MYERS: Good afternoon. I am Phyllis Berry Myers, Executive
Director of the Centre for New Black Leadership. Thank you for
joining us. Our presenters will be Dr. Richard Swenson, Mr. Michael
O'Dea, and Dr. Robert Moffit.
Swenson received his M.D. from the University of Illinois School of
Medicine. He is currently a researcher, author, and educator. As a
physician, his focus is cultural medicine, researching the
intersection of health and culture. As a futurist, his emphasis is
four fold: the future of the world system, society, faith, and
health care. He is the author of six books, including the
bestsellers, Margin: Restoring Emotional, Physical, Financial, and
Time Reserves to Overloaded Lives and The Overload Syndrome. He has
written and presented widely, including both national and
international settings. He is a frequent guest on Focus on the
Family Radio, and his programs are some of Focus's most popular
broadcasts. In 2003, Dr. Swenson was awarded the Educator of the
Year Award by the Christian Medical and Dental Associations. Dr.
Swenson and his wife, Linda, live in Menomonie, Wisconsin.
Michael O'Dea is founder and Executive
Director of the Christus Medicus Foundation, a not-for-profit
organization focused on reclaiming Christ-centered health care by
reforming corporate and public policy to allow God's people a
conscientious choice in selecting health insurance. Mr. O'Dea was
formerly president and CEO of the Value Sure Corporation, a unique
management resource and benefits consulting firm specializing in
pro-life health care. Mr. O'Dea is an MBA graduate from the
University of Detroit. He entered the United States Army in 1967 as
a private, attended officer candidate school, and was commissioned
in 1968. He served in Vietnam, where he was awarded the Bronze
Robert Moffit is the Director of The Heritage Foundation's Center
for Health Policy Studies. He is a 25-year veteran of Washington
policymaking, a former senior official at both the U.S. Department
of Health and Human Services and the Office of Personnel Management
(under President Ronald Reagan). He specializes in Medicare reform,
health insurance, and other health policy issues. Bob received his
B.A. in political science from LaSalle University in Philadelphia
and his Ph.D. from the University of Arizona.
SWENSON: Our health care system is changing in
historically unprecedented ways. This is not new to many of us. The
dominant change is out-of-control health care costs. There are
probably 20 systemic problems that we are facing right now. Our
health care system is the best that history has ever seen, but it
is besieged by problems.
prominently, our system is besieged by increasingly higher costs.
Currently, we are paying $1.6 trillion. We are adding $120 billion
per year to the health care bill. This is unsustainable. Federal
authorities predict that by the year 2012 it will reach $3.1
trillion. However, it will not, because it cannot. It is
impossible, and something is going to happen between now and
cost curve approximates an exponential curve. Very seldom do
peoples' intuitive abilities penetrate these exponential cost
increases. A physicist once said, "The greatest shortcoming of the
human race is their inability to understand the exponential
function." Now, I would say there are other shortcomings of the
human race that exceed that, but, nevertheless, most ordinary
people do not understand vertical curves. They are very dramatic
and they are very sudden.
is the cost of health care going up? Let me summarize it this way:
There are more and more people living longer and longer with more
and more chronic diseases, taking more and more medications that
are more and more expensive, using more and more technology with
higher and higher expectations, in the context of more and more
attorneys. All the convergences are simultaneous and the math is
exponential. If you do the math, you will see that nothing is
of the rising cost that you see is attributed to the success of our
health care delivery system. Let's look at the components of
- There are more and more people. That is
not necessarily bad; that is good. Some of my best friends are
- People are living
longer and longer. That is good, too. Two thousand years ago,
the average life expectancy was 21 years. In 1900, it was 47 years.
Now it is 77 years. That is an exponential curve. It also
represents a success of our health care system.
- There are more and
more chronic diseases. One hundred million Americans have some
kind of chronic disease. People used to die of these diseases. They
do not die of these conditions anymore, largely because of our
health care system.
- People are taking
more and more medications. New medicines are very expensive,
but they do keep people alive. They get them out of the hospital
sooner and they keep them from needing to go into the
- People have higher and higher
expectations. Our higher and higher expectations are something that
we probably need to do something about. Yet we have them.
- We have more and more attorneys. In terms
of attorneys, litigation, and medical malpractice, the American
Medical Association says that its largest legislative priority is
the 19 states that are right now in crisis of existing medical
malpractice laws: 25 additional states are poised on the brink of
A New Consumer-Choice Model
will hit a tipping point, probably sooner rather than later. When
that happens, we are either going to go to a single-payer health
care system or do "something else." Single payer is politically
difficult for many reasons. It is a possibility, but I would say it
is politically difficult. It is not optimal. "Something else" is
optimal, and not as politically difficult.
"something else" is what I would like to see. I believe that the
"something else" model is the faith-friendly model--a
private-sector, consumer-choice, defined-contribution model. I
believe that our health care future will be, and can be, faith
friendly. The opposite is not as faith friendly.
are the rationales and predicted beneficial effects of this
consumer-based model? First of all, we have history. We have a long
history of churches and religious organizations that date back
millennia in terms of health care--starting hospitals, medical
schools, clinics, and missions across the world helping the needy,
the infirm, the elderly, and the sick.
model also promises superior performance. Peter Drucker, the
nationally renowned management expert, makes the case that the
volunteer sector--there are 2 million volunteer agencies in the
United States today, including faith-based organizations--has a
track record that works. It exceeds the track record of the public
sector (government) or the private sector (business).
Equally important, the relationship
between voluntary faith-based health plans and the delivery systems
is, and should be, a natural development. Faith equals health.
There are now over 1,000 studies that investigate the link between
faith and health. Almost all show a positive association.
Therefore, one could make the case that faith equals health. This
is not rote, once-a-year faith, but intrinsically meaningful faith
that translates into good health benefits. The savings may be
around 25 percent. I once asked the late Dr. David Larson about
this, and he said it was possibly as high as 75 percent. I would
never go that high, but, nevertheless, we could see real savings
Pre-existent Natural Synergies
me spend some time on the pre-existent natural synergies between
the mission of faith and the needs of a health care system.
- First, churches are a center of community.
Maybe they are the last remaining centers of community in America.
