User:Doc Tropics/United States health reform under Carter

James Earl Jimmy Carter, Jr. worked to enact healthcare reform during his presidency in the late 1970s and early 1980s. President Carter's non success in establishing National Health Insurance with a Democratic majority in Congress can be attributed to many factors. Carter's position on universal care was never clear, and neither was his plan. He was also not able to reach an agreement with Congress or interested parties such as the United Automobile Workers (UAW).

On December 12, 1974, Jimmy Carter announced his candidacy for the 1976 democratic presidential nomination to the National Press Club. In that speech, he emphasized that every American has the right to pursue health. He said that American’s policy and "long–range goals [are] in health care". Carter criticized the idea that the quality of health care in America depended heavily on economic status and challenged the Congress to pass a national health insurance law. This was the first step of Carter’s journey in pursuing universal health coverage(ADDRESS BY JIMMY CARTER ANNOUNCING HIS CANDIDACY FOR THE 1976 DEMOCRATIC PRESIDENTIAL NOMINATION TO THE NATIONAL PRESS CLUB)

The issue

Background

National Health Insurance was a topic already opened and laid out by Carter’s predecessors. Truman proposed national health insurance in the late 1940s and early 1950s (Kingdon 7). Medicare and Medicaid were passed in the mid 1960s. The 1970s again addressed national health insurance, with a proposal submitted by Senator Edward Kennedy and Wilbur Mills, the chairman of the House Ways and Means Committee (7). By Carter’s presidency, Congress and other supporters of NHI seemed ready to retackle the issue.

Carter made many campaign promises, telling Americans that he favored a comprehensive health insurance program. Inflation, however, became his number one focus. Giant spending on national health care by the government would only agitate this problem. Furthermore, Carter's staff advised the pushing a large plan that would be rejected by Congress would be a public relations defeat (Schram 1979).

How the issue got noticed

Carter gained much political support from the United Automobile Workers (UAW) when he openly declared some form of national health insurance in his 1976 campaign (Kingdon 7). The passing of Medicare and Medicaid provided only insurance for the elderly and poor, and there lacked some sort of comprehensive coverage of hospital and physician’s care for the masses (Kingdon 7, Finbow 172). In addition to the UAW, there was support from Congress, religious, charitable and consumer groups, and the general public for Carter to spearhead a national health insurance movement.

How the issue was framed

Carter decentralized domestic policy formation responsibility, delegating it to ad hoc committees, many of which were comprised of generalists who had little experience in the particular area of national health care reform (Finbow 170). He focused on the creation of a comprehensive, all-inclusive solution, and did not compromise his notion of the “perfect” policy, until all efforts to create one had been exhausted(170). Carter considered many plans - single-pay system, universal care, compulsory insurances, comprehensive and selective benefits programs from various inputs (Kingdon 7). The divided power over the issue between cabinet members and committees led to tension and lack of efficiency, and his idealistic goal of a comprehensive plan also led to little effective progress.

Furthermore, President Carter took office during an economically strenuous time; Carter faced the phenomenon of stagflation. The inflation and fiscal crisis greatly affected planning. (Finbow) The Office of Management and Budget (OMB) argued that health reform would have negligible effects on the quality of care but had "profound implications for inflation, unemployment, income, and investment." (Finbow)

To make matters worse, Carter stood before a nation divided, as evidenced by his narrow victory on Election Day. (Weissert) Conservative Congressmen therefore demanded economic stimulus be the top priority, and health care reform seemed to aggravate the already strained national situation.

