The recent failure to enact fundamental health care reform has tended to be blamed on either the personal qualities of key policy makers or the immediate political context following Bill Clinton's inauguration. This paper argues that the failure of health reform results from structural features related to America's distinctive pattern of health policy. In particular, America's preoccupation with supplying technologically sophisticated health care has produced a political dynamic that inhibits support among elites and the mass public for fundamental health care reform. The political obstacles created by American health policy are more enduring and deeply embedded than the immediate conditions or personality traits associated with any one particular time point.

The rising number of accounts for the defeat of national health care reform in 1994 tend to fall into one of two categories. They stress either the personal qualities of key policy makers or the immediate political context following Bill Clinton's inauguration. To insiders and journalists, health reform was undermined by the difficult personalities of Ira Magaziner and Senator Daniel Patrick Moynihan, and by President Clinton's failings as a leader. Moreover, the President's personal leadership style, it is emphasized, produced a series of tactical blunders -- his establishment of a secret task force locked out allies and fed the worst fears of moderates, his decision not to release his legislative proposal during his first 100 days created an opportunity for the opposition to mobilize and his own popularity to ebb, and his announcement of the administration's proposal in September 1993 was followed by an inept public relations campaign.¹

The recent articles in Health Affairs by Theda Skocpol and Hugh Heclo typify a second approach to explaining the defeat of national health reform in 1994 -- one that focuses on the immediate situation or context that the Bill Clinton faced. This "situational" account argues that although better leadership could have improved the odds of passing health care reform, the President's probability of success were always low because of such unfavorable "conditions" as a weak electoral mandate, a well-organized conservative opposition, and an ambiguous and difficult policy objective.

Although personality traits and immediate context obviously contributed to the failure of health reform, what also needs to be emphasized is the political impact of America's distinctive structure of health care policy. The commitment in the U.S. to expanding the supply of technologically sophisticated health care (what I characterize as America's supply state) creates structural pressures that discourage and inhibit support among elites and the mass public for comprehensive national health reform. In particular, America's supply state has two enduring influences on the political process: it shapes how elites and the general public define their interests and goals, and it differentially affects the political capabilities and resources of politically active groups.² In short, America's established health policy produces political obstacles to reform that are more enduring and deeply embedded than the immediate conditions or personality traits associated with any one particular time point.

This paper will begin by discussing America's distinctive policy toward health care. The concept of policy will be used to refer to macro decisions that provide an organizing principle for what are otherwise discrete government decisions. One illustration of this kind of meta-policy is Canada's arrangement for financing health care and for limiting each province's discretion in designing its health plans. The second section will examine the impact of American health policy on political struggles to reform the delivery and financing of health care.

Health care policy in industrialized countries has developed along two interrelated dimensions: the sequencing of government decisions and the form of government policy. The first dimension refers to the temporal sequence by which governments widen access to available health care and expand the supply of health services. Does widening access or expanding supply come first? The second dimension involves the degree to which the government expands the supply of health services and, specifically, the supply of hospital-based health services. Government involvement in the expansion of supply has typically entailed government participation in the construction of medical facilities, the training of medical personnel, and, since the 1960s, the technological development of medicine's diagnostic and therapeutic tools. Although additional research is necessary on the health care systems of specific western countries, the general sequence and form of health policy in the U.S. differs from that in other industrialized nations.

The exceptional feature of American health policy is that the government's first and most generous involvement in health care focussed on expanding the supply of hospital-centered, technologically sophisticated health care.³ With the drive to expand access to health insurance deadlocked by the 1940s, Congress and interest groups found that a durable consensus could be built on expanding supply. Under Hill-Burton, the government dramatically increased the number and geographic dispersion of hospital beds. Instead of concentrating hospitals in regional centers or building general medical clinics, the American government constructed acute-care facilities and encouraged the diffusion of hospitals to smaller cities and underserved rural areas. In addition, the government expanded the number of medical personnel and actively promoted the training of physicians who would provide acute care rather than primary or preventative care. As a direct consequence of this policy, nearly 80% of American physicians are specialists.

