Incorrect conventional wisdom about health care reform
4 September
Here are ten pieces of conventional wisdom about health care reform that I think are wrong.
CW #1. The Obama team learned and avoided the mistakes of HillaryCare.
The Obama team avoided the mistake of jamming Congress with a massive and detailed plan without consultation, and they effectively neutralized interest groups that helped kill the Health Security Act. But, like the Clinton Administration, they tried to restructure one-sixth of the economy in one big bite. This is again proving to be more than the American people are willing to swallow.
Congressional Democrats were far more effective in expanding government’s role in health care in the fifteen years after HillaryCare failed, by repeatedly enacting incremental expansions of government to the most sympathetic population slice left uncovered by a government program.
CW #2. The President needs to propose a specific detailed plan to improve his chances of success.
Congressional Democrats need Presidential guidance on a few big policy elements: public plan in or out, must a plan provide universal coverage, how should $1+ trillion of new spending be offset, how serious are you about not increasing the long-run budget deficit. Presidential leadership here means choosing whether a bill must be partisan or bipartisan, and making a few big policy choices among well-defined options.
Five Congressional committees have already marked up bills, and the sixth has specifics they have not made public. If the President were now to propose legislative language or a detailed policy spec, it would be ignored but for what it says about these first-tier policy choices. Details from the White House might have been helpful in March. Now they would be irrelevant.
CW #3. The President is ambiguous about his position on the public option.
The President and his team have clearly and repeatedly stated that the public option is not essential. In Washington terms, that means it’s out if it needs to be to get a deal. There is no ambiguity. Upcoming House floor vote notwithstanding, the public plan will be out of any final comprehensive bill unless the President chooses a 50-vote reconciliation path through the Senate. Even in that scenario it might be watered down. The marginal votes oppose the public option, so it has to drop. I expect the Administration will perpetuate the facade of ambiguity to keep the Left at bay, right up to the moment where it drops out of the bill.
CW #4. The public option is the core of the government takeover of health care.
Democratic staff drafted these bills with a belt-and-suspenders. If (when) the public option is removed from the bill, other provisions would still turn health insurance into a public utility. Even without a public option, government employees or people appointed by the government would define standard benefit packages and cost-sharing for all health insurance. The government would regulate relative premiums and redistribute premium revenues among insurers, and have authority to place limits on insurers’ profits. A government-appointed board would define guidelines for quality care and for health care delivery models. Government guidelines labeled “advisory”have a tendency to become de facto standards over time, whether or not they are legally mandated.
Even without a public option, the pending bills would make provision of health insurance largely a governmental function, although run by for-profit firms.
CW #5. This debate is mostly about health policy.
This debate is equal parts health policy and economic policy. Every bill publicly pending would increase the short-term and long-term federal budget deficit, and the Administration recently upped its 10-year deficit estimates by two thousand billion dollars. CBO says the House bill would increase long-term budget deficits by ever-increasing amounts, exacerbating the long-term entitlement spending problem under current law. The pending bills would raise taxes and result in lower wages as expanded coverage and mandated benefits increase the price of health insurance. Claims of long-term deficit reduction are unsubstantiated by any government policy analyst – even the Administration has failed to support its “bend the curve down” claims with numbers.
Policymakers should be focusing on short-term economic recovery, preventing tax increases, and reducing long-term budget deficits by slowing the growth of entitlement spending. The pending bills would instead mean higher taxes, lower wages and exploding government debt. If these bills become law, they will be the most significant change in economic policy in years. Health reform is also an economic issue.
CW #6. Governor Palin blew it by talking about “death panels” that aren’t in the bill.
Yes, Governor Palin’s “death panel” statement was an exaggeration. But as a tactical matter from the perspective of someone trying to kill the President’s health care reform, was it an unwise move?
The President spent much of August using Governor Palin’s “death panel” claim as a straw man to argue that most substantive concerns with the pending legislation were exaggerated and spurious.