You need a tradition that stretches into the past with durable,
stable relationships in the present and a shared vision for the
future. Churches have that.
- Second, churches are already helping the
ill. Already you have parish nurses. Many churches have been
experimenting with this concept. You also have church assistance
with hospital visits or post-surgical care. Sadie, who is 85 years
old, needs cataract surgery, and her extended family is 1,000 miles
away. She just comes and stays at our house for two days. Churches
do it all the time.
- Third, faith-based organizations can
provide meals during sickness, respite care, retirement homes,
assisted living, nursing homes, hospice for the dying, prescription
plans, prayer, and credibility. They also provide care for the poor
and even help for the uninsured. It goes on and on and on.
- Finally, they also offer dependable and
secure bioethical standards. We will be talking about that
The Single-Payer Health Care Model
Let's look at the predicted adverse
effects of a single-payer system on both faith and freedom. I don't
want to be too one-sided about this and say that a single-payer
system would be automatically hostile to issues of faith. Yet I do
believe there is enough of both theoretical and practical evidence
to suggest that it would be very problematic.
First of all, we are a wildly pluralistic
society. I do not believe we used to be as pluralistic in the past,
but we clearly are today. This has profound consequences. The
cultural and moral polarization that we see today is actually quite
extreme. Meanwhile, we are poised on the threshold of a whole host
of ethical conundrums that are going to hit us all very
soon--within the next 10 years.
is a question for Congress and federal policymakers. Why in the
world would the federal government want to set itself up as the
arbiter of these inescapable ethical decisions, knowing that no
matter what decisions they make, they are going to alienate certain
large segments of their constituencies?
of the decisions that a single-payer system would require would
certainly violate the tenets of one faith tradition or another.
Certainly, I would expect that many of my most deeply held faith
beliefs and doctrines would be violated by such a monolithic
Consider Roe v. Wade and its aftermath. It
has been suggested by some commentators--Peggy Noonan most
recently--that perhaps our "culture wars" started in 1973 with Roe
v. Wade. The public policy debate on abortion then was not taking
place on the cultural level (leaving years to be worked out through
public debate and discussion); instead, it was imposed.
Would you want Roe v. Wade 20 times over?
That is what I am suggesting we would be facing in a government-run
health care system.
The Bio-Ethical Challenge
have already touched on abortion. Yet partial birth abortion to me
supercedes any other ethical marker. It does not need to go any
further than that. As a physician, I have delivered many babies.
What does partial birth abortion entail? This may be a nine-month
baby, totally healthy. Yet the abortionist holds the head in the
cervix, and he punctures the skull and sucks the brains out.
However, we cannot decide as a nation today that this is morally
tells me something about where we are as a nation today with regard
to making moral decisions. I am not sure that I really want to
trust all the other upcoming major moral decisions to a national
governmental health system that cannot make a judgment on this
consider some of the other issues:
Suicide. Oregon is the only state in which assisted
suicide is legalized right now. Just recently, you saw the courts
overturn the Justice Department's objection to this practice. The
Justice Department was saying, "No, the doctors there cannot use
medicines to kill their patients." It will not be long. Other
states will follow Oregon.
- The Challenge of
the Elderly. What are we to do with the elderly? We face a
whole set of new challenges, particularly in dealing with the
elderly. Financing and delivery of care for the growing number of
elderly is already a very difficult issue. Thus far, it has not
been solved in a socially or fiscally stable manner. Yet in the
future, we are going to have our grandmothers taking care of their
grandmothers. We are going to have super-longevity. By the year
2030, we are going to have a doubling of the seniors, and each
senior is going to be spending twice as much in Medicare dollars as
he or she does today. Those are real dollars. In other words, by
2030, we will have four times as much spending. Given such economic
pressures, assisted suicide is going to happen, but not in my
health care system--not in the one that I want to join.
- Stem Cell
Research. Stem cell research has been in the front of the
news for a long time. It is very difficult for us to make a
decision about that. There are some ways to explore embryonic
versus adult stem cell research. If we do adult research, and we
use non-federal spending, then we could pursue a lot of work and
perhaps make some real progress in an ethical way. Yet many
politicians want the federal spending and they want that funding
for embryonic research.
Screening. There are 35,000 genes in the human genome. We
now can get portions of the baby's genetic imprint by chorionic
villus sampling done between eight and twelve weeks of gestation.
We have also found ways of maximizing the recovery of fetal DNA in
the mother's bloodstream. In addition, very sensitive sonograms can
now tell us things about that fetus at eight to 12 weeks.
Consider: There are 4,000 single-gene inherited defects. Out of
35,000 genes, there are 4,000 diseases that are defective in only
one gene. They are, for example, cystic fibrosis, Tay-Sachs
disease, Duchenne's muscular dystrophy, and sickle cell
anemia--just to name a few.
If you are going to get a gene imprint of that baby at eight or 10
weeks, and you have a federal system with some rationing in place,
and you find out that this child has a gene that would predispose
her for Alzheimer's or premature coronary vascular disease or
breast cancer, the government officials might tell you, "Well, you
can go ahead and have the baby. We are not saying that you cannot
have the baby, but we would have to exempt this baby from our
government insurance program because it is going to be very
expensive. As a nation, we cannot foot that bill." That would be a
very difficult situation. It is not unlikely. On the front page of
the June 20 edition of The New York Times, reporter Amy Harmon
writes about the "agonizing" personal choices that result from
finding fetal defects through early genetic screening.
Genetic Diagnosis. Maybe there has been a genetic problem
in the family. Therefore, what they do is take eggs from the mother
and sperm from the father. They create maybe eight embryos in a
Petri dish. Then they do genetic testing on all of those and find
out which ones to implant. If that is to avoid genetic problems,
maybe that is one rationale. Yet what if they are starting to look
for genes for I.Q. or genes for athletic performance or genes for
eye color? This is getting into eugenics.
- Human Genome
Project. The Human Genome Project has been a spectacular
success in so many ways. Dr. Francis Collins said this research
should not, however, be used for cloning or for trait optimization.
