Steven Soifer, PhD
Mary Lou Balassone, DSW
Jaime Johnstone, MSW
ABSTRACT. This paper provides an overview of both the current healthcare crisis in the United States and various reform proposals (some based on Canadian and British models) being considered at the federal and state levels. The proposals discussed fall into three categories — multiple-payer national health insurance programs, one-payer national health insurance programs, and a national health service program. The authors review four important criteria (cost, quality, access, and equity) that must be considered in evaluating the proposals for reform. Information is provided to assist healthcare professionals in understanding the various national healthcare proposals, applying evaluative criteria to these proposals, and advocating for needed changes.
A PERSPECTIVE ON HEALTH CARE
The current debate regarding the future of the United States (U.S.) health healthcare system is a central issue for healthcare professionals. We need to understand and participate in current discussions about national health care for three major reasons. First, what tasks we perform as practitioners, when and where we practice, and how much we are paid will all be determined to some extent by the
The authors would like to thank Virgina Sencchal and Dick Weatherley for commenting on earlier drafts of this manuscript.
Correspondence may be sent to the authors at the University of Washington, School of Social Work, 4101 15th Avenue NE, JH-30, Seattle, WA 98195.
Journal of Health & Social Policy, Vol. 3(3) 1992
© 1992 by The Haworth Press, Inc. All rights reserved.
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policy or program adopted. Second, our clients will feel the impact of whichever policy choices are made. Third, we are all healthcare consumers and thus have a right to advocate for the service we want at the cost we are willing to pay.
In this vein, this paper will give healthcare professionals an overview of the U.S.’s current healthcare crisis and how we got there; show the need for some kind of national healthcare system in the U.S.; present information on various state and national healthcare reform proposals, some of which are based on the Canadian and British models; discuss criteria by which to evaluate these proposals; and encourage health care professionals to advocate some kind of national health care system in the U.S.
BACKGROUND TO THE U.S.
HEALTH CARE CRISIS
The national healthcare debate is a complex and multi-faceted one. Factors affecting the debate include the lack of healthcare coverage for many citizens, escalating costs, the U.S.’s health ranking in comparison to industrialized countries, and inequities in the current system.
Currently, 37 million people in the U.S., or about 18 percent of the population (of which one-third are children), lack health insurance-a30 percent increase in the last decade. Evidence indicates that the numbers will continue to rise (Health Insurance Association of America [HIAA), 1989; Lacher, 1990).
Of those without insurance, the poor are heavily represented. Medicaid, one of the programs of the 1960s intended to improve the health of the nation’s poor has historically excluded about one-third of those with incomes below the poverty level (Starr, 1982)Lack of insurance, however, is not just an artifact of poverty. Figures for 1987 show that 70 percent of the non-elderly uninsured had family incomes above the poverty level (HIAA, 1989).
While the number of those who have no coverage rises, overall costs are also steadily increasing. In 1988, about one-half trillion dollars went to health care costs, accounting for 11.1 percent of the GNP. This figure climbed to over $600 billion, or close to 12
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percent of the GNP at the end of 1989, almost double the percentage GNP spent on health care in 1964. By 1995, 13.9 percent of the GNP will go toward health care costs. In the year 2000, healthcare costs could be $1.5 trillion, according to the Conference Board business research group, absorbing 15 percent of the U.S.’s GNP (Schorr, 1988a; Schorr, 1988b; HIAA, 1989; Enthoven, 1989; Associated Press, 1990).
Such increasing expenditures have not necessarily resulted in improved health. Two commonly used health status indicators are the infant mortality rate (IMR) and the rate of immunizations. The IMR in the U.S. is just over 10 per 1000 live births (U.S. Department of Health and Human Services, 1989). This figure is approximately double that of nations such as Sweden and Japan (both of which have some form of a national health plan).
The impact on people of color in the U.S. is even greater. For example, the IMR for Caucasians is 8.6 percent, while for African Americans, the figure is 17.9 percent. Racial differences are also evident in the rate of immunizations. While 40 percent of all pre-schoolers in this country are not fully immunized (a disturbingly high figure in itself), the rate for minority pre-schoolers is 60 percent (Sidel & Sidel, 1984).
