America, land of the sick: The US healthcare system is ailing badly; Bill Clinton has put forward his prescription. Jack O'Sullivan reports

If Bill Clinton wins the race for the White House on 3 November, he will become the first president in nearly 30 years to be elected after pledging major healthcare reform. His promises may seem modest by British standards: to guarantee that every American has access to reasonably priced health care. If they became a reality, the United States would finally leave South Africa behind as the only industrialised nation without a universal healthcare system.

It may seem unfathomable that the US could continue with its present system, which costs at least twice as much per head as the NHS but leaves one in seven people without coverage. This year the bill will be dollars 800bn with 37 million people, many of them full-time workers, outside the system. Yet reform would be an extraordinary development in a country where a 'healthcare crisis' has been a familiar and tolerated feature of the landscape since Richard Nixon's presidency.

Political realities are quite different from Britain, where prime ministers from Harold Wilson to Margaret Thatcher can testify to the political cost of being responsible for the NHS. In America, politicians do not take the rap for failures in the healthcare system, because they are not in charge of it. Furthermore, until this year, no successful presidential candidate had tackled the problem because to do so would have been to take on the wrath of America's most powerful interest groups.

To see a doctor in the US generally requires payment to a physician and a hospital, so people take out private insurance, usually paid for by employers. The government pays bills for some of the poor (Medicaid) and the elderly (Medicare). It seems a simple system, drawing on American values of individualism, private enterprise, the market, pluralism and freedom from government interference. The trouble is that no one has managed to keep the bills down. They rise by up to 20 per cent a year, as doctors and hospitals deliver ever more expensive care to patients ill-equipped to argue and, in any case, none too worried about letting insurers foot the bill.

'There is what amounts to a medico-industrial complex - a cluster of doctors, hospitals and insurers - braying to protect its economic privileges and throttling moves for reform,' argues Theodore Marmor, professor of public policy at Yale University.

This year may be different. Opinion polls show that health care ranks second, well behind the economy, but ahead of education, in the list of voters' worries. Many of the people hurting most are the middle classes, so- called Bush/Reagan Democrats, those who deserted the Democratic fold in 1980. President Bush has awoken to the dangers by proposing relatively minor reforms almost 12 years after he entered the White House.

The past three decades have been marked by the growth of a gargantuan health system, which now consumes 13 per cent of national output compared with 7 per cent in 1970. (The current figure for the UK is just 7 per cent, itself enough to provoke claims that the NHS is a bottomless pit for resources. Keeping up with American scales of spending would take up the entire British defence

budget.)

The roots of the crisis lie at least partly in American methods of organisation, so successful in other spheres but uniquely unsuitable to health care. The failure of the system offers a dramatic critique of how market economics can go wrong.

Whereas in Britain the government puts a ceiling on spending and takes the political flak for its decision, in the US there is no such limit. Armies of clerks at 1,500 separate insurance companies are employed searching for inappropriate billing, which is then defended by similar clerks in hospitals. One patient alone can attract a dozen bills from different professionals. Paperwork consumes 16 per cent of US health spending, but has had little impact on controlling costs. It just upsets patients and infuriates doctors.

Not surprisingly, premiums have rocketed, finally making many recession-bound employers drop health insurance as a perk. Cost makes coverage impossible for low-paid workers. Insurers, frustrated at being unable to hold down medical costs, focus instead on eliminating bad risks. Those with pre-existing illnesses, such as diabetes, often cannot secure reasonably priced insurance. Workers become 'job-locked' for fear of losing their insurance if they change jobs. Meanwhile, state governments, horrified by rising costs, have cut the numbers of poor they fund and created labyrinthine rules for payment.

Between the poor and the insured have thus emerged the 37 million people disenfranchised from the healthcare system. Marilan Firestone is typical. She worries every day what will happen if illness strikes her family, because she cannot afford insurance. If more than one member of the family is sick, she may have to choose who visits the doctor at once and who must wait until her next pay day. Serious family illness could leave her in debt for years, or bankrupt.

A 29-year-old divorcee, Ms Firestone starts work each weekday at 4am at a bakery in Yellowstone, Ohio, finishing at noon. Then, two afternoons a week, she trains apprentices. But her dollars 11,000-a-year take-home pay is too low for health insurance for herself, seven- year-old Emily and Evan, aged four. She is not poor enough for government help. 'It is very frightening,' she says. 'Friends of mine have a son, the same age as Evan, who has leukaemia. It's costing them thousands of dollars. The cheapest policy I can buy is dollars 250 a month that would cover only serious illness. I take my chances and just hope we stay healthy.'

There have always been people like Ms Firestone, but for change to come in America calamity must be broad-based. Last November, the signal finally came from the electorate. Harris Wofford, an unknown Democrat, routed the Republican hot favourite in a Senate race.

Wofford's platform banner was: 'If criminals have the right to a lawyer, I think working Americans should have a right to a doctor.'

Clinton's proposed reform is artful in harnessing Bush Democrat discontent, while pulling its punches to diffuse Republican charges that the plan means extra taxes. Everyone would be insured, whatever their health risk, either by employers, sweetened by tax breaks, or through government funding (non-workers). Hospitals and doctors would have to hold their prices so that a nationally agreed total health budget was not breached. 'This is my plan, personal choice, private care, private insurance, but a national system to put a lid on costs,' declared Governor Clinton.

It is a radical departure, the first sign that a US government might take responsibility for the health of all its citizens. Clinton's presentation and evasions are those of a Democratic candidate at a time when antipathy towards big government remains endemic. In contrast, President Bush's plan is minimalist, offering tax credits and cuts to help people pay for health insurance. Universal coverage would not be achieved, but the pain of high premiums would be eased. Critics say medical inflation would be fuelled.

Both policies are calculated attempts to win the Bush Democrats. Taking on the 'medico-

industrial' complex may be for a later date. The incrementalist history of US domestic reform suggests change will involve fierce battles in which small gains are achieved only at the expense of large concessions.

Jack O'Sullivan, health services correspondent of the 'Independent', is a Harkness Fellow of the Commonwealth Fund of New York.

(Photograph omitted)