For the last several months, much of the Obama administration's healthcare reform strategy has been framed by discussions of the lessons of '93 (when Clinton unsuccessfully rolled out his healthcare reform plan) and '94 (when the Democrats lost Congress).
Last week, I diaried about the administration's (and its supporters') failure to learn the real lesson of '94: don't piss off the base. Today, I'm going to discuss the unlearned lesson of '93: you can't pass real healthcare reform by trying to bring the insurance and pharmaceutical industry on board your reform efforts.
This is, of course, not the lesson that the Obama White House has drawn from '93. Instead, they focused on a smaller, tactical lesson: don't propose a plan to Congress. As we've seen, letting Congress devise the plan has hardly proven to be a magic bullet. And we shouldn't be surprised that Obama team has limited its lesson-learning to matters of tactics, while reaffirming the strategy and ideology of the Clinton attempt, as many leading figures in the Obama White House are veterans of the Clinton years, most notably Chief of Staff Rahm Emmanuel. Of course, the jury is still out on the value of this tactical lesson of 1993. Meanwhile, the larger strategic lesson remains unlearned.
Back in 1993, the Clinton White House and its healthcare team, led by then-First Lady Hillary Clinton and Ira Magaziner, tried to neutralize the opposition of the healthcare industries by drawing up a plan that would more or less protect their bottom line. From the start, single-payer advocates were shut out of the healthcare task force's discussions, which largely took place behind closed doors. The Clinton overhaul didn't even include a public option.
But as good as the Clinton plan would have been for the healthcare industries, the status quo was better. So the very same industries who the Clinton administration had catered to led the public face of the opposition to healthcare reform in '93. The Health Insurance Association of America (HIAA) produced the Harry and Louise ads that were widely seen as turning the tide of public opinion against the Clinton plan:
The Obama administration did draw one lesson from this debacle: they decided to work even harder to coopt the healthcare industries. And to a certain extent the Obama White House proved more successful in their efforts. For example, the Obama White House did a behind-closed-doors deal with PhRMA, the pharmaceutical industry's trade association. In exchange for promising to keep a series of measures out of the final bill that would have made healthcare spending more efficient but would have hurt the industry's bottom line, PhRMA agreed to accept reforms that would reduce their profits by $80 billion and to buy $12 million of ads in support of HCR in marginal Democratic congressional districts.
When the details of this agreement leaked last month, Robert Reich declared that this was a terrible deal for the cause of real reform:
That's basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it's proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don't know how far the deal extends beyond Medicare because its details haven't been made public.)
Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor any congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed?
But it seemed hard to argue with the Obama administration's tactical success. After all, PhRMA was now supporting reform. Heck, PhRMA even revived the characters of Harry and Louise....this time supporting HCR. How nifty is that?
But it turns out that the Obama White House is running into the same structural problem that the Clinton White House did: however hard you try to buy off the health insurance and pharmaceutical industries, they will always choose worse reform over better reform. And our political system will always provide the healthcare industries with the worse reform they prefer.
Today, PhRMA announced that it is going to spend $150 million to promote the (as-yet-unannounced) Baucus Plan, the most industry-friendly option currently on the table and one which might not even meet the White House's loose and open-ended notion of what constitutes real reform.
Maybe in a generation, when we have another bite at the healthcare apple, we'll learn this lesson for real: the healthcare industries are the enemy in the battle for real healthcare reform. We cannot frame a good solution to the problem of healthcare in this country unless we take them on. And, just as importantly, we cannot make a compelling case that motivates the public unless we are willing to make the pharmaceutical and health insurance industries into a rhetorical enemy, too. The Teabaggers are reteaching us an old Saul Alinsky lesson: to achieve power, you need a polarizing enemy. The technocratic Clinton/Obama approach to reforming healthcare has no such enemy, and as a result, reform advocates have yet again found themselves taking a knife to a gunfight.
But rather than leaving on such a down note, here's my favorite bit of messaging from recent days: