How America's forbidding political landscape made health care reform impossible for Clinton and nearly so for Obama.
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.
Although 50 million people remain uninsured, American health policy has thus fostered the rise of what Starr calls “protected publics.” As Cornell professor Suzanne Mettler has described in these pages (see “20,000 Leagues Under the State,” July/August 2011), these large constituencies often do not perceive the full costs of the substantial subsidies they receive. The present discounted value of Medicare benefits for seniors far exceeds what most beneficiaries have contributed to the system, and holders of employerbased coverage benefit from substantial tax expenditures which they scarcely know exist.
These protected publics also have reason to regard themselves in competition with other groups. Starr argues that millions of seniors, veterans, and others have come to see themselves as having earned their benefits, and many believe that their claims to public resources are more morally worthy than those of Medicaid recipients or the uninsured.
No comprehensive health care reform that would harm these protected publics is politically feasible. (Not coincidently, Starr argues, no other advanced democracy has followed such a trajectory, establishing separate programs for the elderly before pursuing broader efforts for near-universal coverage.) The combination of vested constituencies and a political system designed to thwart comprehensive reform locks liberals into incremental measures that attach new protections, new coverage, and new costs and quality control efforts onto an already complex and inefficient health care delivery system. These political realities hinder efforts to craft sound policy and lead instead to reforms that are incremental, ideologically moderate, forbiddingly complex, and unlikely to generate grassroots excitement. The resulting encyclopedic legislation invariably exposes political vulnerabilities. Difficult compromises must be struck through precisely the kinds of sausage making that voters disdain.
A fragmented health system particularly hinders efforts to deploy government’s bargaining power to control costs—much to the benefit of many entrenched constituencies. Millions of Americans see reasons to resist measures that might constrain the care or benefits they receive, but because the full costs of health care are hidden, few perceive corresponding direct benefits to controlling these costs.
Given all of these realities, it’s remarkable that the Affordable Care Act was passed last year. The single most important factor in its success was the presence of strong Democratic majorities: President Obama enjoyed much broader and more unified congressional support than President Clinton did, even after Scott Brown’s victory deprived Democrats of their sixtieth Senate vote. Clinton’s reformers, Starr writes, also “lacked one critical element” that Obama and his team possessed: “an agreed-upon remedy.” As Starr writes in perhaps his most intriguing chapter, “Rise of the Reform Consensus, 2006-2008,” much political heavy lifting was done before and during the presidential primaries, as Democratic policy elites and the major Democratic presidential contenders coalesced around “minimally invasive reforms” influenced by recent efforts in Massachusetts.
By the time Obama entered office there was already a broad Democratic consensus on what health care reform would look like. Institutionally radical alternatives such as the Wyden-Bennett bill were effectively sidelined, since they threatened too many protected publics. Starr is cynical regarding the public option and Medicare buyin proposals, writing that they were politically valuable, to “bring the left within the fold.” Yet they faced fierce opposition from the supply side of the medical economy, as well as quiet opposition from many House members— some liberal—who worried about the impact such policies would have on providers in their districts back home.
Mobilizing a larger and more cohesive majority, Democratic congressional leaders shepherded the legislative process far more successfully in pursuing the Affordable Care Act than was possible in the Clinton years. The strong Democratic majority gave health reform an aura of inevitability that was an invaluable asset in striking bargains with insurers and with others. Because Democrats possessed a large majority, much of the cross-party negotiations that might otherwise have occurred took place within the party, between Democratic liberals and Democratic conservatives and moderates. (Starr cites with some irony the “bipartisanship within one party” that resulted in last year’s reform.) ACA provisions such as the individual mandate had appeared in past Republican bills—Governor Pawlenty’s ironic sobriquet “ObamneyCare” may provide the best description of the final outcome. Yet perhaps unintentionally, partisan polarization and Democrats’ subsequent intraparty bargaining gave moderate and conservative Democrats a strong stake in the bill. Figures such as Max Baucus and Kent Conrad were the marginal votes. Their personal reputations were on the line in securing its final passages. Republicans acquired no such ownership, with predictable consequences.
Starr finds much to celebrate in health reform, and much to worry about in pondering the ACA’s uncertain future. He lucidly describes Democrats’ most important political error: the extreme backloading of the program’s main provisions to 2014. The key provisions of the new law are highly unlikely to be repealed once health reform becomes part of the fabric of American life, but the law was designed so that at least two congressional elections and one presidential election will pass before pillars such as health insurance exchanges are fully implemented. As Republicans continue to profit from the nation’s economic woes, Obama’s reelection is in doubt—and with it, the fate of health reform.
Starr is one of many commentators to say that backloading was a consequence of the administration’s foolishly low ten-year budget targets. He also notes the more subtle reality that Democratic lawmakers, mindful of recent experiences in Medicare prescription-drug coverage, were leery of any policy that might produce embarrassing administrative glitches before the 2012 election. Whatever the motivation, the future of last year’s reform is dependent on the results of the 2010, 2012, and (in many cases) 2014 elections and beyond.
Starr is disgusted—as I am—that the ACA’s substantive moderation does so little to temper Republicans’ extreme and often dishonest attacks on the new law. He is also frustrated—as I am—that so many progressives are disparaging of this historic (albeit incomplete) achievement.
Starr ends with a sober observation:
Repealing that law would not just mean denying insurance to more than 30 million people. It would also be a confession of political helplessness in the face of a problem that has nagged at the national conscience for a century. The search for a remedy would continue, but it would proceed under a shadow of uncertainty about whether Americans will ever be able to hold their fears in check and summon the elementary decency towards the sick that characterizes other democracies.
I closed this excellent book doubly worried—about the uncertain fate of health reform, and about the political lessons this story teaches. President Obama embarked on health reform with virtually unique political advantages. He risked catastrophic defeat, sacrificed more than a year of his presidency, and, remarkably, succeeded. Thus far, however, health reform has brought him and his party little political benefit. As a friend of mine said recently, the ACA’s passage was a “catastrophic victory.”
Future presidents will need to contemplate large measures to address our large national problems, from climate change to widespread unemployment. I fear these leaders will contract a kind of legislative “Vietnam syndrome” as they recall Obama’s and others’ difficulties in the struggle over health care reform. As the health debate has shown, our capacity for collective national action does not currently match the serious challenges we face. In health care and other areas, we will need to do better.
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