Friday, October 16, 2009

The New War Within the War Over Healthcare

Finally, a fight that really gets Democrats juiced up--not the battle over health care, but the battle against private health insurance companies. As we have seen all year, Democratic activists, who lean left, have not rallied behind President Obama's healthcare plan because they have viewed it as weak corporatist tea, strained through all the lobbyists surrounding Senate Finance Committee chairman Max Baucus. Activists ask, if the Fortune 500 likes it, how good and progressive can Obamacare really be?

Yet in the last few days, the struggle for Obamacare has gained a new frisson-y edge, because a new fight has erupted, a jihad against the insurance companies. So now Democratic activists are ready to storm the barricades. It’s this second front, this war within a war, that has even gun-control advocates reaching for their revolvers.

But as we shall see, a grave voice from the grave is telling Democrats to subordinate emotion to reason. Because wars are won by strategy, not adrenalin.

For now, though, the headlines of the moment appeal to the heart, not the head. “Democrats Fire Back at Health Industry” blared the header in The Washington Post Thursday morning. And Thursday afternoon, we saw this from Reuters: “Pelosi condemns U.S. health insurance industry.” It’s such heat, of course, that has gotten “progressive” hearts beating faster; on Thursday afternoon, the banner across the top of the lefty website Buzzflash was reading, “Pelosi pledges again House will pass health care bill with public option. Go, Nancy!”

The “public option,” which would create a public rival to the insurance companies, is much prized by the left, as a step toward the left’s true goal--which is to put private insurance companies out of business, to replace them all with a government-run program. And so the “public option,” of course, is vehemently opposed by the right, which sees it as the first slip on a slippery slope.

Which is to say, white-hot feelings burn on both sides. And those feelings get stronger when the talk shifts, when the discussion becomes less about “stakeholders all coming to the table in the spirit of compromise” and more about rip-roaring combat.

From an activist perspective, earlier this year we were seeing way too much consensus and civility. That was when all the big institutional players--the AMA, PHARMA, AHIP--seemed to be working together on behalf of Obamacare. Such chummy corporate cooperation, detailed in Politico this morning, was deflating to activists on both sides, who, of course, relish an uncompromising fight.

But now the once-grand coalition has fallen apart, as the insurance companies have broken with the President, lefty activists are free once again to go after their enemies--all of them. So goodbye, cooperation, or at least the pretense of cooperation; hail, partisan-ideological warfare between polar opposites. A brand-new survey from Zogby, headlined “Sharp Red, Blue Divide On U.S. Healthcare System,” tells an ideologically satisfying tale of mutually intensifying antagonism.

Strong feelings don’t bother me--so long as they are aimed at the right target. Indeed, speaking of strong feelings, one argument I have always made here at Serious Medicine Strategy is that the best way to think about fighting a disease is to compare it to fighting a war. The trick is identifying the proper foe.

Yes, the touchy-feelies of healthcare--health and fitness, wellness and prevention--are great, and have enormous demonstrable effect, but government efforts to promote healthy lifestyles have a way of degenerating into politically correct, and politically unpopular, nanny-statism. Moreover, it’s not clear that the government can, on the whole, do a good job of manipulating people’s individual desires and preferences. See, “War on Poverty.” As my onetime campaign colleague and longtime friend, Lloyd Green, a sometime contributor to SMS, once noted, “Constitutional government can provide incentives, but it can’t force outcomes.” To which I would add, as a friendly codicil, “Constitutional government can’t force outcomes that involve human beings. But government can force outcomes against viruses and microbes and other nasties, because we don’t have to follow ‘due process’ with those mean little suckers, nor do we have to read them their Miranda rights, or obey the Geneva Convention. Government can’t do social nuance very well, but it can do scientific blunt instrument.”

Besides, even people who live the healthiest of lifestyles still get sick and die of something. And there’s no point in letting that happen sooner that it has to. So I say, with apologies to Dylan Thomas, let’s not go gentle into that good night; let’s rage--medically--against the dying of the light. But if we are in the business of raging, then we need a strategic structure, so that we rage effectively.

And to return to the fighting-a-war metaphor, we must consult the master martial strategist, Carl von Clausewitz, who described war as the “fascinating trinity” of violent emotion, chance, and rational calculation. Yes, the Prussian died in 1831, but he still speaks to us through his book, On War.

As we can see from the formulation of Clausewitz’s trinity, “rational calculation” is usually the least of the three. Sometimes, for a cause you really care about, you just cry havoc and let slip the dogs of war. Because of such recklessness you might lose the war, of course, but at least you will have fought the good fight. It’s better, therefore, to keep cool with Clausewitz--that’s why he wrote that book, to tell us how to do it. So you send your soldiers out in a ferocious fight, while back home your top leaders constantly calculate and calibrate how long the war should go on. Does that seem too cynical for popular consumption? Yes, most certainly--but Clausewitz wasn’t writing for the masses; he was writing for the elites. And he was writing for people who wanted to win.