Concern over the inequities of the U.S. healthcare system is intensifying, but it is certainly not new. In the 1960s, for example, this concern led to increased public spending in the form of such programs as Medicaid, Medicare, and Community Health Centers, which were aimed at bringing health care to the poor. These programs did have an impact, but overall improvements have been limited.
In the 1970s and 1980s, the debate over our healthcare system seemed to focus on spiraling costs. Approaches to this problem included attempts to limit government spending {one result being Diagnosis Related Groups, or DRGs) and what some have called the “‘corporatization” of health care, which included an emphasis on competitive market strategies. Neither has been very successful (Grumbach, 1989).
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ALTERNATIVES TO THE U.S.
HEALTH CARE SYSTEM
We will explore three alternatives to the present healthcare system in the U.S. The first is a multiple-payer national health insurance program. This is a fee-for-service, private practice model in which private insurance companies play a major role. It is funded by a combination of businesses, workers, and taxes. Under such a program, everyone in the U.S. would be covered by either the public or: private health insurance, or some combination of them.
The second alternative is a one-payer (the government), national health insurance program. This is a fee-for-service or global payment, private practice model funded solely through taxes. Private insurance companies play little or no role in such a system. Finally, there is a one-payer, national healthcare service program Under this system, healthcare providers are employees of the state. Most of all healthcare services are funded and provided by the government.
MULTIPLE-PAYER NATIONAL HEALTH INSURANCE
The United States
On the federal level, there has been a recent flurry of activity on the issue of national health insurance. The National Leadership Commission on Healthcare, with former presidents Nixon Ford, and Carter as its honorary co-chairs, suggested making health insurance available to the uninsured by increasing individual and corporate taxes by 315 billion (Danielson, 1989). Also, the Pepper Commission has proposed a universal health insurance plan that would cost the federal government over $65. billion and private businesses over $20 billion a year. This plan, however, was seen as a partisan Democratic plan with no political future (Rosenblatt,1990).
Senator Edward Kennedy (D-Mass.) and Representative Waxman (D-Calif.) have introduced the Basic Health Benefits for All Americans Act. Combining plans outlined by Michael Dukakis and George Bush in the 1988 presidential campaign, the bill would have all businesses give their workers basic health have all businesses give their
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workers a basic health care package (Dukakis’s proposal), while the unemployed could purchase health care from Medicaid (Bush’s proposal). Estimates are that this bill would cost the U.S. government $5 to $10 billion, states $3 to $5 billion, and businesses about $18 billion. Not surprisingly, President Bush, most Republicans, the Chamber of Commerce, and the National Federation of Independent Businesses oppose it. On the other side of the political spectrum, over “100 health-provider, labor, religious and social-welfare organizations” support it (Rovner, 1989, p. 827).
State Initiatives
A number of state governments have taken the initiative to deal with the current healthcare crisis in the U.S. Two states (Massachusetts and Washington) have recently implemented innovative health insurance plans that make healthcare services accessible to the uninsured. Several other states are in the process of considering legislation to help those without health insurance. These state programs could eventually become the basis for a national health insurance plan. Historically, state social welfare initiatives have often served as models for subsequent national programs (Katz, 1986).
In April of 1988, Governor Dukakis of Massachusetts implemented the Universal Health Insurance Law — “the first clear legislative declaration in the United States that health care for all is a basic right” (Sager, Hiam, & Socolar, 1989, p. 2). The Massachusetts Department of Medical Security (DMS) was created to administer the program. At the start of 1989, 7,600 people were covered; by the end of that year, over 36,000 were scheduled to participate (Egan, 1989). In early 1990, between 62,000 and 72,000 people were covered under several different programs (Commonwealth of Massachusetts, 1990). Sometime in 1992, all Massachusetts residents without health insurance (about 600,000 people) were scheduled to have health insurance (Robert Wood Johnson Foundation, n.d.).
