Is Obama Naive About the For-Profit Health Industry's Commitment to Real Reform?

Optimism is a virtue; it leads us to see the best in people despite
their worse sides, and to envision a better future even when we can
clearly see the obstacles we currently face. But blind
optimism is no virtue. Naive or overeager optimism can lead us to
ignore the fact that most people have mixed motives, and to envision a
bright future so clearly that we are blind to the obstacles that stand
between a hard now and a better then. Wise optimists trust - but
verify; they have faith in the better, but do not ignore the worse,
angels of human nature.

On Sunday afternoon, two senior Obama Administration
officials called a telephonic press conference to announce a huge,
positive new development in the healthcare reform effort. When I say
senior, I mean pretty darn senior. And they seemed genuinely, sincerely
excited about this mysterious new development - excited enough to buzz
every national journalist's BlackBerry with an invitation to the
conference call in the middle of Mother's Day. They considered the
development significant enough to declare an embargo, forbidding
journalists to write about it until 9 p.m. Eastern Standard Time.
Because the President himself will be announcing this development
officially tomorrow morning, they made the call - arranged by the White
House press office - "on background," asking not to be identified by
name or position.

The big news? Just this: a coalition of health insurance,
hospital, pharmaceutical company, and physician trade groups, plus a
major union, will promise the President Monday that they will reduce
the rate of future growth in the cost of healthcare by 1.5% per year for the next decade.

That's it. And the President will be announcing it himself Monday morning, presumably with equal excitement.

Healthcare will continue to be increasingly expensive for
consumers, but not quite as quickly as it was going to be. 7% per year
inflation will become 5.5% per year inflation -- that is, if
the participants keep their promise. Which, according to the officials,
they'll do, not because there's any kind of enforcement mechanism -
there isn't one - but simply because they're "Americans."

(That's a quote: Big Pharma, the health insurance lobby, the American Medical Association, hospital industry groups, et al. are going to reduce costs, and presumably profits, solely because they're good "Americans.")

The senior administration officials were hyperbolic, if not
hyperventilated. One, focusing on the political battle to enact
healthcare reform, called this promise by industry trade groups "a game

The other official, focusing on economic issues, saw this as nothing less than the salvation of the entire federal budget:

"I don't think there could be a more significant step to
help struggling families and to help the federal budget than reducing
the growth rate of healthcare spending by 1.5 percentage points per
year. With regard to the federal budget... the only way that we are
going to restore the nation to a sound fiscal path over the long term
is to reduce the growth rate in health care costs... Reducing the
growth rate of health care costs overall by 1.5% per year would
virtually eliminate the nation's long term fiscal gap. ... This, by an
order of magnitude, is far more important [than Social Security or
related reforms] to the fiscal trajectory that we're on, especially
over the long term, than anything else that could be done."

Remember, we're talking about slightly reducing the rate of growth in health care costs, not a reduction in health care costs themselves. That's what's supposedly going to save both American families and the nation's fiscal problems "over the long term."

The journalists on the call, understandably, were more
skeptical. The biggies queued up to ask questions: reporters from the
New York Times, Wall Street Journal, Associated Press, Washington Post,
NBC News, CNN, Los Angeles Times, Reuters. Some asked for wonkish,
green-eyeshade details (answers were rarely forthcoming).

Other reporters questioned what mechanisms were in place for making sure those promises are kept (answer: there are none).

In response to a question from Reuters, one of the officials put his
trust in the bully pulpit and the Fourth Estate, saying, "I don't know
how many of you have made, in-person, a commitment to the President of
the United States... There will be accountability not only through
regular check-ins with the President of the United States but also
through the media, because I have no doubt that you all will be
checking up on them."

The other official simply believes that pharmaceutical, insurance
and hospital trade groups are acting in patriotic good faith, saying,
"These are very sophisticated trade associations which in the past
have, one could argue, dragged their feet when it came to the subject
of health care reform and certainly cost containment. They're coming
forward voluntarily, approaching this President and saying, we want to
be part of the solution, we want to be part of getting health care
reform done... That fundamentally aligns these major provider groups
with the President's goal of getting health care reform done this year.
That is a game changer in our opinion."

