When Bigger Is Better
J. Peter Nixon December 3, 2009 - 1:14pm
The Catholic bishops of the United States have historically been a strong voice in favor of health-care reform. More than fifteen years ago, they issued a statement that began, “our nation’s health-care system serves too few and costs too much,” and went on to argue that “government, an instrument of our common purpose called to pursue the common good, has an essential role to play in ensuring that the rights of all people to adequate health care are respected.”
The majority of U.S. bishops would probably still subscribe to these statements. Yet a small but vocal cohort of bishops has taken an increasingly negative view of health-care reform. Oregon Bishop Robert Vasa, for example, memorably suggested that passing the kind of reform legislation that is currently being proposed would be tantamount to “giving poisoned water to the thirsty.”
While the treatment of abortion remains the major focus of their criticism, these bishops have broadened their critique to include the role of the federal government in health care. In a recent statement, Bishop Thomas Doran of Rockford, Illinois, argued that “the federal bureaucracy is a vast wasteland strewn with the carcasses of absurd federal programs which proved infinitely worse than the problems they were established to correct.”
Many of these bishops draw on the Catholic principle of subsidiarity. The principle holds that the role of higher levels of authority in a society is to provide support for lower levels of authority and other intermediary bodies. Higher levels of authority should not seek to supplant these entities in carrying out a particular social function unless the latter are unable to do it—or unable to do it as well or efficiently.
Politically conservative Catholics argue that the church’s teaching on subsidiarity should lead Catholics to take a more skeptical attitude toward national health-care reform. In a post on InsideCatholic.com earlier this year, Deal Hudson argued that the “right” to health care in Catholic teaching “does not necessitate that the good in question be provided by the government.” Hudson’s argument was subsequently echoed by several bishops, including Iowa Bishop Walter Nickless and two Kansas City-area bishops, Joseph Naumann and Robert Finn.
Regrettably, the understanding of subsidiarity that animates these criticisms is seriously deficient. Subsidiarity is not equivalent to the Jeffersonian idea that the best government is the one that governs least. Moreover, the concern about the involvement of “the government” in health care overlooks the reality that all levels of the U.S. government have been deeply involved in health care for decades, and that their involvement has largely followed principles consistent with the Catholic notion of subsidiarity. That is likely to continue under virtually any conceivable scenario of health-care reform. Those of us who work in the industry may sometimes bridle at the way government officials exercise their regulatory role, but we also regularly partner with government on a range of public-health initiatives.
While it has deep roots in Catholic thought, the principle of subsidiarity was given its most characteristic expression by Pope Pius XI in his 1931 encyclical Quadragesimo anno:
"Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them."
While that passage is sometimes read out of context as an argument for limited government, Pius’s concern was somewhat different. Like most of his predecessors in the nineteenth and early twentieth centuries, Pius was a foe of both economic and political liberalism, which he blamed for the “overthrow and near extinction of that rich social life which was once highly developed through associations of various kinds...[leaving] only individuals and the state.” Pius’s overriding concern was the health of civil society, which he saw as threatened by both the state and the market.
It is true that more recent papal teaching has made use of the concept of subsidiarity to criticize certain features of the modern welfare state. In his 1991 encyclical Centesimus annus, Pope John Paul II was critical of the tendency of the modern state to take on an ever-expanding range of functions to the detriment of private initiative. Pope Benedict echoed these criticisms of the “social-assistance state” in his recent encyclical Caritas in veritate. Both encyclicals, however, also argue that the state must play a role in structuring markets so that the benefits of economic growth are equitably shared.
The 2003 Compendium of the Social Doctrine of the Church attempted to summarize these key aspects of subsidiarity by noting that the principle must be understood in two senses, “negative” and “positive.” Negatively, the state should refrain from restricting the initiative, freedom, and responsibility of the smaller cells of society. Positively, the state should provide the necessary economic, institutional, and juridical assistance that allows these cells to flourish.
What that brief overview of subsidiarity makes clear is that its primary concern is the health of civil society, the web of institutions—families, voluntary associations, businesses, local government bodies—that stand between individuals and the state. The principle of subsidiarity reminds the state that its role is to support and sustain the institutions of civil society, not to replace them. Nevertheless, to the extent that threats to those institutions arise from the workings of the market, Catholic social teaching envisions an active role for the state in their defense.
One of the ironies of using the concept of subsidiarity to criticize the role of government in health care is that the public sector has been an important actor in the health-care industry from its very beginnings. For the most part, government bodies have operated very much in keeping with the principle of subsidiarity. They have supported and coordinated private initiative where possible and stepped in to provide services where private providers have been lacking.