The policy stream

Policy communities

Department of Health, Education and Welfare (HEW) was placed in charge of policy formation. They created four contrasting health insurance models, which polarized the administration (Finbow 172). HEW guarded its authority on health care reform and alienated the White House liaison; by 1977 a "spirit of detente" was declared. (Finbow)

The Secretary of HEW, Joseph Califano, advised the president not to take a firm stand on a controversial issue such as health reform, especially because no consensus had been established on key features of the plan such as the role of states, how much federal money would be required, the role of private and local agencies, whether the plan would be immediate or phased-in, and finally, what choices the consumer would ultimately have. (Finbow) Califano was an "idealistic liberal reformer" who had entered government "with the idea of making a revolution" (Quadagno 2005: 125); he had been one of those present to escort James Meredith, the first African-American student at the University of Mississippi and had previously worked with the Department of Defense on plans to take down Fidel Castro. To curb the high cost of health care expensives, which were expanding at fifteen times the national inflation rate (Sinclair 1978), Califano instituted price controls, limiting annual rate increases to one and a half times the price index, with a nine percent cap. These controls also applied to the private payers. Carter claimed the proposal would save the nation $80 billion by 1983 (Sinclair 1978). Hospital lobby groups called Califano's plan a "most serious challenge" (Quadagno 2005: 124).

The AHA, representing non-profit hospitals, mobilized and the for-profit hospitals soon followed. The for-profit hospitals were huge beneficiaries of health care inflation. Profits for these companies had shot up as high as 52.3 percent in one year (Quadagno 2005: 124). A political action committee was formed, $1 million set aside for advertising, and members of Congress received large donations from the Federation of American Hospitals. Over 23,000 letters were mailed out to join the campaign against Carter's administration before he imposed "inflexible and bureaucratic federal controls" (Quadagno 2005: 126). No group really supported Califano's plan, including many of Carter's own advisors, and it fell apart in the Senate Finance Committee (Quadagno 2005: 127). A compromise bill was passed, however, that would allow hospitals to voluntarily contain costs, but would allow the government to eventually impose a cap if cost containment goals were not reached (Quadagno 2005: 128). Califano, as opposed to Caspar Weinberger in the Nixon Presidency, had an inflexible position on healthcare reform. If he was to have realized the necessity of compromise and consensus building that Weinberger practiced, he would have had much greater success.

Policy entrepreneurs

Senator Ted Kennedy had previously suggested a proposal with Wilbur Mills, chairman of the U.S. House Committee on Ways and Means, in the mid-1970s, and then reemerged as a major force behind comprehensive national health insurance during Carter’s administration (Kingdon 7). Kennedy suggested a softening of the comprehensive plan by pulling back on support for a totally government program, and to include private insurance companies as part of the proposal (Kingdon 7). Kennedy pushed Carter to fulfill his campaign commitment to national health insurance. Carter, however, seemed uninterested, telling Kennedy, "If you come up with a program, that's fine and you'll have my support if it preserves a role for the insurance companies" (Quadagno 2005: 124).

In 1977, Kennedy spoke at a UAW convention, telling the crowd that Carter was not fulfilling his promise and urging the President to take action. The next day, Carter promised to have a bill ready by the end of 1978. When Califano finally began writing a bill, he was surprised at "how unprepared HEW was to develop a national health insurance proposal" (Quadagno 2005: 129). When a plan was finally presented to Kennedy, it called for a phasing-in process that would be on a time schedule determined by the President with inflation and fiscal policy in mind. Kennedy rejected the idea and publicly announced that Carter had failed as a leader and, as a result, Kennedy would be presenting his own plan soon. Democrats began a campaign to have Kennedy run for President in the 1980 elections instead of Carter (Quadagno 2005: 130). Kennedy came forth with his Health Care For All Americans Act, which would guarantee universal coverage. Carter fired back with his own plan, named HealthCare. This plan, however, did not guarantee univeral coverage and preserved a large role for private insurance firms. Carter and Kennedy negotiated behind the scenes and finally managed to form a compromise bill that was close to Kennedy's plan with a larger part for the private sector (Quadagno 2005: 131). The bill, though, died soon after. Carter fired five cabinet members, including Califano; in addition, the public's interest was arrested by the developing crisis in Iran (Quadagno 2005: 131).