Massachusetts’ plan for universal health insurance coverage is an “employer-based” system (Robert Wood Johnson Foundation, n.d.). While many businesses in the state provide their workers with health with health insurance benefits, a large number
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do not or can not, especially smaller firms. The new law requires businesses with more than five workers to eventually pay a substantial part of their employees” health insurance costs (Egan, 1989). Several programs have also been set up to help small firms insure their workers (Robert Wood Johnson Foundation, n.d.). Finally, unemployed workers who get unemployment compensation will be able to get health insurance through the state beginning in the spring of 1990 (Commonwealth of Massachusetts, 1990).
There have been problems in implementing the new law, mostly due to Massachusetts” recent fiscal crisis. Several attempts were made in the 1989 legislative session to substantially alter the law, but these failed. However, the goal of universal access to health care may be in jeopardy if the state of Massachusetts cannot live up to its fiscal obligations to the program (Sager et al., 1989).
The Washington Basic Health Plan is primarily a state-financed plan and “the nation’s first program of subsidized health care coverage for the low-income uninsured” (Washington Basic Health Plan [WBHP], 1990a, p. 1). While businesses do not pay into it, participants make minimal payments depending on their income and the size of the family (Egan, 1989). Still, in its pilot stage, the Plan is eventually expected to cover 30,000 of the state’s uninsured, or less than 10 percent of those eligible (WBHP, 1990c).
The State’s Basic Health Plan eligibility criteria are that applicants be less than 65, have a pre-tax family income no more than twice above the U.S. government poverty line, and not be eligible for Medicare, The plan works by having a newly created state agency arrange with “privately managed health care systems to provide the Basic Health benefits package for a set monthly rate” (WBHP, 1990c). These benefits include hospital, emergency, and maternity care; doctors” services; and preventive health care. There are no yearly deductibles and only small copayments for certain services (WBHP, 1990b). Those enrolled in the program pay “monthly premiums which range from $7.50 to more than $300, depending on their income and family size” (WBHP, 1990a, p. 1).
As of December 1, 1989, the state’s pilot program had enrolled over 7,000 individuals in four Washington counties (WBHP, 1990c). In 1991, the state legislature will decide
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whether or not to implement the Basic Health Plan statewide. The total plan is expected to cost the state about $50 million during the 1989-91 biennium (WBHP, 1990d).
At the present time, a number of other states are considering legislation to provide health care coverage for the uninsured, including California, Georgia, Illinois, Iowa, Maine, Minnesota, New York, Pennsylvania, Wisconsin, and Vermont (Danielson, 1989; WBHP, 1989).
ONE PAYER
NATIONAL HEALTH INSURANCE PROGRAM
Canada
Canada’s National Health Care system is a prime example of a one-player, National health insurance system. It began with reforms on the provincial level, eventually becoming a national program (Vayda, 1989). Currently, each of the 10 Canadian provinces and two territories “run their own health programs which must meet the standards set by two [Canadian] federal Acts: the Hospital and Diagnostic Services Act (1957) and the Medical Care Act (1966)”(Begin,1982).
Canadians have virtually complete access to their health care system based on four principles: comprehensiveness, universality, portability, and accessibility (Page, 1989; Begin, 1982). Besides full medical and hospital coverage, Canadians have few or no deductibles or co-insurance payments. With universal coverage and all citizens receiving equal benefits, the Canadian healthcare system is clearly based on a person’s needs, not on his or her ability to pay (Vayda,1989).
The Canadian health care system is funded by both the federal government and the provinces but administered solely by the latter. Initially, the federal government and the provinces each paid 50 percent toward health care costs, but the former’s financial role is gradually being reduced to about one-third of the costs (Northwest Hospital, 1990). The government at the provincial and federal levels thus acts as the insurer and reimburses any private practitioner of the patients” choice. Regarding benefits available to everyone, private insurance plays no role. Benefits are interchangeable
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between provinces. Medical costs are strictly controlled by the government. The Canadian system is more efficacious than the U.S. system; Canadians pay only 8.6 percent of their Gross National Product (GNP) for health care, while U.S. citizens pay over 11 percent (Vayda, 1989).
