Questioning conventional wisdom

Before taking this class--what did you think were the biggest issues in health care that needed to be fixed?

What types of stories do you see daily about health care reform? What gets coverage?

What do you think of when you hear the term "health care reform"?

What are the assumptions/conventional wisdom that appears in these stories?

The Problem and the Question

Seven times in the last century presidents have attempted to guide the United States legislature to adopt some form of comprehensive health care reform. 

Seven times they have failed. 

At the Iowa Caucus in 2008, President Barack Obama promised by the end of his first term he would deliver exactly that—comprehensive health care reform. The obstacles he faces are not easy to understand, let alone negotiate.             

Navigating the health care issue in the United States is perilous on the best days. Powerful special interest lobbies dominate almost every facet of the health care system, from insurance companies and doctors to pharmaceutical conglomerates and medical device manufacturers. 

A powerful social stigma that labels universal health care as “socialism” doesn’t help either—a problem that arose in the early ‘50s and is now considered as American as muscle cars and fast food. Even America's consumer culture where more and new is better stands in his way. 

The president has pointed to rare economic circumstances, a unified Congress and a health care system that is not simply broken but falling apart at the seams as strong indicators that he can deliver on his promise. 

But it is not solely in his hands. Rather, how he responds to a collection of barriers entrenched in American politics and society will determine his political fate and the future of health care reform in the United States. 

LBJ's success

We’ll just skip right to the good part on this one, because the rest of this gets pretty complicated. After a solid decade of the American Medical Association opposing government sponsored health care, the Social Security Act of 1965 was passed in July under the leadership of President Lyndon Baines Johnson.

Johnson gets all the credit for creating both Medicare and Medicaid, but just as his “Great Society” was a direct descendent of President John F. Kennedy’s “New Frontier” agenda, Johnson’s Medicare bill was the child of the Medical Health Bill for the Aged that had been a part of Kennedy’s campaign platform in 1960.

To back things up one step further, and introduce another key player, that campaign promise was based on the inadequacy of a the one piece of health care coverage the AMA had supported—the Kerr-Mills bill. Wilbur Mills, the author of the bill, was the chair of the House Ways and Means Committee, a key position because all health care legislation had to make it through his conservative-dominated committee, blocking bills from making it to the Democrat-dominated full session.

The Kerr-Mills bill expanded medical vendor payments under state-run programs, but didn’t do enough—few people were able to access the expanded coverage.

After Kennedy was elected, the first iteration of the bill which would eventually become Medicare came into being. It was called the King-Anderson bill, but the Democrats decided to wait until after the 1962 mid-term elections before attempting it. (They had lost a number of seats in the 1960 elections.)

When Kennedy decided to move forward with King-Anderson in 1962, he found his way blocked by Mills and the other conservatives on the Ways and Means Committee. It was thought that the bill could pass if it made the floor in a regular session, but because tax legislation can only be introduced in the House of Representatives, there was no practical way of getting the bill out of committee.
To get around the stubborn Mills and his committee, King-Anderson was introduced to the Senate as an amendment to an existing tax bill. This proved to be a tactical error. Because it undermined the traditional power of the committee, dodging the Ways and Means Committee alienated five senators who had previously supported the King-Anderson legislation, and the amendment was defeated 52-48 in a July 1962 Senate vote.

Unfortunately, the question of Kennedy’s continuing to pursue health care reform was answered permanently on November 22, 1963 by Lee Harvey Oswald.

Johnson did not pursue the controversial topic of health care reform until after winning a landslide victory in the 1964 presidential election. But when he did, he found his efforts stymied, just as Kennedy’s had been, by the Ways and Means Committee, and Wilbur Mills.

Mills was, however, feeling the public support for the concept of government funded health benefits, and drafted a bill which combined King-Anderson with several competing ideas. His compromise, which would create both Medicare and Medicaid, eventually became law only after 513 differences were ironed out in the conference between House and Senate.

American Culture: Anti-Socialism and More is Better

Attacks on Sen. Barack Obama’s health care plan during the 2008 election were a common occurrence, and these attacks often included at least some mention of “socialism” or “socialized medicine” coined during Truman's reform failure in the '50s. 

American’s deep-rooted fear at the mere mention of socialism is no accident. The “Red Scare” of the 1940’s and '50s defined American culture. With a universally held enemy in the Soviet Union, concepts such as welfare, universal health care or nationalized insurance were seen as overtly communist or socialist. 

To be American was to be strong, independent, a believer in individual freedoms and wary of big government. 

The impact of this mindset is felt today just as strongly as it was in the '50s. As the only industrialized country without a universal health care system, the United States is at a cultural crossroads. Obama is attempting to succeed where no other president before him could—efficient and comprehensive reform in the health care arena. 

However, American culture is firmly blocking Obama's path. The culture gap between the U.S. and other regions, specifically Western Europe, is large, Parente explained. The difference is how citizens view government intervention and action. Just as with socialism, Americans (and Republicans) fear big government in a way unlike their European counterparts. 

Both attitudes were adopted over the past century. The “Red Scare” and escalating Cold War defined American thoughts on universal health care while the Europeans relied on their governments to rebuild after the destruction of World War II and to provide just about every service. 

“Countries like the England and Germany are much more open to and even expectant on the government doing things like providing comprehensive health care,” Parente said. “In the United States, we openly reject that thought and see the government as the enemy.” 

