Monthly Archives: September 2009

The Post-Mortem on Obama’s Health Care Speech

If, as the case increasingly appears to be, there will be at best modest changes to the existing health care system (modification of insurance coverage, e.g., forcing companies to cover preexisting illnesses; an increase in the number of individuals with insurance coverage; and perhaps the creation of consumer cooperatives), it will be tempting to blame President Obama for failing to achieve more sweeping change, such as the creation of a governmental insurance option or universal coverage.

That would be wrong.  As I’ve tried to argue in previous blog postings, Obama has not made major mistakes in his efforts to persuade Congress to enact more sweeping health care reform.  Indeed, he’s largely avoided the key errors that the Clintons made in 1994.  This is not to say his performance has been flawless. His recent national television address, for example, fell short, in my view, because it lacked specifics on how he proposed to pay for health care reform, and because he sent mixed messages, by both appealing to Americans’ higher motives while also taking thinly veiled partisan jabs at opponents of his plan and setting up insurance companies as the bogeyman.  Far better, I think, that he spelled out the true costs of the plan, including the almost certain necessity that taxes will need to be raised to fund it, in the context of appealing to American’s more virtuous side and bringing business, including insurance companies, on board.  Businesses – particular small businesses – cannot be expected to support any initiative unless they know what the costs will be, and how they will be apportioned.

But even a perfect speech, I argue, was unlikely to significantly change the underlying dynamics of the health care reform debate.  As it was, his less-than-perfect speech had at best a modest impact on public attitudes, as indicated by the national polls released in the last couple of days (see here and here).

Why, then, is broad-based health care reform so difficult to pass, if not because of Obama’s leadership failings?  I’ve hinted at the answer before, but let me address it more directly.   The reason has less to do with failed political strategies, and much more to do with the complexity of health care policy itself in the context of public attitudes toward reform.  Simply put, there is not a lot of strong, unabashed public support for the type of sweeping reform envisioned by most advocates of health care reform.  This fact is often easy to overlook in the welter of survey data that is frequently tossed around by both sides in the debate.   A careful read of this data suggests two basic dimensions to public opinion on this issue – dimensions that have not changed appreciably since 1993-94.  First, most Americans support reform in the abstract if it promises to control rising health care costs and prevent loss of coverage.  But when they are presented the options, and competing arguments, for achieving these goals, support for reform begins to erode, and for very predictable reasons.

To see this, consider public attitudes toward the “public option” – the idea that insurance costs can be contained by providing a nonprofit government-run insurance option to compete with private insurance companies.  In the abstract, most Americans by slim majorities, like this idea. Here’s a chart containing polling results from several surveys asking about the public option (see source here).

If we look at a single poll with consistent question wording, moreover, we find these numbers are pretty stable throughout this debate. For example, a recent ABC poll finds 55% support a public option, with 42% opposed. Although down from June, when it was supported 62-33, the public option still has majority approval.

However, as the chart below suggests, if you include in the question the notion that the public option would give the government an “unfair advantage” in competition with private companies, or is the first step toward a single-payer system, public support erodes.  Conversely, if you present the public option as increasing insurance options, and as a means of holding down costs, support, not surprisingly, goes up. (For more on this, see source here).

The debate over the public option, I believe, mirrors Americans’ uncertainty over health reform more broadly.  In the abstract, support is there for change. But when confronted with competing arguments, uncertainty grows.  Over time, as the particulars of the competing viewpoints are disseminated, we see a gradual erosion in overall support. This happened in 1993-94.  And it’s happening again, as indicated in the latest polls. Looking at the ABC poll, we see that a plurality of Americans think that health care reform, as outlined in the president’s speech, would make their own care worse, rather than better (32-16 percent, the rest no change);  cost more, not less (40-20), and worsen their own coverage (37-11). And here’s the kicker – among the uninsured, only 51 percent think reform would improve their own coverage. Similarly, the latest CBS poll suggests that most Americans (52-42) think Obama’s health care plan will increase the deficit, and by 27-22 they believe the proposed reforms would hurt rather than help them personally.