Finally, government policy -- as implemented through the Defense Department, the Department of Energy and, especially, the National Institutes of Health [NIH] -- has championed biomedical research and innovations in medical technology. NIH's budget has skyrocketed from 26 million dollars in 1945 to 7 billion dollars in 1990 (1988 inflation-adjusted dollars). Although the dominant pattern of health policy over the past half century has been to support the development and distribution of medical technology, detailed histories of NIH and programs like Heart, Disease, Cancer, and Stroke offer important illustrations of ambivalence or failure in delivering high tech medicine.⁴

The result has been the geographic dispersion of large numbers of acute care facilities, the stable employment of burgeoning numbers of acute-care personnel, and the growth of a large market for innovative medical technology. While other countries have also encouraged the development of medical technology, the American government's involvement has been unprecedented and has contributed to the far greater availability of Magnetic Resonance Imaging, radiation therapy units, organ transplantation and other innovations than are found in Canada, Germany and other countries.⁵ The expansion of supply has been financed by direct government subsidies as well as by insurance companies and Medicare, which allow hospitals to receive reimbursement for capital expenditures.

America's unprecedented development and distribution of medical technology is not an unfortunate anomaly or oversight but rather a natural and indeed inevitable outcome of government promotion of sophisticated hospital-oriented health care. America's unparalleled level of health expenditures among OECD nations is but the most visible sign of its priorities.

The government's efforts to increase access followed its supply-side commitments and evolved in a restrained manner -- access to care was granted as a condition of employment, age, and medical condition. The aged and disabled receive Medicare, the indigent are eligible for Medicaid, and individuals with middle and upper incomes receive private health insurance as a non-wage benefit or as something they purchase themselves. The 37 million Americans who are uninsured and the additional 20-40 million who have inadequate health insurance coverage are but one indication that widening access has always taken a back seat to expanding the supply of health care.

The sequencing and form of American health policy are inter-related. When policy makers decided to expand supply and later to expand access under Medicare and Medicaid they operated under comparatively simple assumptions about medical technology. The government's early commitment to a simple notion of supply locked it into a technology-supporting payment system. Early decisions about supply fed into later decisions about access.

In contrast to the United States, however, other western countries have made the expansion of access the government's first and primary priority; governments accelerated the expansion of supply in response to widening access and growing demand for care. In Europe, the national commitment to guaranteeing all citizens unimpeded access to health care evolved from private and voluntary arrangements. The government's involvement typically began with employer mandates: employers of blue collar workers were obligated to provide health insurance, sharing the cost of the premiums with their employees. This form of self-financed coverage for blue-collar workers was subsequently expanded to other population groups and was financed through government taxation. The emanation of universal access from private and voluntary arrangements and working class programs was guided by the overriding principle that health care is a right owed to all citizens -- one that should not be compromised by financial barriers.⁶

Expanding supply is considered an important function by most governments offering statutory health insurance; but these governments have historically treated this function as secondary and one that can be achieved without building the kind of hospital-oriented system that American governments encouraged. In contrast to the U.S., other industrialized countries have geographically concentrated medical facilities; new medical programs have been placed in selected regional centers rather than being allowed to proliferate throughout the country. The comparatively constrained development of new medical facilities as well as government decisions about medical personnel produced a relatively high proportion of physicians in general and family practice: 20-40% of physicians in other industrialized countries are specialists while 60-80% are generalists. Finally, the development and diffusion of medical technology has been limited by comparatively constrained facility development, greater emphasis on primary care physicians, and the exercise of government planning authority.

Canada offers a less stark comparison with the U.S. Much like the U.S. in the immediate postwar period, Canada both expanded hospital capacity and failed to pass national health insurance. The difference, though, is that by 1950 four Canadian provinces had established government hospital insurance plans which formed the basis of a national program in 1957. In addition, both the mass public and the leading political parties explicitly embraced the principle of universal health insurance.⁷ In Canada, government programs for all were incrementally expanded according to service -- first hospital care and then physician services. Although Canada relies on provincial (rather than national) government bargaining with providers, its health policy follows the same pattern found among European countries -- an emphasis on access over supply.

In short, America's unique sequence and form of health policy sets it off from other advanced democracies as a supply state.

Government involvement in health care began by encouraging unrestrained supply and then (conditionally) expanded access. Despite wide variations in organizational arrangements, the initial government policy in all other industrialized countries focussed on universalizing access and then (conditionally) expanding supply.

Most discussions of America's promotion of technologically sophisticated, hospital-centered care focus on the financial consequences and, specifically, their contribution to America's exceptional level of medical expenditures.⁸ America's commitment to the supply of high-tech care, however, has not only economic but also political significance.

America's supply state has shaped its citizens' political resources and the way in which they conceive of their interests and define what seem like feasible and desirable objectives. Intense political conflict over the delivery and, especially, financing of health care is of course evident in all industrialized countries. The common theme is that individuals and groups demand a high level of services for minimal costs in a context of constrained resources and divergent values.

American political conflict is distinctive because of the kind (and not simply the degree) of struggles that break out over health care. What Americans fight over is starkly different from what citizens of other industrialized countries consider appropriate and worthy of battle.