Eliza Marcus of Bloomberg and Michael Fletcher of
the Washington Post asked outright whether the healthcare industry was
buying something with this concession. One of the officials dismissed
the possibility denied that there have been any discussions at all
about the public plan or any other quid pro quo, instead casting the
industry coalition in purely patriotic terms: "They put it to me that
everybody must share responsibility... they want to get everybody
covered..., and they said to me, we know we have to do our part... this
is them coming forward as Americans to get this done."

Am I the only one who is puzzled at the Administration
taking these groups at their word? Big Pharma, for example, hasn't made
a concession yet without something being in it for them. Many of the
groups participating in this initiative historically have opposed
health care reform and are large donors to the Republican and Vichy Dem
politicians who are preparing to mount a political and rhetorical
battle against health care reform, as evidenced most recently by the
leak of Republican pollster Frank Luntz's crassly cynical talking points memo on how conservative and industry opponents of healthcare reform can "spin" Obama's plan so it sounds like Mandatory Gay Nazi Communism.

It's difficult to believe that the concessions being made by the
for-profit members of this "patriotic" coalition are unrelated to any
hope that Obama can be persuaded to drop his current proposal to
include an inexpensive, government-backed, single-payer-style
healthcare plan among the options available to consumers once
healthcare reform passes later this year. That government-backed option
scares the for-profit healthcare industry, because they know they can't
compete with it; Medicare, for all its faults, still has the lowest
administrative costs than any other health provider in the country, and
delivers competent care to millions of Americans who otherwise would go
uninsured. For-profits can't top that -- and they know that if millions
of Americans sign up for federally-run healthcare and see that it
works, the inertia towards single-payer healthcare for everyone may
become a juggernaut.

The last question of the call, happily, went to me. I wanted, first,
to confirm that the grand announcement was merely about a reduction in
cost increases, not a reduction in cost, and second, to know whether
Obama, himself, considered a public health care option to be beyond

I didn't like the answers I got, though. The first tells me that the
Administration is getting too excited about too little. The second fell
short of the adamant reassurance I wanted to hear. But decide for

Bellows: "I have two questions. The first is following up
on Michael Fletcher's and Eliza Marcus' questions: is the President
still insistent that a public health plan will be among the options
offered to people, or is that a bargaining chip in any way? And the
second question, following up on Andrew Beatty's: is it correct that
the cost per capita will still increase, just not as much as it
previously was projected to?

Senior Administration Official #1: "On the second
question, the answer to that is yes. Again, what we're talking about
here is reducing the growth rate, so yes, health care costs, you should
anticipate health care costs will continue to rise, but achieving a
slowdown in the rate at which they increase is a, would be a huge
accomplishment in terms of freeing up resources for other priorities
and in terms of relieving pressure on the federal budget."

The official continued with a justification for accepting
continued healthcare cost increases: "One of the reasons that you
should expect health care costs to continue to increase is not only
that the population is aging, which puts some upward pressure on health
spending, but also that as incomes rise over time, it is natural that
people want to spend part of their additional income on health care...."

Senior Administration Official #2 on questions one: "On
the public plan, this event with the President tomorrow is not about
the public plan, we've had no discussion with this group about the
public plan, in fact, if I look at the list of trade associations that
are part of this, there are different views about it, but the President
likes the public plan, it's part of his campaign platform."

I'm not normally a knee-jerk cynic, but this simply
sounds naive to me. One of the Obama administration's mantras is "don't
let the perfect become the enemy of the good." But in these times, with
this mandate and the American people's rare but undeniable hunger for
radical change, their motto ought to be: "Don't let the good be the
enemy of the perfect."

Radical health care reform - reform
that doesn't shave health care costs for regular people, but slashes
them; reform that doesn't force single-payer healthcare on the American
people too soon, but sets the stage for their eventual, uncomplaining
acceptance of it - is within Obama's grasp. He'd be wrong to settle for
merely "good" health care - for health care that merely slows the rate
at which costs increase, or health care that doesn't include a
government-payer option that would demonstrate that a
government-sponsored plan can provide better care at lower cost than
any profit-driven private plan is capable of.

Single-payer, low-cost healthcare is America's future. By taking
for-profit corporate lobbyists at their word, is Obama setting himself
up to agree to step off the path to that future? Obama has, within his
grasp, that once-in-a-lifetime rarity: a plan that is both nearly
perfect, AND achievable. Will he reassure us that nothing less will do
for the American people -- people who have put their trust in his
commitment to do more than compromise?

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