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What Would Dubya Do?


In the last week the Democrats must have gotten sick of being told that they are supposed to be moderates. The New York Times tells them that populism should trump ideology, the nut jobs on the right still think that they are the second coming of Lenin, and the corporate-friendly Emmanuel faction is already starting the fight with the Dean “net roots”. Which is why I’m on the record as saying that no radical health-care reform will happen in the balance of this decade.

When you look at domestic issues, of course, health care is by a mile the most important, and the party’s presumptive 2008 presidential candidate Sen. Hillary Rodham Clinton, has, shall we say, a history in the area. But realistically all that will happen in the next two years is for Congress to give the administration the right – but presumably not the obligation – to directly negotiate with drug companies about Medicare prescription drug pricing. There’s also the likelihood that Congress will approve a reduction in the bonus profits currently offered to private insurance plans by the 2003 Medicare Act. But it’s just as likely that the drug pricing measure will be vetoed by President Bush, although the cuts in Medicare private insurer reimbursement will likely be part of a budget act which the President will probably sign.

And in terms of actual legislation, that’s probably your lot for the next year.

All the talk about moderation isn’t new. Democrats are being warned by the wise heads of the party to be as moderate as possible so as not to put anybody off for 2008 when they’ll probably be facing a moderate Republican for control of the White House. This all seems familiar, though. Similar suggestions were made to the current president when he won a not exactly convincing victory in 2000. The moderates didn’t prevail then. Instead, the various constituencies of the Bush base were rewarded with incredible tax cuts, corporate welfare and social policies which were exactly what it wanted, and gave no heed to any perceived moderate center.

So if you wanted to egg on history to repeat itself and reward the Democrat base which would directly benefit from universal health care, and you want to do it quickly, what would you do?

This is may be a hypothetical question but it’s not unrealistic. Certainly the ground is being prepared for some kind of legislaiton.

This week AHIP, the trade association for the insurance companies, has come out with its proposal for how to get to sort-of universal health care. Amazingly enough it involves the government subsidizing very poor families to buy health insurance from private plans with no reforms in the way health insurance is organized or regulated. Oh, and it only gets us to 95% of the population with coverage in a decade’s time. Still, plenty of platitudes were paid to this plan suggesting that it was a combination of right and left wing ideas – it’s the season and all that. But what would an aggressive political operative who is interested in getting to real universal coverage – universal meaning “all” or 100% coverage that could not be lost or wound back – have to do to achieve that goal and reward the base? It would probably need some combination of a tax-based (whether you call it a premium, a tax or a mandate) system, administered through a series of insurers that looked like public utilities.

That end game would take four major moves. First, the doctors would need to be neutralized, they would need to be promised that their incomes would be maintained, and that insurers and Medicare would get off their backs, and stop micro-managing their decisions. Some of the super specialists and the entrepreneurial doctors would have to be sacrificed along the way, but the mainstream physicians would probably take that bargain.

Second, the two most significant power players in the healthcare system would have to be split. Some deal would have to be reached with the hospitals, in which the academic medical centers, the poorer county hospitals, and probably the bigger religious affiliated systems were split off from the more egregious for-profit and nonprofit systems. Again, like the doctors, they’d need promises of financial security and freedom.

Similarly, insurers like Mega Life and Health, who specialize in underwriting and selling policies with only minimal coverage – often under less than straightforward terms – would need to be split off from those insurers who at least seem to have potential to add value to the care management process. Something similar to this split was tried in 1993-4, and the the fly-by-night outfits launched the Harry and Louise commercials that helped put and end to the Clinton plan. This time, there are signs that some of the larger regional Blue Cross Blue Shield plans, as well as regional HMOs like Kaiser, might be interested in reaching a compromise. They could be allowed access to people covered by government programs (i.e. more customers) while being protected from being undercut by the cream skimmers in return for regulated rates and the freedom to stay in business.

Thirdly, some decision would have to be made about how to deal with the richest part of the healthcare system, the pharmaceutical and medical device companies. My guess is that the Dems can punt on dealing with these guys, because they don’t have that much of the healthcare sector going through them–it’s less than 15% of the dollars. But eventually their sector’s rate of financial growth would have to slow too, closer to the rates seen in Europe (where they are still incredibly profitable, by the way!)

Which leaves the fourth and trickiest part of the equation: how to keep the employers and the public on board. Make no mistake, if you cannot show employers that they will end up spending less, and upper and middle class Americans that they won’t have to pay substantially more tax to cover the poor, then any coalition in favor of universal care will fall apart. This will require roughly the same amount of money going into the system and covering more people.

Not an easy thing to do, which is precisely why this is a tough political equation, and probably won’t happen anytime soon. But there are signs that the public may be ready. A recent study in California did a complex analysis of the trade-offs required that would be acceptable to the public for universal health care. It found that in general they were willing to trade limits on futile end-of-life care for lower-cost universal insurance. No one usually dares explain this in the Terri Schiavo era, but it is excessive spending on a few very sick people that leads to the overall high cost of health care for everybody. If the public understands this and develops the cojones to say no, then there may be some hope for us getting to universal reform without having the massive tax increase which will politically kill it.

I doubt that anyone cares enough for the working poor who need universal coverage to make this happen. We’re not talking about the Bush base of the haves and the have-mores. But politically I think it can be done and eventually will be done. And it’s been a long time a coming.

Share  Posted by Matt Holt at 8:38 AM | Permalink

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