America's supply state influences political rationality by encouraging factionalization. By contrast, in advanced democracies where access preceded supply, institutional mechanisms aggregate individual interests, articulating a collective interest and forming something close to an "encompassing organization."⁹ Statutory health insurance that provides universal coverage and relies on government involvement in funding encourages individuals to think of quality, access, and cost as affecting everyone.

This pattern of health policy defines interests in inclusive and encompassing terms. The consequences are two-fold. First, hospitals, specialists, and other providers who are intensely committed to protecting their concentrated interests face countervailing pressures. National discussion of medical expenditures creates competitors for the public funds from interests outside the health care sector. Moreover, government promotion of general practitioners creates a countervailing pressure from within the medical profession against the demands of specialists.

Second, medical resources come to be understood in collective terms. The deterioration of care and cost control have clear penalties for the entire society in the form of substandard services, increased taxes and more cost sharing. For instance, in Germany sickness funds are chiefly financed by collecting premiums through a payroll deduction, which averages approximately 13% of gross wages. Although this rate is split between employers and employees, the total premium rate is the focus of public discussion. A diffuse set of actors -- unions, employers, and providers -- all cue on that figure; when pressure builds to increase the rate, collective action to contain costs quickly follows. In Canada and many European countries, doctors, hospitals, and patients all accept the fact that providers may deny available medical technology after weighing the net benefits of health care against alternative uses of the funds.

By contrast, America's pattern of promoting supply and making access conditional produces social divisiveness and discourages the mobilization of broad-based constituencies. America's health policies have created incentives for members of society to fight as individuals or small groups to champion what they see as their narrow interests.

Each component of the health system -- from access and cost to actual care -- is perceived in factional terms. The practice of making health insurance conditional on age, medical condition, indigence and employment invites Americans to equate their interests with winning classification in one of the covered categories and then protecting their benefits. Premiums for private insurance similarly encourage Americans to define their interests in individual terms -- fighting on the basis of their personal health profile for the best deal that they can receive. New York's recent insurance reforms demonstrate the difficulty in introducing community rating into the current American context: the inevitable rise in premiums for the young prompted 12% of individual policyholders to re-evaluate their personal positions and to drop their coverage; the result was a net increase in the number of uninsured people.¹⁰

The payers of care also adopt a factional approach: they equate their interests with minimizing their own expenses by shifting costs to others -- patients, business, or providers. The nation's overall expenditures on the health care industry are dispersed throughout the economy, with Americans gradually absorbing these costs through such indirect means as consumer prices and non-wage compensation. The effect is to impose the financial costs of sophisticated care on the large but diffuse groups that receive and underwrite care.

Finally, patients, providers, and suppliers perceive clear stakes in providing maximal care for each insured individual. Patients feel freed by third-party reimbursement to demand all available care; hospitals are reimbursed for purchasing, maintaining, and utilizing medical technology; suppliers are eager to furnish new products for a well-paying and stable market; and physicians are financially rewarded and professionally trained to use every possible diagnostic and therapeutic service.

America's supply state encourages providers and patients to perceive health care as involving concentrated interests and individually large stakes. Rationality in the American system nearly dictates that hospital specialists fight restrictions on medical technology, that Medicare beneficiaries battle to protect their services, and that the healthy resist paying more to compensate for the cost of insuring the less healthy. Unmet demand, escalating costs, and excessive levels of costly low benefit care are discovered at the end of each year as an accidental by-product of individual calculations.

Discrete services and insurance arrangements attract their own distinct sets of promoters, and attempts to alter these arrangements provoke intensive opposition. In the absence of institutional arrangements that coalesce unorganized interests, actions beneficial to diffuse interests are almost certainly blocked.

America's health care arrangements have produced factionalization and a dense pressure group environment that has defeated two of most recent efforts at systemic reform.¹¹ President Carter's proposal to establish centralized budgetary controls on annual hospital revenues and on the system's volume of capital spending was defeated by the political tag team of intense stakeholder opposition and subdued support for addressing the national problem of runway health expenditures.

President Clinton's recent attempt to achieve cost containment and universal coverage faced a similar political tag team. One of the central issues in the President's plan was taxation. In an attempt to dampen opposition, the Administration decided to avoid an explicit tax in favor of a more indirect payroll tax (an employer mandate). But, both the explicit and indirect payroll taxes faced the same political problem: they represented a collective action -- the government would be collecting, controlling, and dispersing money. Clinton's dilemma was that health reform required a collective mechanism for raising revenue but the country lacked aggregating mechanisms for mobilizing diffuse actors behind programs perceived as advancing their "interests." Instead, Republicans gleefully exploited Clinton's vulnerability; they drew on the Congressional Budget Office's evaluation of the Clinton plan to hammer it for proposing new federal taxes that would threaten individual Americans.

