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Will Health Reform Tactics Mean a Pyrrhic Victory?



December 24th, 2009

With the passage of health legislation in both the Senate and House, the presumption now is that reform will happen.  Still, let’s not forget that there is the daunting task of reconciling several significantly different provisions –for example,  on financing, a public plan, or abortion – while maintaining 60 votes in the Senate.  But for now let’s assume that high hurdle is crossed.  What can we say about the tactics used to accomplish the major health reform goals and their implications?

Well, let’s note first that it is not 100 percent clear what long-term goals will have been accomplished.  This legislation will have restructured one-sixth of the entire U.S. economy in a series of political deals that makes sausage-preparation visually appealing by comparison.  The U.S. health care economy is larger than the entire economy of Britain, or France.  The chances are against a reform of this scale and complexity, done the way we do things in Washington, actually working as advertised and fully reaching many of its goals.

Reform is a “Living” Document

Huge, controversial pieces of legislation like this one set in motion a profound dynamic, both substantively and politically.  Pressures begin to push the seemingly finished product in new directions.  That’s why wily proponents and opponents throughout the process have been focused on securing key provisions that will become “tipping points,” serving to build momentum in the direction they want. 

Proponents of single payer, for instance, will be striving to gain adequate language in conference to assure that, within a decade, a combination of a health commissioner, a public option, boa-constrictions on private plans, and Henry Waxman’s legendary committee skills will achieve a workable single-payer system – probably much like a regulated utility.

On Collision with the National Debt

Yet however things ultimately turn out on the public plan/single-payer front,  substance and politics will almost certainly collide and derail the goal of “bending the cost curve” and reducing the long-term deficit.  For instance it is surely delusional to think that Congress will actually permit Medicare physician fees to plummet 20 percent in 2011 as the Senate bill prescribes. It will also be impossible for Congress to maintain the huge inequities in subsidy levels – amounting in many instances to several thousand dollars per household – between people in the proposed exchanges and those still in employer-sponsored insurance once that inequity is fully understood.  Further, Atul Gawande’s hypothesis that the dozens of earmarked pilot projects in the bills will somehow trigger a continuing wave of cost-cutting innovation is illusory, as Alain Enthoven has explained.

It is because underlying entitlement pressures and political reality will drive right through commitments to fiscal prudence that national debt worriers like the Washington Post‘s David Broder and Robert Samuelson are having a coronary over this legislation.

Substance aside, as a political and policymaking exercise this has been a fascinating episode to watch.  I’ve been in Washington at The Heritage Foundation for 30 years, working on health care reform among other things.  So I have experienced (should I say endured?) the aptly named Medicare Catastrophic legislation, Clintoncare, the Medicare drug bill, and everything in between.  What observations do I draw from the current, apparently successful, effort at reform?  Especially when compared with the failed Clinton approach?

Like most Washington health analysts and Hill staff over the last 16 years, I attended plenty of navel-gazing conferences on the demise of Clintoncare, at which pollsters and strategists inspected the body and pronounced how to do it better next time.  Did Obama and his allies learn the right lessons?

Partisan Poison

As we all know, they did not make Post-Hoc Obvious Mistake #1 – i.e. “Don’t design and run health reform from the West Wing.”  Indeed, the Obama administration essentially adopted the opposite extreme.  In the first half of 2009, with health analysts from other think tanks,  I attended several meetings of senior staff – some of one party and some that were bipartisan – to give professional advice on design decisions.  I was struck at how the White House’s views or position almost never came up.  It was as though President Obama was not part of the process. Indeed, with only the broadest of goals, he gave control to the Democratic Hill leadership.

A result of handing over the reins to Congress at the outset was that health reform became increasingly partisan, save for the constant quest to find a couple of Republican senators to get cloture and the veneer of bipartisanship.  Initially senior Democratic staffers in the Senate made a genuine effort to include their Republican colleagues.  But as the leadership game plan became clearer, Republicans smelled the coffee.  Generally they decided there was not much to be gained, substantively or politically, from continuing to talk seriously, let alone deal.

So President Obama, who had won an election mandate for bipartisanship – or rather “nonpartisanship” – ended up repeating President Clinton’s go-it-alone-with-Democrats approach, becoming increasingly partisan himself as the Senate vote became more knife-edged.

