It's the Process, Not the Plan
I appreciate the opportunity to join the discussion of Jonathan Cohn's book and his opening argument here. Like Jon, I'm torn between what he calls the “hybrid” approaches such as the Wyden plan and single-payer. But, along with Jacob Hacker, I don't quite agree that, “a discussion about changing public policy ought to start with a discussion about which policy would actually work best, whatever the politics.” It's hard to really disagree with such a noble and common-sense statement, but if one really does think that single-payer is a non-starter for political or cultural reasons, while a politically feasible -- albeit less efficient -- alternative is on the table, then it would be foolish and even immoral to hold out for the unattainable ideal, while letting millions of people endure the suffering and inadequate care described in Sick.
Further, I'd point out that not only do many advocates of hybrid approaches admit they prefer single-payer as policy, many also say – very quietly – that they think a well-designed hybrid might begin to look a lot like single-payer, or would evolve into single-payer. That this is always said sotto voce should be an indication of just how unthinkable we all think single-payer really is. But if it's the best solution, and we could get to it through the back door... well, so what? (That said, I'm often wary of schemes that assume one thing is going to inevitably evolve into something else, or that having set something up we can fix it. As Jacob's book The Divided Welfare State shows, we often wind up stuck with solutions that make little sense except as the first step to something else, and the something else never arrives.)
So the important question in my mind is whether the political analysis that holds that the hybrid approach is saleable while single-payer is not is really solid. The hybrid strategies, broadly speaking, would reduce the burdens on employers (either by subsidizing insurance for their employees, or creating a structured marketplace for them to purchase as individuals) and retain a place for insurance companies. In doing so, we expect that the opposition of both employers (because their costs will be reduced or made more predictable) and insurance companies (because they will not be put out of business) will be at least muted.
Let's treat the two constituencies separately, and also note that there are differences within them. Large employers that provide insurance to most employees are most interested in making health care costs stable and predictable, and would be better off under just about any conceivable system, with the exception of a raw employer mandate with no cost controls. They would be better off with single payer, better off under the 1994 Clinton plan, better off under any of the hybrids on the table. Employers that don't provide health care, such as a lot of small employers, and low-wage big employers such as Wal-Mart, and those that provide cheapskate health care of one kind or another, are going to be better off as well (reduced absenteeism, productive workers, etc.), but in terms of the immediate bottom line, they will be worse off under just about any system. Either they will pay higher taxes, or deal with a mandate.
Insurers will of course be screwed by single-payer, but not all of them will thrive under the hybrid schemes. Most hybrids (the Wyden plan, for example) would require insurers to offer a basic benefit package, with community rating and guaranteed issue, and would subsidize the cost of that basic package. Rather than competing as they do now to reduce their exposure to risky customers, insurers would compete to offer the basic benefit most efficiently. That's good, but it almost certainly means that one or two insurers would dominate the market, just as the Blue Cross/Blue Shield Standard Option dominates the Federal Employee system. To generalize, a few insurers, like the Blues and Kaiser, would thrive under a hybrid, many other insurers would not.
So, according to theory, a "hybrid" system should have political support from two critical sectors: Large employers and large insurers. But will it? Not necessarily. Obviously, big business did not support reform that was in its interest in 1994. That's partly because it was mishandled, partly because of the rise of the NFIB to preeminence among business interest groups. And partly it was because of business's allegiance to the Republican Party. If big business sees its more fundamental interest in electing tax-cutting, deregulating, friendly Republicans, then except for a few idiosyncratic CEOs, they will not support a Democratic initiative on health care. Last year, Senator John Sununu of New Hampshire told a business group, "stop complaining about health care costs. There is no solution." Essentially Sununu is saying, you're better off with Republicans but you have to forget about health care, and many business leaders are likely to put their alliance with the Republican party ahead of their worry about health care.
My conclusion from this is that we are relying way too much -- in typical liberal policy-wonk fashion -- on the details of the plan to do the political work for us. The assumption is that if we construct the details in a way that is demonstrably to the advantage of the key political constituencies, we can then sell it to them effectively, and at least limit their opposition, and that if large businesses are supportive, perhaps some Republicans will be too. (Not to mention the relatively conservative Democrats who will be essential, such as Max Baucus, chair of the Senate Finance Committee.) But all experience suggests that's not the way the world works.
Thus I think the key to winning the politics of health care is in the process, not the details of the plan. How do you win broad consensus, including among social conservatives, for the urgency of reform? (Jon takes one step by demonstrating that the actual health outcomes of both the insured and the uninsured are made worse by the current system.) Who is seriously willing to be part of a process of developing a plan that they will then put their weight behind, and who is not? And where are the lines of the fight drawn? That is, who will we define as the enemies of reform? The latter questions cannot really be answered until we understand the political climate of 2009, which means not just the numbers of Democrats in the Senate but, for example, whether big business recognizes that a political marriage with the Republican Party is not in its interest. That climate, and the process, in turn, will determine what's actually politically feasible. We should not presume to know now what can be passed in two years.
And that's why I commend the one politician who seems to understand that putting together an elaborate health care plan at the campaign stage is an irrelevant waste of valuable time. The process starts on Inauguration Day.
Basic negotiating theory says that if the tableau is:
2 - your preference
5 - what you think can be realistically achieved
10 - your adversary's preference
you don't start by putting 5 on the table. You start by putting 1, 0, or -10 on the table and working from there.
Of course, the Democrats tend to open with 7...
sPh
April 11, 2007 11:33 AM | Reply | Permalink
It is very important to understand that it is not true that a single-payer health system would mean the end of private health insurance. It just means that the health insurance market will change. It will change quite dramatically to be sure, and it will get smaller, but it will not disappear.
To see why this is the case, all you need to do is look at the countries where single-payer is already in effect. Even in the UK, the ultimate single-payer system, there is still health insurance.
This is because under any conceivable single-payer plan, not all possible health expenses would be covered. There will inevitably be a market for people who want better, more expensive service that should be covered by insurance. Employers that want to attract the best people will continue to offer insurance as a benefit.
This is not to say that it will be possible to convince insurance companies to support single-payer. To be sure, they will fight it tooth and nail. It's just that the idea that insurance will disappear and we will all be subject to a lowest common denominator single package of benefits under a single-payer plan is just not true.
April 11, 2007 11:50 AM | Reply | Permalink
"then it would be foolish and even immoral to hold out for the unattainable ideal"
Starting the discussion with the best ideal is not the same as holding out for the unattainable ideal. Not the same thing at all.
You start with the best- and then, if need be, compromise, reach a negotiated solution. But you don't avoid discussing the best or ideal solutions. That leaves the actual negotiation starting from an already compromised position.
April 11, 2007 12:12 PM | Reply | Permalink
A post that starts with a political perspective one often associates with compromise is not going to be popular here, but I do appreciate that it ends up contradicting the conventional wisdom that it's precisely the hybrid compromise that's most feasible politically. True or not, the arguments are going to be useful in building support for sweeping change.
It mentions in passing also that a hybrid might easily lead to something else. That clearly depends on how the hybrid is structured. The trick, if that's what we do get, is to make it comprehensive enough in several regards. The public-sector half should be comprehensive enough that it could already provide a template for single payer; that rules out "start with children," "we'll help you if you earn under $30K," or any other idea that simply is not universal coverage.
It also has to be comprehensive enough so that that the private-sector half is constrained. It shouldn't be allowed to exclude people or restrict care such that the public sector takes on the greatest expenses, "proving" that government doesn't work. And it shouldn't be allowed to cherry pick if that means lowering its own costs, encouraging businesses and individuals to stay there and not switch.
Thus far, it's been a healthy debate, I think, with pretty much all posts agreeing on those principles and thus leaning to single payer or the Edwards plan. Sadly, Nathan thus far is the exception, when unions should be leading the charge and not, as in past health-care debacles going back half a century, protecting their own. I know they can do better, and they should start showing it.
John
http://www.haberarts.com/
April 11, 2007 12:26 PM | Reply | Permalink
True,
Even better look at the example of the largest Single payer system in this country; Medicare. You can't watch TV for long without seeing ads for Medicare supplemental insurance.
My incrementalist plan is simple, the goal is medicare for all, ideally everyone right away, if that isn't possible the way to get there is start by including everyone 25 and under and 55 and older, if you can't get that go for 22 and 60 and so on, once you get it keep going back to narrow that age gap.
April 11, 2007 12:26 PM | Reply | Permalink
This is a truly astonishing thing to say. But it captures perfectly the essence of conservative philosophy. Problems affecting real people may be truly dire and people suffering. But if there isn't a solution that comports well with conservative dogma, the answer should be "tough shit". The political viability of such an approach is directly proportional to the level of contentment felt by most people. In 1932, people needed more than "tough shit" from their government as they waited on bread lines. It remains to be seen whether enough people are fed up with the current health care system to say that "tough shit" isn't good enough there as well.
This is one of the reasons why I think it is so misguided to put business-bashing at or near the top of the Democrats' agenda. The turning point in the health care debate will happen, in my opinion, when some smart Democrat makes it his business to peel away big business from the Republicans on the strength of the health care costs issue. Business is a natural ally on this issue and when business gets behind single-payer, which they will do eventually, the ground will shift. Someone should be making the case to CEOs that health care is the single biggest cost item that they have some measure of control over. Support Democrats and watch your bottom line increase as a revamped health care system starts to bring costs under control.
