President Obama Entering Health Care Reform Arena

President Barack Obama’s approach to health care reform has been a bit unusual. Many of his predecessors have taken the Moses approach to major legislation. They descend from the mountain top with legislation chiseled in stone, hand it to Congress and in their best imitation of Charlton Heston (Republicans) or Patrick Stewart (Democrats) instruct them to “Make It So!”

Sometimes the tactic works, other times, not so well. President Bill Clinton and First Lady Hillary Clinton were the last to take the long walk down from the summit. Upon telling Congress to enact their commandments as is they were told in no uncertain terms to take another hike. No Congressional committee even voted on their legislation.

President Obama approach to health care reform is less dramatic, but is likely to be more effective. He articulated three general principles for reform, identified some key elements he’d like to see, guaranteed that the phrase “everything is on the table” would be 2009’s most overused cliché, and told Congress to figure it out the details themselves. The payoff is on the horizon: in the next six weeks several Congressional committees are likely to not just vote on comprehensive health care reform, but actually pass draft legislation. This is historic.

It is also messy – as disorderly and trying as anything the FCC allows to be broadcast on public airwaves during the family hour. Lawmakers are busy building the case for their favorite provision, pundits are busy making clever pronouncements, organizations of all stripes are seeking to create the next “Harry & Louise” advertisement, and voters are consistently demanding all this activity produces something responsible.

Whether voters will get their wish is as yet unknown. There are some hopeful signs and I’m willing to make some broad (and pretty darn easy) predictions:

  • cost control will be a major part of any reforms
  • the public plan is likely to look nothing like the government-run plan proposed by then candidate Obama and more like a Sunkist (or some other non-profit, non-government cooperative).
  • paying for reform will come from a variety of sources, not all of them pleasant, but the price tag will be significantly less than the $1.5 trillion originally identified.
  • premiums will be subsidized to make coverage more affordable for millions of Americans
  • carriers will no longer be able to exclude applicants due to pre-existing conditions (this may qualify as the safest prediction around)

Of course there are some warning signs, too. Among the open issues of concern:

  • politicians of all stripes are convinced exchanges / purchasing pools / gateways or whatever term eventually emerges are the solution to all of the insurance industry’s ills – depending on how these are structured the only impact they may have is to crush innovation and eliminate brokers from the system (then again, they may not – the topic for an upcoming post)
  • while carriers will be required to sell coverage, consumers may not be required to purchase coverage, which will lead to skyrocketing premiums – New York and New Jersey take this lopsided approach and the average premium for individual coverage in those states are twice that of California’s.
  • what cost controls are put in place may prove inadequate – opposition to creating medical guidelines to tie costs to outcomes may not survive the political process

Whether any of these predictions become reality and how the open issues are resolved will depend in large part on the action Congress takes in the next few weeks. And that’s unknown. As I’ve written before, much of the draft legislation under consideration are better viewed as negotiating positions than representative of a likely final bill. There is an exception, however.

Senator Max Baucus, Chair of the Senate Finance Committee, has been hard at work with Senator Charles Grassley, the ranking Republican member of the committee, to fashion bi-partisan reform (and to be fair, their staffs have been working pretty darn hard, too). The fruits of their labor were to be made public at the end of last month, but it has yet to see the light of day. That’s about to change.

According to the Associated Press, President Obama made it clear during a White House meeting that he wants “health care legislation ready in the Finance Committee by week’s end.” Coupled with his statements while introducing his impressive nominee for U. S. Surgeon General, Dr. Regina Benjamin, it is becoming clear President Obama is about to personally engage in the health care reform sausage making process. “Don’t bet against us,” President Obama said. “We are going to make this happen.”

The President has tremendous political capital, especially with Democrats. If you’re running for election in 2010 you do not want to be branded a hindrance to this Administration, especially if you represent a marginal seat. For now, the conflict over health care reform is an intra-party battle, especially in the House of Representatives. House GOP members are basically spectators, carping from the sidelines. The real contest is being waged between liberal and moderate Democrats. That’s the price of a large majority, but it also means President Obama is well positioned to resolve the differences. And as his recent statements indicate, he’s willing to enter the arena and, merely by showing up, change the dynamics.

As President Obama proved during the election, when he says “Yes we can” it often means “Yes we will.”

