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Under the radar: Obama health strategy that’s getting little attention

Much has been said and written about how architects of the Obama administration’s health-care reform strategy deliberately detoured from the failed Clinton effort 15 years ago.

But two of the crucial differences in Obama’s strategy are not getting much attention, University of Minnesota political scientist Larry Jacobs said Thursday evening.

“One is to minimize the cost in the short term to the stakeholders, and so you see a remarkable array of health-care stakeholders who were opposed to the Clinton effort … becoming supportive of what the Obama White House is doing,” Jacobs told about 250 people at a continuing education forum on the U’s St. Paul campus.

“The other element that the Obama White House has been pursuing is to delay costs to the future and to obscure the impact of these costs,” said Jacobs, director of the Humphrey Institute’s Center for the Study of Politics and Governance. “Now this is an element that is very important and it’s gotten almost no attention.”

To contrast the presidents’ strategies, Jacobs played videos of Clinton’s and Obama’s addresses to Congress. Whereas Clinton said he wouldn’t sign a bill that didn’t guarantee health insurance for all Americans, Obama focused on cost containment:

Larry Jacobs
Larry Jacobs

“I will not sign it if it adds one dime to the deficit now or in the future — period,” Obama said. “And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with spending cuts if the savings we promised don’t materialize.”

Not even major stakeholders have caught on entirely to what the provision on spending cuts actually means, said Jacobs, who for years has studied the politics of health-care policy and written 10 books, including “Healthy, Wealthy, and Fair.”

“This provision [included in Senate Finance Committee Chairman Max Baucus’ bill] means that for sure, there will be cuts to the pocketbooks of the stakeholders,” he explained. “That will happen. It’s also certain that the drug manufacturers and makers, the doctors and the hospitals, and the other suppliers are going to see cuts. What the Obama administration has done is put those costs into the future, and it’s done in a way that’s fairly obscure.”

Bang for the bucks
Jacobs said the Obama administration and others don’t think the United States gets a lot of bang for the bucks spent on health care, given that other industrialized countries pay significantly less and see better public health outcomes. “The prediction is we are going to see an impact in driving down what the stakeholders are being paid,” he said.

That won’t happen now, however. “If the stakeholders see the burden of health reform on their shoulders now in a very clear way, they will then move back to Harry and Louise [the couple in the ad that doomed the Clinton plan but since have had a change of heart, thanks to funding from the pharmaceutical industry] attacking the Obama plan.

The American public’s split evaluations of system and personal health care

The American public's split evaluations of system and personal health care
Courtesy of Lawrence R. Jacobs

“But with the future obscured, you can see that they’re a little bit like the cattle marching off to the slaughterhouse,” he said. “They’re a little bit confused. And one of the issues that we’re going to have a lot of debate about is the connection between the price paid to providers and the quality of care.” 

In his talk for the College of Continuing Education’s Headliners series, Jacobs touched on the history of health-reform efforts dating to Franklin Delano Roosevelt’s administration. Although national health insurance reform was among the recommendations of the committee that came up with the Social Security program, FDR didn’t go forward with it because he feared it “would lead to the defeat of the broader social insurance effort.”

FDR saw the risk and “ducked.” Most of his successors pursued sweeping changes without success.

“Think of the lemmings who have this urge to jump off cliffs. Well, in health reform, we’ve seen this urge to continually pursue a certain kind of reform, what I would call systemic reform. … Again and again it’s led to defeat, and it’s a long list just since World War II,” Jacobs said, citing these examples:

Harry Truman tried to get national health insurance. Richard Nixon proposed a system built around an individual mandate.

Still, the same people who conceived the Truman plan eventually went on to craft Medicare, which was signed into law by Lyndon Baines Johnson in 1965, he noted.

“The reformers that put together Medicare did not think hospital care for seniors was the limit of the problem,” Jacobs noted. “They fully understood the full extent of the problem but they thought this is what could be done, and they thought and expected that over time what was done for the one population group would be expanded to other population groups.”

