Increased federal healthcare costs and healthcare costs as a percentage of Gross Domestic Product (GDP) are tearing apart the monetary fabric of this nation. One thing is certain: the inflationary nature of healthcare costs is exceedingly unsustainable, for both the federal government and the American citizen.
What President Nixon claimed during his presidency is all the more true now—that “one of the biggest problems is that fully 60 percent of the growth in medical expenditures in the last ten years has gone not for additional services but merely to meet price inflation.”

Studies have shown that the unabated rise in medical costs is a result of several factors, including but not limited to the growing consolidation of the hospital industry, the increasing cost of medical technology, wasteful spending, and an aging population.

As the United States struggles in its efforts to provide universal coverage and as the Obama administration attempts to ease Americans’ concern over an unsuccessful health exchange launch (watch as a House committee on Thursday questioned contractors for the health-insurance website), we look back on President Nixon’s attempt to tackle healthcare reform. He faced the burgeoning giants of Medicare and Medicaid and a growing healthcare demand as a result of these programs. Similarly, but instigated by the Affordable Care Act itself, the Obama administration will be facing skyrocketing healthcare demand.

President Nixon delivered a national health strategy on the horizon of a nationwide healthcare crisis. By 1970, federal expenditures for healthcare had consistently increased—in 1960, Washington spent $1.5 billion on medical needs of the total nationwide expenditure of $5.2 billion. In 1970, federal expenditure for healthcare accounted for $12.1 billion of the total nationwide expenditure of $21.8 billion.

President Nixon proposed in February of 1971 a national health strategy that would have been coordinated on the basis of four cardinal principles:

-assuring equal access

-balancing supply and demand

-organizing a more efficient system

-building on strengths of the current health care system

To effectively implement these principles, President Nixon delivered a comprehensive six point program that would address all facets of the nation’s healthcare needs.

These points included:

-reorganizing the delivery of service by requiring public and private health insurance plans to allow beneficiaries to purchase membership in Health Maintenance Organizations when available; by initiating a $23 million program for planning grants and federal loan guarantees to aid potential sponsors of HMOs; and by declaring a statute to not limit the group practice of medicine and laws which prevent doctors from delegating responsibilities to assistants.

-meeting the needs of scarcity areas by providing $22 million in off-setting risks to encourage HMOs into scarcity areas; by dedicating $40 million for a series of new health education centers; and by compensating doctors/nurses for practicing in scarcity areas.

-meeting the personnel needs of a growing medical system by providing capitation grants to fund medical education; by doubling the scholarship grant program for low income students; and by promoting greater use of allied health personnel.

-addressing the problems of malpractice suits and malpractice insurance by forming a commission of medical malpractice for intensive research.

-preventing illnesses and accidents with new actions by committing federal resources to biomedical research, health education, and prevention of accidents.

-developing a national health insurance partnership by requiring employers to provide basic health insurance coverage for their employees via the National Health Insurance Standards Act; and by giving incentive for the working poor towards better economic position through the New Family Health Insurance Plan.

These six points were aimed at satisfying projected demands, while keeping the existing budget intact. President Nixon supported an expanded healthcare budget (in that it has contributed to great advances for medicine), but not one that would unremittingly inflate annually. He wanted to ensure value for what was already accorded to the healthcare economy.

Today, Obamacare would summarily:

-require most U.S citizens and legal residents to have health insurance.

-create state-based American Health Benefit Exchanges through which individuals can purchase coverage, with premium and cost-sharing credits available to individuals/families with income between 133-400% of the federal poverty level.

-create separate exchanges through which small businesses can purchase coverage.

-require organizations to pay penalties for employees who receive tax credits for health insurance through an Exchange, with exceptions for small employers.

-expand Medicaid to 133% of the federal poverty level.

Obamacare and Nixoncare are similar on one point. Their healthcare programs would mandate employers to provide adequate health insurance for their employees. However, with President Nixon’s plan, employees would directly contribute in guaranteeing its cost and employers would need to offer Health Maintenance Organization (HMO) plans. Additionally, the National Health Insurance Partnership Act would require that individuals be given a choice between fee-for-service or HMO payment plans.

The critical contrast of both healthcare plans lies in the proposed methods of reform. Whereas President Obama seeks to dismantle the current healthcare structure and incrementally rebuild it with a focused subsidization of insurance, President Nixon on the other hand recognized the strengths of the traditional system, particularly the pluralistic nature of the medical insurance enterprise and private healthcare providers. What needed most attention for change was the existing supply and distribution of doctors, nurses, hospitals, and other health resources. While Obamacare administers councils and grant programs to deliver preventative care research, Nixoncare addresses the issue of supply and efficiency of care head on by encouraging greater medical insurance competition and private physician competition to deliver more efficient care.

The primary provision under Nixoncare would have been the promotion of HMOs. President Nixon wanted to completely reverse the commercially incentivized trend of doctors and healthcare providers—to promote sensible healthcare economies:

Under traditional systems, doctors and hospitals are paid, in effect, on a peace work basis. The more illnesses they treat and the more service they render—the more their income rises. This does not mean, of course, that they do any less than their very best to make people well. But it does mean that there is no economic incentive for them to concentrate on keeping people healthy.

With HMOs, President Nixon intended to finance an expanding system that would incentivize doctors and hospitals to keep patients well and to prevent them from becoming ill. It would also encourage doctors to cure sick members as quickly as possible. Thus, President Nixon pledged federal support for HMO programs because he believed it would provide a greater value for every federal dollar spent on healthcare.

Without excessive insurance mandates, Nixoncare would have retained the pluralistic health insurance enterprise intact without infringing upon the patients’ freedom of choice—that is, whether or not to purchase insurance individually. It would not have mandated the purchase of health insurance, but would have given the financial means to purchase under the National Health Insurance Partnership Act. After all, to promote economic sensibility would mean to place the economic power in the hands of the user of healthcare, not a single entity like government.