Not only did national health reform lack aggregating mechanisms, but it also provoked a plethora of oppositional minority coalitions intent on protecting their stakes in the current system. One set of groups like representatives of unions and Medicare beneficiaries were conditional supporters: they backed reform as a whole but lobbied intensely to make sure that it did not come at the expensive of their existing benefits. Other groups also hedged their support: the AMA and other physician organizations voiced concern about shrinking clinical autonomy and income; Academic Health Centers complained that it would undermine their financial positions and compel quotas on the proportion of primary care practitioners; different geographic regions lobbied to insure that the inevitable reshuffling of funds between and within different states did not come at their expense.¹²

A second set of groups stood to benefit from reform but nonetheless opposed Clinton's plan. Large businesses stood to gain from controlling cost escalation and the incidence of uncompensated care, but their umbrella organization -- the Business Roundtable -- opposed the Clinton plan because of innate ideological hostility to government social regulation and intense pressure from a few members (namely, health insurers) who had large stakes in the existing system.¹³ Similarly, health maintenance organizations (HMOs) also stood to profit from the Clinton Plan's efforts to increase their numbers, but voiced strong reservations because of fears about government regulations and requirements to accept poor people.¹⁴ A third set of interests like small businesses, pharmaceutical companies, and small and medium health insurers were implacable foes of what they saw as a dire threat to their survival.

In nations where access has preceded supply, the health system encourages the development of shared or collective interests; all patients and providers feel the impact of health policy decisions. The interests of successful employees and the aged are tied to the general interest rather than to discrete programs and identifiable services. By contrast, the American health system promotes individualism and social divisiveness, pitting Medicare recipients and employees of large firms with generous health benefits against those who lack access to similar levels of care. Indeed, research on public opinion suggests that over the past two years Americans have become increasingly concerned about the personal costs rather than the national benefits of health reform. Reiterating a concern voiced by many policy makers, Drew Altman observed that "the American people want change as long as it doesn't cost them too much or affect them too much personally."¹⁵ Although the media and political elites contributed to the public's increasing focus on self-interest, America's supply state makes the public especially predisposed to individualistic appeals and resistant to collective considerations.¹⁶

Health policy decisions also feed back into political deliberations by influencing the perception and definition of new problems as they emerge. The central problem in all western countries since the 1970s has been rising health expenditures. While all these countries have wrestled with health costs, cost escalation has been understood and framed in the U.S. in dramatically different terms than elsewhere.

In other industrialized countries, the escalation of health expenditures has been defined as a problem involving the supply of care. This has meant that in Canada, for instance, cost escalation during the 1970s was addressed through a series of strict limits on health care supply: the strict imposition of prospective budgets and physician fee schedules, and the confinement of new medical technology to teaching hospital centers. Germany, France, Britain and other western governments also used prospective hospital budgets, physician fee schedules, and physician practice style (e.g. the gatekeeping function of British GPs) to constrain the supply of expensive, sophisticated services. These constraints on supply have produced the significantly lower levels of health expenditures and usage of specialized services than exist in the U.S.

Restricting the supply of services has been fiercely resisted in these countries by the medical profession, which warns that quality and patient "need" are being sacrificed. What is striking is that the government has overcome professional opposition and successfully offered an alternative definition of "need." A diverse group of politicians, employers, and employees equate quality with the average care available for the entire population, accepting that cost and the demonstrated effect of medical interventions are legitimate considerations.¹⁷ Because equal access to available health services is a guiding principle, care is rationed in Britain, Canada and other countries on the basis of relative medical need as determined by physician judgement.

In the context of America's dense pressure group environment and absence of aggregating mechanisms, cost escalation has not been defined as a problem of excess supply, and attempts to restrict the supply of health services have been blocked. Cost control efforts in the 1970s began by narrowly focussing on modifying the clinical behavior of providers. By the 1980s, cost containment shifted from behavioral to budgetary regulation. But, in contrast to the centralized budgetary controls established in European countries, American efforts were disjointed and indirect. Hospitals and physicians continued to be reimbursed by numerous and uncoordinated channels of payment (government, employers, and private insurers), and new government prospective payment systems avoided direct controls over the expenditures on non-Medicare patients. Moreover, the private sector in the U.S. continues to reimburse doctors on the basis of innumerable distinct payment scales; other western countries base physician fees on clearly specified and uniformly binding schedules.¹⁸ The guiding theme has been to minimize disruption of the existing system of health care delivery.

