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

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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.

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