Yet, obviously, at some point, it will be used for cloning and
trait optimization. In a recent issue of The Futurist magazine,
authors speculate: "What parent is not going to want to use this to
increase the I.Q. of their child, or maybe to change the hair
coloring, or the eye coloring; or"--get this--"the skin coloring,
or to add height?"
Therapy. Gene therapy has been disappointing so far, but
later on, it will be more successful. If you can do gene therapy
and solve the problem of cystic fibrosis, who could be against
that? Yet where do you stop? Where do gene therapy, genetic
manipulation, and genetic engineering stop? How do you stop short
- Rationing of
Care. There is simply too much need in America, as long as
you define "need" broadly--not just critical need, but non-critical
need, elective need, cosmetic need, and hypochondriacal need. The
needs greatly exceed what we could possibly deliver in terms of the
resources required to meet them. Therefore, there will be
rationing. There will be some form of "managed care." There will be
some medical priorities that have to be established. Who is going
to decide what kind of rationing system we will have? Who is going
to define exactly who gets the care and who doesn't? I think that
kind of decision is much more sensitively handled if it is in a
voluntary, private, faith-based scenario.
Life. This is no joke. Some researchers are attempting to
do this with single-cell organisms of 350 genes: They are
attempting to create life.
Species and Transhumanism. "Post-human" species are being
talked about, and it will probably happen. There was a major 2003
conference at Yale University, and the closing keynote address for
the "Transhumanism" conference was, "Who's Afraid of Post-Humanity?
The Politics and Ethics of Genetically Engineering People."
Species and Chimeras. Researchers have already mixed pigs
with humans, and sheep with humans. The reason they are doing this
is to try to create a species to be used for transplantation. You
could use the "pig" liver, for example. They found some very
interesting results. They had some totally normal pig cells, some
totally normal human cells, and the others had very strange
mixtures of DNA--human and pig together. Incidentally, they also
speculated that this might be an entry point for some viruses, such
Cells. These will change the genetics and the genetic pool
of the human species that follows.
Options. There are now 25 different ways to make a child.
Just recently researchers created an embryo without any male genes
from the Dead, or Giving Birth to Yourself. A bull in
Japan sired 350,000 calves. They decided to clone this bull. They
made six clones of this bull and one of the clones has now been
cloned. Now you have some immortality. If bulls, why not
think you have a sense that we are on the threshold of a whole host
of cascading ethical dilemmas. We need consensus at a time in which
we really do not have national consensus. In the meantime, the
practical impact of these issues on our personal lives would be
much better handled if it were done in a situation in which each
person could affiliate with an affinity group that would carry
their own insurance. They could have reliable bioethical
O'DEA: I have been in the health care business for 34
years. What we pay for is what we get in health care, and I am
going to demonstrate that. I want to go back to 1987. That is when
I actually got involved in this struggle. My wife and I run a
pregnancy center. I have done a lot of work with young teenagers
who find themselves pregnant.
Through counseling one young lady, her mom
told me that financing was not a problem, because whether they had
the baby or whether it was aborted, their insurance would pay for
it. It knocked me out of my seat when I heard that. From that day,
I have been trying to find out why our health plans are subsidizing
and promoting a culture of death.
I started my work, some people I ran into in Chicago handed me a
health plan that the National Organization for Women (NOW) put
together. In this health plan information, there was data showing
that NOW testified before Congress in favor of an "economic equity"
act for women. In this proposed plan, there was coverage regardless
of marital status or sex, coverage for elective abortions, and
coverage for surgical and non-surgical birth control. If we just
think about that today, that has become the standard health plan in
current health care culture was shaped by the Alan Guttmacher
Institute, along with partners in the private industry, government,
and insurance industry. Their objective was to have abortion
services, contraceptives, sterilization, and infertility services
included in regular health insurance and they have accomplished a
very significant part of this.
The Loss of Parental Control
1993, we entered a great debate about health care reform under the
Clinton Administration. There was the push for national health
care. Yet even back in 1993, 86 percent of all types of typical
plans routinely covered tubal ligation and at least two-thirds
covered abortion services when considered "medically necessary or
appropriate" by the health care provider. If you look at the data
on health maintenance organizations (HMOs), they are more likely to
have billing and claims processing procedures that allow spouses
and non-spouse dependents, such as teenagers, to obtain
"confidential" reproductive health service. As early as 1993,
between 64 percent and 71 percent of HMOs were already providing
"confidential" abortion coverage. You can imagine how that has
undermined parents and the impact it has had on corrupting our
children and destroying the family.
Analysts at the Alan Guttmacher Institute
then said that this coverage for abortion and other such
"confidential" services was uneven and unequal. They said that it
was not enough. There should be 100 percent coverage for all
reproductive services, all dependents, and at any age--and no
parental involvement in it. You had preventive programs without
deductibles and co-pays to assure that "confidentiality";
therefore, parents or spouses could not be even involved in the
Clinton Administration, of course, wanted to require abortion
coverage in its proposed nationalized standard health care plan. As
we all know, that 1993 Clinton health care reform package did not
pass. Yet a couple of years later, President Clinton said that
incrementally we are going to accomplish the same thing. In 1996,
the analysts at the Alan Guttmacher Institute went back and
developed a whole new plan to incrementally achieve national health
insurance with these confidential "reproductive" services.
first program was the State Children's Health Program (S-CHIP).
Now, I do not object to the State Children's Health Program.
Congress, when they passed that legislation, imposed no legal
requirement for abortion for any reason. There was no requirement
for contraception or sterilization. However, when it was rolled out
across the country, every state except Pennsylvania covered
abortion and contraception. In my state, they offered
sterilization. I do not know how many other states offered
sterilization. Yet remember this: This is all "confidential
coverage" to children under 19--without parental knowledge.
Religious organizations, particularly
Catholic health care providers, are encouraged to implement health
plans that provide these procedures. They are establishing bypass
arrangements to remain an arms-length away from cooperating. In
order to accomplish this, they hire a third party to collect the
premiums so they do not have any direct involvement. Yet they are
still getting the money to pay for these procedures by having a
third party collect the premium and distribute the necessary funds
to the providers when these procedures are performed. Most of the
insured in these religious plans are not aware that these
procedures are being funded. The abortionists know, and because it
is kept confidential from parents, they get their money.
