The Politics of the Senate Health Reform Bill: Obama’s Two Mistakes

“No one — not on the right; not on the left; not in the middle — no one says this is a good bill,” said Tucker Carlson on C-SPAN. “It’s not pretty to see sausage being made,” echoed Margaret Carlson. “It’s an appalling way to make our laws,” said Margaret. “It’s disgusting,” said Tucker.

They were talking about the Senate health care bill that is being debated this week; and I agree with all of the above.

But why is the bill so bad? Why are the majority of Members of Congress preparing to vote for a bill that no one really likes? That no one thinks will control costs or improve quality and possibly not even improve access to care?

Need to get right back
to where we started from


This bill is bad — much worse than it ever needed to be — because of two Barack Obama decisions:

  1. The decision not to take a principled approach to health care reform
  2. The decision not to try for a bipartisan bill

Let’s take the second decision first. If you propose a bill that isn’t going to get a single Republican vote from the git-go, you need every single Democrat vote (at least in the Senate). If you can’t afford to lose even a single Democrat, that basically means you have to start bribing the holdouts — $300 million for Mary Landrieu’s vote, for example. It also means you can’t afford to lose a single special interest. You need the doctors, the hospitals, AARP, the drug companies, the insurance companies (at least the large ones), the medical device companies, all the Medicaid constituencies, etc., etc., etc. Or, more precisely, you need the organizations that claim to represent doctors, the elderly, etc.

So whatever bill you start with has to be modified — again and again and again — until you line all these folks up. Since almost all those special interests benefit from wasteful spending, the end product will have no possibility of controlling costs. Since all those interests are threatened by fundamental quality improvements, the end product is not going to improve quality either. Since opening up the market to improve access (with walk-in clinics, surgi-centers, doc-in-the-box, etc.) would also threaten a lot of interests you have to keep onboard, very little can be done to increase supply and improve access to care as well.

So as in the field of education (see my previous Alert), the only reform that can pass is one that does little more than spend more money.

The fact that you can’t lose a single Democrat vote also means that you must satisfy the left wing of the Democratic Party. And what the left hates the most in health care is anything that even hints of capitalism and free markets. So at a minimum, keeping the left onboard means no economic incentives, no price competition, no entrepreneurship, no patient power, no consumer-driven health care — at least no more than what we have now.

By the way, almost all the special interests that are onboard — even the ones running TV ads in support — will tell you  privately these are bad bills. They are likely to make things worse, not better. The interest groups have signed on because the Administration confronted them with a threat: If you don’t stay at the table, you are going to be the meal.

How could reform have been different? Obama could have started with the Wyden-Bennett bill, a bipartisan measure that has 15 Senate cosponsors, including 5 Republicans, and this bill, by the way, isn’t a timid approach to health reform. It has an individual mandate and a health insurance exchange!

Obama might also have taken an approach that is both bipartisan and principled. He could have started with the Coburn bill — under which the federal subsidy for health insurance to all Americans is the same and which is close to revenue neutral. This is an approach that would command support from a wide spectrum of health economists. In addition, the Coburn bill is Republican. And since John McCain ran on a similar plan in the last election, McCain would have been a major player in devising the reform from the outset. That would have made it very difficult for any Republican senator to vote “no.”

Of course, a Coburn/McCain approach probably could not pass in its pure form — especially given labor union opposition. But it could serve as the starting point from which modifications could be made in order to bring enough special interests and recalcitrant Democrats onboard to pass a bill.

What might have been is what people thought they were voting for in the last election: A nonpartisan, get-things-done-the-right-way, no-special-interest approach to health reform.

What we got instead was politics as usual.

Comments (16)

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  1. Ken says:

    Very good Health Alert. Everything else that’s being written about these bills is getting so stale. By contrast, I can almost always count on learning something at this site.

  2. Nancy says:

    Nice musical pairing. Very appropriate.

  3. Vicki says:

    Perfect song. We do need to get back to where we started from!

  4. Larry C. says:

    I agree totally on Obama’s two mistakes. The are exactly the same two mistakes Hillary made 15 years ago. It’s amazing how little the Democrats learned from that experience.

  5. Patrick Skinner says:

    Who’s to Blame for High Insurance Premiums?
    If airlines raise their prices to cover increased fuel prices, should we crate a ‘public option’ airline? Should we increase taxes on high earners to subsidize low earner fliers? Sure you can legalize on time percentages, lost bag compensation, and waiting times on the tarmac, but you really haven’t done anything to reduce the problem – high fuel prices!!

    Isn’t this the basic argument in healthcare ‘reform’? You can cover pre-existing conditions, outlaw rescissions, mandate guaranteed issue, do community rating, etc, but you haven’t made it more affordable for anyone. Actually quite the opposite.

  6. Dr. Nancy Gahles says:

    Unless and until there is an end to the medical monopoly in America, there will be no reduction in costs, no patient centric/individualized medicne and no decrease in chronic disease. 47 members of the House recently sent a letter to Nancy Pelosi asking her to be sure to include non-discrimination language in the final bill. This will ensure that “other” disciplines, licensed and nationally certified will be able to particpate in mainstream healthcare as first portal of entry providers. Increase healthy competition, give consumers a choice, encourage research to develop best practices and allow freedom to reign in our healthcare system with personal responsibility re-established. it is what the people want and according to the recent IOM summit, it is what the 600 stakeholders in the industry want. Is anybody listening??

  7. Dr. Francis Kendrick says:

    The quality of our health care is not an issue. We have the best in the world, despite unsupported claims to the contrary. The issue on which there is greatest consensus is that health care costs too much, resulting in some limitation of access to health care. The best if not the only solution to reduction in health care cost is consumer driven health care. It is available now. No new legislation is required. No new costly bureaucracy is necessary. Incredibly, the current Senate Health Care Bill will outlaw consumer driven health care, not for any rational reason, but for political reasons. We must not allow this to happen.

  8. Arthur Middleton Hughes says:

    There are two problems with both Senate and House bills. They both outlaw pre-existing conditions for insurance eligibility. They both specify community rating payments. Result, insurance premiums will go through the roof. Those with insurance can cancel their policies today. When they get sick, they can fill out the forms for insurance on the way to the hospital, and they have to be covered (pre existing conditions). As soon as they are well, they can cancel their insurance until they get sick again. So the health bill will cover only sick people. To prevent this happening, they plan to charge those without insurance $700 per year. Great: cancel your family plan of $14,000 per year, pay a fine of $700 and get coverage whenever you need it.

  9. Bruce says:

    I agree with Arthur. The best strategy for evryone will be to remain uninsured while health and buy insurance only after you get sick.

  10. JMB says:

    I enjoy your work and commentary. The proposed Healthcare legislation, as well as a lot of the related conversation about the issue, generally seems to ignore the “supply” problem (i.e. , getting more licensed Docs; more procedures performed by non-Docs, Docs who want to emigrate to the US to practice, etcetera). What would be a source of decent data I might look at that gets to things like #’s of med school grads who want to enter primary care, versus, say, ten years ago, and stuff like that? I imagine that present liability, reimbursement and regulatory issues tend to discourage med students from entering primary care, already; and that this would get a lot worse under virtually any of the schemes being thrown around by the Democrats…

  11. DFR says:

    Add a third mistake—the decision to discourage individuals’ choice and competition between providers. Choice and competition have reduced prices of cosmetic procedures and Lasik eye surgery, areas of medicine where consumers pay out of pocket.

  12. Uwe Reinhardt says:

    I hope someday John will feature the Dixie Chicks. This song gave me a headache.

    In general, there is not enough country music on his blog. If he had more of it, I would agree to agree more with him.


  13. Dave Lund says:

    B.O. is obsessed with his agenda. Health care is not our most important problem, it’s his obsession. Our politicians in congress, and especially the Democrats, have little or no motivation or mind-set to think about what’s best for America in the long run. It’s partisan politics at its best (worst). Frankly, they’re like a herd of sheep following the herder. It’s more important for them to “follow the party” instead of doing what’s best for America. If we go down this path of government sponsored and controlled health care, we’ll be very sorry. Why can’t politicians learn from their mistakes? Why are so few of them not willing to stand up for America’s financial future? Why are they trying to push through a health care bill that most people, especially those who’ll have to pay for it, don’t even want? Why are high priority issues such as unemployment, the war and national security constantly placed on the back burner? Why is there such an obsession with “political correctness” (the essence of the tragedy at Fort Hood)? Can anyone explain why so many things do not make sense?