Alain C. Enthoven of the Graduate School of Business at Stanford University proposed a plan in 1977 named Consumer-Choice Health Plan (CCHP). His plan featured a refundable tax credit that could only be used as a permium contribution toward a qualified health care plan. CCHP would replace the Medicare and Medicaid systems with the proposed system of premium subsidies. The plan was greatly supported by the economists of the Carter administration, but HEW rejected the plan as they were already committed to Califano's proposal (Enthoven 1980: 142).

Origin of the idea of national health insurance

Theodore Roosevelt commenced discussion of national health insurance (see US health reform 1912-1920). This carried over into Truman’s time in the late 1940s and 50s and further into the 60s when Medicare and Medicaid were passed. Thus, national health insurance had been on the public mind for several decades already.

The political stream

The national mood

The declining national economy was high on the American agenda when Carter took office. Government faced the consequences of the oil embargo, the Vietnam War and the Great Society. The Watergate scandal also made many Americans distrustful of the government and the President (Finbow).

Foreign affairs were also of great concern during the Carter administration. There were many skeptics of Carter’s plans to relinquish control of the Panama Canal. Additionally, Carter's response to Soviet aggression in Afghanistan by pulling out of the Olympics and ending the sale of wheat to the Russians took a lot of criticism. His recognition of communist China and his negotiation of new arms control agreements with the Soviets, were both criticized by conservatives in the Republican Party. The largest international crisis of Carter’s presidency involved Iran when Iranian student militants were encouraged to storm the American embassy and take over fifty Americans hostage. Carter’s ineffectual handling of the hostage crisis, and the disastrous failed attempt to rescue them in 1980, doomed his presidency. Foreign affairs placed a large shadow over domestic issues, such as national health insurance.

Regardless of foreign conflicts, the United Automobile Workers (UAW) had been pushing for comprehensive national health insurance for years (Kingdon 7). They were supported by religious, charitable and consumer groups (Finbow 172).

Organized political interests

Jimmy Carter was unable to organize other political interests especially Congress to support his cause. His long standing failure to come to agreement with the UAW especially hurt his chances of passing universal health insurance legislation. The AFL-CIO, surprisingly, refused to support Carter (Quadagno 2005: 124). Another interest group was the American Medical Association, which also did not support government health reform.

Carter's Political Position

Carter was a self-proclaimed Washington outsider. His entire Presidential campaign had focused on solving the issue of corruption in Washington. Carter's newcomer status soon showed itself in his inability to make deals with Congress. His “unwillingness to compromise or share credit with Congress proved disastrous to healthcare and other initiatives” (Finbow, 182). Jones referred to Carter as a “trusteeship” president, one whose preference is to “do what’s right, not what’s political” (Jones, 3). This trusteeship was apparent in Carter's health care reform initiative. It seemed as though Carter “worked against the system” and often found himself at insurmountable odds with a Congress strongly influenced by what would get them reelected(Jones, 8). With little power to influence Congress, Carter sealed the failure of his healthcare proposal.

The policy window for health reform

Why the window of opportunity for health reform opened

The policy window for health reform tends to open in cycles. After the passing of Medicare in 1965, the attention to health policy weakened. However by the late 1970s reform was once again a hot button issue (Kingdon 189). Carter’s win into presidency was coupled with a Democratic Congress. That, along with his public commitment to national health insurance allowed opportunity for major reforms. (Kingdon 7)

Why the window of opportunity for health reform closed

National efforts. Carter delegated the majority of his administration’s policy-making authority to cabinet departments – this meant that the Department of Health, Education and Welfare (HEW) took the lead on health-care reform and could proceed unchecked by the White House Domestic Policy Staff (DPS). With DPS powerless “to impose unity and compromise among the agencies” (Finbow, 179) HEW proceeded with four widely different proposals resulting in deep rifts within the administration (Finbow, 172). With no authority keeping the warring clans in line, Carter was caught between “the concerns of his economics advisers that a major increase in government spending would be inflationary and the pressure of his social policy and political advisers to improve insurance coverage…” (Feder et al., 12) and floundered for months.