What does this mean for fundamental health care reform?  There simply is not enough political support for any proposal that would radically change the way Americans receive health care today.  That means proposals including the public option, mandated universal coverage, higher taxes on “Cadillac coverage” – in short, all the core components of what most people think of when they talk about significant change – lack enough support to overcome opposition from well-entrenched and vocal minorities.  Americans, as a generally risk-averse and pragmatic populace, one ideologically more conservative than the publics in other industrialized democracies, are more reluctant to sign on to major policy change in the face of these uncertainties.  (This is why I am always surprised when politicians, including Obama, point out that America is the only industrialized country without universal health care coverage.  For many Americans, that’s an argument against universal coverage – not in favor of it!) And our open system of shared powers at the national level, with geographical-based representation in Congress, and federalism, by affording many access points to block change, works to amplify this uncertainty.  Change can occur, but not nearly on the scale envisioned by proponents of fundamental health care reform.

The bottom line is that polling data indicate that Americans want change, yes, but only in the context of maintaining the broad outlines of the private insurance/fee for services/employer-based system they know.  If Obama made any mistake, it was in suggesting that anything more than incremental change was possible.  In the end, I think he can get incremental changes through, with some (minimal) Republican support.  But because so many portrayed this battle as the last, best chance to implement a universal health care system enjoyed by most other “western” industrialized democracies, passage of only incremental change will invariably be portrayed by some as failure.  In fact, given that Obama was elected with about “average” political support, (see my numerous previous posts on this issue), even incremental change– particularly in the midst of an economic recession – of the type described above is a significant accomplishment.  We ought not to lose sight of this in the midst of the inevitable wailing and gnashing of teeth that is certain to follow if more sweeping change does not occur.

Live blogging the president’s speech

Before we get started, take a look outside in the Vermont skies for the space shuttle and international space station going overhead

Hillary wearing red….but wait! So is Pelosi!!  Don’t they talk beforehand?

We are watching the NBC feed, and Brian Williams has been prattling on about “death panels” as if that’s what’s turned this debate.

Note that the choice to give this speech in the House legislative chambers is not merely to demonstrate the significance of this speech.  It’s also designed to remind voters that, in the end, it’s up to Congress to make this happen, not Obama.

While we are waiting, here’s a quiz for you:  when Bill Clinton went before Congress to give his speech on health care in 1993, what impact did it have on his poll numbers?  Nate Silver looks at the Gallup polls and suggests the speech moved numbers in Clinton’s favor.  but if you look at several polls, the results actually look different: Clinton gets no bump.  See the Roper poll at:

Ok, much hurrahs and cheering as he takes the podium.  Years ago when Clinton gave his health care speech the teleprompter brought up the wrong speech.  For seven minutes Clinton spoke from memory and notes. No one noticed.  So you can imagine how smooth he was in denying any dalliances when speaking to Hillary….

Ok, nice touch here to open with an overview of the economy, to set the stage for linking his success here to health care.

You’d think Dingell would try something different – his bill obviously isn’t working!

Ok, the first of what will be several efforts to frame this as a “middle class” bill.  the problem, as Clinton found out, is that most middle class voters are pleased with their health care,  although they worry about spiraling costs.  And now the effort to use the insurance company as the bogeyman here.

Uh oh.  I’m probably in the minority here, but I just don’t think these types of stories are the way to sell health care.

Health care costs, on the other hand, is something that resonates with voters.

So far he’s laid out the problem.  He needs to get to the solution.

And now he positions himself in the middle.  It’s the Henry Kissinger memo strategy – we have three options in Vietnam: unilateral withdrawal, nuclear war, or my strategy: gradual escalation.

(Dan – I’m not against personal stories. But stories in the context of scaring people worries me, particularly because it doesn’t bring insurance companies on board.)

Ooops, the rhetorical repeat fell flat there.

Look, soaring rhetoric is just not going to do it here. He needs to get down to proposals. Ok, here it comes:

Start with the points of agreement – no denial of coverage for preexisting coverage, or dropped insurance, or caps, or limits on out of pocket expenses. Low hanging fruit, and all will get bipartisan support.

purchasing cooperatives are right out of the Clinton Health Security Act.

