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The Lessons from History on Health Care Reform


With Congress returning from recess to consider health care legislation and the President set to deliver a major address on the subject to both houses of Congress tomorrow, a bit of history may be in order. An excellent starting place David Blumenthal's and James Marone's "The Heart of Power," which I reviewed for the New York Times this past weekend. Here are the major points:

Universal health care has bedeviled, eluded or defeated every president for the last 75 years. Franklin Roosevelt left it out of Social Security because he was afraid it would be too complicated and attract fierce resistance. Harry Truman fought like hell for it but ultimately lost. Dwight Eisenhower reshaped the public debate over it. John Kennedy was passionate about it. Lyndon Johnson scored the first and last major victory on the road toward achieving it. Richard Nixon devised the essential elements of all future designs for it. Jimmy Carter tried in vain to re-engineer it. The first George Bush toyed with it. Bill Clinton lost it and then never mentioned it again. George W. expanded it significantly, but only for retirees.

All the while, the ideal of universal care has revolved around two poles. In the 1930s, liberals imagined a universal right to health care tied to compulsory insurance, like Social Security. Johnson based Medicare on this idea, and it survives today as the “single-payer model” of universal health care, or “Medicare for all." The alternative proposal, starting with Eisenhower, was to create a market for health care based on private insurers and employers; he locked in the tax break for employee health benefits. Nixon came up with notions of prepaid, competing H.M.O.’s and urged a requirement that employers cover their employees. Everything since has been a variation on one or both of these competing visions. The plan now emerging from the White House and the Democratic Congress combines an aspect of the first (the public health care option) with several of the second (competing plans and an employer requirement to “pay or play”).

Devising a plan is easy compared with the politics of getting it enacted. Mere mention of national health insurance has always prompted a vigorous response from the ever-vigilant American Medical Association; in the 1930s, the editor of its journal equated national health care with “socialism, communism, inciting to revolution.” Bill Clinton’s plan was buried under an avalanche of hostility that included the now legendary ad featuring the couple Harry and Louise voicing their fears that the Clinton plan would substitute government for individual choice — “they choose, we lose.”

One lesson is that a new president must move quickly, before opponents have time to stoke public fears. After his 1964 landslide, Johnson warned his staff to push Medicare immediately because “every day while I’m in office, I’m going to lose votes. I’m going to alienate somebody. We’ve got to get this legislation fast.” George W. Bush started planning what became the Medicare drug benefit months before he was elected.

Clinton, by contrast, suffered from delay. Right after his election, national health insurance looked so likely that even some Republicans began lining up behind various plans. A year later, it was dead. In the interim, battles over Clinton’s budget and Nafta drained his political capital, gave his opponents ample time to rouse public concerns about government-sponsored health care and soured key allies like organized labor and the AARP.

Congress can be just as much of an obstacle: one lesson from history is that a president must set broad health reform goals and allow legislators to fill in the details, but be ready to knock heads together to forge a consensus. “I’m not trying to go into the details,” Johnson repeatedly said of his Medicare bill, yet he flattered, cajoled, intimidated and bluffed recalcitrant members until they agreed. “The only way to deal with Congress is continuously, incessantly and without interruption,” he quipped.

Carter, on the other hand, pored endlessly over his incipient health care plan, scribbling opinions in the margins about every detail, and dealt with Congress at arm’s length. And Clinton delivered a plan so vast and complex that even a Democratic Congress chose simply to ignore it. Republicans, meanwhile, decided that a defeat of Clinton’s health care bill would be seen as a repudiation of the new administration and might give them a shot at retaking the House and Senate.

Presidents who have been most successful in moving the country toward universal health coverage have disregarded or overruled their economic advisers. Plans to expand coverage have consistently drawn cautions or condemnations from economic teams in every administration, from Harry Truman’s down to George W. Bush’s. An exasperated Lyndon Johnson groused to Ted Kennedy that “the fools had to go to projecting” Medicare costs “down the road five or six years.” Such long-term projections meant political headaches. “The first thing, Senator Dick Russell comes running in, says, ‘My God, you’ve got a one billion dollar [estimate] for next year on health. Therefore I’m against any of it now.” Johnson rejected his advisers’ estimates and intentionally lowballed the cost. “I’ll spend the goddamn money.” An honest economic forecast would most likely have sunk Medicare.

It’s not so much that presidential economic advisers have been wrong — in fact, Medicare is well on its way to bankrupting the nation — but that they are typically in the business of thinking small and trying to minimize risk, while the herculean task of expanding health coverage entails great vision and large risk. Economic advice is important, but it’s only one source of wisdom.

Yet since Johnson, presidents have found it increasingly difficult to keep their economists at bay, mainly as a result of the growth of Washington’s economic policy infrastructure. Cost estimates and projections emanating from the White House’s Office of Management and Budget and the Congressional Budget Office, both created during the Nixon administration, have bound presidents within webs of technical arguments, arcane rules and budget limits. To date, Democratic presidents have felt more constrained by this apparatus than Republicans, perhaps because they have felt more of a need to prove their cost-cutting chops.