The division of power led to ineffective progress as a result of disagreements, and Carter’s idealistic push for a proposal created without compromise made it difficult to create a feasible plan of action. Jones referred to Carter as a “trusteeship” president – one whose preference is to “do what’s right, not what’s political” (Jones, 3). On health-care reform, Carter “worked against the system” as a “trustee” of national interests, and thus found himself at insurmountable odds with a Congress necessarily governed by electoral math (Jones, 8). In addition, with other foreign and domestic policies on his agenda, Carter did not act upon national healthcare timely enough to build on the momentum of public support from his election campaign.

In addition to indecision on the part of policy makers and poor timing, national issues also cause the window of opportunity to close. As inflation rose and the budget deficit increased, Congress and the administration became wary of enacting any plan that would greatly increase government spending. The passing of California Proposition 13 (1978) signaled the tax revolt revealing the American preference for reduced state taxation (Kingdon 171). In his efforts to maintain relationships with powerful interest groups while trying to convince the public indicated vacillation. (Finbow) Carter favored a consensus building approach and this proved counter-productive as Congress and the public lost patience.

Like Clinton, President Carter wasted his “honeymoon” period with Congress, thus losing his chance at passing meaningful health-care reform. Already late out-of-the-gate to begin work on health-care reform (completing nothing in the first weeks of his presidency (Finbow, 172)) he later delayed introducing legislation until after the mid-term elections (Finbow, 176). Indeed, some question Carter’s commitment to passing health-care reform at all; most of his high-priority issues received substantial presidential lobbying efforts and were passed while health-care reform received “lukewarm commitment” at best (Finbow, 182). In the end, “By delaying, [Carter] squandered the goodwill of the honeymoon period (limited though it was because of his narrow victory) and reduced the political and fiscal feasibility of the program” (Finbow, 179).

In 1979, other health care reforms were proposed. This included Long’s, a revised Kennedy-labor plan, and many others. However, the results were the same as before: failure. Perhaps the question of failure should not surround solely on the basis of the plan. Instead, the political atmosphere is an important aspect to look at. There are three main reason for failure in the later 1970s and into the Nixon presidency: 1) the threat that any reform would critically impose pressure on the federal budget, 2) the national mood seemed to prefer a smaller government, and 3) the inability to agree on one proposal (party alliances, etc)(Kingdom 8).

References

"ADDRESS BY JIMMY CARTER ANNOUNCING HIS CANDIDACY FOR THE 1976 DEMOCRATIC PRESIDENTIAL NOMINATION TO THE NATIONAL PRESS CLUB." <http://www.4president.org/speeches/carter1976announcement.htm>
Enthoven, Alain C. "How Interested Groups Have Responded to a Proposal for Economic Competition in Health Services." The American Economic Review. Vol. 70, No. 2, pp. 142-148.
Feder, Judith et al, eds. National Health Insurance: Conflicting Goals and Policy Choices. Washington, DC: Urban Institute, 1979.
Finbow, Robert. “Presidential Leadership or Structural Constraints? The Failure of President Carter’s Health Insurance Proposals.” Presidential Studies Quarterly 28, No. 1 (Winter 1998) (19 pp.).
Jones, Charles O. The Trusteeship Presidency: Jimmy Carter and the United States Congress. Baton Rouge: University of Louisiana Press, 1988.
Kingdon, John W.. Agendas, Alternatives, and Public Policies. New Yokr: Longman, 2003.
Weissart, Carol and William Weissart. Governing Health. Johns Hopkins University Press, 1997.
Quadagno, Jill. "One Nation, Uninsured." Oxford University Press, 2005.
Schram, Martin. "Health Plan: carter Staff vs. Califano." The Washington Post. February 18, 1979, A1.
Sinclair, Ward. "The Politics of Hospital Costs." The Washington Post. Novermber 12, 1978, A1.