A nod to McCain (ok, he was right after all….)

Now he begins skating on thin ice.  Americans simply do not like the word “required” – this touches on an ideological divide between Republicans and Democrats.  I’m not sure this is going to fly.

Significant differences still to be ironed out – you think?!

This is a mistake. He shouldn’t be giving “death panels” new life at all.   Same with illegal immigrants – don’t go there.

Did someone just say he’s a liar?!

Is he about to throw the public option under the bus?  If you listen carefully here, he’s hedging bigtime on whether the public option is going to save money or not.

Zoom!  The bus just rolled through! Nancy is not pleased…

Or did it?  He’s really trying to have it both ways here, which is precisely what both Republicans and Democrats have criticized him for doing..

this – the promise that the plan will be revenue neutral – is crucial for getting moderates support.  The question is: will it pass the smell test?  Olympia Snowe, among others, says she will wait to hear the CBO estimates.

The notion that an increase in expenditures can be paid for by reducing waste and administrative overhead goes back to the Reagan administration’s plan to balance the budget.   It is a dubious claim.  Certainly insurance companies are not going to accept that some of their profits are “waste”.

Medicare protection – a bit of misdirection here….

An olive branch to the Republicans: malpractice reform.  It won’t be enough to bring them on board.

I have to say I will be surprised if the CBO numbers are anywhere near what he’s projecting in terms of cost savings, and where he will get them.

Ah, I was waiting for the Kennedy card to be played… .

This is a really interesting choice of strategies – I’m not sure how it’s going to play.  Kennedy was one of the most beloved Senators in the Senate – and one of the most politically divisive figures in American politics.  Is this going to be portrayed as rank politics, or a moving tribute?  And will it serve to unify public support, or divide?

The problem with his use of these illustrations is that both programs – Social Security and Medicare – are facing fiscal pressures……

Will the rhetorical finish — which he does so well – help bridge substantive differences on the particulars of legislation?

Will he quote Kennedy at the end?

Ok, send me your reactions!

To start things off, I am not convinced that Jane or John Q. Public really understand the details of his health care plan after this speech.  It’s a complex issue, but he did little to simplify the issues. Substantively, he placed himself squarely in the political middle – hailing Republicans and Democrats, while dissing those on the left and the right.  The theme he came back to again and again was health care reform as a middle class program.

But first – the Republican response from Charles Bostany

If insurance companies are Obama’s bogeyman, Reid and Pelosi are the Republicans!

A bit of sleight of hand here- he’s portraying the House bill as Obama’s bill – but they aren’t the same.

Obama portrays health care reform as a middle class program – the Republicans portray it as a government takeover of medicine.

Ok, now let me know what you think!  NBC has cut off the coverage, so I’ll see if I can get the pundits reaction via other sources…

Well, my analysis of the pundits’ reaction will have to wait until tomorrow – class prep takes precedent.  But left me finish with a few first impressions of the speech:

Hillary is smiling!  There is not a little irony in Obama deciding to sign onto a policy that mandates that everyone must get coverage – as some of you will recall during the campaign, this is what Hillary advocated, but Obama rejected it then, saying the penalties for not getting coverage under Clinton’s plan were too harsh.

There’s bound to be pushback on Obama’s claim that under his plan no one will be forced to change their plans. In truth, if his plan is adopted, it is likely that many employer-based insurance plans will be dropped, necessitating a change in policy for some people.

It will be interesting to see whether the CBO cost projections fall anywhere near Obama’s.

I’m running short on time, but I see by the blog stats that this was one of the most read posts in a while, so I expect more comments after you’ve had a night to digest things.  I’ll be on tomorrow with more analysis.  I particularly want to address some of the public opinion data on the public option, and health care reform more generally – there is a lot of misinformation based on the misreading of polling data regarding these questions.

more tomorrow…

What You Should Know About Health Care Before Tonight’s Speech

The prevailing media consensus seems to be that Obama has bungled the health care debate and that tonight represents his last, best hope to salvage support for some type of health care legislation.  His polling numbers are down, and support for health care reform, as the chart below documents, has leveled off even as opposition continues to grow.  Today, more Americans oppose than support health care reform, broadly defined.

