By Edward Luce Published: August 19 2009 21:14 | Last updated: August 20 2009 02:01 When Barack Obama started to push healthcare reform in earnest, most people assumed the US president’s biggest challenge would be winning over the healthcare lobby groups. Mr Obama’s Democratic colleagues, on the other hand, would happily stand up and be counted. Conventional wisdom got it back to front. In 1993 the insurance industry’s legendary “Harry and Louise” advertisements helped kill off healthcare reform. Today, older and perhaps wiser, Harry and Louise are strongly in favour. In a line that a few months ago would have persuaded any sceptic that health reform would happen, Louise tells Harry: “We can get the job done this time.” Indeed, if it were up to the healthcare industry, reform might already have been enacted. Mindful, perhaps excessively so, of the spoiling role the corporate lobbyists “K Street” played last time round, the Obama administration has gone out of its way to butter up the most important chunks of the healthcare sector. For the industry as a whole, there is the promise of lots of taxpayer money – at least $100bn (€70bn, £60bn) a year – to help expand the insured healthcare market by up to 50m people. For each sector there are then additional sweeteners. Doctors, for example, will get a more generous annual formula for reimbursement of Medicare fees under the bill that is evolving in the House. The pharmaceutical industry has succeeded in avoiding its biggest fear – government negotiation of much lower drugs prices. Under a favourable Senate deal the sector has pledged to lower drugs cost for the elderly by $8bn a year in exchange for continuation of the broad status quo. Given the drugs companies make by far the largest profit margins in the industry, $8bn is a tiny haircut. The insurance sector will see its market of potential customers rise by up to 15 per cent. Each sector has its specific complaints. Hospitals, for example, fear they may face lower reimbursement rates to help pay for the reforms. Doctors complain about the absence of reform to the US’s malpractice laws. The American Medical Association says “defensive medicine” adds a large cost to the average doctor’s practice. But set against their worst fears, the aggregate picture looks good enough for a critical mass of the industry to favour any bill. All that would change if the final bill included a public insurance option, which Mr Obama until recently insisted was necessary to “keep [private insurers] honest”. Harry and Louise would revert back to where they were in 1993 and the White House would face a near unified campaign against the bill. Which is why Mr Obama has signalled he would be prepared to junk the public option if that were the price to achieve a deal. Most healthcare experts say the bill could achieve the same goals a public option would achieve were it drafted intelligently. As long as private insurers were subjected to robust regulations that ensured they could not exclude higher-cost customers, or withdrew insurance when customers fell sick, or imposed annual or lifetime spending caps on policy holders, the reform could hit its targets without a public option. At a blogger convention last weekend, Bill Clinton argued reformers should not make the perfect the enemy of the good. His message did not convince progressive Democrats, 60 of whom are promising to vote against reform if it does not include a public option. There may be some way for Mr Obama to win back his liberal base, large chunks of which believe he is preparing to sell them out. But their opposition appears to be hardening in parallel with the already inveterate Republican opposition to any reform. If the liberals were to carry out their threat, Mr Obama would need the support of 22 Republicans in the House to enact a bill – a virtual impossibility. Having done everything necessary to build a coalition for reform, Mr Obama’s own supporters could turn into his unexpected Achilles heel.Obama backers risk becoming Achilles heel
Friday, 21 August 2009
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