To be sure, the ill-advised decision of Republican leaders not to offer an alternative vision of health reform, together with a comprehensive alternative bill, had the effect of further aggravating partisanship.  That lack of a full alternative meant that there was no clearly defined competition of approaches for solving the same problem, which could have forced compromise in the Senate, and instead only a Republican effort to block the legislation.  In 1993, by contrast, a major Republican alternative was offered in the Senate, eventually backed by Majority Leader Robert Dole, with companion legislation on the House.  That led to a serious debate. And, as Joe Klein noted in his Clinton biography, The Natural, the President came very close to embracing key sections of the Republican alternative when his own proposal got mired in the Senate.

Whatever the final result of today’s legislative battle, the way in which the health care legislation proceeded has further and significantly poisoned relationships between the parties.  So what, some might ask? At least we got the bill through.  But the fallout will have important repercussions for the future. Two in particular will come back to haunt President Obama.

The first is that there will be no second chances on health reform if it is not completely successful.  If the conference on the House-Senate legislation ultimately fails to gain Senate cloture, the tactical decisions made in the effort to get passage mean there will be no willingness among Republicans to agree to a compromise to get a revised bill through.  Yet if the current legislation succeeds, the increased partisanship will make it very hard if not impossible to reach across the aisle on other major issues – most importantly to tackle our dangerously mounting deficit and long-term debt.  That obstacle will have profound and negative consequences for Americans.

Now it’s true that after his health care debacle, Clinton was able to achieve a very important structural reform of welfare in 1996 with votes from both parties.  But let’s remember both that he had to compromise with congressional Republicans after the 1994 elections gave them power.  And also recall that there was strong agreement between Clinton and Republicans on the basics of welfare reform – that’s likely not going to be the case with averting the long-term fiscal tsunami.

The second fallout problem concerns the implications of the steady erosion of public support for the health legislation.  We know that Americans are profoundly risk-averse about changes in the health care system.  A lesson supposed to have been learned from the Clinton era was to push legislation through quickly, to avoid the unpleasant town hall meetings that the Clinton plan endured and which started the slide downhill.  Those town hall meetings were bad enough in the era before Twitter, blogging and the internet, and talk radio as a contact sport. 

To be sure, the White House and the Democratic leadership this year – unlike Clinton in 1993 – cleverly managed to keep most of the health industry at the table rather than funding negative ads.  But to have any chance of maintaining public acquiescence, Obama and the Democratic leadership had to secure enough bipartisanship and industry support to present a common front to calm a skeptical public. And he needed to have bipartisan support to explain to Americans that to meet his goals the health system actually would have to change for people who are satisfied with what they have today. He was not able to do that, and he will pay a heavy price for that in the future when other controversial issues will require broad public support if they are to be addressed.

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1 Trackback for “Will Health Reform Tactics Mean a Pyrrhic Victory?”

  1. D. Brad Wright: Two Views From the Right | Deconstructing The News
    January 22nd, 2010 at 7:56 am

3 Responses to “Will Health Reform Tactics Mean a Pyrrhic Victory?”

  1. David Keller MD Says:

    Interesting. I remember a briefing in September 2008 that saw Widen-Bennett as the way of the future, and I too had wondered what had happened to it. Yet here we are- this has been and is a terribly ugly process that has not yet finished the work that needs to be done. Going forward, I am interested in your thoughts on whether or not the politics of this can be used to gain us the policies that we need to finish the job. Assume that a bill passes, the elections will happen; there will be blood on the tracks and there will be a new Congress, which will be more closely divided with a narrow majority of Ds or Rs one or two houses of Congress. And the Executive Branch is deep in the weeds of trying to figure out what the new bill actually means. How does one bend the cost curve in that political environment? Is there a way to develop realistic systems of care as we move toward to 2012 election?

  2. Stuart Butler Says:

    In response to mkjgrima: Four main reasons I believe. One was that W-B was a direct challenge to the approach preferred by the majority leadership in both houses. The second was that while many in both parties liked the tax reform part, Obama’s denunciation of “taxing your benefits” during the election, plus union opposition to that, made it hard for Dems to go with it. Third, the insurance part of the bill involved heavy regulation, which turned off many Republicans. And the fourth thing that undercut the bill’s potential as a compromise was that it constituted a pretty radical change — which made everyone nervous, given the public’s anxiety about big change and the prevailing mantra of “if you are happy with what you have nothing will change.”

  3. mkjgrima Says:

    I wonder if the writer or readers would comment on what happened to Widen-Benett (as we call it in Utah — The Healthy Americans Act?). It seemed to a year ago as the vehicle for compromise and bipartisanship, but that clearly never developed. Why? Labor? Was Obama locked into an employer-centric solution because of old line Democratic politics and Labor?

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