For its part, the Obama administration, led by their Cool-Cucumber-in-Chief, had every intention of managing that “fascinating trinity” with Clausewitzian precision. Activists would be active, through Organizing For America, while the rational calculators back at the White House would call the real shots--which included, at least in the original plan, copious deal-cutting with corporations.

All that was needed next, the Obamans figured, was the third element of the trinity: chance. And Obama had been lucky so far--why not stay lucky a little farther?

And so from the outset, the Obama administration, and most top Democrats in Congress, focused on their rational calculations, even if some supporters, such as Mary Frances Berry, called them “almost bloodless” in their lack of passionate intensity. As noted, they made all those deals with corporations and trade associations.

The Obamans, fatefully, agreed to be guided by the scoring of the Congressional Budget Office--and that’s where their trouble started. In June, CBO estimated the cost of Obamacare at $1.6 trillion over ten years. The result was sticker shock, in Washington, and around the country. As Axl Rose might sing if he were following the healthcare debate, “Take Me Down to Town Hall City.”

Was that a miscalculation on the Obamans part, to think that CBO would produce a smaller number? Or was it simply bad luck? Historians--aided by score-settling memoirists--will debate that question, but the Obamans, along with Baucus, concluded that they had to shrink that $1.6 trillion cost number down, by roughly half, even if such shrinking meant shrinking down the popular elements of their program.

For their part, Democratic activists rightly concluded that the Obamans didn’t really have their heart in the healthcare fight. How is that? Because if healthcare reform was really so important to them, they would have aimed to do it sooner, ahead of such side-issues as “cap and trade.” They would have said, echoing Admiral Farragut, “Damn the CBO, full speed ahead!” Farragut, at Mobile Bay back in 1864, won his battle.

By contrast, in 2009, at CBO Gulch, the Democrats have been in danger of losing their healthcare battle. Lacking an unabashed vision of the healthcare good, as they saw it, Democrats instead settled for a mushy porridge of close-enough-for-government-work numbers. (Numbers that, as argued here, are mostly disconnected from any reliable, or empirical, reality.) Thus the Democrats demoralized their own base.

One full-throated liberal, House Appropriations Committee Chairman David Obey, made exactly this point recently to The Huffington Post. He wondered why it was that nobody was talking about letting a CBO number determine the Afghanistan war, even as top Democrats were submitting to the CBO on health care:

We are now in the middle of a fundamental debate over reforming our healthcare system. The President has indicated that it must cost less than 900 billion over ten years and be fully paid for. The Congressional Budget Office has had four committees twisting themselves into knots in order to fit healthcare reform into that limit. CBO is earnestly measuring the cost of each competing healthcare plan. Shouldn’t it be asked to do the same thing with respect to Afghanistan? If we add 40,000 troops and recognize the need for a sustained 10 year or longer commitment, as the architects of this plan tell us we do, the military costs alone would be over 800 billion. And unlike the demands that are being made of the healthcare alternatives that they be deficit neutral, we’ve heard no such demand with respect to Afghanistan.

Good point, Mr. Chairman! Why isn’t the CBO allowed to dictate our national security policy, too? Why only health security policy? And the answer, of course, is that at least up to now, the Obama administration had tacitly conceded that Afghanistan was more important than the sanctity of the budget, while healthcare policy was less important than the sanctity of the budget.

Yet now the Democrats’ attitude toward costs is now changing, along with their attitude toward corporations. “This is wa-a-ah!” as James Carville would say. In a war, even a peaceful political war, the dynamic becomes different. And as the healthcare war heats up, there’s a lot a lot less interest now, among Democrats, in what things actually cost.

And if Pelosi-type Democrats think, as they now do, they are in a war to compel the insurance companies to dramatically change their ways--or to go out of business--then the cost no longer matters. Cost is no object when it’s a matter of principle, of true believership.

Of course, for most Americans, this might seem like a strange war for the Democrats to be fighting. As pollster Scott Rasmussen wrote in August, a whopping 68 percent of Americans are happy with their insurance coverage. No reason for regular folks to storm the barricades, because they like the status quo. No wonder the American people are resisting Obamacare. When Newt Gingrich says that Obama “wants to put a bureaucrat between you and your doctor,” a lot of Americans, even those who don’t necessarily like the former House Speaker, nonetheless fear that he might be on to something.

So because of this overall fearfulness, the Democrats are waging this war at their own peril. They risk giving the impression that they are so committed to ideological purity--to their new ideological war--that they are willing to jeopardize the healthcare coverage that Americans currently enjoy.

Yet activists have no time for such arguments. They are much happier thinking about their new war-within-a-war. The new war being the war against insurance companies. The trumpet has called, the masses are advancing. So activists feel better about themselves, fighting as they are for ideology and purity, fighting against big corporations. Centrist and “blue dog” Democrats don’t share this zeal, of course, but as they are constantly reminded, inside the party, moderates are merely the puppy tail being wagged by the larger ideological beast.

One of the battlefronts, now receiving more attention, is the left’s battle against the private elements of Medicare, including “Medicare Advantage,”that have long been worked into Medicare, mostly by Republicans. (The fact that the chief architect of Medicare Advantage was the same Gingrich, of course, makes the partisan bloodlust even lustier.)

