Karen Davis

A 20/20 Vision for Health Care, Part I

VTR Date: January 27, 2001

Economist Dr. Karen Davis discusses a public health vision for the year 2020.


GUEST: Karen Davis, Ph.D.
AIR DATE: 01/27/2001
VTR: 12/20/2000

I’m Richard Heffner, your host on The Open Mind. And this is the first of several programs that in the months ahead will deal with a theme that resonates widely and importantly in American life today. One that surfaces again and again in our national politics and that quite literally impacts critically on each and every one of us. Indeed, we all recognize it as a matter of life and death, the matter of health care in America. Well, appropriate then that the Open Mind’s guest today’s President of The Commonwealth Fund, a major national philanthropy heavily engaged in independent research on health and social issues. Dr. Karen Davis is a nationally recognized economist with a distinguished career in public policy and research, having earlier served as Chairman of the Department of Health Policy at the Johns Hopkins School of Public Health and as Deputy Assistant Secretary for Health Policy in the U.S. Department of Health and Human Services. No one doubts that what we Americans need most now is a “20/20 Vision of Health Care” and since Dr. Davis called for just that vision recently, I want her to elaborate on what she identifies as its five basic features. They are: automatic and affordable health insurance coverage for all; access to health care for all; patient responsive health care; information-driven health care; and commitment to quality improvement. All to be achieved by the year 2020. And given that my guest puts it first I gather that automatic and affordable health insurance coverage for all does loom largest for her and her colleagues. Is that a fair assumption?

DAVIS: That’s correct. The biggest problem in the U.S. health care system is the absence of automatic and affordable health insurance coverage for all Americans.

HEFFNER: What do you mean by automatic?

DAVIS: Well, I think we know by looking at studies for example of employer pension coverage that when it happens automatically and you get signed up rather than having to find out about coverage, find out which is the best plan, pick a plan, fill out the application, go through the procedures, and then mail in a premium every month, a lot of people simply don’t get around to doing it and can’t work their way through the red tape. Coverage works best in this country when it’s provided by employers. And employers sign you up automatically when you go to work. It’s not waiting until you get sick to get health insurance coverage.

HEFFNER: You mean you have to say “no”, you don’t have to say “yes.”

DAVIS: That’s right. That’s the key… is making coverage easy for people to get an automatic. And that works well for many Americans. About a 158 million Americans are covered under employer coverage. But we know that about 43 million Americans are uninsured and another 30 million have some coverage, but it’s really not adequate. So the key is how to make it automatic for the other 43 million Americans who are uninsured.

HEFFNER: You say that’s the question, that’s the key question. What’s the answer to it?

DAVIS: Well I think we have to design a variety of approaches that work for different groups of the uninsured. We know that they are predominantly low income. About two-thirds are poor or near-poor and some of those are participating in public programs, whether those are school lunch programs or public housing or food stamps, nutrition programs for new mothers and their infants. But you don’t automatically qualify for health insurance coverage even if you qualify for other public programs. We also have the Medicare program for people over age 65 and people who’ve been disabled for two years or more. But we don’t make it available for people who retire early, maybe have a health problem, lose their employer coverage and they’re hanging in there until they’re age 65 to get Medicare. We could automatically make older adults automatically covered by Medicare and people with serious health problems that maybe permit them to work, but work at a job that doesn’t provide health coverage.

HEFFNER: Is it a foolish question to ask why we don’t?


DAVIS: Well I think there are a lot of reasons. When you look back over the 20th century, we tried a number of times to get coverage for all Americans, starting with Teddy Roosevelt in 1912. President Harry Truman in 1945, after World War II made a major push to get coverage for all Americans added to Social Security. Much like what we have now for Medicare for older people. But things intervened, we had inflation and then the Cold War and we kind of lost sight of the need to, to provide a floor of coverage. We also had, starting in the 1950s, the growth of employer based health insurance coverage. It became a fringe benefit for people with good jobs to get health coverage on the job and then, under Lyndon Johnson, in 1965, he signed into Jaw Medicare and Medicaid to cover people after they retired over age 65 and to cover certain groups of low income people. Primarily single mothers and, and their children. Other Presidents tried, and failed. President Nixon tried, some people forget that. But he would have required all employers who had at least 25 workers to provide coverage to their employees. I personally worked for President Jimmy Carter, we also proposed a similar kind of plan to cover those who were working under employer coverage and to pick up everyone outside of the work place under public programs like Medicare and Medicaid. And we all know about President Clinton having tried to achieve comprehensive coverage in the early 1990s.

HEFFNER: Well, are we talking here about indifference on the part of the American people? Are we talking about a failure to understand that there are so many not covered or poorly covered? What is the key here?