The recent defeat of health reform illustrates the difference in the handling of cost escalation in the U.S. and other industrialized countries. President Clinton's efforts to control costs were snared by two contradictory pressures. On the one hand, Republicans, some Democrats, and many commentators warned that universal health insurance would increase taxes or costs for employers and employees who were already insured.¹⁹ The recurrent question was, Could the country afford to provide equal access to high-tech care? The focus on the cost of expanding access rather than on the expense of operating sophisticated health care delivery systems was a natural and inevitable consequence of America's supply-side orientation.

On the other hand, when President Clinton responded that the country could afford universal access if it restructured its supply of health services, he ignited a political firestorm of opposition. To build the foundation for universalism, the White House proposed a global budget to be enforced through a cap on tax-favored premiums; an increase in the proportion of primary care physicians; a significant change in longstanding practice patterns; and a reduction in the number of hospital beds and redundant medical programs.

The President's attempt to restructure health services frontally challenged America's supply state, and was met by fierce attacks from physicians and politicians and deep uneasiness among the mass public. The rallying cry was that quality was being sacrificed; patients would be "short changed" and denied useful tests and treatments.²⁰ In contrast to their western counterparts, Americans define the concept of quality in terms of maximum technology to alleviate medical problems and prolong life. Although research indicates that many health services in the U.S. lack scientific basis and upwards of 30% of some treatments fail to produce beneficial outcomes, government efforts to redirect the supply of care could not have avoided being equated with the introduction of inferior quality.²¹

In an era of constrained resources, America faces a choice between limiting access or restraining supply. Successive governments since Richard Nixon's administration have failed to define excess supply as the cause of cost escalation and to establish centralized budgetary controls over supply. Instead, governments have opted to accept limits on access and to defer to the dynamics of the private sector. Free to play by their own rules, private insurers have been driven by cost considerations to drop claimants, deny benefits and shift the cost of care to consumers through greater patient cost sharing.

In short, all other industrialized countries have equated cost escalation with excess supply and pursued the question, Can the country afford to continue to supply the same mix of services? In the U.S., though, cost control efforts have fiscalized access and demonized attempts to redirect health resources from the country's system of sophisticated health care.

America's supply state shapes the meaning or rationality of political struggles over health care. The perception that some policy alternatives are "possible" while others are unlikely to be selected has been structured by previous policy choices. It is the height of political practicality in the U.S (and nowhere else) to accept uneven access to available medicine as unavoidable while continuing to encourage the supply of newer and more advanced medicine.

America's supply state not only shapes political rationality, it also influences the resources and capacities of politically active groups; the effect is to empower stakeholders in the process of governmental policy making.

In Canada and Europe, national forums of negotiations have developed among providers, government ministries and others that hammer out approaches to controlling cost while keeping health services universally available. As a result of these patterned interrelationships of bargaining, organized interests are challenged by regional and national policy organs. Pressure from the medical profession in France is offset by the resources of a centralized government.²² In addition, national forums of bargaining coalesce or organize wage earners and employers, both of whom also counteract the pressure of health care providers. In short, health policy in other industrialized countries favors strategies of national mobilization and arguments based on the national benefits of cost control and continued universalism.

In the U.S., however, health policy has encouraged the formation of well-funded, decentralized interest groups. Washington disperses authority and funds for health care to a number of national government offices -- including the NIH, the Defense Department, Health and Human Services, and the Veterans Administration -- as well as to state and local governments.

Groups that can closely mesh with America's system of federated, tripartite policy making are advantaged by this approach to public policy.²³ Relatively cohesive stakeholders can regularly interact with and influence policy makers at the national and state levels. The broad public lacks comparable opportunities for exerting countervailing pressure at these sites of decentralized decision making; broad-based constituencies are disadvantaged by the absence of aggregating mechanisms and inherent difficulties in forming cohesive federated organizations.

For instance, providers have enjoyed unusual success in lobbying the Department of Health and Human Services as well as state governments throughout the country. The medical profession and hospitals influenced the Health Care Financing Administration's (HCFA) implementation of the "reasonable and necessary" clause and its formulation of the physician fee schedule. One recent study of HCFA's handling of the fee schedule suggests that providers effectively supplemented their formal involvement with early and ongoing informal contacts.²⁴ Providers also lobbied the agency indirectly through Congress; after the initial publication of the physician fee schedule, groups mobilized members of Congress to charge that HCFA had violated statutory intent and to demand further revisions of the schedule.

