By
These are, as the Chinese curse reputedly called them, interesting times.
If the burst of new Democratic health care reform proposals is any indication, a fresh breeze of the Obama campaign’s "Yes We Can" optimism is blowing across the nation. Mr. Obama’s team is expected to make health care one of its priorities. First out, though, was Senate Finance Committee Chair Baucus (D-MT), who introduced an aggressive health care reform package that builds on Mr. Obama’s campaign platform of cost controls and extended coverage. Senator Kennedy (D-MA) and Representatives Dingell (D-MI) and Stark (D-CA) are expected to offer proposals soon, and undoubtedly there will be others.
The rub is that Congress’ old-guard lobbying system remains in place. Congress is awash in special interest contributions – $2.8 billion from 15,500 lobbyists in 2007 – that exchange money for influence over policy. When the Democrats retook Congress two years ago, they did not substantively change the lobbying rules.
So it is reasonable to ask whether a new day of governance in the common interest is possible. Can we make progress on health care or on any significant problem – climate change, education, energy policy, finance, the social safety net – without addressing the underlying problem of Congress’ receptiveness to special interest influence?
As the new health care proposals unfold, it is worth remembering that, early in the Clintons’ health care reform effort, things looked promising. There was general approval in the business and health care sectors. True, when industry practitioner input wasn’t welcomed, the process began to go south. But the real trouble came when the draft product appeared and some segments believed it threatened their interests. Health care and small business interests acted decisively against the plan, while the large business sector was indifferent. The public relations machine of the opposition demonized and killed the plan.
There is little reason to think that today’s organizations will be less action-oriented if they believe their interests are threatened. So what strategies are available to minimize resistance to changes America needs?
In an ideal world, the new Congress would emphasize that it is a new day by forcefully rejecting the practice of lobbying contributions (in favor of public campaign financing). That would effectively dispatch the problem of achieving health care reform and many other solutions as well. But that seems a stretch.
Alternatively, the leaders of America’s non-health care firms – who represent six-sevenths of the US economy – could overwhelm the health care industry’s resistance by galvanizing, mobilizing and championing reforms.
This is also a stretch, but it is not impossible. The relationships between health care costs, productivity and competitiveness weigh on every American business executive. There are Fortune CEOs – Lee Scott of Wal-Mart, Craig Barrett of Intel, Jim Sinegal of Costco, Howard Schultz of Starbucks, Steve Burd of Safeway – who have campaigned tirelessly on the issues central to serious reforms. Keynoting last week’s National Business Coalition on Health annual conference, Barrett told those assembled that "The only way health care is going to change is if people who pay the bill tell the industry to change."
It is impossible to overstate the profound importance of business leaders acting together in the common interest. This group currently exerts more influence over policy than any other. That said, businesses typically are mostly focused on their own niche issues. Information technology companies focus their lobbying on IT. Hospitality companies, insurance companies, energy companies all focus on what matters most to them.
But they could unite on the common interest. Especially as they gain increasing awareness that re-enforcing America’s social and market fabric strengthens the stability that has made it possible to successfully pursue the special interest in this country over the last 60 years.
At a time when America so sorely needs real change, when many signs point to the rapid erosion of the health system’s stability and sustainability, will America’s Congressional and business leaders stand together for changes that can strengthen the nation’s foundation? Will they stand against those who, in continuing pursuit of their own interests, undermine our institutions and our ability to advance?
If they will, then real change is upon us. If they will not, then we are destined to remain where we are now.
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Bill, your statement that, “the Canadian model where you don’t have to pay for what you can’t get” is untrue. The system IS paid for with taxes, no one in Canada considers it free and are reminded of that when they get their tax bills. They are more aware of costs there than are Americans here.
