The University of Michigan
555 South Forest Street
Third Floor
Ann Arbor, MI 48104-2531

T 734-936-9842
F 734-998-6341




The United States spends nearly $2 trillion on health care annually. Yet the health care system that gobbles vast amounts of America’s resources while promising to promote health and ease the burdens of disease is failing many Americans. In an effort to fix the nation’s health care system Congress created the Citizens' Health Care Working Group to engage in an open dialogue with the American people, and solicit their input on system fixes. The public has responded, and the Working Group, in turn, recommended to Congress and President Bush, a series of steps for action, including universal coverage. But is anyone listening?

Interview with Catherine McLaughlin, Ph.D., Professor in the Department of Health Management and Policy at the University of Michigan, and former Vice-Chair of the Citizens’ Health Care Working Group

University of Michigan economist Catherine McLaughlin studies issues of the uninsured, market competition, and employer and employee benefit choice. McLaughlin, director of the Economic Research Initiative on the Uninsured, served on the Citizens’ Health Care Working Group, the creation of Sen. Ron Wyden (D-OR) and Sen. Orrin Hatch (R-UT). The group’s charge was to hear how people outside of Washington view the system’s problems, and then seek solutions from citizens. The Working Group was established as part of the Medicare Modernization Act of 2003, and had a 18-month timeframe. The Working Group sent recommendations to the Congress and the President on September 29, 2006. McLaughlin talks about the group’s recommendations, the disconnect between the public and health care policymakers when it comes to dealing with the uninsured, and lessons she learned from citizens.

Can you give us a status report of the Working Group's recommendations?

MCLAUGHLIN: The law gave the President 45 days to pass the group's recommendations on to Congress with or without his own commentary. The five committees in Congress with jurisdiction in health care then have 45 days to hold at least one hearing, in each committee, on those recommendations. The sponsors wrote the legislation to force the President and the Congress to at least respond to these recommendations. We sent the recommendations to the President in October; as of March we haven't heard from the Administration.

After hearing all of the testimony, how would you say the average American views what should happen with health care in America?

MCLAUGHLIN: The typical person thinks we should have universal coverage. People think that every American should have some financial protection against high health care costs and that the system should be easier to navigate. But while the vast majority of people we talked to thought there should be universal coverage, the term does not have a universal definition. In contrast to what some of our critics think, we did not hear "single payer" from every person. There were very strong contingents of the populace who don't want the federal government to be everyone's insurer.

Can you briefly highlight the group's recommendations?

MCLAUGHLIN: In the end, the group wanted universal coverage as the goal of the United States, so that every American could have access to affordable health care. We realize that cannot occur tomorrow, but we recommended two things that could be accomplished in the near future. One: require that every American have protection against high health care costs, so no individual or family would be impoverished because of the misfortune of an accident or injury. Secondly, we need to begin improving the infrastructure for local community health networks. This would allow people with few financial resources to have access to reachable and affordable local clinics for prevention, immunizations, to get treatment for sore throat, tests and other routine medical services. Today, this kind of care can be hard to access in local markets.

Can you highlight some of the longer-range recommendations?

MCLAUGHLIN: One deals with what's included in a health insurance package. While everyone should have universal coverage to affordable health care, we have to decide what is covered. The message that we got loud and clear from citizens nationwide—in both red and blue states—was for citizens and providers to sit down with representatives from the government to decide what should be in this basic health care plan. It should be based on some kind of scientific evidence, when possible. It will take several years to hammer out those details but work needs to start now.

Secondly, we heard repeatedly how much the health care system costs and how those prices are rising rapidly. Those high and rising costs, however, don't always reflect good value. The federal government and the private sector need to work collaboratively to improve system efficiency, to reduce errors and to provide better value. We need to get the best bang for our buck.

Isn't there a recommendation about end-of-life care?

MCLAUGHLIN: Yes, that's part and parcel of the value aspect. End-of-life issues initially weren't on the table but people brought it up at every single meeting. It's on people's minds, whether they were talking about a parent, spouse, or child. The public thinks individuals are dying in the wrong place and with the wrong kind of care.

The issue of health care reform is back on the radar screen, with several competing plans. Do you see elements of the working group’s recommendations influencing any of these proposals?