President Obama seems to have anticipated many of these lessons. He’s moved as quickly on the issue as this terrible economy has let him, and he has not been too rattled by naysaying economists (although the cost estimates of the Congressional Budget Office set him back). But although he outlined his goals but left most details to Congress, the lesson from history is that he may have waited too long to force a deal on that disorderly body (especially disorderly when Democrats are in charge). The question remains whether, in the weeks and months ahead, he can knock Congressional heads together to clinch it, and overcome those who inevitably feed public fears about a “government takeover” of health care and of budget-busting future expenditures. He needs to work fast, and be tough as nails.

But even if Obama fails, there is an art to losing, too — in a way that can tee up the issue for future presidents. Truman lost but nonetheless redefined the terms of debate, setting the stage for Medicare (which is why Johnson honored Truman when he signed it into law). Compare him with Clinton, who walked away from the wreckage of his health care plan and rarely mentioned the subject again. This allowed opponents to gain control over the spin and history, so that the Democrats’ signature cause slipped out of political sight for a decade.

Any history of the fight for universal care in America contains a subplot with a supporting actor who, although he never became president, is repeatedly heard from offstage — goading, pushing, threatening and pulling presidents of both parties toward universal coverage. Ted Kennedy first introduced his ambitious national health insurance proposal 40 years ago, and he never stopped promoting the cause. A deal he reached with President Nixon was the closest this country has ever come to universal care. Even before Kennedy’s death last month, his illness had tragically sidelined him just when his powerful voice was most needed. Yet when and if America ever achieves universal coverage, it will be due in no small measure to the tenacity and perseverance of this one remarkable man.

14 Comments

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Johnson ... intentionally lowballed the cost.
Bush intentionally lowballed the cost of the war in Iraq. Obama intentionally is trying to lowball the cost of the universal health insurance. Obama is in a good company.
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Well what is gonna help Americans more in the end.

Low balling health care.... or Iraq. As we have since seen the results of Iraq, im going with the former

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Well lying is not going to help Americans in the end.

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The birth of the HMO:

Ehrlichman: “Edgar Kaiser is running his Permanente deal for profit. And the reason that he can … the reason he can do it … I had Edgar Kaiser come in … talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because …”

President Nixon: [Unclear.]

Ehrlichman: “… the less care they give them, the more money they make.”

President Nixon: “Fine.” [Unclear.]

Ehrlichman: [Unclear] “… and the incentives run the right way.”

President Nixon: “Not bad.”

http://www.kaiserthrive.org/about-kaiser/

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Exactly!

Thank you. I remember hearing this exchange and I'm glad you were able to post it.

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The charismatic Obama, failed as the Leader.
He clearly failed to define the enemy.
An enemy that wants no part of compromise, an enemy bent on destroying your prospects of maintaining control.
He lost many of his supporters and base when he failed to PROTECT the weakest or lowly tiered, the vulnerable from eviction and foreclosures.
Thinking he had captive supporters, because where else could we go, Obama’s self assuredness, knew his base surely wouldn’t back Republicans since the election provided proof that even a man of color, a feat of historic significance, was a better alternative than a Republican.

Obama failing to grasp the momentum, backs the Banker class Capitalists over the middle class and poor, demoralizing his own troops.

Now, he rises up and, and, and; WTF, lets seek bipartisanship, lets compromise, we really don’t want to fight.
It is Obama, that seeks to lay down his arms, because he wouldn’t want to offend his masters, he wants to appease his Capitalist Insurance CEO’s.

Then telling his troops WE tried.

http://aotw.org/exhibit.php?exhibit_id=12

The American working class represented by Abraham Lincoln, had a similar problem when he had to Fire General McClellan (represented by Obama) for inaction, lack of command ability.
Frustrated by General McClellan's apparent inability to follow up on his 'victory' over Robert E. Lee, President Lincoln took a train to Western Maryland on October 1.
President Lincoln returned to Washington on October 4. Two days later McClellan received a telegram from Army chief Henry Halleck: "The President directs that you cross the Potomac and give battle to the enemy or drive him south. Your army must move now while the roads are good.
"... you are now nearer Richmond than the enemy is, by the route that you can take and he must. Why can you not reach there before him, unless you admit that he is more than your equal on the march? His route is the arc of the circle, while yours is the chord ... I would press closely to him, fight him if a favorable opportunity should present, and at least try to beat him to Richmond. I say "try"; if we never try, we shall never succeed..."

Obama is another McClellan, having fought the enemy and won, he failed to press forward, and lying back, he allowed the opponent to fire off shots without a major response. The enemy had been defeated and Obama allowed them to regroup.
Why, is it because he is a sympathizer?
Did you enjoy your trip to the Canyon or your vacation oversees Mr. President?

