The Big Question: Why is US health care in such a mess, and what can Obama do about it?

(REUTERS)

Why are we asking this now?

The issues on President Obama's plate as he prepares to take a summer break on Martha's Vineyard range from the stumbling economy to Afghanistan and the Middle East, but it is domestic policy and his pledge to enact health care reform that keeps him awake at night.

He has reason to be worried. Months ago, he made himself a hostage to fortune – or to Republicans and some conservative Democrats – by insisting that both the US Senate and the House of Representatives pass their particular versions of health care reform before the August recess. That has not happened and lawmakers are already trickling out of Washington to return only in September.

What's holding him up?

Whereas Bill (and Hillary) Clinton tried to ram change through in 1993 by drafting reforms behind closed doors and then demanding that Congress pass it, Mr Obama has taken the opposite approach. For six months he has stood on the sidelines as committees in the Senate and the House have been toiling on their own bills to overhaul the system. This may have been smart, but the opportunities for political squabbling and delay have been multiple. After all, this is no small task. This is an industry that accounts for one-fifth of the total US economy. No wonder one version approved at the committee level runs to 1,300 pages.

What's wrong with the system as it is?

When a charity offered a free medical and dental clinic in a field in Virginia 10 days ago, 2,700 desperate and ill people showed up. Yes, America has some of the world's best doctors, hospitals and clinics, but the system as a whole is nothing short of a national scandal. And it is not just that almost 50 million people in the country have no health care coverage at all. Even those who have insurance find more often than not that what they thought was covered actually isn't, or they struggle to keep up with premiums that continue to rise at a pace far ahead of inflation. Mr Obama tells voters that unless something is done now, the train will finally come off the rails and more people will be without insurance than ever before.

Are they listening?

Mr Obama was elected in part because of his promise to tackle this mess. But six months after coming to office, he faces an increasingly dubious public. Polls even suggest that more voters are inclined to distrust what he is proposing than to approve it. That's why the so-called August recess won't offer much rest to anyone, particularly the White House which is planning multiple events and rallies to regain public support. The biggest worry is this: wavering, conservative Democrats may be bombarded by constituents who don't trust the reform and decide to defect to the Republican side to oppose it. That would be a disaster.

If you are uninsured and fall ill, are you left to die on the street?

No. If you show up at a hospital emergency room, they will treat you. But this creates many problems. Every time a hospital treats someone without insurance it is forced to pass on the costs to those who are covered, driving up the cost of care more and more. This also means that many Americans put off getting treatment until they are too ill to carry on. These reforms will try to re-emphasise preventive care, in part by increasing financial incentives to family doctors. The system now is glutted with specialists who are obscenely well-paid while there is a dearth of primary care doctors who earn much less.

So is America going to have an NHS like Britain?

Mention the NHS and conservatives begin to froth at the mouth about "socialised" medicine and its purported evils like rationing and diminished standards of care. Everyone in America is covered by private plans, usually paid for by employers (if you still have a job), unless you are old or in a low-income bracket in which case you qualify for the state-run Medicaid and Medicare programmes. But the proposed reforms do move in the direction of public medicine by proposing to create a government-run health insurance body that would serve as an alternative to all the private plans out there. The idea here is to rein in the private insurance companies and force them to become more competitive, more efficient, and, hopefully, cheaper.

Is that it?

No. There is much else besides, including provisions that would oblige businesses to offer coverage to all their employees. Even individual Americans would be required to have some form of insurance, just as drivers are required to have a licence. Moreover, new rules on private insurances would bar them from denying coverage to people with pre-existing conditions, which remains a key obstacle to people trying to get insured. Another big problem is the fear doctors have of being sued for malpractice with the result that they always err on the safe side, recommending expensive procedures that may very well not be necessary. Under these reforms, a health board would issue treatment guidelines for every conceivable condition and illness. Doctors who follow the guidelines will be protected from lawsuits. Also, they will no longer have to call up a patient's insurance company for permission before doing anything to help them. The madness of a doctor's paperwork is another reason health care is so costly.

So where does it all stand now?

All the relevant committees in the House have adopted versions of a bill. The Senate is not there yet, but is in Washington through to the end of this week. After the summer break, the Democratic leadership must synthesise these committee-passed versions into one bill for adoption on the floor of their respective chambers. Only then can the Senate and the House begin reconciling those two versions to draft the law that will go to Mr Obama's desk. No wonder it takes for ever. Probably they'll be at it until Christmas. And, by the way, it would take about eight years to get all the proposed reforms up and running.

What are the arguments about?

Cost, cost, cost. The only way to justify forcing people and businesses to buy insurance, whether from a private or the proposed public plan, is to offer generous subsidies. But the US is already in a deficit nightmare with money being thrown in all directions, including to foreign wars and the economic stimulus programme. Can it afford the Obama health plan, which could cost almost $1 trillion over 10 years? Conservatives say it will end up being more expensive than that and the impact on the deficit will be devastating. Opponents of reform are also throwing out other, mostly misleading, claims: that care will be rationed (as if it isn't already for those without insurance), that the government will encourage euthanising the old and infirm, and that taxpayers will find themselves funding abortion.

Is there any solution?

The best one might be simply to impose higher taxes on the wealthy. But no one likes new taxes. And conservatives are suspicious of the public health option because it sounds like "big government" and could harm private insurers.

Will the President have his reform plan by the end of the year?

Yes...

*Obama's legacy will rest on making progress on health care; he'll do what is needed to bring in reform

*Democrats are in control of both sides of Congress and, when push comes to shove, they will give the President his reform

*The status quo is not only shameful it is also unsustainable

No...

*Republicans will bombard the airwaves with advertising that will scare Americans off change

*Discipline in the Democratic Party will break down and enough members will oppose the plan

*Something will get passed, but it will be far from what Obama wants and little will change