affordable Care Act” – still a bitter loss to reproductive rights groups, who memorably described women as having been “thrown under the bus” by Democrats – “but the work to obtain abortion coverage for all women continues.” The last part is particularly debatable, at least when it comes to any momentum on the funding issue from national Democrats, while Republicans in the states and federally have spent considerable energy trying to limit abortion coverage on even private insurance plans.

Still, if the Affordable Care Act is allowed to stand, the magnitude of having an actual, proactive reproductive health access policy shouldn’t be underplayed. Maybe we’ll get closer to a saner republic where hearing “birth control doesn’t matter” from people who don’t want to get pregnant is a quaint memory.

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Irin Carmon

Irin Carmon is a staff writer for Salon. Follow her on Twitter at @irincarmon or email her at icarmon@salon.com.

Healthcare’s foreign invasion

Obama risked a trade war with China about manufacturing -- so why isn't he outraged about medical jobs?

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Healthcare's foreign invasion (Credit: gualtiero boffi via Shutterstock/Salon)
This article was adapted from the new book, "Insourced", available May 8 from Dartmouth College Press.

Approximately 15 percent of all healthcare workers and 25 percent of all physicians in the United States were born and educated elsewhere. This means that 1.5 million healthcare jobs are “insourced,” occupied by foreign-born, foreign-trained workers brought into the United States on special visas earmarked for healthcare jobs. This number is 50 percent greater than the total number of jobs in the U.S. auto-manufacturing industry. It’s amazing to consider that in 2008 and 2009, the auto industry, which makes up just 3.6 percent of the U.S. economy, received a $97 billion bailout. If we estimate that each of these 1.5 million insourced healthcare jobs has an average wage of $60,000, that’s $90 billion a year in wages going to people brought into the United States to work rather than training Americans to do the same jobs.

The healthcare industry makes up 16 percent of our economy. Yet even in these days of close to 10 percent unemployment, we do not invest enough money in our young people to train them for jobs in healthcare — an already understaffed industry that will have to serve an additional 32 million people once the provisions of the 2010 health-reform law take full effect. Instead, when faced with pressure from hospitals and nursing homes for more healthcare workers, the federal government grants visas to import nurses, physicians, pharmacists, physical therapists, and many other types of healthcare workers from countries that can ill afford to lose them.

In some U.S. industries, the outcome of globalization is positive or neutral. Take the sugar industry. Due to lower labor and land costs and better weather conditions, it’s far cheaper to grow sugar cane in the Caribbean than sugar beets in North Dakota. As import taxes fall, global transportation improves, and the number of sugar beet farms in the United States declines, more Americans are sweetening their cereal with sugar from Jamaican sugar cane. Americans save money buying cheaper sugar; the economy of the poorer sugar-growing countries improves, lifting thousands of people out of poverty; and the few displaced American sugar beet farmers generally find other work. But sugar is not a strategic commodity. If CARICOM, the Caribbean Community, were to halt sugar exports to the United States, we would experience no crisis. Sugar is not essential to our diet or life, and we have plenty of substitutes, from honey and corn syrup to NutraSweet. If necessary, within a year we could again be producing sugar in the United States.

The U.S. healthcare industry is 200 times larger than the U.S. tire-manufacturing industry, yet President Obama risked a trade war with China, our biggest trade partner, over tires. He was understandably trying to protect well-paying manufacturing jobs for American workers. Yet each year, we bring thousands of nurses from China to work in even better-paying jobs rather than train young people in this country to become nurses. The irony is that the economic costs of “insourcing” healthcare workers, including the loss of jobs no longer available to Americans, are far greater than the costs when we import Chinese tires. In 2003 the Commission on Graduates of Foreign Nursing Schools (CGFNS), a U.S.-based nongovernmental organization that administers the U.S. nursing licensing exam for foreign-trained nurses, opened a testing center in Beijing. The opening of this center initiated a “mushrooming” of new nursing schools in China and led to credible predictions that China will soon surpass the Philippines as the number one source of foreign-trained nurses imported to the United States.

