No One’s Falling for Big Health’s Bogus Promise to “Reform” May 13, 2009

By Joshua Holland, AlterNet. Posted May 13, 2009.

Corporate Dems are fawning over the industry’s “promise” to hold down costs. A broad progressive coalition is pushing for a real solution.This week, the health care lobby scored a cunning propaganda victory by feigning interest in fixing the perennial rip-off we call a health care system.

With much fanfare, Big Health trotted out a six-month old “promise” — a toothless, non-binding pledge lacking any specifics — to make various nips and tucks that would slow the rate at which health costs grow to “only” 4.7 percent annually. It was hailed by the Obama administration and many observers as a breakthrough in the battle for reform.

Until recently, the health care industry has been dead-set on preserving a disastrous but profitable status quo (The U.S. spends close to twice as much per person on care than other wealthy countries, and gets consistently poorer results; among residents of 30 rich countries polled by Gallup, Americans came in 18th in terms of satisfaction with their care). But now the “disease care” industry is portraying itself as an agent of change. Fearful of a growing movement towards real, substantive reform, it’s trying to co-opt the process under the guise of “getting a seat at the table.” That they’ve given up, for now, their oppositional stance is what has so many tongues wagging about the significance of the proposal.

But it’s nothing new — “voluntary” codes  of conduct, self-regulation and industry-driven initiatives for the private sector to address complex policy issues have long been a standard tactic for heading off real regulation and deeper systemic reforms. The Brookings’ Institution’s Henry Aaron, a former official in the Carter administration told the New York Times that when he heard of the proposal, “I had a Rip van Winkle moment, as if I had fallen asleep in 1977 and woke up again this morning.” According to the Times, Carter’s pledge to do something about out-of-control health care costs “prompted the industry to undertake a short-lived ‘voluntary effort.’” The growth of health care costs also slowed briefly after Bill Clinton’s failed attempt to fix the system.

But while the industry’s proposal is light on substance, it is a game-changer to some degree. Instead of simply opposing reform, which is a more dangerous proposition today — with 47 million uninsured and health care eating up 17 percent of the country’s economic output — than it was when Clinton mounted his fight, Big Health is trying to kill the most important and progressive elements of Obama’s promised reforms from the inside — from its “seat at the table.”

But while health lobbyists are trying to maintain the industry’s grip on trillions of dollars of business, Health Care for America Now, a broad coalition of groups including ACORN, the AFL-CIO, Campaign for America’s Future and MoveOn.org, is fighting for the inclusion of a public-insurance option that would add to the current mix of employer-based insurance and government programs for the needy — one of the centerpieces of Obama’s health care proposals during the campaign. According to The Hill, “Organizers believe their efforts will pressure centrist Democrats and Republicans to line up behind Obama’s health care proposal, which calls for all Americans to have the choice of a public insurance plan.”  This week, the group launched a series of ads targeting wishy-washy Dems by name.

The Public Option 

The creation of a public health insurance option is what the insurance industry fears most. The idea is to allow businesses and individuals to continue purchasing coverage from private insurance companies if they desire, while also establishing a public insurance program modeled on Medicare as an alternative. The government would subsidize the premiums paid by low-income families, but anyone could buy in. “Choice” is the key word.

With a very large pool of insured, a greater emphasis on prevention and a reduction in paperwork and administrative costs, advocates contend that the public option would prove more attractive for most employers and families, and its membership would grow, leading in turn to greater cost reductions. Eventually, gradually, most people would switch from private health insurance, and we would end up with a national insurance plan. 

The idea of creating a choice of a public-insurance plan is a bit of political jujitsu intended to get the U.S. to something approaching a single-payer system incrementally and without taking on the powerful insurance lobby head-on (Over the past 10 years, the insurance industry has ranked second in dollars spent lobbying Congress and the White House. The top spot is held by the pharmaceutical-and-health-products industry. Big insurance is one of the most influential lobbies in Washington, and it has trillions of dollars at stake in the health care battle.)

Although the proposals put forth during the primaries by presidential candidates Barack Obama and Hillary Rodham Clinton differed in the specifics, both had a public-insurance option at their hearts; it was one of the promises that helped get Democrats elected. And this is where the fight will be — a coalition of “free-market” advocates led by the Heritage Foundation put a public insurance option at the top of its list of six health care “deal-killers.” And all of the health care lobbyists behind this week’s “proposal” have signalled their intention to fight against the inclusion of a public health option. Again, from the inside.

On the outside, we can look forward to the corporate-right’s network of media outlets, think tanks and PR firms calling any substantive reform “socialism.” The New York Times reported that Rick Scott, a veteran of the Bill Clinton-era health care fight whom the Times describes as a “conservative investor willing to spend freely on a political cause,” started a group called “Conservatives for Patients Rights,” which has already launched a multimillion-dollar campaign attacking the Obama administration on health care before the White House even endorsed any specific legislation.

Scott is a controversial figure; the former CEO of Columbia/HCA, then the world’s largest health care company, was “ousted by his own board of directors in 1997 amid the nation’s biggest health care fraud scandal.” According to the Times, Scott’s new group hired the right-wing PR firm behind the “Swift Boat” attacks on Sen. John Kerry, D-Mass., in 2004 to scare the public about the “perils of socialized medicine.” 

The ideological stakes in the fight are high and go far beyond the bottom line of the insurance industry.

In an op-ed in the Wall Street Journal, Rep. Paul Ryan, R-Wis., and Peter Wehner, a former deputy in the George W. Bush administration, argued that a public option would make the conservatives’ one-size-fits-all economic policy — tax cuts — more difficult to enact.

“Once a large number of citizens get their health care from the state, it dramatically alters their attachment to government,” they wrote. “Every time a tax cut is proposed, the guardians of the new medical-welfare state will argue that tax cuts would come at the expense of health care — an argument that would resonate with middle-class families entirely dependent on the government for access to doctors and hospitals.”

Wavering Dems

The Obama administration insists that it is still intent on including a public option in thelegislation expected to make its way through Congress this year. But in recent weeks, key Senate Democrats, including Finance Committee Chairman Max Baucus of Montana,  “Blue Dog” Ben Nelson of Nebraska and party newcomer Arlen Specter of Pennsylvania have signaled they would likely oppose the inclusion of a public-insurance option as part of a sweeping overhaul of our health care system. 

That’s why the importance of a broad grassroots movement pushing Democrats to stand up to the insurance industry can’t be overstated. The momentum is there. According to research cited by Democratic pollster Celinda Lake (PDF), 70 percent of Americans — including almost 2 out of 3 Republicans — want major reforms, with the choice of a public insurance plan open to everyone added to the current mix of Medicare, Medicaid and  private insurers.

But while the public overwhelmingly favors the public option now, history suggests that the insurance industry’s ability to shape the debate can’t be underestimated. The Christian Science Monitor noted, “when President Clinton first outlined his Health Security Plan, more than two-thirds of Americans initially supported the idea. Then the health insurance industry launched a massive advertising campaign opposing the plan. Within a year, support had plummeted, along with any chance of health care reform.”

When Harry Truman proposed a national health insurance plan in 1945, 75 percent of Americans favored it, but again, says the Monitor, “after the U.S. Chamber of Commerce and medical groups attacked the plan as ‘socialized medicine,’ support sank” to almost nothing. 

If ordinary people don’t get engaged at the grassroots level and push for a public-insurance choice, then anything approaching real health care reform will likely face a similar fate. But with significant pressure on members of Congress and the Obama administration to challenge the status quo, we might just be able to avert a looming public policy disaster.

Joshua Holland is an editor and senior writer at AlterNet.