State agencies have found themselves outgunned by providers. For instance, in the 1970s, 205 agencies were established around the country to implement Certificate-of-Need legislation and to control the spread of medical technology. These small agencies were simply overwhelmed by organizationally coherent state bodies of doctors and hospitals.²⁵ Government encouragement of a decentralized approach to health policy advantages stakeholders who have the concentrated incentives to press their interests in dispersed settings.

Major stakeholders also took advantage of their federated organization to fight against national reform. Small business and, specifically, the National Federation of Independent Business (NFIB) were especially successful at directly lobbying individuals within Congress by mobilizing its geographically appropriate members. The NFIB's well-funded national organization used advertising to play on the fear of Americans throughout the country that health reform would cost jobs.²⁶ Health insurers similarly drew on both grass-roots organizing and national pressure. Academic medical centers fought the Clinton proposal's requirement that they train more primary care doctors; they rallied relevant members of Congress to help them preserve the current dependence on specialized care. What was notably missing from the recent health reform debate was organized pressure for outcomes beneficial to the large but diffuse number of Americans that lack a concentrated stake in the current system.

Passage of national health reform that controlled medical costs and universalized health insurance seemed quite probable following Bill Clinton's election in November 1992. The political context for national health reform appeared promising as the Democratic party assumed control over both lawmaking branches, and the medical profession and the business community divided with some of its members becoming active supporters of change. Moreover, the rationale for reform seemed unassailable. Reform was necessary and functional for America's economic and political systems because rising health care costs were undermining the middle class's security and the country's global economic position. Comprehensive national health reform, it was argued, would preserve the country's well-being by correcting irrational features of American health care: it would squeeze out excessive administrative complexity, cut exorbitant malpractice judgements, and put an end to inadequate insurance coverage that wastefully encouraged excessive hospitalization among the poor because less costly primary care was unaffordable.

Despite the optimism following the 1992 elections, comprehensive national reform faced three obstacles that were underappreciated at the time of Bill Clinton's inauguration. Pursuing what was functional for the country's political and economic systems -- controlling rising health expenditures and satisfying unmet human need -- was not sufficient to force comprehensive reform through Congress. Politics and the inevitable struggle over competing values and interests unavoidably permeate policy making, and the outcome can be detrimental to the country's economic and political systems. Secondly, Skocpol's and Heclo's analysis suggests that the optimistic appraisal of health reform's prospects following the 1992 election gave insufficient weight to the unfavorable conditions at the time.²⁷

Finally, America's longstanding commitment to expanding the supply of sophisticated care produced a political dynamic that inhibited support for establishing equal access and cost control. America's supply state reinforces the authority of the current stakeholders and promotes prevailing perceptions of status and class differences -- perceptions that highlight individual self-interests and the personal costs of universalizing access to health care. These political obstacles are augmented by professional and financial pressures to expand the use of medical technology. Comprehensive national reform is obstructed, then, not just by the liabilities of a particular president's leadership style or immediate circumstances but also by the established pattern of health policy which empowers stakeholders and fuels an individualistic political rationality.

The confluence of political circumstances and structural conditions offers important insights in explaining the probability of enacting national health reform. Reform efforts have the highest probability of success when they confront a favorable political situation (i.e. the president has won a landslide election and his political party enjoys a large, ideologically-compatible majority in both legislative chambers), and the proposed reform is consistent with America's supply state. Thus, Lyndon Johnson's success with Medicare came after the 1964 Democratic landslide victories and reformers' decision to pursue an incremental approach to health reform rather than President Truman's plan to restructure the existing health system.

Health reform faces the stiffest odds when political circumstances and structural conditions are both unfavorable. This was the case in 1994. In addition to facing adverse political circumstances, the Clinton administration frontally challenged America's system of supplying high-tech care by proposing both centralized budgetary regulation and a comprehensive restructuring of health care delivery. (President Carter had failed in his more modest effort to restrict the supply of sophisticated care by reforming health care financing.)

The prospect of successful reform enters a zone of uncertainty, though, in a case where either (but not both) political circumstances or structural conditions are favorable. Lyndon Johnson decided after the 1964 elections to minimize uncertainty by sticking with Medicare's incremental approach rather than proposing a more ambitious restructuring of America's health care system.²⁸ In a context of unfavorable political circumstances, policy makers can boost the probability of their proposals' success by not directly targeting the supply of sophisticated care. Although Bill Clinton's campaign promises precluded the choice of incremental health reform, proposing familiar reforms that were less threatening to current structures would have improved the odds of political success.