Obama Health Care Reform Strategy Sidesteps Clinton’s Missteps

The number of mistakes made by the Clinton Administration in pushing for health care reform in 1993 are embarrassingly numerous.  One of the most damning was their heavy handed approach with Congress. Instead of engaging with lawmakers from the beginning, the task force led by then First Lady Hillary Clinton worked behind closed doors. Democratic Congressional Members were pushed out of the loop and expected, I assume, to fall in line with their Democratic President because, well, he was their Democratic President. Oh, and of course because the health care reform package developed by the task force was so obviously wonderful.

Leaving aside the lack of wonderfulness in the plan they developed, this approach was nothing short of political malpractice. The president may propose, but it’s Congress that enacts legislation. Any effort to dramatically change something as expensive and personal as health care will generate opposition. Some of that opposition is based on sincere differences of opinion concerning public policy. Some emerges from economic or political agendas threatened by the changes. In either event, it’s important to have a strong base with a unified message to withstand the inevitable attacks. The Clinton Administration’s approach — imposing their viewpoint on Congress — meant they had few supporters when and where they needed them most. The result was a political rout that helped open the way to a Republican takeover of Congress in 1994.

Whether based on temperament or wisdom earned at the Clinton presidency’s expense, President Barack Obama and his team are approaching health care reform in a far different manner. Their outreach to Congress has been extraordinary. They are not only working with Congressional leaders to design the plan, but are helping to create a unified message as well.

The Associated Press reported on a meeting today between several Democratic Senators and White House political advisor David Axelrod. Their goal, according to Senator Dick Durbin, was to “coordinate our messaging so we present a health care reform effort that the American people trust.”

The meeting was, in part, a response to advice circulated among Republicans by Dr. Frank Luntz outlining ways to attack the Democratic proposal. Dr. Luntz is a highly regarded GOP consultant and an expert on political messaging, the author of Words That Work: It’s Not What You Say, It’s What People Hear. He urged Republicans to be “on the side of reform.” while attacking the Administration’s proposal as leading “to the government setting standards of care, instead of doctors” and “to the government rationing care.”

The 26-page report has caused quite a stir on Capital Hill. Democrats in Congress wanted to make sure they were prepared to withstand the suggested assault. The meeting today with Senators and with House Leaders yesterday were designed to do just that. It was reinforced by a message to the grass roots following President Obama developed during the campaign that now operates as Organizing for America.

What was agreed to was a three-pronged message: medical costs must be lowered, people must have choice in their health care coverage, and care must be affordable for everyone. How these principles are put into action has yet to be determined. No legislation has yet emerged from the numerous Congressional hearings underway.

It’s the lack of explicit information that makes framing the reform effort so important. Until there’s actual legislation to read, all the public has to go on is the general policy positions pronounced by various parties. Eventually, we’ll see a bill, but how the public reacts to it will be influenced to some degree by the spinning that occurs before its release.

By involving Democrats in Congress early in the process of developing the legislative language and working with them to shape a unified message, the Obama Administration is sidestepping one of the most damaging missteps of the Clinton Administration. Ultimately what will matter is the legislation itself. But the mere fact that President Obama and his team are avoiding the mistakes made 16 years ago, is an indication of how different the battle will be this time.

News Channels Fail to Explain Clinton Health Care Plan Failure

With President Barack Obama launching his health care reform initiative last week with a White House summit, the news programs have, not surprisingly, been recalling the last major push for change. For those who missed it, that was in 1993 and 1994. Then President Bill Clinton, who, like President Obama, had campaigned with a pledge to change America’s health system, assigned then First Lady Hillary Clinton to spearhead his Administration’s effort to provide affordable health care for all.

In recalling this recent history the news channels make it sound like the only reason the Clinton effort failed was the opposition of special interests. But for the insurance industry’s Harry and Louise ads, some greedy doctors and uncooperative Republicans, the Clinton Administration’s reforms would have breezed through Congress ushering in a golden era of health care. This is far from what happened.

Yes, special interests campaigned hard against the Clinton reforms, but they had a lot to work with. As I’ve written before, the Clinton effort failed in part because it was fashioned behind closed doors and in part because it wasn’t a very good proposal.  The task force that helped the First Lady draft the proposal excluded input from many in Congress and shunned many stakeholders. So when it emerged from the inner sanctum it  lacked broad buy-in. The take-it-or-leave-it attitude of many in the task force didn’t help matters.

