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President Obama on trading off health policy for political victory

November 19, 2020

Topics: Quote of the Day

The story behind the Obama Administration’s most enduring—and most contested—legacy: Reforming American health care

By Barack Obama
The New Yorker, October 26, 2020, Published November 2, 2020

When I think back to those early conversations, it’s hard to deny my overconfidence. I was convinced that the logic of health-care reform was so obvious that even in the face of well-organized opposition I could rally the American people’s support.

As for the political hazards that Axe and Rahm worried about, the recession virtually guaranteed that my poll numbers were going to take a hit anyway. Being timid wouldn’t change that reality. Even if it did, passing up a chance to help millions of people just because it might hurt my reëlection prospects—well, that was exactly the kind of myopic, self-preserving behavior I’d vowed to reject.

The question was whether we could get it done. Any major health-care bill meant rejiggering a sixth of the American economy. Legislation of this scope was guaranteed to involve hundreds of pages of endlessly fussed-over amendments and regulations.

There was also the question of how to pay for the changes. To cover more people, I argued, America didn’t need to spend more money on health care; we just needed to use that money more wisely.

In other words, both the politics and the substance of health care were mind-numbingly complicated. I was going to have to explain to the American people, including those with high-quality health insurance, why and how reform could work. For this reason, I thought we’d use as open and transparent a process as possible.

Among many progressives, the need to replace private insurance and for-profit health care with a single-payer system like Canada’s was an article of faith. Had we been starting from scratch, I would have agreed with them; the evidence from other countries showed that a single, national system—basically, Medicare for All—was a cost-effective way to deliver health care. But neither Massachusetts nor the United States was starting from scratch. Teddy, who despite his reputation as a wide-eyed liberal was ever practical, understood that trying to dismantle the existing system and replace it with an entirely new one would be both a nonstarter politically and hugely disruptive to the economy. Instead, he’d embraced the Romney proposal and helped the Governor line up the Democratic votes in the state legislature required to get it passed into law.

The slow march toward health-care reform consumed much of the summer. As the legislation lumbered through Congress, we looked for any opportunity to help keep the process on track. The good news was that the key Democratic chairs—especially Baucus and Waxman—were working hard to craft bills that they could pass out of their respective committees before the traditional August recess. The bad news was that the more everyone dug into the details of reform, the more differences in substance and strategy emerged—not just between Democrats and Republicans but between House and Senate Democrats, between the White House and congressional Democrats, and even between members of my own team.

Politically and emotionally, I would have found it a lot more satisfying to just go after the drug and insurance companies and see if we could beat them into submission. They were wildly unpopular with voters, and for good reason. But, as a practical matter, it was hard to argue with Baucus’s more conciliatory approach. We had no way to get to sixty votes in the Senate for a major health-care bill without at least the tacit agreement of the big industry players.

By the end of June, they’d hashed out a deal, securing hundreds of billions of dollars in givebacks and broader drug discounts for seniors using Medicare. Just as important, they’d gotten a commitment from the hospitals, insurers, and drug companies to support—or at least not oppose—the emerging bill.

It was a big hurdle to clear, a case of politics as the art of the possible. But for some of the more liberal Democrats in the House, where no one had to worry about a filibuster, and among progressive advocacy groups that were still hoping to lay the groundwork for a single-payer health-care system, our compromises smacked of capitulation, a deal with the devil. More than a few constituents wrote in to ask whether I’d gone over to the dark side.

A preliminary report by the Congressional Budget Office, the independent, professionally staffed operation charged with scoring the cost of all federal legislation, priced the initial House version of the health-care bill at an eye-popping one trillion dollars. Although the C.B.O. score would eventually come down as the bill was revised and clarified, the headlines gave opponents a handy stick with which to beat us over the head. Democrats from swing districts were now running scared, convinced that pushing forward with the bill amounted to a suicide mission. Republicans abandoned all pretense of wanting to negotiate, with members of Congress regularly echoing the Tea Party’s claim that I wanted to put Grandma to sleep.

The only upside to all this was that it helped me cure Max Baucus of his obsession with trying to placate Chuck Grassley. In a last-stab Oval Office meeting with the two of them in early September, I listened patiently as Grassley ticked off five new reasons that he still had problems with the latest version of the bill.

“Let me ask you a question, Chuck,” I said finally. “If Max took every one of your latest suggestions, could you support the bill?”

“Well . . .”

“Are there any changes—any at all—that would get us your vote?”

There was an awkward silence before Grassley looked up and met my gaze. “I guess not, Mr. President.”

I guess not.

To overcome the possibility of a filibuster, Harry couldn’t afford to lose a single member of his sixty-person caucus. And, as had been true with the Recovery Act, this fact gave each one of those members enormous leverage to demand changes to the bill, regardless of how parochial or ill-considered their requests might be.

This wouldn’t be a situation conducive to high-minded policy considerations, which was just fine with Harry, who could maneuver, cut deals, and apply pressure like nobody else. For the next six weeks, as the consolidated bill was introduced on the Senate floor and lengthy debates commenced on procedural matters, the only action that really mattered took place behind closed doors in Harry’s office, where he met with the holdouts one by one to find out what it would take to get them to yes. Some wanted funding for well-intentioned but marginally useful pet projects. Several of the Senate’s most liberal members, who liked to rail against the outsized profits of Big Pharma and private insurers, suddenly had no problem at all with the outsized profits of medical-device manufacturers with facilities in their home states and were pushing Harry to scale back a proposed tax on the industry.

Whatever it took, Harry was game. Sometimes too game. Occasionally, he’d dig his heels in on some deal he wanted to cut, and I’d have to intervene with a call.