Next, we had the 1997 Equity in
Prescription Insurance and Contraceptive (EPICC)
mandate--contraceptives in the Federal Employees Health Benefits
Plan (FEHBP). That was the real beginning of the political push for
contraceptive mandates throughout the country. To date, 21 states
have contraceptive mandates. Keep in mind, when we talk about
contraceptive mandates, we are talking about "confidential"
coverage to children of any age in this process. One thing to note
about the federal contraceptive mandate for federal employees is
that there was a "conscience" exemption in it. Very few states have
conscience exemptions, and the states that do have ineffective
we have the Health Insurance Portability and Accountability Act
(HIPAA). Proponents of reproductive rights had as a goal to ensure
"confidentiality" to children, particularly to vulnerable
populations, such as Medicaid recipients. Initially, HIPPA, under
the Clinton Administration, denied parents medical information
about their minor children. In April of 2001, Secretary of Health
and Human Services Tommy Thompson announced that President George
W. Bush was revising HIPPA to assure that parents would have access
to information about the health and welfare of their children.
mentioned the S-CHIP program, which was rolled out across the
country in 1998, to be administered in the states. Let me tell you
what happened in Michigan. Initially S-CHIP (known statewide as
MIChild) offered abortion, sterilization, and contraception (which
included chemicals and mechanical devices that induce abortion)
available without parental consent or knowledge. We did remove
mandatory sterilization from our plan, and we also removed abortion
for rape and incest. Now people say, "You cannot have abortion. The
federal government will not allow that." Although not required by
the federal government, S-CHIP offered abortion for rape, incest,
and saving the life of the mother, which is the only type of
abortions federal funds can be used for. I can tell you from my
work with pregnant moms that the categories of rape and incest are
so manipulated that it is difficult to prove, in most cases, that
women were not raped. Insurance companies in Michigan, if they
wanted to participate in S-CHIP, had to agree to participate in
1997, Planned Parenthood started pushing the idea of nationwide
contraceptive mandates based on the idea that employers and
insurers would save money. On an economic basis, the contraceptive
pill costs about $300 a year--one birth, about $4,000. In October
of 2000, the Associated Press reported that major national
insurance companies said they would cover RU-486. For those of you
that do not know what RU-486 is, it is a drug that women take which
causes them to abort the child. Health insurers have generally
agreed to cover this newly approved procedure, which is, again,
available to children without parental knowledge and is very
dangerous. The Equal Employment Opportunity Commission (EEOC)
ruling of December 13, 2002, about contraception spurred further
momentum for employer-paid contraception and nationwide
can we do to redirect what we finance in health care? We now have
Health Savings Accounts (HSAs) available that really empower
individuals to become more directly involved in their health care.
HSAs will also enhance the relationship between physicians and
patients, which we so desperately need.
Therefore, we need to start developing new
health plans that use this new benefit, and that deal with both the
moral and economic crises in health care. We can immediately
implement a new health plan by individually underwriting it,
administering it, and passing the risk on to a large insurer (a
propose that faith-based organizations (e.g., the Christian and
Catholic Medical Associations, the Knights of Columbus, Christian
Management Association), with the assistance of health insurance
experts, test the market in a limited number of states that would
be the most favorable to a free market, faith-based individual
health plan. They could then expand marketing to other states and
faith-based organizations. After a large pool is formed,
faith-based organizations can establish their own health insurance
companies to take risks, experience rate, underwrite, and
administer in those states.
me outline for you the major criteria for the establishment of
nationwide, faith-based, and self-insured health plans.
First of all, we have to have a health
care plan that is totally committed to spreading the Gospel of
Life. The question is: Do people of faith really have the will to
actually step forward and do this?
Next, you need critical mass. Anybody who
knows the insurance business knows it is all about the spread of
risk. It is out there among faith-based communities. They just have
to have the will to pool that critical mass together. The plan
design is key, and the plan design must be truly in line with the
beliefs of the faith-based organizations. They must also make sure
that they control health plan administration. The problem in health
care today is that people really do not know what is in their
health plans, and many times they do not even know what is being
paid for--particularly when it comes to issues regarding abortion,
contraception, or sterilization. That is all kept
Somebody needs to be willing to take on
the risk. There are numerous people that would take on that risk in
the industry--as long as they had a commitment of the critical
mass. Conscience and parental rights must be protected in law.
Michigan, four bills are pending that have passed through the U.S.
House of Representatives. At the federal level, the Abortion
Non-Discrimination Act has now passed in the House. It awaits
Senate action and a presidential signature. In the interest of
freedom, policymakers should oppose new EPICC contraceptive
mandates (and reverse the passage of the current mandates); reform
S-CHIP, Medicaid, the EEOC ruling on contraceptive mandates, and
HIPAA; and enact parental consent laws.
The President's Program
There are different programs that
President Bush has proposed in his State of the Union Address that
are critical for the establishment of faith-based health plans.
First, it is taking care of the uninsured
by making sure they have some economic fairness in the marketplace.
President Bush wants to see that everyone gets treated the same
with tax dollars when purchasing health care, as most Americans do
now through their employers. He also wants to see the uninsured get
tax credits so that they can afford to buy insurance.
Second, the President favors association
health plans. This legislation would preempt the 21 states that
have mandated contraception, because association health plans will
be self-insured plans under the guidance of the Employee Retirement
Income Security Act.
final comment about HIPAA: President Bush did come out very
strongly against the way HIPAA was set up under the previous
administration. HIPAA language said that parents no longer had the
rights to their children's medical information unless the child
consented. President Bush went public and said that he was going to
change that. He said all parents will be protected and have the
right to their children's medical information.
real problem with HIPAA is that President Bush did not change what
was happening at the state level: States have taken that right to
medical information away from parents, so parental rights is a
state-to-state battle. The other major battle that must be fought
about HIPAA is to reverse the federal mandate that no longer
requires authorization from patients for the release of their
medical information to insurance companies and governmental
is ironic to me that we have patients' health protection, when, in
fact, the government and the insurers can get the information
without any authorization. People think that they are being
protected under this law. We really have got a lot of work to do in
this area to awaken America.
