Obama Search for a Public Health Plan Compromise a Good Omen

One of the most contentious issues in the current health care reform effort wending its way through Washington, D.C. concerns whether the government should offer a health plan in competition with private carriers. To oversimplify the controversy: supporters argue it will help bring prices down and keep private insurers honest while opponents argue it will unfairly compete, driving private health plans out of business. Both sides are preparing for a no-holds barred fight over the issue. (For more on this topic, please see earlier posts here and here).

The Associated Press is reporting today that President Barack Obama will be seeking a compromise on the issue. The Associated Press describes Nancy-Ann DeParle, director of the White House Office of Health Reform, as stating that “a public plan could be designed to address concerns about the federal government overreaching in its role.” One example given by Ms. DeParle is that “a public plan could pay hospitals and doctors rates that are similar to what private insurers pay — addressing fears that government would use its powers to dictate low rates that private plans can’t compete against.”

Because the government plan could be operated without the need to make a profit and would have lower administrative costs, Ms. DeParle argues such an arrangement could still work to lower the cost of health care coverage. However, there are already non-profits in the health care system. Many Blue Cross Blue Shield plans are non-profit and so is Kaiser Permanente. The Obama administration will need to demonstrate that they will be more non-profit than the other non-profits.

Whether the government can run a health plan more efficiently than private enterprise (whether for-profit or non-profit) has yet to be seen. That didn’t seem to be the case with California’s experiment, the Health Insurance Plan of California. And since government programs tend to look at distribution costs for savings, putting the focus on reducing administration costs doesn’t necessarily bode well for health insurance agents. Whether these savings are real or a mirage will be the topic of much debate. Agents will have a chance to argue their value to the system and statistics of all kinds will be plentiful. But the good news is that there will be a debate.

It’s still early in the debate. What I take away from Ms. DeParle’s comments is that the Obama Administration is aware of the dangers posed by a government-run competitor and are open to a constructive dialogue on the issue. That’s a hopeful sign. In a previous administration (one that rhymes with “Clinton”) there was little talk of compromise. The Obama Administration’s approach doesn’t guarantee common ground will be found, but it’s willingness to try to find it is as significant as it is welcome.

Obama’s Warp Speed Health Care Reform Rightly Focused

President Barack Obama’s address to the nation was both a rallying cry and a call to arms. And, if there remained any doubt, President Obama made clear he wants health care reform and he wants it now.

In his speech, President Obama promised the budget he will propose soon “includes an historic commitment to comprehensive health care reform — a down-payment on the principle that we must have quality, affordable health care for every American.” He then pledged to begin meetings among stakeholders to begin working through the contentious issues surrounding the topic next week. Pledging reform at warp speed he proclaimed, “So let there be no doubt: health care reform cannot wait; it must not wait and it will not wait another year.”

Can meaningful and comprehensive reform really be developed, debated and enacted in less than 12 months? Some would argue that it has to, that the political will to pass meaningful change must be seized and seized quickly. There will be great pain for some in the reform, and like pulling off a band aid it’s helpful to pull it quickly. Others will say making massive changes to a system as complex as America’s health care system needs to be done thoughtfully and carefully or else the damage from unintended consequences will swamp the benefits of change.

My take on it is that various aspects of a reform package can be developed in a year, but some elements will take longer. The question will be whether the Administration determines it’s better to pass what it can quickly and continue the legislative process into 2010 or wait for an omnibus package.

In any event, the President has little choice but to call for fast reform. His political capital is high right now. It has a lot more room to fall than to grow. Further, there’s broad consensus that health care reform could greatly aid the nation’s economic recovery — and that is his top priority. The sooner the details of reform are clear, the sooner business can rely on help in managing this cost. Further, there’s no shortage of proposals being discussed in and around Congress. If he doesn’t act on health care reform, someone else will. And he has no intention of ceding leadership on the issue to anyone else. Besides, if he misses his target and only brings about reform in 2010, is anyone going to complain? The only real deadline he has is to pass something before the mid-term election in November of next year. In the meantime, why not call for fast action?

More important than his timetable for reform is his focus for reform. And President Obama has made clear the kind of reform he’s looking for. Although former Senator Tom Daschle will no longer be leading the effort, his book, Critical: What We Can Do About the Health-Care Crisis (co-written with Scott S. Greenberger and Jeanne M. Lambrew, now the Deputy Director of the White House Office of Health Reform) clearly sets forth the Administration’s goals.

