Health Care Reform on the Hill: Where We've Been and Where We're Going

This year's efforts at national health reform represent one of the most ambitious attempts ever to assemble a coalition that combines the forces of greed and envy; and we've still got Washington representatives for the five other deadly sins to go! But it's hard to keep those respective parties from fighting with each other eventually, and then threatening everyone else.

President Obama's speech before a joint session of Congress on September 9 provided his "plan" with a brief bump back up in the opinion polls. A few weeks later, the bleeding away of support is starting again, as we return to pouring over legislative details, the many disagreements about them, and questions about how they actually fit together coherently. Old conflicts resurface, and new conflicts emerge.

The main strategy for "success"appears to be to keep as many parties as possible from being able to read the evolving bills' text-–particularly on the Senate side--and keep members from talking to their constituents again before they vote.

We don’t have real, solid Congressional Budget Office cost estimates on what’s actually going to be the next REAL stage of legislation--the estimates that matter.

We may be in a temporary bubble of legislative optimism, on the theory that whatever doesn't kill these various contraptions will only make them stronger. And we'll see some seeming signs of activity, which is not the same as progress. The ugly process of putting actual bill language under real scrutiny will, once again, begin to unravel and spin apart a host of interconnected provisions that discomfort and anger enough real people, let alone organized interests, to make the whole even less than the sum of its parts.

The biggest problem, whenever we get to our latest set of political wishes for health care, is that we feel constantly compelled to overshoot the marks of resource limits and the evidence base, while stretching any possibly supportive factoid too far, if not making them up. There remain fundamental mismatches between political demands and expectations, on the one hand, and sustainable pay-for revenues and savings, on the other hand in your pocket. The basic dilemma is that we remain unable to subsidize enough to effectively coerce others enough to purchase what is mandated.

President Obama, after all of his many speeches, including the one two weeks ago, has not really adjusted his opening position that much. Aside from some modest gestures to a few Republicans in Congress amounting to not much more than offers of fig leaves, his stance really remains "My way or the highway." It’s come down to Democrats only, on board, which is unfortunate for all concerned.

The president's many claims, exaggerations, and repositioned arguments--as salesman and lobbyist in chief--are creating a larger problem of credibility erosion for his presidency. His past promises and supporting factoids just don’t hold up, as they stretch from no taxes on anyone with family income below $250,000 a year, to no individual mandate penalties for adults without insurance coverage, to no cuts in Medicare benefits, to double-counting of proposed Medicare savings both to preserve the Medicare trust fund and finance expanded insurance coverage for everyone else at the same time, to deficit-neutral health reform that doesn't cost a dime more, and to older promises of transparency in government policy making.

We need to remember that we still lack any real legislative bill text, anywhere-- particularly in the Senate but even after the summer's tri-committee exercise in the House. I'm providing you today with almost as much of a conceptual markup of health reform language as the Senate Finance Committee appears to be doing. There still is no final House bill. Nor even the released text of the Senate HELP Committee's homework, which the dog must have chewed up this summer. And what the President spoke about so eloquently, if manipulatively and inaccurately, about earlier this month had little relationship to what's actually going on at Capitol Hill or what his administration really remains committed to jam through whatever process remains possible.

We don't have real, solid Congressional Budget Office cost estimates on what’s actually going to be the next REAL stage of legislation--the estimates that matter. But we know that the numbers do not add up, and they get worse – both the more you examine them and the further out into the future one goes past initial gaming of phase-ins and budgetary safeguards that are not safe and don’t guard taxpayers' wallets.

Although the emphasis of the proponents of this particular version of health reform has been that the problem was in the message making, the real problems remain in its original and still largely unchanged content. An inherently irresolvable conflict continues in choosing between a broader employer coverage mandate--which hides to full costs of coverage expansion technically "off-budget"--and more expensive direct subsidies by taxpayers to the millions of Americans forced to purchase otherwise unaffordable insurance through an individual coverage mandate. We also face the likelihood of mission creep for the proposed health insurance exchange that would convert them into much more of an increasingly exclusive and tightly regulated single source of permissible insurance coverage.

