On Political Books

November/ December 2011 Sisyphus Gets to the Top

How America's forbidding political landscape made health care reform impossible for Clinton and nearly so for Obama.

By Harold Pollack

Remedy and Reaction: The Peculiar American struggle over Health Care Reform
by Paul Starr
Yale University Press, 335 pp.

No other nation organizes its government as incoherently as the United States…. Its policies are set to run a legislative obstacle race that leaves most reforms sprawling hopelessly in a scrum of competing interests. Those which limp into law may collapse exhausted, too enfeebled to struggle through the legislative tangle which now confronts them, and too damaged to attack the problems for which they were designed. The humiliation of the will of government is popularly reckoned no bad thing.

Thus begins Peter Marris and Martin Rein’s landmark 1967 book, Dilemmas of Social Reform: Poverty and Community Action in the United States. Their critique of the structural impediments of American government could easily have been written today by some liberal blogger lamenting the shortcomings of health reform. It is certainly a theme of Paul Starr’s new book, Remedy and Reaction: The Peculiar American Struggle over Health Care Reform. A Princeton professor and Pulitzer Prize-winning author, Starr was a senior adviser to President Bill Clinton during the 1993 battle over health care reform. While he is an ardent liberal and a supporter of the 2010 health bill, Starr has maintained a critical distance from the Obama camp. This unsentimental perspective serves him well in this outstanding volume.

Remedy and Reaction accomplishes several tasks in its brisk 300 pages. The first quarter of the book provides a tour de force 100-year history of American health care reform—a dimension often missing from current policy discussion. Encountering many useful nuggets of information along the way, one finds the need to revise many commonly accepted accounts of how we came to our present predicament.

You may have heard, for instance, that employer-based coverage was created during World War II to evade wage and price control—and, certainly, that history matters. Yet, as Starr relates, employer-based coverage started in earnest during the 1930s, as early Blue Cross plans addressed classic market failures in the provision of health coverage. Providing health insurance through large employers offered economies of scale and provided stable and favorable risk pools, mitigating the problems that perennially plagued insurance markets. Given this history, it’s important to keep in mind that any hasty effort to unravel employer-based coverage—such as candidate McCain’s 2008 plan—might prove quite harmful if these concerns were not addressed.

It’s common knowledge that, in signing the Affordable Care Act, President Obama succeeded at a task that had eluded his predecessors going all the way back to Theodore Roosevelt. Indeed, many presidents have sought to expand health services while in office, but, as Starr notes, only one previous president entered office with an explicit promise to provide near-universal health coverage through health care reform: Clinton, in 1993.

From his insider’s perspective, Starr describes the painful failures of the Clinton reform effort. Many liberals—not least many Obamans—blame one or both Clintons for the debacle: had they presented a bolder and simpler plan, had they shown more tactical savvy, had they dealt more effectively with key House and Senate leaders, had Daniel Patrick Moynihan been less destructive, had Bill Clinton been less of a cad, we would have enacted comprehensive health reform long ago.

If the experiences of the past three years didn’t suffice to debunk these aspersions, Remedy and Reaction certainly should. Viewed in historical context, President Clinton’s willingness to attack health care reform was more remarkable than the subsequent disappointing result, for three main reasons.

The first was changing partisan dynamics. In principle, Clinton’s efforts might have led to some sort of grand bargain among the diverse constituencies that make up our $2.6 trillion health care economy. That, in turn, might have resulted in an ideological compromise between liberals and conservatives, in which universal coverage was pursued within a framework of market incentives. In reality, this kind of transactional politics was supplanted by a much more poisonous partisan politics—which remains with us today. A new breed of ideologically motivated Republicans saw an opportunity to destroy the centerpiece domestic policy initiative of a Democratic administration, and they were unafraid to wield powerful procedural tools to accomplish this objective. Starr quotes political scientist Gary Jacobson’s astute summary: “The illusion of unified government put the onus of failure on the Democrats; the reality of divided government let Senate Republicans make sure the administration would fail.”

Second, as Starr notes, these same procedural tools allowed a skilled Republican minority to demoralize Democrats and heighten public cynicism and apathy—simply by dragging out the process. As commentators Ezra Klein and John Sides emphasized last year, and as John Hibbing and Elizabeth Theiss-Morse’s book Stealth Democracy: Americans’ Beliefs About How Government Should Work documents in greater detail, American voters hate the actual process of legislating. The electorate’s undiscriminating disdain for prolonged legislative bickering will always impose a large roadblock to ambitious reforms, many of which require prolonged bargaining. True to form, the Clinton plan slowly asphyxiated as it got stuck in Congress.

Third, beyond these generic roadblocks, Clinton faced other daunting obstacles rooted in the specific history of American health policy. Before Bill Clinton even reached grade school, President Harry S. Truman failed to achieve a near-universal program modeled after Social Security. After this defeat, liberals made two fateful decisions that brought permanent, largely unintended consequences. As Starr writes,

The United States took the critical steps in the formation of its health care financing system in the two post-World War II decades, when it turned decisively towards private, employer-based insurance and created separate programs for the elderly and for the poor. These were the years when the United States ensnared itself in a policy trap—a costly, extraordinarily complicated system which nonetheless protected enough of the public to make the system resistant to change.

In expanding coverage to the elderly, in measures that culminated with Medicare (and in providing large subsidies for capital investments), many supporters believed that they were taking the first steps to expanding help to the sick and the disadvantaged. That was, roughly speaking, the virtuous circle of Social Security. While that program began with serious gaps, it created favorable conditions for its own expansion. Medicare played out differently. Indeed, one could argue that the program has been a decidedly mixed blessing for American social insurance. It has proved a lifesaver for hundreds of millions of people, but the program’s high and growing costs (made worse by President George W. Bush’s poorly financed prescription-drug program) have led many policy makers and voters to regard any further expansion as fiscally irresponsible. (These fiscal concerns are, I believe, misdirected: Medicare has done no worse than the rest of the health care system in controlling spending growth. But the political reality remains.)

The shift in American interest group politics was equally acute. Private insurers had obvious reasons to resist Medicare’s expansion. More important, Medicare accelerated the emergence of the elderly as a distinct constituency. Meanwhile, many workers receiving employer-based coverage believed that they were getting better coverage than Medicare provides, often for free.

Harold Pollack is the Helen Ross Professor at the School of Social Service Administration at the University of Chicago.