The structural features of American health policy and the associated political dynamics does not eliminate the possibility for change in American health care. The focus on the obstacles to comprehensive government reform should not obscure the fact that the private sector is profoundly restructuring health care financing and delivery systems. Moreover, the political dynamics created by America's supply state complicates (rather than prohibits) governmental reform. Significant political and social upheavals comparable to those of the 1930s and 1960s would probably be necessary for the government to restructure the current health care system.

Redirecting the focus of reform efforts away from restructuring health supply and toward incremental change would improve the political prospects for government action. Among the commonly discussed incremental changes that would enjoy a better opportunity for success include proposals to reform health insurance markets and Medicare (to encompass children).²⁹ In addition, the political prospect for successful reform may be more promising at the state level where there is greater opportunity for experimentation and stakeholder's opposition is more uneven. Modifying the federal Employee Retirement Income Security Act to allow state government regulation of all employers would encourage state innovation.

The lesson of the past two years is that previous government policy has created a trap: it is financially ruinous to open access to an unrestrained supply of ever-developing medical technology, and yet it is politically treacherous to attempt to restructure the supply of high-tech care. Pursuing incremental strategies and proposals provide an opportunity for maneuvering out of America's health care trap and the enduring political inhibitions that perpetuate it.

1. Adam Clymer, Robert Pear, and Robin Toner, "For Health Care, Time was a Killer," New York Times, 8/29/94; Elizabeth Drew, On the Edge: The Clinton Presidency (New York: Simon and Schuster, 1994); Bob Woodward, The Agenda (New York: Simon and Schuster, 1994).
2. Several decades of research have studied the impact of social policy on the political process. Harold Wilensky, The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures (Berkeley: University of California Press, 1975); Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, Mass.: Belknap Press of Harvard University Press, 1992). Lawrence R. Jacobs, The Health of Nations: Public Opinion and Policymaking in the U.S. and Britain (Ithaca: Cornell University Press, 1993, ch.3).
3. Ideally, America's supply state should be treated as an intervening variable, which develops and constantly evolves because of professional, cultural, economic and governmental pressures. Among the pressures that contribute to the development and evolution of America's supply state are the following: a widespread perception that the government lacks the capacity to take specialized, authoritative policy initiatives; the comparative weakness of the working class organizations; and the distinctive character of the medical profession's development including the profession's comparatively effective political mobilization and influence, and the comparative absence of general practitioners committed to establishing community-based care. Theodore Marmor, "Lessons from the Frozen North," in The Politics of Health Care Reform ed by James Morone and Gary Belkin, Durham: Duke University Press, 1994; James Morone, The Democratic Wish, New York: Basic Books, 1990; Paul Starr, The Social Transformation of American Medicine, New York: Basic Books, 1982; Lawrence Jacobs, The Health of Nations, Ithaca: Cornell University Press, 1993; David Wilsford, Doctors and the State, Durham: Duke University Press, 1991.
4. The history of Hill-Burton, physician training, and government support of medical research can be found in the following: Paul Starr, The Social Transfomation of American Medicine. New York: Basic Books, 1982; Daniel Fox, Health Policies, Health Politics: The British and American Experience, 1911-1965, Princeton, N.J.: Princeton University Press, 1986; Lawrence D. Brown, "Political Evolution of Federal Health Care Regulation," Health Affairs (Winter 1992): 17-37, and "Health Policy in the United States," Occasional Paper no.4, Ford Foundation, 1988; Susan Foote, Managing the Medical Arms Race, Berkeley: University of California Press, 1992; Annetine Gelijns and Nathan Rosenberg, "The Dynamics of Technological Change in Medicine," Health Affairs, 13 (Summer 1994): 28-46.
5. Rublee, 1989 and 1994; W.Knauss et al, "A Comparison of Intensive Care in the U.S.A. and France," The Lancet (9/18/82): 642-646; Victor Rodwin and Simone Sandier, "Health Care Under French National Health Insurance," Health Affairs, 12 (Fall 1993): 111-131; Klaus-Dirk Henke, Margaret Murray, and Claudia Ade, "Global Budgeting in Germany: Lessons for the United States, Health Affairs 13 (Fall 1994), 7-21.