Both impressions – that Obama has bungled the debate, and that tonight’s speech is critical to passing reform – are, I argue here, wrong. In fact, Obama’s efforts to shape the health care debate to date – while not flawless – have been generally very well done, and his speech tonight almost surely will have at best a marginal impact on public support for health care.

Let’s consider his legislative strategy to date. For comparison purposes, consider President’s Clinton’s failed effort to pass health care reform in 1994. Most analysts believe the Clintons made three fundamental errors that ultimately doomed health care reform:

  1. They developed the policy behind close doors, with minimal input from the major stakeholders – especially Congress – in the health care debate.
  2. When legislative stalled, they refused to compromise and accept half a loaf, most notably when Clinton threatened to veto any plan that didn’t provide 100% coverage.
  3. They portrayed opponents of their plan as acting in bad faith, and as fundamentally opposed to what was best for Americans.

In the end, the Clintons got nothing for their efforts – indeed, the debate contributed to the Democratic loss of their Congressional majority.

Note that Obama has made NONE of these mistakes. Rather than control policy development, he’s allowed five separate committees in the House and Senate to develop their own proposals, although he has been actively involved in working behind the scenes during this process.  He has made it quite clear that he’s willing to compromise, most recently signaling (wink, wink) his readiness to jettison the “public option” (the idea of a government-run insurance program that would compete with private insurers to keep costs down)  if that’s necessary to get some reform legislation passed.   And –for the most part – he has not yet fallen into the trap of portraying insurance companies, Republicans and other opponents of versions of the plan as members of Satan’s Brigade.

So, if Obama has pushed all the right buttons, why is opposition to health care reform rising?  Because of the nature of “reform” in a political system designed to make sweeping policy change almost impossible.   Without going into the permutations of the various health care proposals that have been voted out of the House committees and which are now being debated in the Senate, health care reform centers on two basic elements:

  1. Cost containment.
  2. Broadening health care coverage.

The difficulty is that, in the short run, these goals work at cross purposes.  Yes, proponents argue that real reform, such as a universal single payer system would in the long run both expand coverage and reduce costs. Maybe, but in the long run we are all dead.  Politicians generally look ahead as far as the next election cycle, and it is simply impossible to square the circle – expand coverage and reduce costs – in the short term.

This explains the falling support for health care reform.  When asked the generic question – “Do you support health care reform” – most Americans initially respond positively.  That is because, according to polls, most respondents view reform in terms of cost containment. But as soon as the details of reform are presented, support begins to erode. What we have seen in the last few months is that as the details of health care reform emerge in the form of specific policy proposals, support has – quite predictably – begun to decline.  Nothing – I repeat: nothing – Obama could have done would have changed this dynamic.  The mistake pundits make – and we see this in the coverage leading up to today’s speech – is to overestimate the power of the president.  As longtime readers of this blog will recall, I have presented mounds of data showing that Obama’s election – while decisive – did not radically redraw the political landscape in this country.   His election owed much to a rejection of the Republican Party and the promise of unspecified “change”, but – like Ronald Reagan in 1981 – Obama has discovered that support for change melts when the details are specified.

Keep in mind, as I detailed in an earlier post, that his political support in Congress is almost identical to what Clinton had in 1993, when he failed to get health care passed.  Blue-dog Democrats don’t care about the national implications of the health care debate – they care about what their own constituents will support in 2010.  More generally, our political system is designed to empower vocal minorities and reward intense opposition.  Sweeping policy change rarely takes place, and then only in the aftermath of an overwhelming realignment of political forces.  Otherwise, policy change is incremental – typically centered on adjusting existing policy at the margins.  The fact that the country is in the midst of a huge economic recession has only complicated Obama’s task by making the cost implications of reform that much more politically significant.  In this respect, he takes office at a particularly inauspicious time to pass sweeping change.

This is not to say that Obama’s strategy has been flawless. He has fallen into the quite understandable trap of overpromising what health care reform can possibly deliver, which leaves him open to criticism, when legislation does pass, that he didn’t achieve his goals.  Rather than promise that every single American would be covered, for example, he would have been better served by promising to move toward the goal of universal coverage.  It’s quite likely that with moderate cost increases Congress can pass legislation that bumps coverage up to 95%.  The problem is that the cost to cover the remaining 5% becomes prohibitively expensive and almost certainly would entail some combination of surcharges on insurance companies and wealthy taxpayers, penalties on companies who don’t provide full insurance and on taxpayers who don’t enroll – all politically difficult to sell.

So, given these constraints, what must Obama do in tonight’s speech?  Pundits are suggesting (see here and here and here) it is his last and best chance to salvage health care.  They are, of course, wrong.

The reality is that the utility of the president’s “bully pulpit” is vastly overrated; presidential speeches, particularly in today’s hot house 24-hour news cycle, almost never substantially shift underlying public opinion.  Although there may be a short-term positive bump in favor of reform due to his speech, within a week the existing levels of public support are likely to be reestablished as critics weigh in on Obama’s talk. If Obama wants to influence the health care debate he would do well to avoid portraying this fight in partisan terms or castigating his opponents as unprincipled, or greedy, or against the public interest.  Nor should he portray the choice in apocalyptic tones.

Instead, he needs to do the following:

Lay out the principles of the health care reform package he supports (but avoid focusing on the details of specific legislation), and be upfront about the costs as well as the benefits. In the short run, health care reform will be costly, and anyone who says otherwise is ignoring reality. Given these costs, why should Americans support reform?  He needs to avoid the doom-and-gloom approach which portrays the failure to enact health care reform as a fiscal and social catastrophe. Nor should he present this as wealthy-taxpayer subsidized plan; class-based politics do not sell well in the United States. Rather than play up the importance of passing this legislation, he should instead downplay its significance.  That is, he should argue that rather than radical change, he is supporting common-sense proposals to help middle and lower-income Americans get decent health care coverage at a slightly higher cost.   Most importantly, he needs to target his message directly to the same handful of moderates who held the swing votes on his stimulus bill. This means Nelson, Snowe, Collins, et. al.   This bill needs to have the support of the moderates, if not necessarily true bipartisan support.

Ultimately, Obama needs to get legislation out of the Senate and into a conference with the House.  It hardly matters what is in the Senate bill, as long as they pass something.  Once in conference, he can play the two Houses against each other by pointing out the dangers of failing to enact something. Pelosi, for strategic reasons, is sticking to her guns on the public option, but this is almost surely a negotiating tactic designed to keep pressure on Obama and Senate moderates from the Left.  With luck, Obama signs a bill that, while certainly not sweeping in nature and almost surely falling far short of what he promised in the campaign, will nonetheless represent incremental progress.

In the end the very best legislation Obama can hope for is something that broadens coverage for lower income families, perhaps by establishing an expanded Medicaid system that involves tiered pricing based on income, along with some insurance reform designed to prevent denial of coverage for preexisting illnesses, and maybe creating a nonprofit (but not government-sponsored) insurance option based on the formation of buying cooperatives (a version of this was the center piece of the Clinton plan in 1994).  Penalties on consumers for not purchasing insurance ought to be avoided. He’s unlikely to achieve universal coverage, but he can certainly expand coverage.

None of these proposals, mind you, would reduce per capita health care costs – in fact, all would raise them in the immediate future.  But Americans have shown a willingness to pay higher costs if they know what the costs are, and what they are getting in return.

Not real reform, you say?  Not what we elected Obama to do?  Not what he promised?  Perhaps. But presidential politics is about the art of the possible.  And in the current economic and political climate, fundamental health care reform was not likely to happen no matter what Obama did.

In honor of the start of the new school year I’ll be live blogging tonight’s speech which begins at 8.  Hope you can join in.