HillaryCare 2.0 – Back to the Future

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It was 1993, nearly a generation ago.  President Bill Clinton had delegated massively to the First Lady the task of putting meat on the bones of his ambitious healthcare announcement.  Ms. Clinton, in turn, undertook the task of drafting and then selling to Congress what was titled the “Health Security Act of 1993,” but what is remembered as “Hillarycare.”

No one doubts Ms. Clinton’s intelligence and determination.  That she was so completely derailed and the way it happened is nothing short of remarkable.  In many ways, we were then so ready for reform.  Many things were aligned, including a newly robust economy that lasted for over 7 years.

There are many reasons why Hillarycare failed back then, not the least of which were the AHIP sponsored television ads,  Harry and Louise, who became famous for their very effective skewering of what was loosely represented to be the effects of the Act.  The entire debacle became a cautionary tale about how healthcare IS different and is extremely resistant to change.

Ms. Clinton recently cited the failure to pass her proposed healthcare reform in 1994 as her greatest political regret.   Think she has a good memory?  Think she might want some measure of closure on this one?  A rematch maybe?  Maybe, but not quite at this point of the election process, as we will discuss.  She has enough baggage to overcome without being too obvious about healthcare.

The provisions of Hillarycare are remarkably similar to what finally became Obamacare.  It is not possible in this short article (nor particularly helpful) to outline all the similarities.  But know that there is a direct and thorough lineage leading from Hillarycare 1993, to  Ms. Clinton’s American Health Choices Plan that she proposed in her 2008 campaign, to Obamacare.  All three contain the same basic provisions.

As Scott Gottlieb, MD,  concluded last year in a comprehensive article:

“As she outlines her platform for her 2016 presidential campaign, Hillary Clinton will be forced to revisit health-care reform. The challenges that Obamacare has faced will make it tempting for her to try to distance herself from the unpopular reform. And had the 1993 statute been her only foray into writing health-care policy, perhaps the more than two decades that have passed would have given her enough wiggle room. But her 2008 campaign and its health-care reform proposal concretely bridge the gap. Clinton can’t easily shy away from taking credit (or blame) for the fundamental blueprint of Obamacare.”

So, unlike the other remaining presidential contenders whose demonstrated healthcare naivete has been embarrassingly on display, Hillary has the unfortunate burden of having “been there, didn’t do that” (her quote from her NY Times Magazine article), and having provided far more than just the conceptual framework for Obamacare.

To sum up, Hillary simply cannot distance herself too far from what is already on the books.  She is wed to its large strokes by virtue of her own work in 1993 and 2008 that ineluctibly led to Obamacare.  While we might disagree with aspects of both Hillarycare and Obamacare, she clearly understands it and healthcare at a level far beyond the other candidates.

Should that makes us feel comforted or threatened?  That depends on where you stand on the major issues.  Ms. Clinton clearly stands for universal healthcare, calling it “a core Democratic value.”  She has not to date come out in favor of a single payor system (which would be the federal government most likely adopting a Medicare for all plan distastefully similar to Mr. Sanders), remembering the sting of AHIP’s Harry and Louise ads.

To be sure, single payor would be much simpler, but while she will continue to vilify the health insurance industry, she has good reason to be wary of its clout.  So her (and Obamacare’s) alternative to single payor is the unpopular (but necessary) “mandate,” the so-called “shared responsibility” of individuals and businesses to pay for coverage, sometimes called “play or pay.”  Don’t you just love these labels?

Fact of the matter is that Hillarycare in 1993 was far more aggressive than Obamacare, featuring her National Health Board (NHB) which would have consisted of Presidential appointees (surprise) which would wield enormous power across a spectrum of healthcare activities.  To give you a sense of the sweep of her vision, the NHB would have had oversight (read control) over, among other things:

  •      Health insurance premiums
  •      Design of insurance plans
  •      Approval of new benefits
  •      Healthcare spending caps

A short step indeed away from single payor.  What would have been left for insurers to do?  In fact, the NHB’s legislative proposals and decisions on rates and benefits were exempted from any legal or administrative review.  Now that’s nice if you can get it.

Ms. Clinton did not jump into the pond gently, which gives you some idea of what she might do if elected.  She plainly wanted much more direct federal governmental intervention and oversight, even more than that of Obamacare.  A sense of this is captured in a 1993  op-ed piece written in the Washington Post by conservative University of Virginia Professor Martha Derthick, as follows:

“In many years of studying American social policy, I have never read an official document that seemed so suffused with coercion and political naivete…with its drastic prescriptions for controlling the conduct of state governments, employers, drug manufacturers, doctors, hospitals and you and me.”

For a very detailed and relatively accurate, albeit conservative (Heritage Foundation), contemporary analysis of Hillarycare see A Guide to the Clinton Health Plan.

So what does this likely portend?  To date, Ms. Clinton has nibbled around the fringes on this issue, playing it progressive-safe.  She has pledged support for such non-controversial issues as autism, Alzheimer’s, children’s coverage, more generic drugs, and taking umbrage with Turing Pharmaceuticals’ price increases and some pending insurer mergers.  Nothing remarkable there.  She has variously been quoted as supporting and opposing single payor healthcare coverage, which she presumably believes makes her the “safer” candidate from an industry perspective.

Her website on healthcare leads with:

“Hillary will:

  •      Defend [Obamacare] and build on it to slow the growth of out-of-pocket costs.
  •      Crack down on rising prescription drug prices and hold drug companies accountable so they get ahead by investing in research, not jacking up costs.
  •      Protect women’s access to reproductive health care, including contraception and safe, legal abortion.”

Nothing remarkable there, except to note that the culprit in the growth of out of pocket costs is the growth of healthcare costs overall, which contributes equally to individuals’ out of pocket and employers’ premium costs.  But we all knew that.

