Philadelphia Reflections

Historical Foreward

Historical Foreword

Sixteen years after the Clinton Health Proposal was withdrawn from Congress in 1994, its sponsors can thank their lucky stars they withdrew it. While high-minded or even nobly intended, The Clinton Plan's operational feature was an elaborated system of Managed Care, usually called HMO (Health Management Organizations.) Leaders of large business, hoping to streamline the risk-adjusted health insurance they provided to their employees, had originally cooperated with the Clinton administration, but were dismayed by the habits of micro-management they encountered, and pulled out. In their view, politics would soon cripple a complex idea which needed good management more than it needed legal sanction or a legal monopoly. The Clinton Administration decided to yield to the wishes of Big Business, and let them go their own way. So, major businesses undertook the job themselves but burned their fingers badly when they discovered the HMO concept was fundamentally doomed to failure. The public, even their own employees, bitterly resented the intrusiveness and loss of personal freedom for patients which characterize HMO systems. HMO is now the butt of every joke, so while Democrats escaped the stigma of its flaws by failing to get it passed, Democratic politicians did get some benefit. But somehow they never grasped the real message the public was sending.

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So in 2013, while political grievances from this earlier failed experiment may partly explain unfocused public dissatisfaction, much deeper issues still need to be debated. In the resurrected Obama version, which actually passed Congress to be implemented January 1, 2014, Obamacare is no longer a theory, but a program in operation, fixed in place and required to stand examination as written. Millions of people were legitimately worried about how they could afford to get sick and certainly were not prepared to see costs forced upwards. The deeply indebted Medicare program was also doomed to bankruptcy by demographics unless something was done about rising healthcare costs. We might even find we analyzed health finance exactly backward; the bigger problem may soon become, not the cost of dying too soon, but the cost of living too long. Perhaps we now have gained some better idea of how to look at our problem, and how to fix it. Both political parties in the 2008 election promised to revise healthcare financing and delivery. When Democrat Barack Obama won the election, his concrete proposal was eagerly awaited and now will be remorselessly examined. In order to receive an essentially free hand, the elements of Obamacare were not concisely stated; in America, that may have been his biggest misjudgment. After enactment, they can no longer escape systematic examination for what they are, and what they omit.

Political strategists calculated that sweeping changes had the best chance of approval immediately after a new president takes office. That may have been true but miscalculated; such short timing gave interest groups responsible for Obama's election undue influence over the proposal, arising out of an undue sense of mandate from the election. The resulting proposal, the Affordable Care Act, is heavily slanted toward rewarding the base, Organized Labor, blacks, and Hispanics, without openly saying so, while displaying no great willingness to accommodate features the rest of the nation objects to. As Lyndon Johnson once said, the majority of Americans are non-black and non-poor. The political misjudgment is increasingly called Obamacare.

Thousands of pages of uncoordinated proposals soon emerged from four congressional committees, intentionally confusing the public about what the basic proposal was, but making it uncomfortably obvious that the congressmen themselves had neither written nor properly considered it. It was announced to general satisfaction as a proposal to expand coverage to the whole population and to save the resulting cost by eliminating waste and overutilization in medical care. That's indeed what the public wanted. But without more explanation about how these goals would be made achievable, the public could not see how to program expansion and cost reduction were compatible, or how these two thousand pages made them so. Furthermore, the public could not see what urgency justified delivering a stack of paper to congressional authorizing committees in the morning and demanding an affirmative vote in the afternoon of the same day. Consequently, the conviction took hold that what was proposed might end up being a massive cut in Medicare benefits to pay for it. Soon after the voluminous bills were released, the Congressional Budget Office (CBO) further undermined trust in the proposal by announcing the assessment it would add a trillion dollars to health costs in ten years, but still would only extend insurance to about half of the uninsured population. That didn't sound like universal coverage at no added cost. Furthermore, the CBO had credibility, in fact, was the only credible agency that had actually studied this massive legislation. Since the President immediately appeared on television, endlessly repeating the promise that the extra cost would not add one dime to the public debt, fear of large impending Medicare cuts was entirely plausible if you believed anything the man said. The public uproar about an implausible idea thus became general before members of Congress had time to read it or devise soothing explanations; this floundering appearance upset the public even more.

To rescue the deteriorating situation, the President attempted to go directly to the public with weeks of daily speeches, and on one Sunday appeared personally on five television talk shows. Naturally many speeches were ghost-written, containing misstatements or exaggerations, with the result that the harried President next resorted to heated oratory that would have been excessive even on the campaign trail. He was criticized as using rabble-rousing undignified for a sitting President. Failing in a "trust me" approach, he was left with the difficult choice of withdrawing the proposal or being seen to ram it through Congress on a party-line vote. Party-line enactments of controversial legislation tend to provoke the opposition party to repeal a controversial law just as soon as the opposition returns to power.

With the public bewildered as to what the proposal really was, enacting something certain to be reversed was unappealing. The alternative, a humiliating withdrawal of the proposal, seemed intolerable to its strongest supporters. But reversal did not seem unreasonable to independent voters, who had wondered all along why there was such haste. The nation was fighting two wars, both of them going bad, and was in the deepest economic recession since 1937. What's the hurry with this healthcare thing? It was a reasonable question, and the President did not help himself by reflexly accusing opponents of delaying tactics.

In this analysis, the following three sections address 1) the proposal and its own flaws, particularly a salvage strategy for getting enacted. 2) The growing consequences of flaws in health financing which long pre-existed Obamacare and 3) An improved proposal, not so much radical, as extensive. For a century, conservative proposals of all sorts have been incremental, creating opportunities for mid-course corrections. Often denounced as hesitant and timid, a grand strategy often takes longer than a pitched battle, but usually advances farther and more enduringly.

Originally published: Tuesday, December 10, 2013; most-recently modified: Tuesday, May 21, 2019