Deron, you keep bringing up the point that we need to control sickness demand BEFORE we tackle budgets and supply. I agree that better policies controlling what makes us sick in the first place are vital, but if you think that a paradigm shift would be necessary for single-pay, it would be nothing compared to the shift necessary for the change in food, pollution and poverty policies that now drive sickness and would set up an even larger fight with corporations and the public. You are talking about a complete change in how America produces and distributes its goods and services, and would require a catharsis for our entire society. Given the rising cost of already expensive healthcare we need to choke that first, then nibble at what is causing our sickness because that will take many decades to change. As it is we may not have enough time to prevent the coming hell on earth from our continuing assault on this planet from global warming.
I continue to be amazed at those who focus on single issues as if they were individually going to solve the problem. If we will take time to disassemble the traditional approach and look at the pieces, we will readily find there is more than enough blame/guilt to go all around – including the buying public. How can you not possibly see the inequities in PBMs, carriers and agents while realizing at the same time individual accountability is a major piece of the game. Single payor will do absolutely nothing to fix it long term. Many continue to talk about the Canadian model where you don’t have to pay for what you can’t get. Let’s start from scratch on planning and develop a truly transformational approach to the issue and do it step by step. By the way, one of the first things to address are the inequities of payment to family practitioners so we will attract more graduates to that area of practice.
Peter/jd – We can’t keep perpetuating this idea that corporate profits are the sole reason why our system is so expensive. That’s a selling point for allowing the government to take over and you have bought in. There’s no doubt that greed is a factor, but as a contributor it is dwarfed by our focus on treating illness instead of preventing it, waste, poor communication, and unnecessary complexity that’s out there.
I just read that the incidence of diabetes continues to increase and now costs over $200 billion annually. Do you want to go after the drug companies and say their expensive drugs are the problem, or do you want to reduce the incidence of diabetes? The correct answer is probably both, but I think we need to focus on the source to find the biggest savings. Seems to me that if we decrease our demand for these drugs, we’ll take a pretty big chunk out of corporate profits. If we focus on the corporate profits, the diabetes still remains.
Hal and Deron,
Why in the world do you think major industry players will voluntarily give up billions in revenue…actually, hundreds of billions? The publicly-traded companies cannot do this because it would go against the interest of their shareholders. The rest won’t do it because it is far easier and more comfortable to keep on doing what they’ve been doing and raise costs by 6-10% a year until they are eventually forced to change. You can wait until the market truly does force change when health care costs reach 20% of GDP, or whatever the breaking point turns out to be, or you can precipitate change now through government action.
This administration and Congress must force change, not simply ask for it. You’re right that government often makes a mess when it micro-manages. But it’s one thing to solicit input from industry in implementing a reform once certain broad objectives have been set and industry can be held accountable to meeting them; it’s another thing to let the foxes decide how the henhouse will be protected, and then trust them to guard it. We saw how well that worked in the financial sector.
The special interest groups are definitely part of the problem and only one symptom that is plaguing the governments inability to make progress on this issue.
At the end of the day, I don’t think any President — even the magical Obama — will be able to solve this. Not until the underlying measurements in the healthcare system change will we be able to make smarter decisions. The archaic cost accounting measurements drive faulty incentives (sorry — I’m an econ and accounting guy — so I see the myriad of problems from that angle).
In the meantime, we’ll see if the new guard can make anything happen.
Hal, I didn’t know the First Amendment allowed the exchange of millions of corporate dollars to get their point of view into legislation or lack thereof. As to your second point, who in the 1/7th will organize everyone to take collective action? What mechanism will “prescibe solutions” if it is not government? Let me know when the industry summit will be announced. Seems the financial sector couldn’t incorporate THEIR collective knowledge, even the “Big” three auto companies couldn’t get their act together even though they’ve had 25+ years of a failing system. Doing the same thing over and over doesn’t change anything, neither does giving billions of tax dollars to the same failed policies.
Brian – Thanks for the thought-provoking post.