Because McClellan failed to press Lee, the War waged on for years.
Because Obama failed to press the enemy, we get to fight more battles against the enemy. Convenient if your goal is to benefit from continued battles and discord.
Those bad Republicans, those bad Democrats, all the while filling campaign coffers.
Then I suppose Obama can give excuses, tired from the battle he inherited, from the prior Administration. Healthcare was unable to achieve victory because so much was lost on the battlefield of the Financial Problem, necessary to Bail out the Capitalists.
Isn’t war great for the Capitalists?
If the Capitalists don’t want Healthcare, we won’t get Healthcare.
If the Union soldiers had not pressed the South, we’d still have slavery.

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Follwing on your line of reasoning then we need a Ulysses S. Grant to replace our current McClellan. Don't know who that might be other than Howard Dean or Bernie Sanders.

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Senator Sanders describes himself as a democratic socialist.[ a staunch supporter of a single-payer universal health care system

The leading voice in the Senate for the renegotiation of the North American Free Trade Agreement (NAFTA) and a strong opponent of the United States current trade policy towards Latin America and China
Opposed the 2003 invasion of Iraq
Fought for increased veterans benefits
Been a leader in calling for Media reform and opposes increased concentration of media outlets
He warns about the dangers of Global Warming and supports clean energy
Sanders fights for civil liberties from Government encroachment
He has also joined Rep. Paul in calling for an audit of the Federal Reserve,
http://en.wikipedia.org/wiki/Bernie_Sanders

Someone like Bernie Sanders,
I didn't see where Dean was any different than the rest of the Capitalist Democrats

I would accept some of the blame should fall on Reid and Pelosi.
When the Republicans were in power Chairmanships were threatened. Nothing speaks more to power than when the suggestion is you may lose it.

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Small prediction: not too long from now, we're going to see some Bob Woodward-style book giving us the first draft of history on the health care fight. In it we'll see how much the president was cajoling, flattering, and twisting congressional arms behind the scenes, much in the way Reich described it, and in ways that the pinhead press didn't notice. We may also be surprised how much the path to the signing of the final bill (yes, I do believe we'll get a signing) following the one laid out above.

We'll see how this holds up.

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Mr Reich inserts a line which he subsequently doesn't address:

"It’s not so much that presidential economic advisers have been wrong — in fact, Medicare is well on its way to bankrupting the nation — but that they are typically in the business of thinking small and trying to minimize risk, while the herculean task of expanding health coverage entails great vision and large risk."

So if Medicare is well on its way to bankrupting the nation, what is the PLAN to stop that from happening? Nothing from the President; Nothing from the Democrats in Congress; Nothing from the Republicans.

The proposals seem to be to make the problem bigger, then hope magic happens to decrease costs. Not the tough decisions Candidate Obama promised.

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Medicare is only 'on the way to bankrupting the nation' because health insurers, providers and drug companies have perverse incentives to keep costs high which has a direct effect on the costs of medicare. Medicare isn't the problem...our for profit health care system is.

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yep

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"So if Medicare is well on its way to bankrupting the nation, what is the PLAN to stop that from happening?"

Maybe the truth is finally coming to the fore.
To the Capitalists, GOVERNMENT IS THE PROBLEM.

In order to form a more perfect Union, is not the objective of laissez faire.

The Republicans are quite vocal about how Government is bad; the democrats are just more cunning about it.

I noticed today Mitch McConnell, Republican Leader, suggesting the Congress should start over on Healthcare reform.
WHY waste the time. Republicans will never believe Government will work; they’ve stated as much.

The Bankrupt Medicare program is a perfect example of the Norquist ideology.
Norquist has been noted for his widely quoted quip: "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub
Drowning the baby in a sea of debt will eventually kill it.

I remember an illustration of a city bus driver who would drive off, even though he saw people running to catch the bus. When asked about it, he complained how it aggravated him that people were not ready when he came. Evidently never realizing his job depended upon riders.

Just as the riders aggravated the bus driver, the working poor apparently aggravate the Congress and their Capitalist Masters

It is becoming apparent that both parties are finding their subjects are whiners, becoming burdens on the FREE ENTERPRISE system.
Why would a Capitalist want to be taxed, in order to provide for someone else, to subsidize the least amongst us?

The Americans for Tax Reform mission statement is "The government's power to control one's life derives from its power to tax. We believe that power should be minimized”
Norquist founded Americans for Tax Reform in 1985, at the request of President Ronald Reagan, and has headed the organization ever since
http://en.wikipedia.org/wiki/Grover_Norquist

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The Republicans are not the problem. There aren't enough of them in the population to stop SMART reform. The issue is that Independents have turned against current reform proposals because they don't hold water -- increase coverage, provide subsidies, mandate insurance for all, have a new public insurance option, tell everyone that "if you like what you have, it will not change", then *magic* happens and costs come down. It isn't credible.

Maybe the President should demonstrate that he can have Medicare "bend the cost curve" before having all the other parts of reform enacted. Have Medicare negotiate prices, institute cost controls, demonstrate success and the Independents will support the President and Democrats for a generation.

Don't obsess about Mitch McConnell or Grover Norquist. Self-described republicans are less than 30% of the population; they can be ignored if the President can get the independents on our side.

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Robert Reich

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