As I’ve written before, what’s significant, and encouraging, about this approach to health care reform is its focus on controlling the underlying cost of medical care. And that’s where the focus needs to be. A report by the Department of Health and Human Services projects health care costs in 2009 will exceed $8,000 per person. And this doesn’t include additional costs likely to result from the recent expansion by Congress of coverage for children and the economic stimulus money targeting medical technology. In a story on the report, the Associated Press quotes White House spokesman Reid Cherlin as saying “Health care costs are crushing middle class families and the small business that fuel job growth in this country.”

This doesn’t mean the administration will ignore market reforms or back off from seeking to establish a national purchasing pool (they’ll call it an Exchange) for coverage. But the fixation on costs is both appropriate and needed. Especially if we’re going to take health care reform where no American system has gone before — and at warp speed at that.

Dashcle Appointment Puts Obama Health Care Reform on Fast Track

In case there was any doubt, President-elect Barack Obama made clear today that reforming the nation’s health care system will be an early priority for his Administration.  Hhealth care reform won’t wait while President Obama first focuses on fixing the country’s economic mess, but will instead be an integral part part of that effort. As he said during a press conference announcing the creation of a White House Office of Health Reform, to be led by his nominee for Secretary of Health and Human Services, former Senator Tom Daschle, “If we want to overcome our economic challenges, we must also finally address our health care challenge.” (Here’s a  video of the press conference — the comment is made at roughly the 2:40 mark).

The need to move quickly on health care reform was a central theme of the press conference. After reciting the usual litiany of the current health system’s shortcomings, President-elect Obama said, “We’re on an unsustainable course. The time has come, this year, in this Administration to modernize our health care system for the 21st century, to reduce costs for families and businesses and to finally provide affordable, accessible health care for every single American.” (This statement begins at about the 1:40 mark).

He then directly tied health care reform to addressing the current financial meltdown.  “Now, some may ask, ‘How at this time of economic challenge we can afford to invest in reforming our health care system’. And I ask a different question: ‘How can we afford not to?'” (About the 2:00 mark).

The creation of a White House Office of Health Reform, and the appointment of Senator-soon-to-be-Secretary Daschle as it’s Director is especially telling. By placing the locus of health care reform inside the White House, President-elect Obama elevates the importance of achieving meaningful change. By placing the leadership of the Office in the hands of his HHS Secretary he makes it easier for his Administration to speak — and negotiate — with one voice. By making that HHS Secretary Senator Daschle he assures the reform effort will move forward in a nuanced fashion, sensitive to the legislative process. 

This approach stands in stark contrast to the Clinton Administration’s health care reform initiative.  That fiasco, led by then First Lady Hillary Clinton, was a textbook example of insularity and insensitivity to political realities. It discouraged vigorous debate and excluded Congressional input.

Senator Daschle, who led Democrats for 10 of his 18 years in the Senate and who served in the House for eight years, will take a far different approach. First, he can’t help but reach out to members of Congress — it’s in his DNA. Second, at the press conference he pledged to work with “people from across the country to find a path forward that makes health care in this country as affordable and available as it is innovative.” As a member of the Obama Transition Team he is already coordinating thousands of small meetings across the country on the topic to bring the American people “into this conversation” in order to make “an open and inclusive process that goes from the grass roots up.”  (Beginning at the 7:10 mark).

Senator Daschle is no newcomer to the health care reform debate. He’s studied, and written about, the issue as a Senior Fellow at the Center for American Progress. He is co-author of Critical: What We Can Do About the Health-Care Crisis along with Dr. Jeanne Lambrew, who President-elect Obama named today as the Deputy Director of the White House Office of Health Reform.  Their prescription for reform is not dissimilar from that put forward by Senate Finance Committee Chairman Max Baucus which, in turn, reflects many of the principles put forward by candidate Barack Obama during the presidential election.

During the press conference, both President-elect Obama and Senator Daschle emphasized the many problems apparent in today’s health care system. This shouldn’t be a surprise. When rallying the nation to change a complex and critical component of government service reminding voters of its flaws and the need for reform is standard practice.

It would have been nice, however, if a bit niaive, to hope they would have noted, even in passing, that much of the current system works and is worth preserving. Such a statement would have been as refreshing as it would have been unexpected. And it might even have underscored the new kind of politics President-elect Obama promises to bring to Washington.