For us, the slog through the Senate was a P.R. nightmare. Each time Harry’s bill was altered to mollify another senator, reporters cranked out a new round of stories about “backroom deals.” And things got markedly worse when Harry decided, with my blessing, to strip the bill of something called the “public option.”

From the very start of the health-care debate, policy wonks on the left had pushed us to modify the Massachusetts model by giving consumers the choice to buy coverage on the online “exchange,” not just from the likes of Aetna and Blue Cross Blue Shield but also from a newly formed insurer owned and operated by the government. Unsurprisingly, insurance companies had balked at the idea of a public option, arguing that they would not be able to compete against a government insurance plan that could operate without the pressures of making a profit. Of course, for public-option proponents, that was exactly the point. By highlighting the cost-effectiveness of government insurance and exposing the bloated waste and immorality of the private-insurance market, they hoped the public option would pave the way for a single-payer system.

It was a clever idea, and one with enough traction that Nancy Pelosi had included it in the House bill. But, on the Senate side, we were nowhere close to having sixty votes for a public option. There was a watered-down version in the Senate Health and Education Committee bill, requiring any government-run insurer to charge the same rates as private insurers, but, of course, that would have defeated the whole purpose of a public option. My team and I thought a possible compromise might involve offering a public option only in those parts of the country where there were too few insurers to provide real competition and a public entity could help drive down premium prices over all. But even that was too much for the more conservative members of the Democratic caucus to swallow, including Joe Lieberman, of Connecticut, who announced shortly before Thanksgiving that under no circumstances would he vote for a package containing a public option.

When word got out that the public option had been removed from the Senate bill, activists on the left went ballistic.

I found the whole brouhaha exasperating. “What is it about sixty votes these folks don’t understand?” I groused to my staff. “Should I tell the thirty million people who can’t get covered that they’re going to have to wait another ten years because we can’t get them a public option?”

It wasn’t just that criticism from friends always stung the most. The carping carried immediate political consequences for Democrats. It confused our base (which, generally speaking, had no idea what the hell a public option was) and divided our caucus.

Olympia Snowe braved a blizzard to stop by the Oval and tell us in person that she’d be voting no. But it didn’t matter. On Christmas Eve, after twenty-four days of debate, with Washington blanketed in snow and the streets all but empty, the Senate passed its health-care bill, titled the Patient Protection and Affordable Care Act—the A.C.A.—with exactly sixty votes.

We weren’t docked yet—not even close, it would turn out—but thanks to my team, thanks to Nancy, Harry, and a whole bunch of congressional Democrats who’d taken tough votes, we finally had land within our sights.

This piece is adapted from “A Promised Land,” which was published on November 17th by Crown.



By Don McCanne, M.D.

Perhaps it’s the order of things? First we define optimal health policy, and then we enact and implement it. Or do we?

It is certainly logical to specify policy in advance and then design legislation to meet those goals. Include everyone by making it universal. Make the system more affordable and more efficient by eliminating administrative waste and introducing administered pricing through negotiation. Make participation affordable for each individual by funding the system with equitable, progressive taxes. Improve access through central planning and separate allocation of capital improvements. Also improve access by eliminating financial barriers to care and eliminating restrictive provider networks. Ensure portability of care by placing the entire health care delivery system in a single, universal financing system. Of course, that model is a single payer improved Medicare for All program that has been well described by Physicians for a National Health Program and by others.

Then you follow the rule that you don’t compromise on any policy before you sit down at the negotiating tables. But what really happens? President Obama abandoned single payer because we were not “starting from scratch.” But that is not a valid reason. The original Medicare program did not start from scratch (even though it was limited to a specific sector of our population – a policy compromise).

Obama writes that Ted Kennedy, a long-time advocate of a universal health care system, supported Massachusetts Governor Romney’s more limited reform proposal because “trying to dismantle the existing system and replace it with an entirely new one would be both a nonstarter politically and hugely disruptive to the economy.” But disrupting a health care economy that is not working and replacing it with one that would is precisely what we should want to do. But then, there is the politics.

Policy we can get right, but it is the politics that screws things up. If, at the beginning, you modify policies in order to fix the politics, you will end up with a mediocre result, or worse. On the other hand, if you begin with perfect policies, the politics often will result in serious damage to the policy product, but it does not necessarily have to. Some of the programs of the New Deal and the Great Society were passed without having to make major political compromises that would have impaired much of their effectiveness.

So where do we stand now? Donald Trump’s “beautiful” health program likely never existed and anyway has been eliminated from consideration by his loss in the election. Bernie Sanders single payer Medicare for All proposal would certainly have begun the process with policy first, but he lost the nomination to Joe Biden who has stated up front that he will not support Medicare for All.

So what is Biden recommending? Basically tweaks to the current highly dysfunctional system. He does not propose meeting any of the policies listed above, thus violating the rule that you should begin with uncompromised policies. He does have one proposal previously supported by others and that is the public option. But Obama explains that the political barriers erected by the private insurance industry were too great to get it approved as part of the Affordable Care Act. So Biden is beginning with grossly inadequate policy proposals that are so weak that several of them may be able to clear the political process, except the public option (which is undesirable for other reasons).

Basically Biden is modifying policy to comply with the politics. He has it backwards. We need to start with solid policy proposals and then modify the politics to accomplish the goals. Admittedly that is not easy, but it is possible. If you begin with inadequate policy proposals, it is impossible to achieve the goals.

If we want efficient, affordable, equitable, comprehensive health care for all, then we are going to have to change the politics. The election is over, but now is when the real politics begin. Get with it.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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