6. William A. Glaser, Health Insurance in Practice: International Variations in Financing Benefits, and Problems (San Francisco: Jossey-Bass Publishers, 1991).
7. The political importance of organized labor and the presence of a social democratic party -- the Cooperative Commonwealth Federation -- set teh policy agenda during the 1940s and 1950s, establishing the principles of universal and comprehensive health insurance and compelling the Liberal Party (at both the provincial and national levels) to commit itself to passing legislation. Antonia Maioni, "The Failure of Postwar National Health Insurance Initiatives in Canada and the U.S." Journal of Health Politics, Policy and Law. Forthcoming.
8. Henry Aaron and William Schwartz, The Painful Prescription, Washington: Brookings Institution, 1984; Henry Aaron, Serious and Unstable Condition, Washington: Brookings Institution, 1991; Gelijns and Rosenberg.
9. Mancur Olson, The Rise and Decline of Nations, New Haven: Yale University Press, 1982.
10. Alissa Rubin, "A Salvage Operation," Congressional Quarterly, 9/10/94, 12.
11. Material on the influence of interest groups on health politics include the following: Theodore Marmor, Political Analysis and American Medical Care (New York: Cambridge University Press, 1983); Ellen Immergut, Health Politics: Interests and Institutions in Western Europe (New York: Cambridge University Press, 1992); Wilsford, Doctors and the State; J. Rogers Hollingsworth, The Political Economy of Medicine: Great Britian and the U.S. (Baltimore: Johns Hopkins University Press, 1986).
12. Tom Redburn, "Conflict is Seen Between Regions in Health Plan," New York Times, 11/5/93; "Health-Care Changes Would Transform Medical-School Financing and Curricula," Chronicle of Higher Education, 9/29/93, p.24 and 30; Jon Meacham and Theodore Marmor, "The Bottom Line on Health Reform," The Washington Monthly, June 1994, 30-32.
13. Cathie Jo Martin, "Mandating Social Change: The Struggle within Corporate America over National Health Reform," Presented for the Annual Meeting of the American Political Science Association, September 1994.
14. Robert Pear, "H.M.O. Leaders Express Doubts On Health Plan," New York Times, 10/18/93.
15. Adam Clymer, Robert Pear, and Robin Toner, "For Health Care, Time was a Killer," New York Times, 8/29/94.
16. Robert Y. Shapiro, Lawrence R. Jacobs and Lynn K. Harvey, "Influences on Public Opinion Toward Health Care Policy," Presented at the 1995 annual meeting of the Midwest Political Science Association, Chicago.
17. Aaron and Schwartz; Robert Evans, "Canada: The Real Issues" in The Politics of Health Care Reform.
18. Over the past two decades, legislation to modify clinical behavior produced professional standard review organizations, health system agencies, capital expenditure review through state certificate-of-need legislation, peer review organizations, practices guidelines, and outcomes research. Lawrence Brown, "The Political Evolution of Federal health Care Regulation," Health Affairs, 11 (Winter 1992), 17-37.
19. The best example of the Republicans' fixation on the cost of universal access was their use of the Congressional Budget Office's finding that the Clinton plan would increase the budget deficits through the year 2000.
20. Erik Eckholm, "Less Cost vs. Less Care: Clinton's Proposed Cap on Health Spending Forces a Debate on Rationing of Medicine," New York Times, 9/20/93.
21. John Wennenberg and Alan Gittelsohn, "Variations in Medicaer Care among Small Areas," Scientific American, 246: 120-33.
22. Wilsford.
23. Skocpol.
24. Foote; Steven Balla, "Medicare Physician Payment Reform: The Influence of Legislators, Interest Groups, and Citizens in Agency Rulemaking," Presented for the Annual Meeting of the American Political Science Association, September 1994.
25. Lawrence Brown, The Political Structure of the Federal Health Planning Program (Washington: The Brookings Institution, 1982).
26. Adam Clymer, Robert Pear, and Robin Toner, "For Health Care, Time was a Killer," New York Times, 8/29/94.
27. For somber appraisals of health reform's prospects written at the time of Bill Clinton's inauguration see Lawrence R. Jacobs, "The Health Reform Impasse: The Politics of American Ambivalence Toward Government," Journal of Health Politics, Policy, and Law (Fall 1993); Theda Skocpol, "Is the Time Finally Ripe? Health Insurance Reforms in the 1990s," Journal of Health Politics, Policy, and Law (Fall 1993): 531-550.
28. Jacobs, The Health of Nations, Ch.9.
29. For a recent review of incremental reform proposals see Skocpol, "The Rise and Resounding Demise of the Clinton Plan" and Henry Aaron, "Small Steps: Health Care Reform is Still Possible," The Brookings Review (Spring 1995): 34-35.
30. Theodore Marmor and Jerry Mashaw, "Federalism: Making it Work in Health Care Reform," unpublished manuscript, June 1994. For a discussion of the obstacles to state-level reform see Stone, The American Prospect (1992).