Given the publicity and furor over the loss of manufacturing jobs, the lack of protest over healthcare-worker insourcing is surprising. Congress passed legislation and President George W. Bush signed a law in 2007 to protect the American sock industry from the rival Honduran sock industry. Yes, that’s right: socks. Protecting a few hundred $15-an-hour sock-manufacturing jobs based solely in the small town of Fort Payne, Ala., was worth acting on. Yet insourcing hundreds of thousands of $60-an-hour healthcare jobs has prompted no such similarly high-level response from our leaders.

Instead, on a regular basis, Congress approves and presidents from both political parties sign legislation to enable the legal entry of an ever-increasing number of foreign healthcare workers. Each year, about 20,000 new healthcare-specific visas are issued for these workers.

The United States has traditionally not allowed strategic industries to be outsourced. That’s why the U.S. steel industry and the U.S. car industry have received bailout after bailout. Access to enough steel and automobiles is essential to our economy; without a sufficient supply of each, our economy would be severely damaged. It’s time we acknowledged that the health of the population is just as important as steel and autos in keeping our economy strong. Healthcare is too important to risk continuing to insource it.

It’s not just a matter of protecting and expanding jobs for American workers. Every year, thousands of Americans die, and the health of thousands more is compromised, because of the shortage of healthcare workers in every one of the healthcare professions.

On the surface, insourcing may appear to be a harmless or even win-win solution to the country’s healthcare-worker shortage. The hospital receives a much-needed worker, and the worker escapes life in a struggling country for a better life here. But we should be training more people in this country to work in those professions, especially people from poor and minority communities. Rather than investing in our own people and communities, however, the U.S. government has decided to take the best and brightest workers from struggling countries.

Many foreign-trained healthcare workers, no matter how smart, are not adequately prepared for practice in the fast-paced, high-tech world of U.S. medicine. Whether in operating rooms, hospital wards, or nursing homes, inadequately qualified and poorly oriented foreign healthcare workers endanger the lives of their patients, as well as the lives and careers of their American-trained colleagues.

But the main reason for this country’s rise in unnecessary deaths and delayed care is understaffing — a result of the failure to train and place enough healthcare workers, especially in rural and underserved communities. Americans who live in rural areas make fewer visits to healthcare providers and are less likely to receive preventive care. The infant-mortality rate for African-Americans is twice that for the average American; Latinos are twice as likely as white Americans to die from diabetes. These health disparities are due in large part to a lack of healthcare workers, especially primary-care workers, in their communities. The quick fix has been importing foreign healthcare workers for these unfilled positions. Unfortunately, once these workers fulfill their initial contracts, most move to communities without healthcare-worker shortages; in fact, foreign-trained healthcare workers are more likely to practice in the well-served, major metropolitan areas than their American-trained counterparts.

Even if good foreign-trained healthcare workers were here in numbers adequate to meet our needs, the U.S. healthcare system is about encounter a tidal wave of demand as 78 million baby boomers approach their 60s. Older people make, on average, six visits to a healthcare provider a year, compared with two visits per year for people under 60. The healthcare workforce is aging, too: More than 50 percent of practicing healthcare workers are eligible to retire during the next 10 years, which will leave us with fewer workers to treat more and sicker patients.

In the eyes of employers, of course, insourcing healthcare workers appears to offer many benefits. Most doctors and nurses in developing countries earn a fraction of what American doctors and nurses earn: A Caribbean nurse makes around $1,000 a month; an Ethiopian physician, about $100 a month. Not only are many foreign-trained healthcare workers accustomed to lower salaries and quality of life, but they also carry little or no education debt, while their American-trained colleagues typically graduate with five- and six-figure debt burdens. With average student debt burdens of $155,00011 for newly graduated physicians and $30,375 for nurses, American-trained health workers require a higher salary just to help pay for their education. Trained in a much more hierarchical environment, foreign workers are much less likely to unionize, or even express dissatisfaction with their work. As the percentage of imported healthcare workers increases, their attitudes toward salary and terms of employment undermine the bargaining power of U.S. workers, and even affect the important feedback loop between employees and management.

Polls indicate that 70 to 80 percent of Americans want to reduce the rate of immigration into the United States. Yet the American public is not aware of our policy of using healthcare-worker-specific visas to solve the healthcare-worker shortage.