MCLAUGHLIN: Some of the states and presidential candidates are coming forth with proposals that reflect three of our recommendations: 1) the goal of universal coverage is in several of them; 2) the emphasis on focusing right away on high costs is something they have in common; and 3) end-of-life issues are being discussed more frequently and in a way they were not even a year ago. Meanwhile, the proposals put forth by the President and some others seem to, in part, rebut our recommendations. It almost seems that those proposing such alternatives are saying, "We don't like what most Americans surveyed said they want done, so we have to come up with something else.

What are the biggest disconnects between what the public wants and what policymakers are focusing on?

MCLAUGHLIN: Many policymakers are saying, "OK, let's keep up with this patchwork stuff and plug this hole and plug that hole." Most Americans said they are tired of plugging up holes. They want universal coverage. Most policymakers are working on plugging the holes. Everybody is afraid of the "r" word, but the current system and proposed systems all have some form of health care rationing. In the current system, you are rationing according to who you are. In a universal coverage system, you ration according to what is covered. The members of the Working Group were stunned at how much consensus there is around universal coverage. We need to re-think how our scarce resources are allocated. And that is something that most policy makers haven't caught up to yet.

As an economist, did any of the testimony you heard change your views?

MCLAUGHLIN: Yes. Economists believe the purpose of insurance is to insure against risk—not the risk of getting sick, but the financial risk if you get sick or injured. What I heard repeatedly is that people want some prevention coverage. Under the strict economists' view of prevention, getting your annual physical or Pap smear, or getting your children their "5 year old shots" are not insurable risks. But economists may need to rethink this. Putting prevention in an insurance package might be the way to get people into the door, get them to understand how the system works and its entry points. This is useful so that if you have an accident or injury, which is the insurable risk, you have your entry point and it works more efficiently because you know where to go, you know what to do, they know you.

What role did most people want the government to play?

MCLAUGHLIN: They want the government to be the health insurer of last resort. Most people thought Medicare was the right thing to do. They think it was done appropriately, and that Medicaid is something the government should do. So, we did hear consensus that the government should be the insurer of last resort. Most people thought the private sector was a good place to improve quality and efficiency. I think people also thought the government should be the guarantor of eliminating the bad guys.

What role did consumers themselves want to play?

MCLAUGHLIN: They want to have a choice, of course. But many understand they should do a better job of taking care of themselves, whether it's eating better, exercising, or something else. When they think about it, individuals also understand they are part of the problem, too, they shouldn't be taking antibiotics for a viral cold. I think most people feel as though they have to take some responsibility. Government is in there, businesses are in there, individuals are in there, providers are in there. This is a shared social responsibility.

Do people seem willing to pay more for this shared responsibility?

MCLAUGHLIN: When it came to talking about the 47 million uninsured, we talked about this. Most people said they were willing to pay more. It wasn't a lot, but most people at least indicated they could afford to pay more for their health insurance if the money could be used to subsidize people who can't afford coverage. Again, it was part of that concept of shared social responsibility.

The Working Group says its recommendations will lead to long-term savings but require new funding sources up front. Can you highlight the financing principles the group laid out?

MCLAUGHLIN: This gets back to this issue of equity. The sick should not pay for being sick. Everyone should contribute, sick and healthy, rich and poor. Most people thought that the fairest way would be based on income. Payment should not be based on your health status or on your age. So people in their 20s, for example, need to chip into the pool if they have some income. You chip in according to your ability to pay. So, that was the overriding principle. People also wanted efficiency. The feeling was that if the financing is so complicated that the cost of administering it is high, then you are not getting enough payback for the cost. We also highlighted that there should be simplicity to the financing of the system.

I know that the Working Group heard tons of testimony. Does any one person's testimony still stand out to you?

MCLAUGHLIN: A woman from Billings, Montana, stood up and said the current employer-sponsored health insurance system was started in the 1940s, when health care really couldn't do very much for you, and it was a privilege, an extra perk offered by some employers to some employees. Now, health care is a necessity, one that can be very expensive, and you have to rethink how we pay for health care and who gets it. That's an excellent point. It really doesn't make sense to try to patchwork a system that was designed 60 years ago.

Back to top

Funded by The Robert Wood Johnson Foundation, ERIU is a five-year program shedding new light on the causes and consequences of lack of coverage, and the crucial role that health insurance plays in shaping the U.S. labor market.