DAVIS: It’s really not indifference. If you look at public opinion polls actually going back to the 1930s and 1940s, health has always been a top priority of the American people. They want good health care, they want everybody to have the benefits now, like modern American medicine. The issues have been budgetary, they’ve been economic and they’ve been political. Many times when we’re in a recession as we were in the early 1990s, people are worried about health coverage. They may have it now because they’ve got a job, but they know they could lose their job. But in the time of a recession you tend to have budget deficits. We’re in a different situation now. We actually have the strongest economy that we’ve had in a long time. We have record low unemployment, the lowest in about 30 years and instead of red tape at the Federal government level and the State governments, we actually have quite significant budget surpluses. So, now is the time when we could reinvest the savings that we’ve achieved, in large part out of the health sector.

HEFFNER: That… you, you say that in your paper on “a 20/20 Vision…”


HEFFNER:… explain that please.

DAVIS: In the 1990s, when we had a budget deficit, there were some tough choices to be made. And in 1997, under the President’s leadership, there was enacted a balanced budget act, and most of the savings in that balanced budget act came by changing the Medicare program, paying doctors a little bit less. Paying hospitals less, and asking Medicare beneficiaries to pay higher premiums. And that resulted in a major slow down in Medicare spending. And that is one of the factors that’s contributed to the significant budget surplus. Other factors were somewhat unintended. Welfare reform as women transitioned from welfare to work, they often got a job that didn’t provide health benefits and they lost coverage under the Medicaid program that provided health insurance when they were on welfare. So, Medicaid spending slowed down. I don’t know that that’s a good thing. But if you put the slowdown in Medicare and Medicaid spending and look at it over a ten year period about a trillion dollars of today’s 4.6 trillion dollar surplus came from savings out of reduced spending on health care. Savings in public programs, Medicare and Medicaid. And I think it’s one of the reasons why we ought to re-invest those savings in health care and use this as an opportunity to really design a health care system that works for all Americans as really worthy of a new century, particularly one with a prosperous economy and strong budgets.

HEFFNER: What is the reaction to your notion that since the huge surplus that we hopefully will have to deal with now, and there are some people who challenge the question of a continuing surplus… what’s the reaction to your notion that it should now be earmarked in some significant degree… to some significant degree to health insurance.


DAVIS: Well, I think there’s a lot of recognition that it should be a high priority. It was an issue in the political campaign that we just went through, not only at the Presidential level, but in a number of Congressional races, Senate races, where there is a resonance on the part of the public to improving health care. Sometimes it’s prescription drugs for older people, sometimes it’s covering the uninsured. Sometimes it’s making sure that the quality of health care is something that people can depend on.

HEFFNER: Well, if we talk about coverage insurance for everyone, and we haven’t achieved it since Teddy Roosevelt’s day, are you sanguine that we will now? That this 20/20 vision of yours will be achieved?

DAVIS: Well, I think it’s hard. We tried for 100 years to make it happen, so to say it’s easy, I think is misleading. I think what worries people the most is giving up something that they now have, that they know how it works…

HEFFNER: What do you mean?

DAVIS: Well, if you now have employer coverage and there’s going to be a brand new, all government program, a lot of people are worried about, “will I still be able to pick my own doctor? What would I have to pay if I’ve got a disabled child who now gets coverage for, for certain services, would those still continue?” So I think building on something that’s familiar is very important, rather than trying a brand new, radically different plan. And that’s why the 20/20 vision that I tried to lay out, builds on existing sources of coverage. Takes the Medicare program for people who are elderly, it expands it to people who are under age 65, but no longer covered under an employer plan. And it tries to expand employer coverage by making it much more automatic, for example for part-time workers, low wage workers who now don’t sign up because they can’t afford their share of the premium. And use tax credits or incentives, use part of this Federal budget surplus to make it affordable for those low wage workers.

HEFFNER: You say affordable for them, what about for the nation at large?

DAVIS: Well, I think the budget surplus does give us some breathing room to really fill in the gaps and make it affordable for others. It’s not going to be the sole solution. Currently employers spend $300 billion dollars on health care. And we need to keep that contribution on the table and that’s important to not replace current employer coverage, but really expand it. To take a concrete example, today if you’re a young adult between the ages of 19 and 23, if you’re a full time college student, you’ll stay on your parents’ health insurance policy. But for middle-class or working families, their kids may not go to college or they may be working part-time, going to school part time, they don’t qualify for coverage under their parents’ health insurance. If we’d just say every young adult who’s dependant on their family still for, for income, whether they’re a full time college student or not can stay on their parents coverage until age 23, there’s another 350,000 uninsured young adults who would get coverage. So that’s a way of making it automatic for more people.

HEFFNER: Well, of course, there’s a major question that I have to put to you. And that is that as an economist do you think we, as a nation, can afford to cover everyone?