DR. ROBERT E.
MOFFIT: The most important issues in health care today are
personal freedom and the preservation of human dignity. If you look
at what is really frustrating many doctors and patients throughout
the health care system, it is the loss of personal or professional
control over key decisions in an increasingly bureaucratized
system. Likewise, a biomedical science unrestrained by traditional
morality, as Dr. Swenson indicated, threatens--in a very profound
Doctors are constantly finding themselves
on the receiving end of decisions made by third-party payment,
whether it is Medicare, Medicaid, or private insurance. Patients,
more than ever before, find themselves in a situation in which the
privacy of their medical records, the range of treatment options
available to them, or (as our panelists have pointed out) the very
morality of certain medical procedures that they are required to
finance, are things over which they have little or no control.
absence of personal control is rooted in the structure of the
insurance market; and the structure of the insurance market, in
turn, is rooted in the tax treatment of health insurance. The
unfairness in the existing tax treatment of health insurance, which
Mike O'Dea alluded to, creates an unlevel playing field and thus
compromises personal freedom--including the freedom to choose a
health plan that is compatible with your ethical, moral, or
religious convictions. We provide $188 billion each year in tax
relief for the purchase of health insurance, as long as you get it
through the place of employment. This means that as long as you get
your insurance through your employer, and your employer makes all
of the key decisions with regard to your health care plan, you get
tax relief. Yet if you are working for a firm that does not offer
you health insurance and you tried to buy a faith-based health
insurance plan on your own (without the employer's sponsorship),
you would get no tax break. There is a profound unfairness in the
tax treatment of health insurance.
recent enactment of health savings accounts is a welcome change in
the tax treatment of health insurance. It is a start in the right
direction. Yet there is much more to be done in transforming the
conventional health insurance market into a system that is consumer
driven and genuinely competitive.
Finally, we are plagued by the growing
bureaucratization of health care delivery, the growth in
administrative cost, and the growth of regulation, red tape, and
paperwork requirements--particularly for physicians. This is
contributing to a dangerous demoralization of the medical
profession. I will repeat it: This is contributing to a dangerous
demoralization of the medical profession.
one of you can go to a medical meeting or a professional medical
association meeting and not feel (tangibly, on the part of
physicians) the sense that they are overwhelmed by what they have
to deal with in Medicare, Medicaid, and private insurance. Now they
are increasingly faced with grave ethical problems as well;
questions of not only what they can or cannot do, but also what
they should or should not do. I will just mention, for example, the
recent pressures on future obstetricians and gynecologists to
participate in abortion procedures as part of their medical
education. The very suggestion would have been scandalous not many
years ago. Now, it is actually something that is somehow
legitimate, if not routine. So much for the Oath of
The Way Forward
Federal tax policies largely shape the
health insurance market. All roads to real health care reform
ultimately lead to the reform of the tax code in the health
insurance system. A simple syllogism: If you want to reform the
health care system, you have to reform the health insurance
markets. If you want to reform the health insurance markets, you
must reform the tax treatment of health insurance. You simply
cannot get to a consumer-driven, patient-centered system, which
allows for the creation of faith-based health plans, without such a
is wrong? The current tax treatment undermines the affordability of
health insurance and restricts consumer choice because the insured
person has nothing to do whatsoever with the policy. The employer
owns the policy; the consumer does not. It hides the true cost of
health care. Actually, many people do not know what they are paying
for. As Mike O'Dea pointed out, Americans are paying for all kinds
of things they would never pay for if they actually had to make
that transactional cost.
current system fuels the rapidly rising health care costs that Dr.
Swenson noted, because it encourages employees to seek more
comprehensive and expensive benefits because those benefits are
tax-free. It favors those who have high incomes. If you are upper
income and you work for a large corporation, you get a big chunk of
tax-free income as a result of the current tax treatment of
conventional health insurance. If you work for a small firm with a
smaller benefits package, you do not get such a big tax break. If
you are a worker in a small firm without insurance coverage, and
you try to buy health insurance on your own, you get nothing.
Basically, upper-income people do just great under the current
system; lower income people do not. Again, for most of you, if you
do not get insurance at the place of work, and you try to buy
health insurance on your own, you are in trouble. If you are
looking for a faith-based health plan, forget it.
are the needed tax changes? First and foremost, a health care tax
credit, preferably replacing existing tax breaks. A health care tax
credit system would be portable, and it could be universal or
targeted. Several years ago, my colleagues at The Heritage
Foundation, Stuart Butler and Edmund Haislmaier, developed a
comprehensive and universal health care tax-credit system, and that
plan became the basis of major legislation introduced in 1993 in
the House and Senate. Twenty-five senators co-sponsored the
legislation. Today, President Bush is proposing a more targeted tax
credit, aimed at individuals and families without workplace health
insurance. In any case, whether policymakers adopt a comprehensive
or a targeted approach, that is, frankly, a matter of political
the basic policy is simple enough: Give taxpaying citizens direct
assistance, in terms of tax relief, for the purchase of insurance
or medical services, or give vouchers to low-income people to
offset the cost of insurance. My preference would be to extend this
direct assistance to offset out-of-pocket medical costs and help
expand access to health savings accounts. If we are going to have
neutrality in the tax code, the tax treatment should apply to all
of these health care options, including new options sponsored by
religious institutions or faith-based organizations.
Policymakers will also have to set some
conditions. If you are going to establish tax relief for insurance,
the insurance should be real insurance, and that means it should
cover you for catastrophic events. My own preference is that the
size of tax credits should be based roughly on need. All
individuals or families would qualify for a basic credit, but
beyond a basic credit, you could vary its size according to income
or health care needs. In other words, if you are lower income, and
you have higher health care costs, policymakers may want to vary
the credit amount accordingly, making it more generous. The more
persons covered under private health insurance, the less dependence
there will be upon government health or welfare programs. You would
also have to make insurance and regulatory reform changes
compatible with the new health care tax credit system.