Was it smart for the President to spend so much air time on the message “Don’t worry, this bill won’t kill your grandma?” That’s not exactly going on offense. He could have easily dismissed it with a single statement and then had his staff and proxies counter-attack. Instead, the President magnified the effect of Gov. Palin’s attack by repeating it.
Going after insurers, Gov. Palin, and conservative talk radio may work to fire up your political base, but it does not reassure those who have legitimate questions about the bill. If the President is talking about “death panels” while trying to sell his health reform plan, then he’s losing the battle.
In addition, I think the President’s repeated counter-attacks on outrageous straw man arguments backfired, because he failed to address the justifiable concerns expressed by millions of citizens at town halls: more government involvement in health care, bigger budget deficits, higher taxes.
CW #7. Rowdy town hall protestors hurt the opposition’s case.
Had the obnoxious shouting and disruption persisted through August, it might have backfired. Instead, it guaranteed press attention throughout the month, and magnified the impact of concerned Americans participating in democratic debate. I think the ensuing public policy debate is a good thing, and the obnoxious behavior early in August involved more people in that debate by generating news coverage.
I prefer thoughtful and impassioned yet civil debate to shouting. But democracy is sometimes impolite and raucus. A little shouting isn’t all bad if it eventually leads to impassioned debate, rather than just more shouting.
CW #8. Senators Grassley and Enzi blew up bipartisan talks among the Gang of Six and walked away from negotiations.
Democratic Senators Baucus, Conrad, and Bingaman, and Republican Senators Grassley, Enzi, and Snowe have worked for months to try to build the core of a bipartisan consensus. They have been unable to do so for three reasons:
1. The substance is difficult.
2. Each side is being pulled back by Members of their own party.
3. The President persistently undercut Chairman Baucus by denying him the ability to negotiate a final deal with Republicans.
Senators Grassley and Enzi are not fire-breathers. They are seasoned legislators who know how to cut a deal. They are also experienced enough to know they should not negotiate a deal with Chairman Baucus, only to have that deal reopened by the House and White House later in the legislative process. They want to negotiate once, not two or three times. That is reasonable and savvy.
The President and his team have known for months how to get a bipartisan deal: negotiate directly with Grassley and Enzi, or authorize Baucus to do so on their behalf. They were unwilling to do so, and are now feebly attempting to shift blame to these Republicans as they embark on a partisan legislative path.
CW #9. This policy debate is shallow and poorly-informed.
Yes, there is a lot of confusion and misinformation out there. Yes, many of the email chains are inflammatory and exaggerated (but not fishy). Yes, the press spends too many column inches and too much airtime on the political back-and-forth rather than the substance of the bills. Yes, too many people are shouting, and not enough are listening and debating. I concede that the debate is nowhere nearly as well-informed or thoughtful as it could be.
But so what? Millions of Americans are deeply involved in a discussion about a proposed fundamental change to how America works. And somehow, the real issues are seeping through the din. Even people getting distorted information from misleading emails are being subjected to a battle of ideas. Yes, those who listen only to one side of the debate will get a limited perspective. But anyone who exerts even a little effort can learn a lot, and anyone who listens only to one side but then debates someone who disagrees will learn something from that argument.
I think millions of Americans understand that this is fundamentally a debate about who should decide how much health care you get and who should have to pay for that care. I think they understand the rough consequences of an expanded government role in private health insurance and health care delivery. I think millions of them are reacting at an instinctive policy level to bigger government – higher taxes, bigger budget deficits, more government spending.
I wish millions of Americans read KeithHennessey.com and were patient enough to learn the details to be as well-informed as you, my brilliant and thoughtful readers. But I believe imperfectly-informed involvement is better than complete disengagement. And I have a core confidence that, given time, the American people are on the whole smart enough to figure out the underlying truths and make sound judgments. I am a strong believer in the inherent wisdom of the common man. I am actually pleasantly surprised how relatively well-informed this debate is, compared to so many other policy debates I have seen. I will continue to do my part to contribute to a thoughtful, impassioned, civil debate.