If Hubert Humphrey had been elected in 1968, he noted, “sitting on his desk was a proposal called kiddy care that was going to expand Medicare to children. The same program then would work down from seniors to near retirees.” Eventually, Medicaid was created for the indigent under-65 population.

Trying to do too much
Administrations run into trouble with health reform when they try to do too much and think that this is their only window of opportunity, Jacobs said. “There…tends to be an assumption that the train is in the station and you got one shot. We’ve got to get it done now or nothing will happen.…[There’s also] an insistence, a demand that the political process give way to this imperative. This is an urgent need and the political process had better wake up and James Madison’s clever tinker toy system of separated powers with all sorts of checks…ought to take a back seat for the moment and let national health insurance reform go through.”

Jacobs is not holding his breath for a bipartisan solution in this Congress.

“I think most Americans would prefer it, but I’ve got a very simple message for you: Forget about it.”

That line got a lot of laughs.
“There’s a lot of different ways for me to show you why that’s not going to happen,” Jacobs said, “but I think the most important thing is to just appreciate that there’s a lot of hard evidence showing our two political parties are more polarized in the House and Senate than in perhaps a century.”

Still, the Obama administration has a few more things going for it than Clinton did, he said. For one, this Congress is a year ahead in the process than Clinton was after taking office. The Clinton administration relied on a national task force to come up with recommendations but lost time trying to translate them into legislation.

“The reality is he’s [Obama’s] got a very long runway,” Jacobs said. “If [health reform] doesn’t get done by November, they’ve got a whole ‘nuther year. With Clinton, it didn’t get done by August and it was time for midterm elections.”

Casey Selix, a news editor and staff writer for, can be reached at cselix[at]minnpost[dot]com.

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Comments (5)

  1. Submitted by Tim Nelson on 10/02/2009 - 10:03 am.


    Wage and price controls on stakeholders are in the bill, even though wage and price controls are not in the bill?

  2. Submitted by Aaron Klemz on 10/02/2009 - 10:25 am.

    That’s a really interesting chart (perception of system vs. personal experience) – can anyone give more detail on where it comes from and what surveys were used to create it?

  3. Submitted by Bernice Vetsch on 10/02/2009 - 12:47 pm.

    Mr. Jacobs forgets — as did the administration and most of the Congress – the most important stakeholder of all. Me. You. The American people. The people who pay for it all.

    The bills on offer, although the House bill is better than either Senate plan, are written to preserve the iron stranglehold the insurance companies have on our health care. Even though the most egregious abuses will now be forbidden, this is not “reform.” We will achieve neither cost reductions nor universality, especially if the Senate Finance bill ends up the winner.

    If Washington MUST have private insurance in charge, it at least could emulate the Swiss or Norwegian systems and let government regulate the industry very tightly: premiums, benefit set, no denials, no dropping of customers, et cetera.

  4. Submitted by Richard Schulze on 10/03/2009 - 06:43 am.

    The reason why the Republicans haven’t put forth a blue print on healthcare, for example, is because so much of what they want is included in the bills they’re attempting to demonize.

    The insurance mandate and health insurance exchanges can be found in the only credible GOP healthcare plan at the moment, Republican Senator Enzi’s plan.
    Cuts to Medicare had the support of Ronald Reagan, the man Republicans *want* to define the GOP. Heck, the supposed “death panels” were originally proposed by Republican Senator Isaakson of Georgia, who felt that it was a travesty for a family to squabble over the fate of a loved one who is unable to communicate while in intensive treatment, with no written guidance for his family and his doctor to follow.

  5. Submitted by Casey Selix on 10/05/2009 - 04:24 pm.

    In response to Aaron Klemz’s question about the source of the chart, Professor Jacobs pointed me to a May 2008 piece he wrote for the New England Journal of Medicine. In the article, he makes reference to data from Gallup, New York Times-CBS News and Pew Center polls.

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