What they proposed was both complex and elegant. They sought to enact “managed competition.”  This approach would have forced most Americans to drop their existing coverage and instead obtain insurance from government run “purchasing pools.” The carriers offering coverage through the pools would offer only plans designed by the managing government agency and would be expected to use their clout to negotiate deep discounts from health care providers. There was a lot more to it — a lot more — but those were two of the key provisions.

It wasn’t just special interests (which the news channels identify as insurance companies, the business community and some doctors) who thought it was a bad idea poorly executed. So did many Democrats in Congress and liberal think tanks. The Clinton health care reforms were attacked and even ridiculed by, well, most everyone who wasn’t on  the task force. It’s not that these critics didn’t recognize the need for reform. They just believed the Clinton package was bad reform. 

Any proposal seeking massive changes to a system as complex as America’s health care system is going to be controversial. It is also highly likely to be seriously flawed. The purpose of the legislative process is to allow interest groups (special and otherwise) to debate the plan’s details, to identify the flaws, and to the extent possible, fix them.

Given the numerous flaws in the Clinton Administration’s plan and the take-it-or-leave-it attitude of its proponents, Congress decided to leave it. Did special interests play a role? Certainly. (Full disclosure: I testified on behalf of health insurance agents against the Clinton plan  at three Congressional committees hearings in 1993). But to credit its defeat solely to those interests is to overstate their strength and to absolve the authors of too much guilt. They were the ones, after all, who put forward a poorly designed package with a striking lack of political skill. A better plan more ably presented might have passed in 1993. We never got the chance to find out.  

In oversimplifying history, reducing what happened to a tag team bout between Bill and Hillary on one side and Harry and Louise on the other, the news channels are doing the country a disservice. Yes, special interests from across the political spectrum will protect their special interests (that’s why they’re called special interests). But the Obama Administration’s health care reforms will stand or fall on their merits, just as the Clinton Administration’s did.

That’s the way it should be. And that’s the way it should be reported.

2009 versus 1993 Health Care Reform: The Difference is Consensus

Politically, 2009 and 1993 will share some similarities.  A new Democratic President takes over after years of a Republican White House. The new president will be able to work with a Congress firmly in Democratic control. Both soon-to-be President Barack Obama and then President Bill Clinton entered office during difficult economic times. And as candidates both made health care reform a top issue in their successful campaigns.

But 2009 is far different from 1993 in many ways. Concerning health care reform the political environment are strikingly different.  In 1993 President Clinton asked First Lady Hillary Clinton to take the lead. As I’ve noted previously, her insular and heavy handed approach helped doom that effort. But she had lots of help. There was broad disagreement about the nature of the problem, let alone the solution. Interest groups fought the Clinton Administration reforms vigorously and effectively. Given the lack of consensus and clumsy politics, it’s eventual defeat, in retrospect, seems inevitable. 

In 2009, the political environment will be far different. That there is a crisis in America’s health care system is broadly accepted. Out-of-control medical costs, and the ever increasing health insurance premiums they cause, are harming the financial security of families and the economic viability of companies. Tolerance for the large number of uninsured in the country is near an end.

There’s not only wide agreement that there is a problem, there’s a growing consensus on what the solution might be. The several proposals already circulating in Washington overlap with one another and the approach advocated by Candidate Obama. Interest groups and academics who waged pitched battles in 1983 are finding common ground as 2009 approaches.

This was strikingly clear in a recent broadcast of NPR’s To The Point. Host Warren Olney interviewed representatives from Families USA (generally considered a liberal health care reform advocacy group, America’s Health Insurance Plans (the carrier’s trade association),  the United States Chamber of Commerce and an academic from UC Berkeley. Their perspectives differed, but what was striking was the amount of agreement they expressed. True, there were no representatives of medical care providers on the show, but the common ground expressed by these four may not have been possible in 1993. And, as is usual when Mr. Olney is conducting the interviews, the show was very informative. (I recommend making the time to listen to this episode, entitled “Barack Obama and ‘Universal’ Healthcare Reform“).

Consensus in December 2008 does not guarantee a smooth and easy process to enacting comprehensive health care reform in 2009. The debate will be vigorous and heated. There will be winners and losers — and the losers will not take their lumps quietly. But unlike in 1993, when the top priority of many stakeholders was to stop health care reform, in 2009 their approach will be to help develop the right reform. Now that is a big difference.