CW #10. The failure of comprehensive health care reform would doom an Obama presidency.
The Clinton health plan was a complete flameout, and yet President Clinton had two productive terms in office. If a comprehensive bill dies this year, I still expect a significant expansion of existing government health programs to become law, providing a significant consolation prize to a dispirited Democratic base. And I am confident that President Obama would be able to portray such a bill as a partial win, accompanied by a promise to continue fighting for larger reform. Failure to enact a comprehensive bill this year would weaken the President significantly in the short run but would not, by itself, doom his Presidency. Four years is a long time, and political weather is impossible to forecast beyond about a three-month horizon.
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Keith Hennessey just called me brilliant and thoughtful. My weekend is made already. I agree with you on your point about the public debate being good (well informed or otherwise). Although I am concerned about them strictly seeing this as a healthcare policy debate. If you watch the news, that's what's getting most of the air time. The extra trillions of dollars are lost on most. I think they just hear "blah…blah…blah…more money…whatever". What they don't realize is that's not the final bill. That's what we'll owe when we start really losing ground.
I love seeing the people who demagogued Social Secuity reform getting their knickers in a bind when the opposition does the same in return. But, I wouldn't necessarily call it "disinformation" in either case. Both sides used hyperbole to forestall what they saw as the shoe in the door. In time, the hyperbolas will surely, by their lights, become ellipses. And, there is no foul in inserting dire prognostications where the proposed legislation leaves options open. In physics, we always say, whatever is not prohibited is mandatory.
That piece was too short to use the word "thoughtful" four times.
Re CW#4- It is not only "guidelines" that become defacto standards over time. Even more importantly, the specifics of what the government pays for (and how it pays) become defacto standards. Look at the transition to DRGs in the early '80s. Most payers began to pay on DRGs (the first real "bundling" experiment) soon thereafter. The vast majority of private insurance payments to providers in the US system are for the the same items that Medicare pays, albeit at different prices. The immense difficulty in shaping a different "product" (i.e. a specific bundle of services) –and getting payers to pay for it– is the largest obstruction to price competition (OK, OK, second largest- after the fact that few pay for their own care).
Incidentally, as a reminder, "bundling" inpatient costs into DRGs in the '80s did actually decrease costs, and certainly decreased inpatient days. Effective new care service bundles would do the same thing. It might be the only approach to "bend the curve".
Sounded like a clear-eyed look at what's happened so far. I agree that the most important thing about August is that tens of millions of Americans took an interest in the future of health care. If they sustain that interest then we will eventually hack our way through to a better system.
Keith
you and Jay Cost are the must read writers of any medium. God bless and please keep it coming. You are making a difference, IMHO.
Too bad you do not understand that there is in fact a death panel defined in HR 3200. It goes under the name of ‘health commission’. It has a commissioner and a panel that will decide all appropriate procedures in all cases.
This is in fact, a death panel as this will be the panel that determines whom is no longer worthy of receiving care.
The problem with this round of healthcare reform is that as many have pointed out, it isn't reform at all. It isn't even healthcare. It is candy. I would be much more receptive to the debate if immigration were addressed first. As it stands the Obamaicans are going to try to pass free heatthcare for all, thenprovide amnesty to 12 million aliens and then invite 12 million more. Free healthcare = 24 million new Democratic voters and a second term and perhaps a third and a fourth
If Obama loses this round (and with his huge majorities it is hard to believe that he can lose), his best option is to change the subject. Can you say “Wag the Dog” with nuclear weapons?
@dadling -
Interesting thoughts, I agree with about 60% of this thesis…however, what is not said is the enormous amount of "Trust" this President has lost with middle America….Clinton didn't lose as much, blaming most of it on Hillary…but, he didn't surround himself with such radical characters in the White House, like Obama has..he didn't shove through, or try, 2 enormous bills (Stimulus & Cap/Trade), like Obama has..and he didn't try to radically change the American landscape during an econmic downturn like this one….