And her website says she would: (i) enhance the premium tax credits; (ii) incent all states to expand Medicaid; (iii) extend coverage regardless of immigration status; (iv) continue to support a “public option”; and (v) expand access to rural Americans.  Might come at a modest cost, you think?  I guess when compared with Berniecare, you are in lesser-of-two-evils-land.

On the other side of the ledger, she wants to: (i) lower out of pocket costs; (ii) do something about the cost of pharmaceutical drugs; and (iii) reward value and quality.  No one would argue against those, and nothing much in all of this makes Ms. Clinton vulnerable to attack, at least on the progressive side of politics.  She clearly is keeping a low profile in healthcare, for now.

While one cannot be certain, it seems likely that if elected, Ms. Clinton will do the following:

  •      She will accept Obamacare as a good first step and use it as a springboard
  •      She will attempt to use heretofore fallow provisions of Obamacare to (yes) greatly expand federal governmental control over the financing and delivery of healthcare (bring back the NHB?)
  •      She will try to eliminate the gap between what we have today and universal healthcare coverage by further expanding governmental subsidy programs
  •      She will focus on what Obamacare did not do, mainly, address the out of control costs of healthcare (for a fascinating read of how and why Obamacare punted on the cost issue, see Stephen Brill’s America’s Bitter Pill)
  •      For her focus on cost, she will cast the pharmaceutical industry and insurers as the scapegoats, and will attempt some additional control over insurer premium increases (whether anyone can do anything about pharma given their legendary lobbying power remains to be seen)
  •      She will (and always has) supported coverage for children and for women’s reproductive rights
  •      Although she, at times, denies she favors single payor coverage, I believe she will vilify (surprise) insurers and their pending mergers in hopes that in her tenure, single payor might just be possible

What might one hope for if Ms. Clinton is elected?  Even in 1993, she and Ira Magaziner, her advisor (and Rhode Islander), recognized that the true primo culprit for our out of control healthcare costs is how we pay for care, the so-called “fee for service” methodology.  To over simplfy, that payment method pays by the piece.  Do more “things” and you get paid more.  Everyone seems to recognize that this is the single biggest driver of excessive costs (in addition to our unhealthy lifestyles).  Yet we drag our feet in resolving it.

Obamacare (to its credit) started the glacial move away from fee for service via Accountable Care Organizations, which in some future time are envisioned to take full upward and downward risk for the healthcare costs of their assigned populations and be paid using a combination of bundled payments for all care, and add-ons for quality and outcome.  I dare say we all know this has to come; and yet the fits and starts are embarrassingly pathetic to date.

To date, Obamacare has focused on health insurance reform—not healthcare reform.  We know…you have to have a “bad guy.”  But once elected, Ms. Clinton, we might hope, could move beyond the cartoonization of healthcare issues and focus on quality of care, and reducing costs, waste, and error.  There is so much more to be done.  So…

We might hope, once elected, that Ms. Clinton would convene the right people to take decisive action using the following definition of what must be done for true healthcare reform:

  •      We cannot reform American healthcare until we reform how it is delivered
  •      We cannot reform how healthcare is delivered until we reform how it is paid for
  •      We cannot reform how it is paid for until we have an agreed upon universally governing set of standards for quality of care and outcomes by which every single practitioner and organization will be measured and publicly scored
  •      And we cannot measure quality of care and outcomes without interoperable electronic medical records that are core to the delivery of care

There of course is the other half of the equation:  the patients’ (our) unhealthy lifestyles and inappropriate use of said delivery system.  But that one is for another day and another set of blogs.

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4 replies »

  1. A thoughtful look at what Hillary might do re healthcare, if she doesn’t have a world of other problems to attend to. I think it’s a significant net plus that she is highly knowledgeable on the details and challenges of health policy. There’s good reason to believe she’ll take a pragmatic approach to costs, recognizing it’s a deeply entrenched issue that will require a multilayered strategy. But she’ll also know on day one, if elected, that it’ll be on her watch that the solutions to unsustainable price inflation and overall costs will have to emerge. And she might only have 4 years.

  2. “The CBO just released their cost projection: from 2017-2026, the gross cost of ACA subsidies will be 1.9 trillion dollars.”

    Somebody likes the ACA, especially those people who could not get coverage before it. If there was another way for those people using the 1.9T to get health care would we be paying less? When you hide numbers by not counting people not in the system and then claim they’re too expensive when they are in – you can’t scream about how much they cost the system, especially when everyone is getting subsidies.

    ACA high users needed health care and were not getting it. Assigning a cost to people not able to get health care makes the cost numbers now not so shocking.

  3. Good comments all. What we hope is not so much that fee for service is changed as that how we practice and how as patients we conduct ourselves change. A hugely tall order. And we have to do this incrementally, so it will likely be beyond my lifetime. And so I write….

  4. Interestingly, the ACA (that I supported at inception) has driven up total Health care costs in the short term. The CBO just released their cost projection: from 2017-2026, the gross cost of ACA subsidies will be 1.9 trillion dollars . The hope is that in the long term cost savings with alternative payment models will be realized. The emerging data is unfortunately not clear that this will happen (patient centered medical homes, ACO’s have not in aggregate shown signs cost reductions yet)

    On the ground, I see hospital consolidation that raises prices, federal subsidies to Medicare advantage plans that seem to be untouched, private cardiology practices joining hospitals in order to preserve reimbursement, and gaming of quality metrics.. Just to name a few. The places I do see cost reductions relate to changes in physician behavior in areas untouched by shared savings incentives (eg reduction in elective coronary stents nationally)

    It’s just not clear to me now that it was ever so simple (fee for service bad, ACO good). Here’s hoping the next POTUS takes a more nuanced approach.