The United States
There is a clear and growing sentiment among many U.S. citizens that the health care system in this country needs to be over. hauled. A recent Harris poll showed that 89 percent of Americans want to see fundamental changes in the U.S.’s healthcare system, while 69 percent of those in Great Britain and only 42 percent of Canadians felt similarly (Page, 1989).
Even the medical establishment, which has traditionally been one of the most potent forces in maintaining the current healthcare system, is beginning to question it. The New England Journal of Medicine recently carried articles and editorials pointing out the need for change and calling for some kind of universal health coverage (Enthoven & Kronick, 1989; McGregor, 1989; Relman, 1989; Himmelstein, Woolhandler, and the Writing Committee of the Working Group on Program Design, 1989). While the specifics of the proposal differ from article to article, the message is the same: the crisis in the American healthcare system can no longer be tolerated from either the patient’s or the physician’s viewpoint.
Himmelstein et al. (1989) propose a plan that is similar to Canada’s national health program. The plan, put together by members of an organization calling itself Physicians for a National Health Plan (PNHP), calls for universal coverage. Equal benefits would be extended 10 all United States residents, without copayments or deductibles. All costs would be covered under a single, comprehensive national insurance program, with funding to come from monies currently earmarked at both the state and federal levels for health care expenditures, as well as from employer taxes. Options are built into this plan to give providers choices as to the method of reimbursement, including fee-for-service reimbursement or global payments. Such options may make the program more palatable to those physicians resistant to change.
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State Initiatives
Various states are considering innovative healthcare legislation too. Some legislators in Ohio have proposed the Universal Health Insurance for Ohio Act (UHIO). Based on the Canadian healthcare system, it would eventually eliminate private health insurance and have the state be the insurer for everyone. The health care system would be funded through a combination of new taxes, including increased payroll taxes on businesses (eight percent) and workers (one percent), a tax on wealth, and a sales tax increase. These revenue sources, as well as federal monies already spent on healthcare (Medicare and Medicaid), would be channeled into the Ohio HealthCare Trust Fund. This fund would be overseen by the Ohio Health Plan Board, its members appointed by the Governor, and comprised primarily of consumers (Hagan, 1989; Page, 1989). The Ohio bill is still in legislative committee, and no action is expected until 1991 (Holman, 1990).
In Michigan, where over one million residents lack insurance coverage, the Michicare program, based in the province of Ontario’s health care plan, has been drafted which would provide quality coverage to everyone under a single health care system. The plan would be administered by the state or an outside administrator, and like the Ohio plan, eliminate private insurance companies. The bill has yet to be introduced into the Michigan legislature (Bullard, n.d.; Geller, 1990).
Even the state of Washington, which has begun a modest state-financed health care plan for low-income people has seen the introduction of “‘the Washington Universal Health Access and Cost Containment Act of 1990.” A “global state budget” would be set up and a state commission established to provide basic health care services to all Washington residents. Funding would be through federal and state sources as well as individual and employer payments (Braddock, 1990). This bill, based on British Columbia’s healthcare system (Simon, 1990b), was severely attacked by the state’s private insurance companies, corporate sector, physicians, and the Republican-dominated Senate. While it eventually got out of a House committee, it had been so
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heavily modified that in the end it merely called for a study on “containing soaring medical costs and guaranteeing medical services for all” (Simon, 1990a).
At least four other states (Connecticut, Iowa, Minnesota, and New York) have set up state commissions to study proposals for state-funded universal healthcare programs (Roemer, 1989)
ONE PAYER
NATIONAL HEALTHCARE SERVICE
Great Britain
The British National Health Service (NHS), in effect since after World War II (Lister, 1986), is a socialist plan that provides “comprehensive health care . . . that is state regulated, monopolistic, free to all consumers at the point of use, and funded from central taxation” (Ollerton, 1989, p. 3120).