This has certainly been true in the area of health-care delivery. The first hospital in the United States, the Pennsylvania Hospital, was created with a mix of public and private funds. Today, the nation’s 4,900 or so community hospitals reflect a mix of not-for-profit, for-profit, and public providers. While just over three-quarters—including 624 Catholic hospitals—are privately owned, public hospitals continue to play an important role. In addition to providing a safety net for those without health insurance, they often provide essential (but expensive) services that other hospitals may not be able to afford, such as trauma centers and burn units.
The history of health insurance in the United States followed a similar path. In the post-World War II period, health insurance was offered by a growing number of employers. That often left individuals who weren’t working (for example, retirees, recipients of public assistance) without ready access to health insurance. In the mid-1960s, the Congress, seeking to fill this gap, created the Medicare program for those over sixty-five and the Medicaid program for recipients of public assistance. While Medicare was federally administered because it was tied to Social Security, the Medicaid program was designed as a federal-state partnership. Today, the Medicare and Medicaid programs provide health insurance to more than 80 million Americans. Taken together, these two programs provide almost half of hospitals’ revenue.
Nevertheless, the private sector remains the dominant actor in the insurance market, providing coverage to more than 180 million people. Even in an area where one would expect government to take the lead-such as regulation-the health-care industry has had a tradition of private actors playing a major role. While hospitals have to comply with a variety of federal, state, and local regulations, one of the most significant players in hospital regulation is the Joint Commission, a private body that accredits hospitals and other health-care organizations. Hospitals accredited by the Joint Commission are deemed to have met Medicare’s Conditions of Participation, an example of public-private partnership designed to reduce the burden of regulation on the industry.
A similar trend has emerged in the regulation of health plans. The regulation of insurance is generally a state function, although employers offering a single health-insurance plan in more than one state can choose to be regulated under a federal statute known as ERISA. Of equal importance to most health plans, though, is the blessing of the National Committee for Quality Assurance (NCQA), a private entity that accredits health insurance plans. It is NCQA’s health-care quality data that are used by magazines like U.S. News and World Report and Consumer Reports to come up with their annual rankings of America’s best health plans.
In sum, the health-care industry in the United States has never existed in a pristine state apart from government. Federal, state, and local governments are deeply involved in the industry as insurers, providers, and regulators. That’s not about to change.
To be fair, most of those using the concept of subsidiarity to criticize health-care reform are less concerned about the current health-care system than how it might look in the future. The concern is that our nation’s mixed approach to health-care delivery, financing, and regulation will give way to a much more centralized system largely controlled by the federal government. Such an outcome is unlikely. What is striking about the current health-care debate is the widespread consensus, at least among politicians, that reformers must build on the foundation of the current American system instead of trying to replace it with something like a Canadian-style single-payer system.
Health-care reform will increase the role of the federal government principally in the areas of financing care for the uninsured and regulating the health-insurance market. As we have seen, providing insurance to those who are not well served by our employer-based system has long been a responsibility of the federal government. While some of this expansion in coverage will come from expanding public insurance programs like Medicaid, most will come from subsidizing employers and individuals so that they can purchase private coverage.
The second way in which the federal role is likely to expand is in the area of insurance regulation. Historically, the states have taken the lead role in regulating both the solvency of insurers and the benefits they offer. States will most likely still have that role, but they will be operating within a narrower set of parameters established by federal law, such as the requirement that insurers offer a standard benefit package.
For the most part, these expansions of the federal government’s role in health care are designed specifically to address problems that lower levels of government have failed to solve. While the number of uninsured has been above the 40-million mark for more than two decades, very few states have been able to marshal the resources needed to extend coverage to this population. States have also faced a difficult time in reforming insurance laws to eliminate various types of coverage exclusions. The case for a federal role in these areas is strong.
Catholic critics of health-care reform may be correct that, according to Catholic social teaching, a “right” to health-care services does not necessarily require those services to be provided by the government. At some point, though, the burden of proof is on the critics to provide a workable alternative. They have largely failed to do that. It is hard to escape the conclusion that the concept of subsidiarity is being employed to mask an antigovernment animus that has little support in the Catholic tradition. There may be other reasons for Catholics to be concerned about aspects of health-care reform, but subsidiarity is not one of them.
About the Author
J. Peter Nixon has worked in the health-care industry for more than twenty years and is currently the director of metrics and analytics in the Office of Labor Management Partnership at Kaiser Permanente in Oakland, California. He blogs at dotCommonweal.