The Creation of Faith-Based Health
Let's think big. What if you did have
universal tax credits, as opposed to the disjointed system that we
have today? How would it affect the insurance market? How would it
affect the subject we are discussing today--faith-based health
Think about this. You would have a genuine
diversity of health options on a national or regional level. You
would have a wide variety of health insurance
options--associations, fraternal organizations, plans sponsored by
unions and trade associations, as well as ethnic organizations and
religious and faith-based institutions. Atheists, too, could have
their own association plan. You would have a real diversity of
plans and options, increasingly tailored to personal needs and
values--including ethical, moral, or religious values. You would
also intensify the demand for information about quality and, on the
basis of that information, you would also intensify the level of
competition that is most desirable--the competition among doctors
and hospitals themselves in the efficient delivery of high-quality
Second, with a national tax credit system,
you would have the creation of large, national pools for persons
employed in large companies. Indeed, a key structural benefit of a
national tax credit system is that it would lay the groundwork for
large national pools. Think about the possibilities for faith-based
institutions. Imagine the possibility of a large national
pool--let's say, the Southern Baptist Convention, which has 17
million members, sponsoring health insurance. Imagine that kind of
you start to include the millions of uninsured in these national
pools, you are going to introduce a downward pressure on average
claim costs. We know a lot about the uninsured. We probably know
more about the uninsured than we know about any other group within
the population. We can count the hairs on their heads. They have
been studied to death, not only by my colleagues at The Heritage
Foundation, but also by researchers at the Kaiser Family
Foundation, the Commonwealth Fund, and the Robert Wood Johnson
Foundation. The uninsured are not well off financially, but, as a
group, they are fairly healthy. So, as a group, when you start to
include them in the insurance pool, you will start to drive down
average claims costs.
Finally, you will have a long-awaited
revolution in consumer relations in the health care system. Right
now, you get what your employer gives you. (In the case of
government programs, like Medicare or Medicaid, it is what Congress
or civil servants say you will or will not have.) The insurance
company is an agent of your employer, not you. But this new set of
tax and insurance proposals facilitates a major change in the
entire relationship between you and your health insurance company.
You own the policy, not your employer. You become the principal,
and your insurance company becomes your agent. Once you start
establishing this kind of relationship, carriers have a powerful
incentive to retain your business. You will start to see the
writing of long-term health insurance contracts, accompanied by a
powerful economic incentive on the part of insurance companies to
keep you healthy as long as possible. In the meantime, you will be
able to access increasingly sophisticated information, not only
about the health benefits, quality, and service of your insurance
plan, but also about the performance of doctors, hospitals, and
clinics retained by your plan. You can expect, with the rapid and
continuing expansion of information technology, for all of this to
Back to the Future?
it comes to faith-based insurance plans, are we talking about
something that is unrealistic? Not at all. Sue Blevins, President
of the Institute for Health Freedom, recently sent me a book called
The Fraternal Insurance Compend of 1926, which is relevant to our
a lot of us in the policy community have forgotten is that, in the
late 19th and early 20th centuries, when it came to insurance--old
age, disability, dismemberment, and sickness benefits--there were
numerous fraternal societies in the United States that sponsored
insurance and social services, and they covered millions of
Americans. Many of these were faith-based organizations. My
personal favorite is an interesting group called the Bohemian Roman
Catholic Union of Texas, serving men of Bohemian birth and descent.
Their total insurance was valued at $3 million in 1925 dollars.
There were many other faith-based groups,
providing similar services: the Aid Association for Lutherans; the
Catholic Aid Association of Minnesota; German Baptist Life
Association; the Independent Order of Brith Shalom; the Independent
Order of the Free Sons of Israel; the Lutheran Brotherhood; the
Polish Roman Catholic Union of America; and the Slavonic
Evangelical Union of America.
of this is fanciful. America was once rich with such institutions.
They were flourishing. America is, as Alexis de Tocqueville
observed, a nation of "joiners." We still are today. With the
change in the insurance market, coupled with the proposed change in
the tax code and the establishment of equity in the way in which we
deal with health options, we could revive similar institutions in
an increasingly diverse 21st century America, with the possibility
of uniting health insurance with the faith-based health care
delivery. Think about that.
more point: Today, Roman Catholics, Lutherans, Seventh Day
Adventists, and Jewish organizations already have many
sophisticated hospital systems throughout the United States. One of
the criticisms of the current health care system is that it is
often disjointed, and that there is often a disconnect between the
existing systems of financing and continuity--a lack of
coordination that compromises the provision of quality in the care
of individual patients. As many of you know, sometimes on the basis
of painful personal experience, these criticisms are often
making key changes in health care tax policy and regulation and by
aligning the economic incentives correctly, we can promote a
powerful integration, a real and effective integration of insurance
and delivery systems. We could have a natural marriage of private
health care delivery and private health insurance, of large pooling
and personal freedom, and a commitment to quality care combined
with adherence to traditional ethical, moral, and religious values.
What could be better?
Question and Answer Session
QUESTION: Could there be a problem now
with homosexual marriage taking place? I'm wondering about a group
like the Metropolitan Community Church, which is geared
specifically towards homosexuals. They might be a much greater risk
from a scientific or medical viewpoint: Could there be
SWENSON: I don't think discrimination is really the issue
there because you would open enrollment, and people would have
voluntary choice about which health plan they would subscribe
example, the Southern Baptists might serve as a good illustration.
Today, 175 million Americans get their insurance through their
place of employment. If, all of a sudden, instead of a defined
benefit they had defined contribution (the employer gives you the
money and you shop yourself), every person would shop according to
the configuration of his or her needs.
Therefore, the Southern Baptists could
come together. Maybe 5 million out of 16 million would decide to
get their insurance through the Southern Baptists, and they would
set it up the way they want to set it up. Catholic groups would do
that. The Sierra Club could do that. You could have any kind of
group that could do that. Therefore, people would have a wide range
of choices and they would obviously choose a program in which they
are not discriminated against. I really do not think it is an issue
QUESTION: This question is primarily for
Dr. Swenson. You mentioned that different groups could make their
own decisions on the really controversial issues. If one group
makes very radical decisions for its own members--say, one group
decides in favor of abortion, human cloning, and stem cells--how
would that keep other groups from saying, "Well, we believe that is
wrong, and we do not think you can choose those things?"
another group decides to support abortion, and I do not agree with
that, I just have to say, "Well, they just have it for their own
group. I cannot do anything about it."