Structurally, the British NHS is set up so that the country’s Department of Health and Social Security distributes funds and engages in “national strategic planning’ to work out the health needs of its citizens (Central Office of Information, 1985, p- 2). The country’s 21 regional health authorities receive national healthcare funds, aid in regional planning, and manage healthcare costs in their area (Central Office of Information, 1985; Ollerton, 1989).
Doctors (referred to as general practitioners in Britain) are salaried employees under the British NHS, as are other health care professionals. Their salaries are paid for from general revenues specifically allocated to them and disbursed through the regional health authorities (Ollerton, 1989). Britain’s health care system, unlike the U.S.’s or Canada’s, is not set up on a fee-for-service model.
Private health insurance is available in Britain, and between 10 to 20 percent of the population have taken advantage of it over the last decade. Still, the British only spend about 6 percent of their GNP on health care costs, one reason being that centralized control over the country’s medical expenditures provides effective cost containment. However, there are persistent complaints of underfunding of the NHS, especially under Prime Minister Margaret Thatcher (Lister, 1986).
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The United States
Representative Ron Dellums (D-Calif. has submitted the National Health Service Act in every Congressional session since 1976. His proposal would completely bypass insurance companies, creating a one-payer, national health service similar to the British model. Dellums claims that to “simply tinker with the financing mechanisms in an essentially private healthcare system and expect it to meet the needs of the American people” is unrealistic. Instead, he sees a National Health Service, governed by national, regional, and community boards, offering complete quality healthcare through a nationalized health labor force to everyone for free. The system would be financed through funds currently spent on Medicare, Medicaid, and other federal programs, eradicating tax deductions for healthcare costs, and a progressive tax on individuals and businesses (Congressional Record, 1985, p. 1; Dellums, 1989; Danielson, 1989).
CRITERIA FOR EVALUATING VARIOUS
HEALTH CARE PROPOSALS
Four types of evaluation criteria —cost, quality, access, and “a city —are proposed in order to examine the healthcare proposals discussed above. The three basic categories of proposals (multiple-payer national health insurance program, one-payer national health insurance program, and a national health service program) have different implications concerning each of these criteria. In looking a the various healthcare policy options that face the U.S., it is important to weigh the advantages and disadvantages of each proposal in terms of these four criteria.
Cost
The various proposals for change to the health care system must be evaluated in terms of their overall cost and the financial burden that would be placed on individuals. In general, proposals that advocate a single-payer system, whether the state to national government, should be less costly. Questions that should be asked with regard to cost include: Who (individuals, businesses, government) will bear how much of the cost, and when? For example, Senator Kennedy’s Basic Health Benefits for All Americans Act would involve both private businesses and the government in purchasing healthcare insurance.
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Although the government’s part of the cost might be covered by tax revenues, the contribution of businesses would probably come from revenues generated by increasing the cost of consumer goods and services. Under Washington’s Basic Health Plan, consumers pay a portion of the insurance cost based on their income. Ohio’s proposed UHIO plan would not charge consumers a premium.
Quality of Care
Few of the proposals put forth to date specify the types or amounts of health care that will be provided. The various proposals must be reviewed in terms of the extent to which they provide for the attainment of a certain standard of health care. Free market proponents argue that the competition in a fee-for-service delivery system, in which consumers can go to any health care provider whose services they can afford or who accepts their insurance coverage, provides a higher quality of health care. Moreover, concerns about service quality continue to be raised in reference to a health service program such as that in Britain. Yet health status indicators (infant mortality, immunization rates, causes of death) seem to refute these claims, since the U.S. does not fare better than Britain on any of these indicators (Wegman, 1985).