Thus, I believe Obama may have not only lost his Halo, he may have lost the trust of most Americans….this may be his true downfall…it will make anything he trys to do in the rest of his tenure, very difficult..he's singlehandly built up opposition to him and his agenda, by his arrogance and total lack of concern with most Americans..and they know it….the Republicans didn't stop him….Americans stopped him, so far….that's a BIG difference between Clinton & Obama……
People no longer trust Obama….that's a huge factor …and it may show in the 2010 elections……………
lets' hope so….
I agree with Keith that the failure of the current health care reform package wouldn't necessarily doom the Obama Presidency. People are projecting too much from the Clinton years, when Clinton lost his ability to continue reform due a combination of complacency among the Democrats, an aggressive effort from the Republicans at organization, and the heavy political costs he paid in getting the budget Alan Greenspan suggested for him in addition to the failure of health care reform on the first go.
That does not necessarily apply to all such efforts. Medicare, for example, was only in enacted in 1965 after several earlier efforts in the Kennedy Administration to pass such a program (that failed), and after the failure of an earlier program that tried to distribute federal grants to states to cover the elderly poor.
I am not so confident as you are about the American people figuring all of this out. After all, the American people elected Obama president, didn't they?
***
Why set up another Ponzi scheme entitlement program? Fix Social Security, Medicare, and Medicaid first. Then talk to me about future stuff when they are on sound financial footings. And keep government hands off the taxpayers wallets!
The evolution of the impact of this reform is unknown and unknowable, at least over the next decade or so. At the core, it's based on theory, much like Medicare was, which has proven to be false. . It's also going to be a huge challenge to implement and there's a certain amount of flying by the seat of our pants required, with the hope that it can be effectively tweaked as we go to get it where we want it to be.
The opponents are often misinformed and transparently turning sumersaults to make a nonsensical case. That's efffective in that it causes one to look more closely at the supporters who are clearly purposely avoiding anything that would force them to be more realistic.
We're not going to be an informed populace on this because the entire debate is an intentional effort by all to make sure we're not.
The difference between the Clinton and Obama experiences is Clinton was an experienced executive who had enough pragmatism to know when to fold his hand, and enough political savvy to tack toward the center. Obama has shown none of this in anything he has done or said, and he has no prior executive experience. He is just used to people obeying him, and gets testy when they question his policies or judgment. It remains to be seen whether passing "something" will make anybody happy for long.
Keith:
The anger at the town hall meetings was over porkulus and cap&tax. It was over passing a bill without reading it. It was about the arrogance of our masters in Imperial Washington.
dadling:
Obama and Congress (both sides) have indeed lost a huge amount of trust. That is why there was such an outcry over Obama's planned speech to the schoolkids, and especially the study guide that went with it.
Paul:
My ancestors, on both sides of the family, were LEGAL immigrants. If you're concerned about the illegals from Mexico and Latin America, then encourage them to clean house in their own country. With the natural resources, arable land and great people Mexico has, they should be showing the US how its done. Our open borders are a safety valve for the corrupt Mexican oligarchy. These illegals need to stay home and square away their country just as we have had to do the same from time to time.
The media and even the blogosphere has mostly missed the underlying cause of the town hall rage: it's a reaction the spooky, mystical appearance on the world stage of one Barach Obama. Not since Kennedy have we seen a media so in bed with a candidate/elected politician. It creeped us out. The face of the man was everywhere. Here he stood, saying nothing at all, getting praised as if he were the orator of the ages. His past was a murky fog, remnants of which he would toss under the bus whenever they emerged.
Looking back, it is shocking how this novice was able to upend a war hero, even in the area of foreign affairs. The media was certainly complicit, but there was something more, call it zeitgeist, call it charisma, call it antichrist, whatever it was deeply disturbed a big hunk of America and now they've found their voice and brought this hollow wizard from behind his magic wall.
I'm with you Max. I wouldn't say antichrist yet, although Jeremiah Wright's screeds should have brought down lightming on that building.