April 11, 2007 12:54 PM | Reply | Permalink
A few comments-
The pulse of the nation has changed since "Harry and Louise" days of early 90s. The U.S. electorate is hungry for national action on health care.
No nation on the planet has figured this issue out completely. It may be unfathamable? But the U.S current situation is,to me as a physician and a U.S. citizen,yet another national embarrassment.
Shame on us for deifying the free market in health care. Human flesh and souls are not commodities-period.(If I sound preachy then so be it)
And may god have mercy on us if we try to export the current U.S. Health Care model to undeveloped or underdeveloped nations!
I don't think we can wait for Inauguration day in early 09 to test the political waters. The electorate want to hear details from every presidential candidate now.
Dr. Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com
April 11, 2007 2:02 PM | Reply | Permalink
The U.S. electorate is hungry for national action on health care.
Maybe so, although I've never seen a poll of the "electorate" -- all 55-60% of American adults -- which says so.
The real question is whether the 7-8% of unaligned and persuadable independents are hungering "for national action on health care" such that they'll vote Democratic because the Democratic candidate promises to do something.
Any evidence that they will? If not, this week's debate is nothing much more than a Wofford moment.
April 11, 2007 3:02 PM | Reply | Permalink
I totally agree with your point here, sPh.
One problem, though, is that I don't think Democrats yet
realize how extreme their opponents' position is on this issue. Mr. Schmitt hints at how graphically callous that position is, but I think most people would have to be shocked into accepting that it is actually that extreme.
Put health care into the moral/ethical context of the war debate. The right has no qualms sending other people's sons and daughters to die in a war that may have no purpose other than money interests - how interested are those people in other people's health status, if they'll send others' children to die to be able to keep or make money?
There should be diametric opposition here. There isn't.
I can imagine folks on the "left" thinking my comments are extreme. But they come from another man, largely, one who said things like "no one can serve two masters - God and Money;" "it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven;" and "that which you do not do for the least of these, you do not do for me."
We on the "left" should stop allowing the right to make money our master. In no uncertain terms.
As I've just commented to Mr. Newman, it has to be understood, I think, that this particular issue too well abstracts the larger moral/ethical/political context for us to think we can address it in isolation - we have to accept that defending universal health care means opposing unbridled free-market capitalism, in no uncertain terms, whether we like it or not. That's what it represents to those who oppose it; to them, it's the furthest thing from business as usual, and we have to defend it on that level.
April 11, 2007 3:22 PM | Reply | Permalink
I think the terminology might be changed to make the challenge more clear.
Logic uses the terms "necessary" and "sufficient", which might be mapped to rhetorical terms like "unacceptable" and "acceptable."
Where this issue is concerned, we should be asking what's acceptable, and what isn't. I believe, as I think most on the "left" do, that anything less that universal health care coverage is unacceptable. And we must understand how the right sees this - as Mr. Schmitt and Mr. Newman both suggest at least implicitly, the right sees the opposite, that universal health care coverage is unacceptable, for ideological reasons, which Mr. Newman got right - it sets a new precedent that they really, really hate. The last thing they want to have demonstrated is that universal coverage can be less costly - that threatens their ideology by its own measures, much like Bill Clinton did by balancing the federal budget by raising taxes on higher incomes.
Simply put, they cannot allow a success on a socialist program of this scope and scale to set an example for other such programs.
We need to be clear about whether or not our principles include the assertion that anything less than universal health care coverage is unacceptable, that any compromise must meet at least that necessary condition.
Beyond that, discussions of ideal vs. acceptable can range far and wide, but we need to be clear about at least what we think is acceptable or not, and also understand what our political opposition thinks is acceptable or not. This is not an issue whether the point of compromise is a matter of ideal vs. not, but an issue of fundamentally conflicting ideas about what is merely acceptable or not.
April 11, 2007 3:41 PM | Reply | Permalink
From my readings downcolumn, I've learned that the required political process is really very simple. All we have to do is:
1. De-stigmatize "socialism".
2. Remove the pernicious influence of money on politics.
3. Fix the voting machines.
4. Some other stuff, and then ...
5. Enact single-payer health care.
Mark is correct in that it would be naive to expect the support of everyone who is advantaged by the proposed reform, and that we may encounter intense opposition from stakeholders who are not intensely disadvanraged.
That doesn't mean it's futile to plant steppingstones and plot paths through the bog ... or that incremental trajectories must necessarily leave us stranded in mid-morass.
I do think we can find our way, and I think we can premeditate most of it.
I do not think we can have Single Payer Now.
We can have mandates and subsidies Now, i.e., 2013 or so, foreclosing Single Payer. Or we can have a strategic increment now toward SP, and Single Payer in 2020 or so. Or we can insist on Single Payer Now, totally miss the pinata, and go back and take our place in line for another 15 years.