Consumer Access to Health Care
Flexibility and ease with which the delivery system can be used are important for healthcare consumers. Environmental and cultural factors that influence the use of health services by individuals also need to be examined. Each proposal should be reviewed for its probable impact on the availability of providers, norms, and policies about the distribution of health service resources, and eligibility criteria. For example, insurance-type proposals may not be able to ensure that providers are available in all geographic areas. Under these fee-for-service systems, people living in rural areas have less access to services than people living in urban areas. Proposals
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which rely on strict eligibility criteria and run the risk of limiting access to providers for those persons who do not fall into narrowly defined categories. For example, programs such as Washington State’s Basic Health Plan provide a managed health care service for those without insurance. If the person subsequently gets insurance coverage through an employer, he or she may have to change to a new provider who participates in the employer’s insurance plan.
Equity in the Delivery of Health Care
To what degree is everyone treated fairly and equally with regard to cost, access, and quality? Policies that propose wo-tiete programs tend to provide no services or a more minimal set of services and less consumer choice regarding providers to the poor and uninsured and much better services and provider choices to the middle classes and well-to-do. Furthermore, the proposed funding mechanism has equity implications. A financing arrangement that relies on regressive taxation is likely to cause an increased burden for the poor and near-poor.
CONCLUSION
The healthcare crisis in this country is reaching epidemic proportions. There are many reasons for the U.S.’s chaotic, poorly designed, and extremely expensive healthcare system. Three recurring themes that help shape our country’s social welfare system have contributed to the problem. The first is an individualistic, free market philosophy versus a collective, government intervention philosophy, which raises questions about the extent of the government’s role in providing for the health care needs of its citizens.A second and related theme is states’ rights versus federalism. Assuming the government is to play some role in providing health care, the question then becomes who finances and controls it. Finally, there is the debate concerning universal versus selective eligibility criteria. Who is to receive health care benefits and in what amount? (Bell, 1987; Feder, Holahan, & Marmor, 1980).
Time and time again, initiatives to implement some form of national health insurance for the uninsured have failed in the U.S. Confluence of factors, however, this may make action only a matter of time. Current state initiatives to deal with the problem of the
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uninsured may provide the impetus for national action to address this issue. Several states are pioneering efforts to help the uninsured access the health system. Says Vayda (1989): “A critical mass of state programs . . . may be the path to universal health insurance in the United States” (p. 12).
We believe that from an equity and fairness point of view, 2 one-payer national health insurance (for example, Canada) or a national health system (such as Britain’s) is much preferable to the U.S.’s current health care “system.” Danielson (1989) points out several key elements to a fair and just healthcare system: Health care as a basic right; access for those who most need it; comprehensive, quality healthcare coverage; public funding through progressive taxation and public control of a single-payer health care system; and an easy-to-administer, effectively run the system.
It is unlikely, however, that a Canadian or British-styled healthcare system will be implemented in the U.S. The opposition from the American Medical Association and the private insurance companies would be too great. The only chance of such a system being implemented is if the healthcare crisis in the U.S. becomes so acute (for example, in the light of a severe recession or depression) that a mass movement demands such substantial reforms.
Unfortunately, social policy reforms in the U.S. happen on a piecemeal basis, often in response to crises of one sort or another, rather than as a result of proactive planning. Given the conservative political climate, the best we can expect at this point in time is a National Health Insurance plan modeled after the current state experiments in Massachusetts or Washington. On the national level, Kennedy and Waxman’s Basic Health Benefits for Al AmericansAct could also be a model, and though it doesn’t look likely to pass Congress now, the Act (or one like it) may generate a lot of support in the near future, especially if there is 2 Democratic president.
While we have not fully reviewed the advantages and disadvantages that might result from each of the healthcare policy options facing the U.S., we have outlined the important issues that must be considered in evaluating various proposals. Healthcare professionals need to be aware of these criteria and be able to apply them in examining legislative proposals offered in states where they practice. Healthcare
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professionals also have an important role to play in this debate. Armed with the knowledge of the positive and negative aspects of the various healthcare systems described here, healthcare professionals, acting as change advocates can be involved in statewide and national efforts to enact healthcare reforms. The U.S. and South Africa are the only two industrialized countries without some kind of national health insurance for their citizens. The time has come to change that.
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