Some legislators who publicly support stabilizing immigration consistently vote to increase the number of healthcare-worker-specific visas granted each year. It’s not that American citizens don’t want to become healthcare workers and fill these jobs. This distinction is critical, because every industry that has brought in foreign workers has argued that American workers won’t do the work for the prevailing wage, or won’t do the work no matter how high the pay is. In the healthcare industry, this argument does not apply. U.S. citizens want the jobs. They just can’t access the training. The United States does not have enough positions in health-professional schools to meet industry demands.

The tens of thousands of qualified nursing school and medical school applicants who are denied entry to school each year permanently lose out on their chosen careers, work that is consistently ranked in the top tier of salaries, with excellent benefits and almost guaranteed job security. This loss of career opportunity is even greater for rural and minority young people, who are grossly underrepresented in the higher-level health professions, such as physicians and nurses, and overrepresented in the lower-level professions, such as technicians and home health assistants. Something is wrong when so many young Americans are forced to pursue other, lower-paying careers at a time when we desperately need more healthcare providers. In exchange we get foreign healthcare workers who are less well trained (they consistently score lower on licensing exams than U.S.-trained healthcare workers) and far less culturally competent than native-born Americans.

The most tragic and most preventable effect of our hiring so many healthcare workers from other countries is the unnecessary deaths of hundreds of thousands of men, women and children in developing countries. The World Health Organization (WHO) estimates that each year more than 10 million people die needlessly, from easily treatable maladies such as diarrhea, pneumonia, malaria, tuberculosis, vaccine-preventable diseases, and complications of childbirth. The WHO Global Health Workforce Alliance estimates that there are a billion people alive today who will never see a health worker in their lives. In Ethiopia, one in 10 Ethiopian children will die before his or her fifth birthday — yet there are more Ethiopian physicians in the Chicago area than in all of Ethiopia, which, with 80 million people, is the second most populous country in Africa. As their most skilled nurses emigrate to work in U.S. nursing homes, middle-income countries such as Jamaica and Trinidad have nurse-vacancy rates of 60 percent or higher.

Throughout the developing world, nurses, pharmacists, physical therapists, and many other types of healthcare workers are being approached and offered 10 times their salaries to practice in modern U.S. healthcare facilities with state-of-the-art technologies. Even the most dedicated, socially conscious worker would be tempted by such an offer. A colleague of mine relayed a conversation he’d had with the head of the Nursing Council of Kenya, who told him about the damage the exodus of senior nurses was doing to her country’s healthcare system. In the next breath, she confessed that the next time he visited Kenya, she might not be there. She was thinking about emigrating herself.

Our unofficial policy of relying on the world’s poorest countries to pay for the training of workers whom we then entice and bring to this country is devastating healthcare systems around the world. The loss to a developing country when a single physician, representing what may be a significant portion of their total number of physicians, emigrates is far greater than our gain. Our failure to provide education for our own citizens and to better plan for healthcare staffing and distribution does not justify poaching nurses and physicians from the countries that can least afford to lose them. How many additional deaths, how much more needless disability and suffering, will we allow this misguided policy to cause?

And consider American competitiveness. Certain industries are vital to U.S. global leadership. Recognizing their importance, we protect those industries. We don’t allow them to move overseas and make the United States vulnerable to the actions of other countries. Poor farmers in the developing world can certainly grow food staples more cheaply than American farmers do. But because of the strategic importance of the U.S. food supply, we subsidize some basic food crops, such as corn and soybeans.

And yet we are overreliant on foreign healthcare workers to meet our most basic health needs. This is particularly dangerous because many countries, almost completely drained of healthcare workers and tired of subsidizing the U.S. healthcare system, are trying to slam the door shut for emigrating healthcare workers. Meantime, of the world’s wealthiest nations, the United States has the worst health outcomes, with lower life expectancies and higher rates of deaths from preventable causes. In infant mortality, for instance, we rank 27th, behind Poland and Hungary. Our disability levels are higher than in most former Soviet countries.

If the United States is to remain competitive in the global economy, we need a healthy workforce. In order to achieve that, we need a healthcare workforce made up of adequate numbers of properly trained physicians, nurses, pharmacists, community-health workers, and other healthcare providers.

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Dr. Kate Tulenko is a physician with degrees from Harvard University, Cambridge University and the Johns Hopkins School of Medicine. The former coordinator of the World Bank's Africa Health Workforce Program, she currently serves as director of clinical services for a global health nonprofit.

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