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From the President

Health care reform: how bright prospects plummeted

As ACP pushes for health care reform, a look at where President Clinton's efforts went wrong

From the May 1997 ACP Observer, copyright © 1997 by the American College of Physicians.

By William A. Reynolds, FACP

In late 1992, the prospects for health care seemed bright. Bill Clinton was elected president in part by promising health care reform, the House and Senate were controlled by Democrats and there was a rising tide of public and political support for health care reform. Two years later, however, all hopes for reform were dashed. What went wrong?

A short time ago, I heard the well-known political commentator Haynes Johnson give his analysis of this exact subject. Mr. Johnson has written about the failure of health care reform in "The System," which he coauthored with David S. Broder. I have borrowed liberally from "The System"—along with several other sources—for this editorial.* My hope is that by reviewing the circumstances and events surrounding efforts at health care reform, we will avoid repeating past mistakes as the College continues to pursue universal access.

The U.S. model of health insurance, which is based on private insurance and employer-paid coverage for many workers, was developed after World War II as a way for unions to increase benefits in lieu of income during a time of price and wage freezes. As "The System" describes, most presidents since that time—including Presidents Truman, Kennedy, Nixon and Carter—have tried to reform health care, but unsuccessfully. The only successful attempt at reform was achieved by Lyndon Johnson. After a landslide election victory—and with help from Democratic majorities in both houses of Congress—President Johnson was able to pass Medicare and Medicaid. Richard Nixon tried to expand on this by creating an employer mandate that would expand employer-based health coverage and expand HMOs, but only the HMO portion of the bill passed.

ACP became a player in reform efforts with publication of its access policy paper in 1990; this was followed by our proposal for "Universal Insurance for American Health Care" in 1992. Nevertheless, when the Clinton administration began its efforts at reform, the College—as well as other physician organizations—was not invited to participate. (Only after the plan was released was our support solicited.)

President Clinton instead chose to develop a reform plan through a special White House task force directed by Hillary Clinton and Ira Magaziner. Important players whose support would be critical in shepherding reforms through Congress—Congressional leaders and administration officials—were left out of the process.

After much publicity and anticipation, the administration's health reform plan was put on hold for nine months. Because of concerns about getting the budget reconciliation bill passed, the plan wasn't presented to Congress until September of 1993, giving the opposition time to organize and mobilize public opinion against the plan.

Originally, the Clinton administration had tied health reform to the budget reconciliation bill, but key senators refused to go along with the plan. Looking back, analysts say that President Clinton should have at that point reached out to moderate Democrats and Senate Republicans who had their own versions of health care reform. They note that an acceptable compromise proposal could have been drafted and passed before opposition positions hardened. Instead, President Clinton continued to push his own plan, and in his 1994 State of the Union address he pledged to veto any bill that did not provide universal coverage. At that point, any chance of success was effectively killed.

The proponents of a compromise plan never got together, and no bill was ever offered for a floor vote in the House or Senate. Led by Newt Gingrich (R-Ga.), the Republicans withheld support for health reform on the theory that defeat of any health care legislation would mean failure for President Clinton and guarantee a Republican victory in the 1994 election.

During the first half of 1993, as details of the Clinton plan became available, opposition forces mounted a very effective campaign to drum up public and legislative opposition, with high-profile trade organizations leading the way. The Health Insurance Association of America spent more than $20 million on advertising that included the notorious "Harry and Louise" television commercials. Small businesses, fearing the financial repercussions of an employer mandate, organized grass roots opposition with mailings and town meetings. In my home state of Montana, for example, a Democratic senator who supported universal health insurance modified his position and agreed to vote against any employer mandate after attending three town meetings where small businesses vigorously voiced their opposition.

While big business was lukewarm to the plan early on, it gradually increased its opposition. It claimed that the plan offered too many benefits and too much regulation and was skeptical about whether the plan would actually control health care costs.

Another important force was the No Name Coalition, which was started by the Conservative Christian Coalition and National Taxpayers Union and eventually grew to include more than 30 organizations. The coalition waged an intensive grass roots campaign, placing editorials in The Wall Street Journal and getting attention from conservative talk radio hosts like Rush Limbaugh. Too much of the public debate was dominated by negative sound bites, scare tactics, false analogies, misleading arguments and statistics distorting the truth. Public records show that more than $100 million was spent in the effort to defeat the Clinton plan; that figure does not include vast additional sums spent by corporations and associations. Efforts by pro-reform forces were feeble in comparison.

In "The System," President Clinton acknowledged that Ira Magaziner's strategy of attacking health care as a big complicated government endeavor led to the plan's defeat. He also noted that sweeping reforms are rare in the United States, and that they are usually accomplished during a national crisis such as war, tragedy or economic collapse. Analysts say that one of the primary lessons is that health care reform must be implemented more quickly and in smaller increments.

In their book, Mr. Johnson and Mr. Broder conclude that the administration's greatest mistake was failing to recognize the limits on the president's authority imposed by the 1992 election returns. They highlighted three fatal errors for which the president readily took the blame:

  • President Clinton knew that passing the budget and economic plan would consume much of his time and political capital-and that he had no popular mandate for the health plan-but he chose to plunge ahead with it anyway.
  • Developing the plan through a special White House task force headed by Hillary Clinton and Ira Magaziner undermined support by critically important players.
  • Health reform ultimately died because of questions about financing. The public favors allowing employers to pay, but not if it means loss of jobs. Support for reforms fades when people find it means they will pay more taxes. Antigovernment sentiment plays a role.

This much is clear: To achieve universal coverage, we'll need either to increase taxes or create an employer or employee mandate—or both—and increase government control.

Next month I'll explore the road ahead and, with some expert advice from battle worn politicians, see how we can profit from the lessons we have learned in our quest for universal health care insurance for all Americans.

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