Winston Churchill argued that democracy is "the worst form of Government, except all those other forms that have been tried from time to time." It follows that democracies enact the worst solutions to problems, except for other grim remedies that could be employed. The outline of Bill Clinton's health reform plan fits this pattern. Congress is poised to launch major surgery on the president's proposal, removing parts like price controls for good reason. Yet lawmakers should preserve two of Clinton's key principles that are the best options among an array of unattractive choices. First is the so-called employer mandate - - the requirement that all employers contribute to their workers' health coverage. The president argues that this approach builds on the current system in which 9 out of 10 Americans with private health insurance get it through their own or a family member's employer. Yet many small firms fear the costs and distrust Clinton's pledge that government subsidies will lighten the load. Moreover, in an era of global competition, requiring firms to pay toward a fixed, generous benefits package could strip them of flexibility to manage future expenses. Fears of massive job losses are overdrawn, but there is legitimate worry about how many future jobs would be created if all firms toiled under Clinton's hefty benefits burden. Still, there is a larger issue at stake. Employment-based health coverage is shrinking fast: In 1987, 72 percent of the work force was covered by private group health insurance, but by 1992 that number had fallen to 68 percent. What's more, roughly 75 million people are now enrolled in publicly funded health insurance, ranging from Medicare to programs for state and local workers. That's three times the number enrolled in Canada's taxpayer-funded health insurance system. America's public insurance pool could well grow to 110 million, or about 40 percent of the population, by the time most baby boomers have turned 65 and qualified for Medicare. If employer-based coverage erodes further, more galloping health outlays will be heaped onto tomorrow's taxpayers. Stoking innovation. Another concern is that without a private counterweight to public plans, the nation might lose out on much critical marketplace innovation. Employer-based plans have led public systems in experimenting with arrangements like health maintenance organizations (HMOs) and ways of fostering enrollees' health. By enacting an employer mandate, policy makers would hand private firms the task of stoking further innovation. But first, Clinton and Congress should strike a deal to phase in the mandate slowly. They could cut the share of premiums that employers must contribute to workers' coverage from 80 percent of an average- priced health plan, as Clinton proposes, to more like 50 to 70 percent. They should reject Clinton's one-size-fits-all plan in favor of a menu of options, from "catastrophic" plans with high deductibles to comprehensive packages. Finally, they should limit the tax break that makes health benefits nontaxable to workers in such a way as to encourage them to pick the best deal on coverage. The second principle that should be preserved is universal coverage, or the guarantee that all Americans will have health insurance. Some pundits argue that the nation can't afford insurance for the roughly 15 percent of the population that is without it at any given time. But every other large industrialized nation except South Africa has universal coverage -- and the World Bank reports that in 1990 the United States, with 1 out of 20 of the world's people, spent nearly $4 of every $10 that the entire globe spent on health care. Meanwhile, U.S. health outlays will undoubtedly rise from 14 percent of gross domestic product now to almost 19 percent by the year 2000. Achieving universal coverage, done carefully, merely means having the political will to spread this gigantic pot of health dollars among more Americans. In reality, the nation can't afford to forgo universal coverage. Health insurance is evolving from a mechanism for simply paying doctors' and hospitals' bills into a means of managing health risks and costs. The results are dramatic: In California, where half the population is now enrolled in HMOs and other "managed care" plans, costly hospital days for every 1,000 people fell by more than a third from 1980 to 1992. To maximize savings, virtually all Americans must be enrolled in similar systems "where their incentives to stay well are matched by providers' incentives to keep them well," contends C. The second principle that should be preserved is universal coverage, or the guarantee that all Americans will have health insurance. Some pundits argue that the nation can't afford insurance for the roughly 15 percent of the population that is without it at any given time. But every other large industrialized nation except South Africa has universal coverage -- and the World Bank reports that in 1990 the United States, with 1 out of 20 of the world's people, spent nearly $4 of every $10 that the entire globe spent on health care. Meanwhile, U.S. health outlays will undoubtedly rise from 14 percent of gross domestic product now to almost 19 percent by the year 2000. Achieving universal coverage, done carefully, merely means having the political will to spread this gigantic pot of health dollars among more Americans. In reality, the nation can't afford to forgo universal coverage. Health insurance is evolving from a mechanism for simply paying doctors' and hospitals' bills into a means of managing health risks and costs. The results are dramatic: In California, where half the population is now enrolled in HMOs and other "managed care" plans, costly hospital days for every 1,000 people fell by more than a third from 1980 to 1992. To maximize savings, virtually all Americans must be enrolled in similar systems "where their incentives to stay well are matched by providers' incentives to keep them well," contends C. that the nation can't afford insurance for the roughly 15 percent of the population that is without it at any given time. But every other large industrialized nation except South Africa has universal coverage -- and the World Bank reports that in 1990 the United States, with 1 out of 20 of the world's people, spent nearly $4 of every $10 that the entire globe spent on health care. Meanwhile, U.S. health outlays will undoubtedly rise from 14 percent of gross domestic product now to almost 19 percent by the year 2000. Achieving universal coverage, done carefully, merely means having the political will to spread this gigantic pot of health dollars among more Americans. In reality, the nation can't afford to forgo universal coverage. Health insurance is evolving from a mechanism for simply paying doctors' and hospitals' bills into a means of managing health risks and costs. The results are dramatic: In California, where half the population is now enrolled in HMOs and other "managed care" plans, costly hospital days for every 1,000 people fell by more than a third from 1980 to 1992. To maximize savings, virtually all Americans must be enrolled in similar systems "where their incentives to stay well are matched by providers' incentives to keep them well," contends C. Duane Dauner, president of the California Association of Hospitals and Health Systems. Let's not kid ourselves: With an aging population and booming technology, rising health outlays will be with us forever. But universal coverage, delivered through managed health systems, is the best hope for spending those dollars more efficiently. Congress should swallow its aversion to confronting people with the upfront price -- new taxes -- and get moving toward this fundamental goal.
