Thirty years ago, one of us asked the retiring CEO of one of the largest drug companies what was the worst mistake he had made as CEO. Without hesitating he said, “Opposing Medicare. We were so ideologically hostile to a big new government program that we lost sight of our own self-interest. All the major drug companies except Syntex opposed it. Luckily we lost. We have made billions of dollars because of Medicare.”
The White House “summit” on health care reform was a nice start but as the as the reform debate unfolds, public and congressional opinion and the positions of the powerful interests involved – pharmaceuticals, insurers, device manufacturers, physicians, large and small employers, and technology companies – will be swayed by their ideology, perceptions of self-interest and the rhetoric used in the debate.
At one level, there is a broad consensus in America that we need to reform healthcare to expand coverage, improve quality, and make healthcare affordable. Public opinion polls show broad agreement and large majorities in favor of fundamental change. Even among specific stakeholder groups, from employers to hospitals and doctors, there seems to be widespread agreement that healthcare needs to change. But, the combination of a deep ideological divide, self-interests that are mutually exclusive, and rhetoric that is capable of turning public opinion against change may end up creating an environment of inaction.
The ideological debate is about the roles of government and the market. Most Conservatives, Republicans and business leaders strongly oppose new government programs (especially if they involve substantial tax increases) and believe the market is the solution. Many believe the individual insurance market, tax incentives (read targeted tax cuts), higher out-of-pocket costs (“skin in the game”) and competition can fix the system. Most Liberals and Independents believe that only government can ensure that the healthy majority pays most of the cost of caring for the unhealthy minority and that markets cannot do this. The left hates for-profit health care. The right hates big government programs and mandates. A poll by Harris Interactive and the Harvard School of Public Health shows that two thirds of Republicans think we have the best healthcare system in the world but only one-third of Democrats do.
And what about self-interest? Doctors and hospitals don’t want Medicare cuts or big, powerful insurers. Pharmaceutical companies don’t want the government to negotiate their prices or to allow drug importation. Doctors, hospitals and medical device companies would all benefit from a big expansion of coverage – if the prices are right. Small employers hate mandates to provide health coverage to their workers. Unions hate mandates that individuals have to purchase health insurance. Large employers hate paying excess health insurance premiums because of the “under-payment” to providers by government programs. And so on. Policy is usually made by the sum of the self-interests, weighted by the political clout of each interest: who has the power and what do they want?
Each powerful stakeholder in healthcare has a “line in the sand” issue that they will not give on. The problem is that in a $2 trillion healthcare system there are many powerful stakeholders, there are very clear “lines in the sand”, and many of these self-interests are in conflict or are mutually exclusive.
One of the lessons from the demise of the Clintons’ proposals in 1994 is that rhetoric matters. If people think reform means expanded coverage, better cost-containment, more value for money and increased personal security in the future, they support it. If they believe reform means higher taxes, higher out-of-pocket costs, less choice, reduced quality, fewer jobs and rationing, they oppose it. Words and slogans have been misused and abused in health care policy for many years. Most health maintenance organizations (HMOs) focused on cost containment, not maintaining health. Managed care firms, it appeared, “didn’t manage and didn’t care.” “Personal responsibility” and “empowerment” really meant “patients pay more.” “Consumer-driven health care” was driven by insurers, employers and consultants and never by consumers. A “preferred provider” was anybody with a white coat, a stethoscope and a pulse. Almost any program to expand coverage was attacked as “socialized medicine” even when
the insurance and the care would be provided by the private sector.
Policies that would constrain costs were either “rationing” or would reduce “quality” or “choice.
Ideology, self-interest, and rhetoric will shape the health reform debate. A sneak preview of this process was embedded in the recent stimulus package. $1.1 billion was added for comparative effectiveness research. Many policy wonks agree that we need better information on what works and what doesn’t in health care, but disagree on the details of what to study and how to use the information. Insurers and employers want a strong agency to study cost-effectiveness so they don’t have to pay for very expensivecare of marginal benefit. Their opponents call this rationing and were insistent that comparative effectiveness research should not lead to any reduction in reimbursement.. Talk radio was full of assertions of “socialized medicine” and charges of “English style rationing” being sneaked in to an omnibus bill in the dead of night.
There is one other important lessons from history. Speed is vital and a prolonged debate causes support for health reform proposals to decline as critics tear them apart. And this debate will be about politics, not just policy. If a major bill passes, it will increase the popularity of the president and help the Democrats in the next election. If it goes down in flames, like the Clintons’ bill in 1994, Democrats are likely to lose many seats in 2010. If President Obama believes that the debate about health care can be conducted civilly without much partisan rancor, he is surely wrong.
The polls show that health reform is a very divisive issue with the pubic, and this polarization is even stronger in Congress. The debate will get very nasty. Let the battle begin.