SWENSON: You would basically have a two-track approach. If
you wanted to just look at politics, morality, or the national
discussion, you would do that using a two-track approach. One would
be a track in which each individual would be able to opt into the
program that fits his or her affinities, that fits his or her moral
beliefs and the tenets of his or her faith. That would be very
comforting to me to have such a system: I could examine it, and
decide that this is the plan or program that matches up very well
with my own conscience on these particular issues.
second track is where you continue on with a national debate about
these particular kinds of issues. The federal government will still
have a role; the state governments will have a role; the Supreme
Court will have a role. Just because one group on the side should
decide things that are scandalous for the entire nation does not
mean that we would not have some kind of national debate about
that. It is best to look at a two-track process.
you do not allow individuals the opportunity to go where their
affinities are, and you have instead a single-payer system, then
you have no option. You have to belong to something. Politicians
will pass different laws that will be contested, and this will be
very frustrating for certain faith groups.
not care what faith groups you are talking about. No matter if you
are way off to the right, way off to the left, somewhere in the
middle, or on the planet Mars. You will have a law that will come
down that will alienate you. Therefore, it will serve only to
increase the level of cultural and political conflict in
O'DEA: This whole public policy in health care is not just
government policy. It is policy that has happened in the private
industry. People will come to me and say, "Mike, I just don't think
you are right. Most health plans are not paying for abortion. Mine
doesn't. Look. Here is this exclusion that says we do not pay for
Well, "elective" does not have any
definition whatsoever; neither does "voluntary" or "medically
necessary." A lot of people just do not know. They really believe
that they are not paying for abortion. I bet if you were to survey
most Americans, and they had a choice between a health plan that
did not pay for abortion and one that did, I think, overwhelmingly,
they would not want to pay for it in their health plan. If you
surveyed them, they overwhelmingly do not know that they are paying
for it. It is something that has been done behind the scenes and
all that information is being kept confidential. That is happening
with a lot of areas of health care.
QUESTION: The Lutheran Brotherhood and
others have combined. I think it is called "Thrivent." Is that a
good example of the kind of approach you have in mind? Do any of
you have any other prime examples of what is going on right
SWENSON: Personally, I don't look at transitional models.
I look at post-paradigm models. The paradigm we have now is not
sustainable--it is going down. Once it goes down, which way is
health policy going? It will go to either single payer or something
else. So that is what I look at.
you try to do "transitional" models that bridge "here" and "there,"
you must realize that we live in such a destabilized and
hyper-volatile time that, no matter what system you invent, it is
going to have conflict on many different fronts.
not spend a lot of time, therefore, looking at transitional models.
I am looking ahead to the time when the paradigm indeed changes. It
will change, I think, quite dramatically. The reason I think it is
going to change in the consumer-choice, consumer-driven,
defined-contributions direction is because we are the only country
in the world that has a system that is employer-based. That started
in World War II and there are historical reasons for it.
Employers cannot wait to shed costs that
they have no control over. They have to do something about it. They
will be the change agents. I do not think it is going to be the
federal government. I do not think it is going to be physicians or
hospitals. I believe it is going to be corporate America. Once they
figure out there is a way to change this that is politically
acceptable (so they will not get some kind of horrible political
and public relations black eye out of it), then I think the change
is going to happen very quickly. That is a post-paradigm model,
such as defined contributions. There is no exact post-paradigm
model that exists now, because we are not post-paradigm yet.
MOFFIT: I want to follow up on this a bit. The basic
question is: Where are we going?
Right now, there are services that are
being delivered through religious institutions. Black churches in
the inner city, for example, have health-screening programs. They
are going on right now. Among African-Americans, the rate of
cardiac disease is roughly three times the rate of cardiac disease
among the white population. Among Mexican-Americans, for example,
there is a very high rate of diabetes. The consequence is that
there have been a large number of amputations in the
Mexican-American community because of diabetes. They were not
getting the best care for a variety of reasons, including cultural
barriers and problems communicating with doctors. Minority
populations, particularly when they are depending upon conventional
employment-based insurance or government health programs, often
find that the existing institutions do not make allowances for
ethnic differences or disease patterns.
question is: How could you build a health care system that would be
more effective in responding to these kinds of demographic
differences? This means responding in the right way, with the right
care, and at the right time. It means responding in such a way that
you will not incur even more massive costs down the road, through
Medicaid or other government programs.
Black churches readily come to mind,
because you have here a social institution in which there is a
great deal of affinity, emotional attachment, and authority. That
is to say, members perceive that the institution is legitimate and
what is being said to them is important and sincere: "You will have
vaccinations. You are going pursue a wellness program. You are
going to control your blood pressure. We care about your health and
you were to tie that social authority to a new system, a
consumer-directed system in which the black church would be in a
position of evaluating health plans for that community, you would
have a major breakthrough with an intermediary organization to do
this kind of work. This function would likely be the norm in a
patient-centered, consumer-directed system. Right now, you have an
organization called the National Association of Retired Federal
Employees. They annually rank private health plans for retirees in
the FEHBP. They evaluate these plans according to their ability to
deliver certain kinds of medical services for disease conditions
that are prevalent among retired Americans. There is no reason why
faith-based organizations or ethnic organizations could not do
something similar for their own members.
is the kind of role that faith-based institutions can play in a
revitalized, consumer-directed health care system. It is a role
that they are not playing now--health insurance companies being
rated by religious institutions or ethnic organizations in terms of
their ability to deliver services to the community in accordance
with the moral values of that community.
QUESTION: Dr. Swenson, you mention that
a plethora of biomedical and ethical issues are poised to cascade
within the next decade. I have been thinking that for several
decades already! Yet public indignation on a lot of these issues
seems to be declining. People become more accustomed to things that
used to shock them. Do you have anything more encouraging than hope
SWENSON: Dr. Edmund Pellegrino of Georgetown University is
here. Dr. Pellegrino, may I call upon you? I'm very glad that you
are in the audience today. I believe you are the foremost medical
ethicist in the United States during the past 50 years. I know you
are concerned with the doctor-patient relationship. You are
concerned about the managed care issue. You write often from a
vantage point of faith. You know more about the ethical issues and
the conundrums than anyone else. Would you want to take a minute or
two and say something about these issues? You might disagree with
everybody up here. Personally, I think something fundamental has
changed, and we are facing a plethora of imminent bioethical
PELLEGRINO: I want to congratulate you on dealing with one
of the major ethical problems with the current health care system
very, very well.
work in ethics. I am a physician. I work in the field of ethics and
I am as concerned as you are over the fact that ethical issues are
now being settled in the public realm by the courts, and, of
course, in the marketplace, in the way you have indicated.
would have questions about whether one needs to link the avoidance
of those particular problems with the particular system that you
proposed--an economic system. I think that is an open question. I
would be prepared to discuss on other occasions ways in which it
might be done in a different way.
Finally, the question running through my
mind over and over again is the recurrence of the phrase
"market-driven." This concerns me because I have written on the
commodification of health care, and I am concerned about that. The
second question is whether there can be true freedom on the part of
a patient seeking help when he or she is in the middle of
illness--or, when you are not ill, the possibility of your
projection into the future of what you will, in fact, need.
Therefore, I question not just your plan,
but any plan, or whether a consumer can really be educated. I do
not like the word "consumer." Yet I do want to applaud what you are
doing in trying to get us out of this terrible morass. I also agree
with you very, very definitely that the medical profession is
totally demoralized. I have been in it 60 years, and I have never
seen it this way before. People are cynical about physicians. Yet I
think it is because we feel we cannot do for patients what we think
they need. I have just stepped out of my clinic because I feel I
cannot provide what the patient needs. That is another moral issue.
What is the moral status of our ability to provide for those that
are ill in this country?
SWENSON: I believe this is a special moment in history.
This is not like 1960. This is not like 1975. This is not like
1990. This is 2004. The scientific ethical issues are there, they
are overwhelming, and we have to start dealing with them. I do not
think we have a national consensus about how to deal with them.
Therefore, I think they are better dealt with on an association
plan basis as opposed to a one-size-fits-all national government
system. That is all the hope I can provide.
O'DEA: I just wanted to make a comment, because I have
been following this and working in this area for years. I totally
agree with Dr. Swenson. I think we are at a moment in time when we
are going to go one way or the other. The decisions will be made in
of the things that really has got people starting to think about
this--how our personal liberties are being taken away from us in
health care--is that recent California ruling about the Catholic
church. They are being told by the courts in California that they
must violate their religious convictions by the mandating of
contraception in their health plan. That has awakened a lot of
moral issue is going to move people even more than the economic
issue. Both of them together are at a crisis. People are starting
to recognize it. That is why I think the moment for change is
QUESTION: In the early 20th century, you
had a rich, vibrant civil society, with all the different fraternal
organizations, and other helping groups. People went to those
institutions because that was where you could get some help. Then
we got the great protectors, the state and the federal government,
which said, "We are the insurer of last resort, or first resort,
and we will take care of you." The older organizations were
recently, efforts to expand civil society have run against another
problem: Getting into bed with the government begins to change the
very nature of what you are supposed to be doing in its pure form.
You are more of a vendor or a partner of the state, rather than the
kind of institution that enables you to do what you do best.
structuring the type of future system you are talking about, what
underpinnings are needed in order to allow these types of
faith-based plans to operate? What makes them work best, as opposed
to being kind of a pale imitation of what might seem to be, in
effect, a non-profit, faith-based sector?
MOFFIT: That is a tough challenge. Unlike the current
system, which is largely a third-party prepayment system through
employers, I favor direct individual assistance--whether it is
individual health care tax credits, or vouchers, or defined
contributions--simply because it maximizes the freedom of the
person. Individuals make the key decisions in the system.
are never going to get the government completely out of health
care. That is not going to happen. Even when it comes to health
insurance, an insurance system is not going to work unless there
are common ground rules for all the players. That is the job of
government. Meanwhile, however, you have got to maximize personal
are right. These older fraternal institutions were indeed "crowded
out." They were "crowded out" by the transformation of the American
economy, the growth in employer-based health insurance, and a
variety of other social, economic, and political changes. In this
context, I was talking to Phyllis Berry Myers earlier about the
black fraternal organizations. It is an incredible story. Dave
Beito, a professor of history at the University of Alabama, has
written about this story, and the stories of other such
organizations, in a book entitled From Mutual Aid to the Welfare
State, a remarkable study of fraternal societies and social
services from 1890 to 1967.
Professor Beito writes, for example, about
the Order of the Twelve Knights and Daughters of Tabor, or the
Taborites, a black religious fraternity very prominent in the
South. They built hospitals because the public hospitals in the
South were segregated, and the quality of care for
African-Americans was so poor in public hospitals that it was a
crying necessity. To paraphrase their message: "We are living in a
hostile culture. This culture does not treat us fairly. With the
help of God--literally--we are going to chart an independent path."
Therefore, the Taborites built hospitals. It was an impressive
achievement. It was also a declaration of social and economic
independence from an aggressive, hostile, segregated state. The
Taborites' story, as the story of other fraternal societies,
constitutes an inspiring chapter in American social history.
SWENSON: Earlier, I was asked a question about hope. I do
not think I have given an integrated answer. I have a lot of hope
for a post paradigm health care system--for three reasons.
First, if this system goes to a defined
contribution approach, you have first dollar decision-making by the
patient. Doctors have been screaming for that for as long as I have
been in medicine, which is 34 years. They have been saying,
"Patients must have more upfront responsibility about spending
their money." That is a major corrective.
Second, for those of us in a faith-based
alliance, if we were to join an insurance program aligned with
that, there would be additional savings as well as wonderful
Finally, I think the future will see a
radical democratization of health care, in which people become
their own primary care provider. Through the Internet, for example,
you can already order 5,000 different kinds of tests you can do on
yourself. If you want to check your cholesterol tonight, you simply
check your cholesterol tonight.
These are dramatic things. I see a lot of
hope. When I speak to physicians, I see a lot of weeping and
gnashing of teeth. There is a lot of anguish right now. Yet
post-paradigm, positive change could decompress many of the
stressors for almost every element in the health care delivery