DAVIS: Oh, I think the economic issues… it’s important to address and to look at carefully and do careful cost estimates and maybe an incremental approach, that’s why I called this a “20/20 vision”, it’s not trying to do it all at once, instantly. But if you look internationally, the U.S. spends about 14% of its economic resources, its gross domestic product on health care. Other countries cover everyone and they spend 8% or 10%. So I think it’s feasible to do it. And in may ways investing in health care can be a good economic investment. Right now the American economy is being fueled by immigrants. Those states that have had strong growth in Hispanic-American, Asian­American populations are the states where employers are able to expand, have workers that can fill those jobs. And yet a fourth of the uninsured are Hispanic Americans, working at jobs, but jobs that don’t provide health benefits. But you can’t have a healthy worker and they can’t have healthy children if they don’t have good access to health care. And what we know, when people don’t have health insurance, they don’t go to the doctor, they put it off as long as possible, they don’t get preventative care, so women, for example, don’t get check-ups for cancer, men don’t got check-ups to detect problems, whether its colon cancer or high blood pressure. And those come home to create disabling and serious and expensive health problems. But it’s also important to invest in the health of children, to make sure that our young children are getting off to a healthy start in life, that they’re not only getting their immunizations, but that the pediatricians are really working with the parents to help them understand how to help their children grow and learn… be healthy, be ready for school. And be able to attend school, not to be missing school because they’ve got a, a toothache, because they’ve got diabetes, because they’ve got health problems that aren’t, aren’t addressed. So, health is an important economic investment. It’s not just consumption. It’s not just spending money.


HEFFNER: You know, it’s interesting when you say that… it’s a good investment… economic investment, because I did derive from a “20/20 vision for American health care” the notion that though one may ask, “can we afford the coverage that you seek? The real question is, “can we afford not to have that coverage?”

DAVIS: And I think we need to design it in a pragmatic way that is concerned with efficiency, that promotes preventative care, not waiting until people get really sick, and I think looking at unnecessary care and changing the whole set of incentives in the health care system that seemed to reward only high tech, do an expensive test as opposed to counsel a patient about quitting smoking, the importance of exercise or diet. We need to pay much more attention to the basic things that can have a long term payoff in terms of improved health.

HEFFNER: What opposition has to be overcome? What, what are the ideas, the thoughts, the concerns that have to be overcome before we get to your number one point, “automatic and affordable health insurance coverage for all?”

DAVIS: Well, I think for the broad public they have to be re-assured that they’re going to continue to have a choice of their own physician, they’re going to continue to have good care, this is not going to increase their cost for out of pocket bills or for premiums, so I think that’s the, the first step. And I think to see something in it for everybody, not just for the 43 million who are uninsured, or the 30 million who are uninsured, but everybody getting something out of the system. For example, all of us have problems getting an appointment when we need it. So there are ways to wed(sic) improved insurance coverage with improved access, comprehensive benefits that makes sure people can afford their prescription drugs, they can get dental care, the kinds of things people really want.

HEFFNER: All right. That, that brings me to the second, and I hope you’ll forgive me for going through these seriatim but it… they’re so important. You write about access to health care for all. What do you subsume under that heading?

DAVIS: You know, the most important thing is that everyone have a personal physician, or other clinician…

HEFFNER: Why, why is that? You make this point in several places when you have written recently.

DAVIS: Well, it’s very important. We know that people without a regular doctor are just much less likely to get preventive care. So that that whole emphasis starting in early childhood through adulthood of getting your screening for cancer, having your blood pressure checked, so that if there’s any problem there, it can be dealt with and managed well. But beyond that… one of the things that could be done, that’s not done as often as it should, is that physicians should be sending you a reminder. You may be getting reminders from your vet that your dog needs to come in. Or you may get a reminder from your dentist that your teeth need cleaning. But you rarely get a reminder from your doctor saying, “it’s now time to come in again, and, and have that done.” And some of us don’t look forward to some of those tests.

HEFFNER: Why? Why is it true of the vet and of the dentist, but not of the general practitioner?

DAVIS: You know partly we still have… rely on individual doctors and we rely on memory. We don’t have systems, we don’t take advantage of modern computer technology that would make it very easy to have, say an e-mail alert. The doctor would have your e-mail address and when you’ve got your tests they would send a reminder… one year from now or two years from now when it’s due again. So that’s one important thing that a regular doctor can do for you… make sure that you’re getting your preventive care. Another thing your regular doctor can do for you is to get to know you well over a long period of time, and the studies show that if a doctor will talk to you about smoking, you are more likely to quit smoking. If the doctor talks to a pregnant woman about the importance of breast-feeding, she’s more likely to breast-feed. If a pediatrician talks to a parent about the importance of reading to their children, they’re more likely to start reading to their child, even at six months of age, which is what is recommended. So, doctors’ advice, doctors are respected by their patients and if they know their patients well, with them a long period of time, they can say, “you know, your weight’s creeping up there, it’s time to really pay attention, get out there and exercise regularly (while you’re watching this program, or other times) and that that’s important. The third thing that your doctor can do for you is to help guide you through a very complicated U.S. health care system. We have maybe one of the best high-tech aspects of our health care system… lots of specialists so maybe you need a referral to a cardiologist, or another type of specialists… maybe you do need some complex tests done. But those test results don’t always get back to you. I mean that’s amazing that we let things fall through the crack in our, our current system. Or your doctor may not know who the best specialist is because they don’t have the information on what the performance of those doctors may be. So, having a regular doctor to make sure you do go to see that cardiologist when that’s indicated, that you do get those test results back; that that is communicated to you. And if you now need to go the next step in treatment that, that gets done.


HEFFNER: Of course, you said something so key a moment ago. You talked about so many specialists. Are there enough generalists, are there enough family physicians at this point in our history to meet your requirement that we all, each one of us, has a general physician?

DAVIS: Well, I think we need to do a much better job. I think we probably have enough doctors, we could probably train some more in primary care. We need to reward primary care better. That’s part of it. We pay a lot for a… an MRI test or a doctor who does a particular procedure. But we don’t pay a lot for basic, basic primary care. We don’t pay a doctor for answering an e-mail. So we need to change the incentives and it may be paying your regular doctor a monthly rate, maybe a rate that’s adjusted if you’ve got a complicated problem that needs managing like hypertension, or like diabetes, so we need to change the financial incentives to reward primary care. One of the things we’ve advocated in this 20/20 vision for American health care is one free doctor visit a year. Totally free, that you could talk to your doctor about anything you want to talk to your doctor about, and I think if we could reward primary care both from the patient’s point of view and from the doctor’s point of view, we could have a system that works much better for all Americans.

HEFFNER: Of course, you’re the economist. But that brings me back to a question about the economics of it all in terms of medical insurance, health insurance. Can we afford that? You’re now talking about better pay for primary physicians.

DAVIS: Well, the other side of that is, we may need to tighten up a little bit on what we paid for specialty care. Those have certainly been better paid among the types of physicians that, that serve patients, and maybe there needs to be a bit of equity. There was an attempt to do that under the Medicare program starting in the early 1990’s with a new type of a fee schedule that tilted it a little bit and maybe it needs to be tilted a little bit more. But beyond that I think, we need to really look at “are there ways in which we can achieve savings?” For example, I talked about your primary care physician coordinating your care. One of the things that happens is these tests don’t just get done just once. They get repeated, people can’t find the medical record, they can’t find the test results so you’ve gone from your primary care doctor’s office, to the specialist’s office, to the hospital and every place you go they ask you the same questions again, and they do the same tests again. If a patient had access to their own medical record, so they could say, “here, I’ve got the tests with me” or if we had this in an electronic system, on the Internet, with, with privacy protection so your specialist doctor could pull up your record. Then maybe we wouldn’t need spend so much money repeating what really does cost a lot in American health care.

HEFFNER: I was warned many, many years ago by two great doctors, Mack Liplin and Bill Goldring… “always ask for the reports when your doctor has a special test made and keep them because he may not keep them, but you will and you’re the only one who does. Now you have a better idea… you talk about electronically preserving all of these reports.

DAVIS: Well, I think this is the 21st century. We’ve had a revolution in information technology… and it still hasn’t hit the health sector. One of the things we know, physician-patient communication is not what it should be, an awful lot of patients leave the doctor’s office, don’t remember what the doctor said, never understood it to start with, and if there were a print-out, or if they went home and looked up on their doctor’s web page and their own record and said, “Oh, the doctor told me that I need to do this, there’d be much better communications.”


DAVIS: There would also be fewer errors. In America we’ve got some of the most sophisticated pharmaceutical research that get us some of the most innovative breakthrough drugs, but we can’t read the doctors handwriting on the prescription. So medication errors are the leading source of errors in American health care. We know that 44 to 98 thousand Americans die every year from medical errors. And something as simple as not reading the doctor’s handwriting contributes to 7,000 deaths a year. We know that electronic ordering systems would reduce those errors at least by half.

HEFFNER: You know, Dr. Davis, there are so many questions that you raise in what you’ve said, that I, I wonder if we could go on to all of these things by doing another program, by my asking you to stay where you are and to continue this discussion: medical errors; primary physicians; saving the reports, etc. You game?

DAVIS: I’m, I’m happy to do that.

HEFFNER: Okay, so thank you so much for joining me today on this first part, and we’ll come back in a few minutes.

And thanks, too, to you in the audience. I hope you join us again next time. If you would like a transcript of today’s program, please send four dollars in check or money order to: The Open Mind, P. O. Box 7977, F.D.R. Station, New York, New York 10150

Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.