A private plan within Medicare? A private plan within the crown jewel--so far--of public cradle-to-grave health care? To doctrinaire leftists, dreaming of government-run everything, that’s a horror that must be rooted out! And behind the scenes, activists have been working, as they can, to undo the private features of the plan; a study from The Tax Foundation finds that more than a quarter of all the savings in the Baucus plan are carved out of Medicare Advantage.

And now, interestingly enough, a chorus of media criticism is crescendo-ing down upon Medicare Advantage. For example, right there on the front page, above the fold, of Thursday’s Washington Post was a piece headlined “Hidden Costs of Medicare Advantage.” An even starker story in The Missourian bannered “Medicare Advantage cited as a culprit in rising health care costs.” And the blogs have been all over this fight, as well. As Sen. Jay Rockefeller told the Post on Thursday morning, Medicare Advantage is “a wasteful, inefficient program and always has been … stuffing money into the pockets of private insurers.”

That’s war talk. And when you’re in war mode, you don’t really care what the dollars and cents are. You can interrupt a romantic martial reverie with numbers from the dismal science if you want to, but you can’t expect the interruptees to thank you for it.

Nor do war-talkers like to be interrupted by practical political advice--for instance, practical advice based on American history. One historically based lesson: In the U.S., nothing popular is purely ideological. The vast middle of the American electorate is just that--the middle. It is not libertarian, and it is not socialist. Americans, in the aggregate, are fond of solutions that meet a variety of niche wants and needs. Different strokes, and all that. So while the ideological, purifying left looks at Medicare Advantage and sees corporate pigs at the trough, the 25 percent of seniors who are enrolled in the program see something they like; most Americans, for their part, probably figure it’s good to leave well enough alone. And do you want to take on 11 million seniors?

The same ideological Democrats, now putting on their warpaint, seem eager to do just that.

Another case in point is yet another part of Medicare, the Retiree Drug Subsidy (RDS). That’s a government tax-expenditure program that subsidizes companies to continue paying their retirees’ drug costs--some 6.3 million people. The left has long seen the program as a “giveaway” to corporations, but the counter-argument is that if the subsidy program were done away with, companies would simply terminate their drug-subsidy programs, leaving those 6.3 million retirees to go on Medicare--which would cost the government even more money. According to data from the Pharmaceutical Care Management Association, in 2009, RDS payments are projected to be $595 per enrollee, which is 46 percent less than projected direct subsidy and reinsurance payments of $1,106 per enrollee in Medicare Prescription Drug Plans and Medicare Advantage Prescription Drug Plans. So it would seem like it’s a good deal for the government to leave well enough alone.

Yet now Baucus’ Senate Finance Committee has voted to eliminate the tax break for RDS. The committee estimates that this elimination would  save the government $4 billion over the next ten years. Evidently the Baucusites don’t think that companies will drop their drug-coverage if RDS is eliminated. Or perhaps they just need to hit their numerical budget goal--$829 billion in the final package. And since, as we have seen, the goal of pushing that number down was regarded as more important than anything else, all other considerations, including policy soundness, were naturally subordinated.

Or, possibly, the Democrats now leading the charge don’t care about the extra cost to the taxpayers, because their real goal isn’t saving money for the sake of the taxpayers, it’s building up Medicare for the sake of “progressive government.” If that’s the case, then killing off RDS is simply another necessary step toward that grand goal.

Thus the original battle for healthcare has spawned new and fierce skirmishes--the fight against insurance companies, the fight, indeed, against anything private.

The good news for Democrats is that their activists are now fired up. The bad news for Democrats is that their opponents, including their new opponents, the insurance companies and fans of a mixed system for health care, are equally fired up.

And so we all stand at Armageddon--like it or not.

UPDATE: Rep. Alan Grayson (D-FL), the new hero of the far left, leads an attack on Sen. Harry Reid, the embattled (both in the Senate and in Nevada) Democratic Majority Leader. It's hard to imagine how such an effort can be constructive, but it is exciting to activists.


  1. They are proposing to eliminate the tax free basis of the subsidy v. eliminate it. The dollar s spent on the retiree coverage is tax free and the thought is the tax-free basis on the subsidy payment is a double dip. The subsidy is not up for elimination in whole.

  2. "And so we all stand at Armageddon."
    You betcha Jim! Come this November and thet November after all my fellow senior citizen friends are planning to vote ALL encumbants out of office at ALL levels of government - local, state & federal. The house has been needing a cleaning for some time. It is not Spring, but it's time for the buggers to go!
    Wouldn't it be wonderful if ALL of "We the People" came out and voted. Yes 100% of us. This is the only way to exterminate the vermin (those who we elected to do our will and haven't; and those who stood by and failed to protect us from the termites).
    Now, that's what I would call a glorious Armageddon. Dr. King taught us to dream. My dream is that we shall overcome these riffraff politicians who haven't represented us in quite some time.
    This is my prescription for America's Healthcare, on all levels. It surely would be the best of insurances we could buy.