Hal – I’m in the same camp as you. Unfortunately, very few others are willing to pitch a tent. We can’t seem to get past the sacrifice part. The claim is that healthcare got us in this mess and they are unwilling to get us out. My contention is that healthcare is largely (although not 100% responsible) for the mess, but healthcare is also the most qualified to get us out. Government should not prescribe the solutions. They should force the stakeholders to the table to develop the solutions. I just haven’t figured out how they can make that happen. Seems to me it should be our duty as citizens to chip into an effort that affects all of us in some way, particularly since we are all contributing to the problem in some way. It’s going to take a very strong leader to get that message across. I guess we’ll see if Obama is that leader.
The Yes we Can optimism never will reach me. Single payer is the solution.
The nursing home industry has mobilized some of Washington’s most well-connected lobbyists to fend off upcoming tough, reform-minded legislation. Among the lobbysts was a representative of The Carlyle Group, the politically connected private equity firm that recently bought Manor Care, the nation’s largest nursing home chain, as a result, went from the frying pan into the fire.
In spite of existing oversight mechanisms, there continues to be horrific treatment of nursing home residents. Recently introduced legislation could significantly increase oversight and enforcement of the nursing home industry. These lobbyists are fighting provisions to fully disclose ownership of nursing homes and to establish outside monitors to review resident care.
To gird for increased regulation, the industry is battening down the hatches because of the new Democratic majority and President coming to Capitol Hill, serious enough in examining whether standards continue to provide an appropriate level of care and protection for residents of nursing homes. According to CMS, regulatory enforcement systems for nursing homes have a lot of problems.
There is a crisis in our nation’s nursing homes. Now is the first time in twenty years to have serious enough legislation to increase the transparency of nursing home ownership, ensure that residents and their families have information about the quality of care at these facilities, and strengthen enforcement of nursing home compliance with quality of care standards.
Two thoughts:
1. Advocating solutions that eviscerate the First Amendment detracts from the other serious points in the post.
2. Instead of waiting for the 6/7 to enforce their solutions on us, those of in the 1/7 could fashion unique solutions that require sacrifice but are likely to incorporate our collective knowledge.
Money is the mother’s milk of politics. Final score: Money 1, bill payers “telling the industry to change” 0
Surprised, Brian, that you misstate the history & thus simplify the problem. It was the small-business lobby, allied with the health plans, that killed Hillary. Small business vs. big business even then. I would argue that NFIB can outgun Fortune 100 any day, because they’re embedded in the Congress. (Big Business thinks the President is important…) Ask Jeff Goldsmith…
This Op’d ed from the Washington Times yesterday:
http://www.washingtontimes.com/news/2008/nov/17/lobbyists-are-good-people-too/
Notice the top five lobby spending organizations – no wonder healthcare is in such a mess. We’ll need to get past this first.
Seems the feelings of lobbyists are being hurt. The spin is that even the Boy Scouts and Cancer Society have lobbyists, it’s just about information sharing not money or influence. As for the “transparency” solution, that’s a crock, politicians have shown they have NO shame. Maybe John McCain can use his “maverick” self label to ride herd on lobbyists?
Needless to say, Healthcare reform is sorely needed in this country. Working in the Group Health Insurance industry in Dade and Broward counties in South Florida, we are constantly exposed to the inequities of the system. Things such as women having to pay so much more than men. The extremely high costs of the plans in south florida due to the extremely high cost of prescirption drugs which the retired population in Dade and Broward counties need so many of. Hopefully the new administration will require the insurance companies to scale the cost of their plans back, so that we won’t have to spend our annuities to pay for our group health care insurance.
Jean Drogus
http://www.securefloridian.com
Thoughtful post, Brian. You’re asking the $64,000 question, as we used to say. Only now it’s worth $2.8 billion. I don’t see corporate business leaders standing together on this in an organized way, even though they may share opinions about what is wrong. This is in part because they continue to choose to do business with around 1,500 different health plans, with many thousands of benefit packages, which seriously dilutes their power to disrupt the market by working more directly with any new and more cost effective provider organizations.
I’m actually more sanguine now about the chances that Medicare and Medicaid policies could change and be influential in terms of rewarding efficiency and not paying for waste, than I am about corporate America pushing health reform…but only marginally more sanguine!
Regards, DCK