Health Care Reform and the Right Compromise

The emotional state of grassroots advocates for health care reform is precarious right now, something like the period in which Obama was on his way to winning the nomination but looked like he might get there too wounded to win the general election, thanks to the Rev. Wright controversy and intramural fighting with the Clinton campaign. Obama sometimes dithered or suffered from self-inflicted wounds. Democrats were split and we wondered if they could be united in time to win the presidency.

Currently, some activists are afflicted with doubt about how much effort to put into working for the President’s agenda when we’re not sure quite what that is. Is the public option an “essential element,” or is it something he is willing to compromise away in search of Republican votes that will never materialize?

Those who think a single payer plan is the right choice, and this public option stuff is already too much of a compromise, are particularly incensed. They see the emergence of some bastard co-op plan that will really be a way of funneling money to the insurance companies.

But just this last week, there have been several news analysis stories saying that the Democrats are now ready to push through a plan on a party-line vote, given that the Republicans seem united in opposing any semi-serious plan, compromise or no compromise. This does open up the possibility of Democrats solidifying their own positions – provided, of course, that we can round up enough Democratic votes for the same plan.

The best spin I can put on all this is that Obama has merely been trying to avoid sounding dogmatic when he says he is open to compromise on the public option. In principle, there might be many ways of structuring a plan to compete with traditional health insurance companies. He articulated it that way in a conference call with bloggers a few weeks ago, as reported in the Daily Kos:

With the topic the public option, and the fact that the Senate Finance committee is still considering the coop model as an alternative, I asked whether there was a coop model that would be an acceptable substitute to his vision of a robust public plan. He [Obama] gave the well-informed, wonky answer I’d been hoping for. His advisers have been looking at the details the coop approach, and have yet to find a model that answers the problems that co-ops have in getting off the ground and growing quickly enough to compete at the level that will be necessary in a public option. His team is looking for the evidence that exists to show that a co-op could provide that competition, and if they can find it, it might be an option. He then reiterated his commitment to having a robust public option.

Since then, however, it’s true that he has made several statements about the public option being “only a small part” of the overall plan.

If he really does fold like a cheap map, expect serious consequences. To quote from another Daily Kos post:

If the White House does end up letting the public option disappear without a major fight, many of President Obama’s most ardent supporters, inspired by his “Yes we can” attitude, will withdraw from politics, their previous cynicism once again affirmed by a broken system.

I think it’s important for the grass roots to send a clear message that he was right the first time, and that the public option really is essential, that it’s the right compromise, a necessary compromise – but also the farthest we should go in search of compromise.

Why Reaching for Single Payer Would Be Over-Reaching

I highly recommend reading Atul Gawande’s essay in the New Yorker, “Getting There from Here: How should Obama reform health care?” A key passage from the introduction talks about the single payer idealists and their contempt for those who portray themselves as pragmatists and compromisers:

The country has this one chance, the idealist maintains, to sweep away our inhumane, wasteful patchwork system and replace it with something new and more rational. So we should prepare for a bold overhaul, just as every other Western democracy has. True reform requires transformation at a stroke. But is this really the way it has occurred in other countries? The answer is no. And the reality of how health reform has come about elsewhere is both surprising and instructive.

He goes on to describe how the more universal plans that exist in other industrialized nations are all different in their particulars, and all arose evolutionarily rather than revolutionarily. One important difference is that nations like the U.K. made the transition at the end of World War II, building on institutions that had been established during wartime. That was the road not taken in the U.S., which instead built employer-sponsored healthcare into a powerful institution.

Perhaps we could have made a different choice in the 1940s and been the better for it. But today health insurance is something like a $400 billion industry (combined revenues, according to a 2007 survey). UnitedHealth Group alone had revenue of $81 billion and employs more than 70,000 people. You say the profits are criminal, and the employees are all uncaring jerks? Hey, I’ve had to fight to get them to pay claims, and I have no love lost for them or any other health insurer I’ve had the misfortune to deal with. But the corporations who profit from the current system and the employees who work in it aren’t just going to fall on their swords for the good of the nation. The stockholders are pension funds and grandmothers, not just robber barons. Some of those employees are good people, trying to do their best within the system, who are also Moms and Dads and friends whom we would hate to see lose their jobs, if we only knew them.

So the revolutionary overhaul that would sweep all that away and replace it with a supersized incarnation of Medicare seems to me to be a fantasy. I’m not even convinced it would be an improvement. The people who think the government can never do anything right (and therefore we can never trust it with anything important) are wrong, but so is anyone who thinks the government can never screw anything up. Good intentions can and do go horribly wrong. There is also a substantial body of management theory on how to achieve systemic change that suggests “big bang” overhauls that try to change everything at once run a much higher risk of failure than processes built around incremental change.

So when Obama talked in one of his recent Town Hall meetings about believing that a shift from our current system to single payer would be “too disruptive,” he had me nodding along with him.

So what’s the right balance between a change that is too incremental and timid and one that’s too radical? The plan for a “public option” seems to me to strike about the right balance, particularly if combined with tighter regulation to prevent health insurers from cherry-picking the people they insure and inflating profits with non-payment of claims. If we can establish a publicly-sponsored plan that sets a baseline of acceptable coverage, and make insurers compete to show that what they offer is superior, then we ought to achieve a better result. I’m not expecting a perfect result, but I do want to see a significant improvement, with room for further improvements to follow.

As Paul Krugman recently pointed out in the New York Times, those who decry this as a step toward something like the U.K. health system are way off base. The most ambitious of the current plans would leave us with a hybrid system of public incentives and regulation over private insurance, more similar to what they wound up with in Switzerland:

If we were starting from scratch we probably wouldn’t have chosen this route. True “socialized medicine” would undoubtedly cost less, and a straightforward extension of Medicare-type coverage to all Americans would probably be cheaper than a Swiss-style system. That’s why I and others believe that a true public option competing with private insurers is extremely important: otherwise, rising costs could all too easily undermine the whole effort.

But a Swiss-style system of universal coverage would be a vast improvement on what we have now. And we already know that such systems work.

We need a system that works and that is a significant advance over what we have now. There are necessary compromises required to achieve it. But we can’t compromise away the whole goal.

Author: David F. Carr

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