Deep in the heart of Texas, not far from the Alamo, another battle is being waged. It’s a fight against all the illnesses associated with poverty in America’s inner cities–in this case San Antonio. Here, in poor neighborhoods where chain-link fences surround ramshackle bungalows and billboards proclaim We Buy Ugly Houses, half of all births are to girls younger than 18, many of whom receive late prenatal care. Infant mortality has increased by 49 percent since 2000 in Bexar County, in which San Antonio is located, and one-third of those deaths occur in nine of the city’s seventy-two ZIP codes. Diabetes is rampart, along with obesity; in some areas more than half of the children between 2 and 4 who come to USDA-sponsored clinics are overweight. One-quarter of San Antonio’s population–about 360,000 residents–have no health insurance. The median income of $26,800 in the nine ZIP codes barely covers housing and transportation, let alone an insurance policy or nutritious food that could forestall major illnesses.
Medical care here mirrors everything that is wrong with the US health system, especially for its poorest citizens. But neither the proposals of Senator John Kerry nor those of President George W. Bush would do much to change it. While Kerry’s plans would do more than Bush’s to assist the poor and those without medical insurance, both candidates’ proposals focus on small changes instead of calling for the wholesale rethinking that is urgently needed.
San Antonio is a good place to see the current system’s many shortcomings. For a start, neither candidate’s proposals root out the system’s perverse monetary incentives that spur a new kind of white flight from poor neighborhoods. In San Antonio, practitioners and specialty clinics continue to move north near the gated communities in the Texas hills, chasing reimbursement dollars from wealthier patients, who have insurance. Entrepreneurial doctors who build their own surgical centers siphon off services located in facilities serving the poor, like the lucrative outpatient orthopedic procedures at San Antonio’s Christus Santa Rosa, leaving the hospital with fewer dollars to care for the uninsured.
More significantly, neither candidate’s proposals would control the relentlessly rising costs of new technology. Bush would encourage people to use health savings accounts, which make consumers pay more of their medical bills, and he would cap malpractice awards; Kerry would give taxpayer money to businesses to help them cover expensive medical claims in the hope that the premiums they pay for their workers might thereby come down; in return, the businesses would have to insure all their workers. But even if these approaches save a few dollars for doctors and big corporations, they do nothing to slow the cost of new drugs, treatments and machines, the major cause of healthcare inflation. Kerry does want the government to negotiate drug discounts for Medicare beneficiaries, a small step toward eventually imposing price controls on pharmaceuticals. But the plans include no mandates, no requirements, no enforcement teeth. Doctors’ incomes would be safe; employers wouldn’t need to provide coverage; insurers could still profit from selling policies; and drug companies could still reap a return that’s the envy of every industry in the world.
That neither proposal has sparked a backlash from these special interests–the same ones that created a firestorm for the Clintons a decade ago–says something about how empty the plans really are. Instead, the proposals would attempt to make some of the nation’s poorest people and some of the most marginal businesses foot the bill for health coverage, offering the prospect of tax credits as bait. Bush’s less generous plan would give a credit of up to $2,000 plus a $1,000 contribution to a health savings account to families with incomes lower than $25,000. Kerry’s plan would give a 25 percent credit to individuals not quite eligible for Medicare if their incomes fell below $28,719. He would also give a 75 percent credit to people between jobs, and a credit of up to 50 percent to small businesses that agree to pay half the insurance premiums for their low-income employees. According to Dr. Michael Chernew, a health policy expert at the University of Michigan’s School of Public Health, neither approach is likely to make much of a dent in the number of the uninsured. “The evidence suggests that subsidizing insurance premiums will be a relatively expensive way to encourage coverage, and relatively few people would respond,” Chernew says.