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Obama's future depends upon his nation's health American voters want healthcare overhauled. But reform is a high stakes game that can wound the president American healthcare remains a mystery to most Europeans. Many of us are vaguely aware that there is a problem with the US system, but the subject is extremely complex, of almost exclusively domestic interest and, to most people in the news-as-entertainment age, boring. Barack Obama only has to swat a fly to get a hundred times more coverage in the European media than he will get when he tries to push his healthcare reform plan through Congress this summer. Be in no doubt, though, that the fate of his reform plan will define the fate of his presidency. It will do so because of two overwhelming reasons. First, because the US healthcare system is so huge. And second, because it has defied the efforts of all those who have tried to reform it in the past. It will be healthcare – not Iraq, Iran, nuclear weapons, climate change, the budget, or even the banks – that frames the verdict on the Obama administration. If you take nothing else away from reading this, please take this one amazing fact. Health spending accounts for 16% of America's GDP (the figure for the UK is 8.4%) and is projected by some to rise to 20% by 2017. Put another way, this means that health spending currently accounts for a sixth of the entire US economy and within a decade will account for a fifth. Since the US already spends around $2 trillion of its total annual wealth on healthcare this means that US health spending exceeds the entire annual GDP of nations such as Brazil or Italy. If the US healthcare system was itself a country, it would be a member of the G20 and probably even the G8. In British politics, spending more money on health is paraded as a national virtue. In America high health spending only exposes a national vice. Spending more on health does not mean that Americans suffer from more diseases than other people. Apart from obesity and some others they don't. Nor does America's vastly higher level of spending – nearly twice the OECD average per head and rising – mean its people are significantly healthier. On the contrary, a 2007 study by McKinsey found the US incidence of 130 common diseases was broadly similar to the incidence in Britain, France, Germany, Japan and other nations. The big difference between Americans and Europeans is not quality of health or quality of treatment but the difference in healthcare costs. In the US, hospital care, outpatient care and medicines all cost far more than they cost elsewhere. America also has a very high number of specialists, who rely more than primary care doctors (of whom there is a national shortage) on expensive technology and high fees. Since health insurers typically pay such specialists most of what they charge, there is little incentive for the system to reduce costs. But since private health insurers are also commercial businesses, premiums are also rising to generate profits. The US private health insurance industry gets $500bn every year from premiums – about three times what the British taxpayer gives to the NHS. As a result, very large numbers of Americans simply cannot afford the health insurance premiums (typically of up to $1,000 per head per month) which in theory give them access to such treatments. Because many of the over-65s and the very poor are covered respectively by the government's Medicare and Medicaid programmes, most of these uninsured Americans come from the working poor and the middle-class. More than 50 million working age Americans – nearly a third of the total – have no insurance. Large numbers of those who are enrolled are themselves underinsured, especially for expensive treatments or operations, because they stick with lower cost schemes administered through their employers. Clearly this is an unsustainable system. The temptation from this side of the pond and the progressive side of the argument is simply to say the solution is a no-brainer: what the US needs is a national health service like ours, and with Obama still enjoying soaraway ratings and the Democrats with a blocking majority in the Senate, now is the time to do it. Plenty of Obama's most committed supporters agree. But it is not going to happen. First of all, it's not going to happen because, especially in the midst of recession, public opinion is uneasy. Voters want reform but, see a Pew Center poll this week, only 41% now actually want the system rebuilt from scratch; the majority want changes within the existing framework. Second, it's not going to happen because Obama's goal is bipartisan reform; the Washington Post reported last month that the president is telling visitors he would rather have 70 Senate votes for 85% of his healthcare goals, than 51 for 100% of it; this recognition that Democratic as well as Republican votes are still up for grabs is why the administration has allowed the congress to shape the legislation. Third, it's not going to happen because there are some very big vested interests involved in this fight, including doctors, hospitals, drug companies, insurers, employers and unions, so some compromises are inevitable; the failure to recognise this was what sank Bill Clinton's plan. But that does not mean that the legislation, when it is published this month, need or will be timid nor that Obama is just another sellout politician. Obama's overriding goal is to get as close to a universal system as possible, but there are many ways of achieving this goal of which state provision is only one. Even in Britain, where the universality of healthcare is deeply embedded, there are lots of differing views about the precise kind of national health service that works best. So the argument over the coming weeks will be about increasing insurance coverage, about the creation of a public insurance plan – perhaps administered at state rather than federal level – to compete with and undercut the existing private ones, and about how to drive down spiralling costs. Fixing healthcare is easy to say and hard to do, even with strong public support. Solving the problem in ways that extend access to care while reducing costs, in the face of powerful vested interests while keeping the voters onside, is a high stakes game. But the rewards of success are also potent. Get it wrong and Obama becomes just another Democratic president, like Clinton, who was decisively wounded by failure on health. Get it right, and he will be unbeatable in 2012 and on course to reshape America. That is why we need to pay attention to America's health.
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