  14. R. F. says:

    I appreciate John’s arguments about the political process of these health reform bills. However, I think the Wyden-Bennett bill (S. 391) is not a better alternative. I have read the bill and it is really not substantially different from the current major bills in Congress. Citing that as a bipartisan bill is correct, but it is still a very top-down approach to health care reform.

    I much prefer a bottom-up, market-driven, personal-choice/personal-responsibility approach, involving individual non-expiring Health Savings Accounts with low-cost high-deductible health insurance (have you ever seen a sentence with so many hyphens?). Insurance premiums would be paid out of the HSA.

    Americans are the most astute and efficient consumers in the world, well able to select the best product for them (just ask Sam Walton). Because they are paying out of their pocket for the first-dollar for medical care, they would be good and thoughtful consumers of the health care services they decide they need. This would drive physicians and hospitals to post their fees and compete for patients, a la the current markets in Lasik eye surgery and cosmetic plastic surgery, neither of which is usually covered by insurance. They would also stimulate more innovative and higher-value methods of health-care delivery. They would be equally good consumers in a free, multi-product market for health insurance, and would stimulate a wide range of very competitive products that would very accurately meet their health care needs. Mass customization of the health care market, indeed! The federal government could require each person to have such a HSA+insurance plan. Low-income individuals could be covered through HSA vouchers.

    This would be very cheap, especially as compared to current health care reform proposals. Other very cheap changes would further improve health care access and costs, such as tort reform, HSA deductibility, insurance availability across state lines, etc.. I like John Mackey’s (CEO of Whole Foods) approach, in the controversial op-ed he wrote in the Wall Street Journal on 8/12/09, p. A15

  15. Henry Massingale says:

    The How to;

    President Obama, asked for the help, of a way to cover the sick. And it is a simple concept that is presented before all to see. Health Care Insurance Companies will not cover the sick, {This will not make dollars for them.} Our tax failure within our system will not be able to carry the load because of cost.
    Within this United Forum, as Health Care Insurance Companies do join and earn money by helping the pay in form and the Health Care Tax Forum within our Medicare Tax system all ready in place, the concept of the dollar is like this in a low ball figure, { $10.00 x 250 million people, per week x 1 month} as stated before you do the math.
    Now this is the part that Government Officials do not like, because of the constant failures before 9/11/2001 to 2/15/2010, all government Officials should be penalized
    10% off of their pay. And that money should go to the Health Care Account. It is a recorded fact of history that our Officials we elected / hired to do a job have failed to do their jobs. The lives of the people have become in dangered and lives lost. They fight over this Health Care Dollar as if it is to be split up between 52 States. Our goal is to Unite The 52 States Of the United States Of America, as it should be.
    Health Care Companies have also failed, and it is also a part of documented history, of their failures. This concept of profit under a Health Care Responsibility is the biggest lie before the people and we offer one last chance to theses Insurance Companies to Unite with the Peoples Government and earn money. Fact; 0ne Insurance Company can not maintain the dollar cost of a few people, so what happens when a Nation Wide Out Break takes Place ?
    Some how Government Officials failed to understand that the American People have a common sense about them to see that around 173 Million people still jobs out of 373 million legal American People and there are around 125 Illegal People in the U.S.A. It would only confirm the failure of Government Officials if they admitted this information.
    Some have asked how I know that this is a $100 Trillion Dollar Health Care Package that Officials fight over, I called and asked Insurance Companies. And to my surprise 70% of those I talked to stated that this concept of a United Health Care Forum Built By The People in our Government System hold a honest approach of how to cover the sick that cant be covered. And Laws built to protect this money from miss use.
    I wanted to Save this for page 100 but I will only show part of the building block of a Health Care Reform Stimulus Package. It is of a interest to many people to see the ideas that will come forward.
    So again I ask all to Help President Obama to get this Job concept under way, and at the same time build this Health Care reform. Do not set it into action and not keep track of it, I am talking about a 10 year month to month data read out to see if scams are in the works.
    Henry Massingale
    FASC Concepts in and for Pay It Forward

  16. Henry Massingale says:

    125 million illegals