More fundamental reforms of our health care delivery system are indeed essential. But we are not there yet in the various legislative proposals. The Baucus bill at least attempts more seriously to move in some promising directions. However, the sequence of reform remains out of balance and mistimed. The current proposals fail to focus first on changing the future trajectory of future health care costs, which primarily involves the grinding, grudgingly tedious reform of the health care delivery system and its many misincentives--rather than first increasing our benefits commitments and then hoping we will find our way out of a worse situation, through sheer desperation, under a mutual-hostage theory of coerced innovation.

The political expediency in financing increased demand and higher expectations for health services by claiming to reduce waste, control prices, and discover efficiencies that don't yet exist quickly will descend into the usual ones of trying to arbitrarily restrict promised benefits--such as by capping Medicare payments and taxing private insurance more broadly. And even that's just not going to happen as hoped without more substantial political upheaval. We already should have learned that there is nothing automatic about automatic mechanism--whether they involve reimbursement cutbacks and price controls across-the-board, such as the sustainable growth rate for physicians--or imaginary out-year cuts that never arrive in time or in the amounts assumed.

Nor can we really save money by covering everyone with more costly insurance. The interrelated illusions appear to be that we can politically require all Americans to purchase more expensive health insurance and health services than many of them actually are willing to pay, yet make up the difference by having everyone subsidize everyone else, with most of us coming out ahead. All while pretending to execute incredibly complex calculations of how to redistribute funds back and forth from taxpayers to premium payers across an intricate ladder of different income and out-of-pocket premium levels. The reality immediately ahead in trying to present this to voters with a straight face is what will kill the implementation of a proposed individual mandate to purchase insurance.

So what's the forecast for this exercise? The conventional wisdom is that something is inevitable, even though we don’t actually know what "something" is. But the conventional wisdom regarding national health reform this year has been consistently wrong, and behind the curve, thus far. The President and congressional leaders may have misread what the broader public can accept in terms of sweeping government intrusion into what remains of their private lives and decisions. They recently decided after the August recent only to modestly bob and weave as a tactical ploy, without fundamentally changing what they assumed they could pull off earlier this year in a particular way.

However, we should recognize the limits of the political process in trying to assemble a majority, anywhere, for a complex and comprehensive set of interrelated proposals and tradeoffs that still does not yet exist. The fate of this year's climb back up the steep mountain of health reform will live or die on the Senate floor this fall. The more limited role of the Senate Finance Committee is not to craft real legislation, but rather just to keep the latest balls moving. The legislative clock for 2009 still is what matters greatly, and even with some easing of concerns over the larger economy, this health reform package has continued to run far behind schedule while facing an effective expiration date later this year.

The role of Republicans in Congress remains limited, if not entirely beside the point, at this stage. The various positive reforms offered by a number of thoughtful members simply cannot break through to the broader public to be heard and considered effectively. At the same time, the more tactically opportunistic approach of highlighting and protesting almost any cuts in projected future spending for Medicare beneficiaries, limits on tax subsidies for the privately insured, and better information regarding medical treatment options can lapse into poisoning the political well for more thoughtful cost containment reforms in the future that will become necessary. The mutual obsession of both parties over the insertion of a public plan option into legislative plans that are already hostile enough to market-based health care choices has distracted us from their broader failure to enlist more parties to take a more direct and accountable role in assessing the overall value and longer-term consequences of their more decentralized health care decisions. After all of the seemingly important debate concludes about who comes out ahead and behind in the shell game of rearranged financing and insurance coverage, we still will need to develop more effective and actionable information about how to treat medical conditions more efficiently and realign incentives to reward better health care decision making and personal health behavior.

The advocates of this year's initial version of comprehensive health reform misread the public mood and sentiment, and they could not jam it through the political process fast enough. We have unresolved conflicts and contradictions in our mix of political sentiments. This version was too much, too fast, and not put together in a way that was sustainable. But all of us, hopefully somewhat more chastened and humbler, will be back to consider health reform in a different context. Just not this year.

Thomas P. Miller is a resident fellow at AEI.

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