The Kennedy Solution

Near the end of Governing America, Joseph Califano writes that “we must as a matter of social justice provide health care to the millions of poor and unprotected Americans, particularly children and minorities.”

Califano tried, but as he acknowledges, his dream of providing health care to the poor, “particularly children and minorities,” failed. He did draft a health-care plan that would have aided children and the minority poor, but not before he had tried to discredit one that would, like Social Security, have aided every American citizen and done so in the democratic tradition of the New Deal.

He tells us that both he and President Carter thought the “current health system was horrible,” and would soon be “unsupportable.” The insurance system encouraged “a system of sick care, not health care,” a system long on tubes, machines, and wires but short on human contact, a system that failed to deliver basic services to some while giving unnecessary services to others. In short, the system Carter inherited was desperately in need of a rational plan if it was not to price itself out of existence.

Just such a plan—known as the Kennedy-Corman bill, and worked out during the preceding twenty years by a coalition of labor, religious organizations, senior citizens’ groups, and others—could have done much to impose rationality, equity, and cost control on American health care. It needed only a Democratic president to guide it through Congress. But Califano tells us he felt that Kennedy-Corman “failed to build on the existing structures, particularly the health insurance coverage most Americans received as part of their employment.”

In response to Califano’s criticism, Kennedy rewrote his bill so that the insurance companies would not just be fiscal intermediaries but would also serve as monitors of the quality of care provided by doctors and hospitals. Insurance claim forms, hitherto used only to justify reimbursements, would now be redesigned to monitor as well the accuracy of the diagnosis and the appropriateness and cost of the treatment given—while providing cumulative data on the effectiveness of all sorts of current treatments (e.g., radical mastectomies).

With the revised bill in hand—now called the Health Care for All Americans Act, its administrative and monetary details exhaustively worked out—Kennedy returned to Califano and told him (as Califano writes) that he had devised the “role for private insurance, which you want…. But…there can be no compromise on the principles of universality, comprehensive benefits, and tough controls” (italics mine).

But Kennedy’s revised bill was never to receive serious consideration from Califano. Even before Kennedy rewrote his plan, Califano had made up his mind that while it “might have been talked to death for a decade,” national health insurance had been insufficiently “studied.” He set about hiring, he tells us, three leading students of the subject: Karen Davis of the Brookings Institution; Ruth Hanft, who had won an HEW medal for developing a national health plan; and James Mongan, Senator Russell Long’s number-two …

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