April 11, 2007 3:43 PM | Reply | Permalink
Shorter Mark Schmitt:
It ain't the meat it's the motion
That makes your daddy wanna rock
It ain't the meat it's the motion
It's the movement it isn't the stock ...
(Mann & Glover, 1951)
Could be right.
April 11, 2007 4:10 PM | Reply | Permalink
Someone should be making the case to CEOs that health care is the single biggest cost item that they have some measure of control over. Support Democrats and watch your bottom line increase as a revamped health care system starts to bring costs under control.
The CEOs will have to understand who is going to pay the taxes to support single payer. If it is a tax on their business that replaces the premiums they currently pay plus something to cover the uninsured, then they need to bet on the promised efficiencies of single payer and they may be skeptical. Once that tax is in place, health care cost really is out of their control. There will have to be a margin built in to cover the other perceived risks to their business of having Democrats in charge in Washington.
April 11, 2007 6:17 PM | Reply | Permalink
Mark writes: "Most hybrids (the Wyden plan, for example) would require insurers to offer a basic benefit package, with community rating and guaranteed issue, and would subsidize the cost of that basic package. Rather than competing as they do now to reduce their exposure to risky customers, insurers would compete to offer the basic benefit most efficiently."
Unfortunately, this is not true. Perhaps because the health insurance business is unlike most other businesses and it is just plain impossible to distinguish among insurance plans other than based on a few bells and whistles, insurers do not appear to compete based on efficiency. Nor do they compete to deliver the best treatments to their policy holders who will most need them. Based on my knowledge of how the new prescription drug benefit under Medicare and Medicare private plans work, obligating insurers to deliver standard benefits to everyone at the same rate still leads them to compete to reduce their exposure to risky customers. Humana's first attempt at a drug benefit for people with Medicare in 2006 is telling. It offered one plan that filled the coverage gap and covered their brand name drugs. Guess what? Lots of people who needed high-cost brand name drugs signed up for this product, so Humana was losing money on it and Humana pulled this product from the market in 2007. Interestingly, Sierra Health Services decided to offer brand name coverage through the coverage gap in 2007. So what is Humana alleged to have done? Advised its members with high cost brand name drugs to switch to Sierra Health. It's good advice for the policy holders, helping them to get the coverage they need and great advice for Humana, allowing Humana to shift risk to Sierra Health. But, it's bad news for Sierra Health. In fact, such bad news for Sierra's bottom line that Kaiser reported on April 10 that Sierra is dropping that coverage. It is simply losing too much money selling people the product they need.
April 12, 2007 6:56 AM | Reply | Permalink
Good points. "Guaranteed issue" just shifts the game to one of covert discrimination.
There are many ways to discourage the people you don't want in your program, and they'll all be employed brilliantly as the bureaucracy strives to keep up.
Analogy, the history of racial discrimiation, post-1960s de jure reforms.
Single pooling is the key. (One reason I disfavor state-level plans, BTW.)
April 12, 2007 8:49 AM | Reply | Permalink
And again utilization skew governs the dynamics. Typical insureds, in large numbers, no matter how efficiently disposed, don't make or break the insurer's bottom line. It's the few bad hands that deterrmine profit or loss at the end of a session.
April 12, 2007 8:59 AM | Reply | Permalink
RogerGathman
SPH's comments are the start of an interesting discussion about how to make something culturally and politically viable. Schmitt's assumption is that all political action flows exclusively from the parties. Thus, "but if one really does think that single-payer is a non-starter for political or cultural reasons, while a politically feasible -- albeit less efficient -- alternative is on the table, then it would be foolish and even immoral to hold out for the unattainable ideal". That sentence sums up the faulty logic that has paralyzed liberals for all too long. In fact, it gets the facts completely backwards: reform in America depends crucially on people outside the bounds using their imaginations. It was not within the Democratic or Republican party that the civil rights movement started - it was outside, and it pressed on both parties to make changes. What was true for civil rights - in fact, true for all progressive movements - is also true for business. Typically, businesses hedge their bets because they operate outside the party system, pressing both parties to get what they want.
The response of those inside the Democratic party or their pundits has been, for a long time, don't do anything to make the Democrats look bad. And anything means, engage in traditional progressive movement building. But eviscerating movement building is destroying the condition for progressive politics. Health and environmental issues are going to loom ever more insistently in our lives over the next decades. To fight out the way in which those issues are formed, what lines are "acceptable", what solutions become 'permissable", one has to break the lock of thinking that political solutions stem from political parties. Rather, political parties operate as early (or late) users of programs created elsewhere.
April 28, 2007 1:48 PM | Reply | Permalink