A deeply held resentment of government intervention is one reason why campaign rhetoric against health care reform often concedes to using such buzzwords as socialism or big government—their use is extremely effective in building coalitions and public support against health care reform. 

Still another major cultural obstacle to effective cost reform is the consumer culture of the American people. 

Americans like the shiny, the new, and the expensive. Abundance is always seen as better. In terms of health care, this means the newest drug, the newest device, the newest treatment always looks better—even if the old treatment was less expensive and just as effective. 

Sullivan said that the conventional wisdom that newer is better is one of the biggest factors in escalating health care costs. The United States government literally has no effective way to gauge the effectiveness of new treatments, drugs or medical devices. 

“Everywhere else in the world, the state says no.” Sullivan said. 

The United Kingdom's National Institute for Comparative Effectiveness (NICE) is an example of a government agency with the capability to deliver comparative assessments to new drugs, treatments or devices. Proponents are likening the newly formed U.S. Federal Commission on Comparative Effectiveness Research (FCCER) to NICE. However, critics suspect the FCCER will have no ability to enforce its findings and prevent certain products from entering the market.

The health industry lobby takes advantage of American adoration of technology and drugs, aggressively lobbying the public whenever politicians attempt to stem health care costs. When coverage of a new drug or product is threatened, cries of “health care rationing” immediately flood the country from coast to coast. 

In 2002, controversy surrounded Xigris, a drug approved by the FDA for the treatment of severe sepsis. With costs approaching $7,000 per patient, per treatment, many hospitals and medical professionals openly doubted its use. Severe bleeding and serious side effects can follow its application. Lingering concerns still exist over the drug’s value in effectively treating sepsis.  

To combat the risk of loosing sales on one of its biggest drugs, Eli Lilly hired an advertising firm to create a campaign raising ethical awareness about not using the drug. The campaign, called “The Ethics, the Urgency and the Potential” failed to include any studies on its cost effectiveness. Instead, it aggressively lobbied the public and accused the government and hospitals of rationing new, revolutionary and life saving drugs. 

At $6,800 per patient per treatment with no clear benefit, the drug is hardly cost effective.

Sullivan is skeptical that the government will ever have the ammunition to shake the stigma of health care rationing. 

“You're not going to be able to address costs without changing public opinion,” he said. 

Experts disagree whether Obama has the ability to do so. “Obama has an instinct about the American people,” Sen. Durenberger said. He thinks Obama can frame the conversation to appeal to the American people. 

Sullivan approached it from a different perspective. People can witness the failures of the health care system in their own lives, but not the effect that all these factors have on the country’s overall well-being. He likened it to the global warming/climate change debate. When the potentials harms are long down the road, the public is less concerned. 

Sullivan openly doubts Obama's ability to change public opinion. “People tell me this guy is transformative,” he said, “I've seen no evidence that he was A. Passionate or B. working really hard for something.” 

Parente also shared doubts. “If he really wants it, he should just barrel through and just get the coverage determination down. Because you’re not going to fix the cost element of it. The only way you’re going to fix the cost is to ration technology and to say no to people to get care,” he said. 

“We’re on a boat where we’re an aging society that’s fairly well to do that loves technology.” 

Not a good combination.

Lawrence Jacobs

Lawrence Jacobs is the director of the Center for the Study of Politics and Governance at the University of Minnesota, as well as the Walter F. and Joan Mondale Chair for Political Studies. He focuses on presidential and legislative politics as well as health care policy. He has a Ph.D. in political science from Columbia Univerisity, focusing on American politics, political institutions and comparative public policy.

He was also co-editor of Health, Wealthy and Fair: Health Care and the Good Society and the author of The Health of nations: Public Opinion and the Making of Health Policy in the U.S. and Britain.

For a full profile and curriculum vitae, see here.


http://content.nejm.org/cgi/content/full/358/18/1881

The Consensus: Can He Do It?

The deck is stacked against President Barack Obama. No leader in the last 50 years ever successfully led the charge and delivered significant coverage or cost reform. Enormously powerful special interest lobbies stand in his way. Political scandal is never far away. Deep rooted and fierce ideological opposition exists not only in the public but within the legislature itself. 

The experts think he has the best chance at passing coverage reform, and he should not attempt to reform costs and coverage at the same time. They agree any significant, comprehensive and effective change will happen incrementally, one step at a time. 

The political will to reform costs simply doesn’t exist, largely due to American culture and misunderstanding of the factors leading to exploding health care costs. To change this, Obama has to transform the entire conversation—something few agree he can do. 

Timing seems to be against Obama. The financial crisis, tensions abroad, the ongoing wars in Iraq and Afghanistan, the threat of another possible flu pandemic all distract his attention from health care reform. 

Avoiding scandal is another matter. His administration managed to quell discontent surround Tom Daschle's departure, but experts disagree whether that departure could mark disaster for the entire effort. 

The question of whether he can help push a bill through Congress and garner enough political will remains to be answered. Timing is an element all three experts agree is crucial. The longer he waits to introduce legislation, the less likely the bill will pass. One expert said if it isn't on the agenda by the end of the summer session, Obama can “kiss any kind of reform goodbye.”

Given all of the obstacles and potential pitfalls, not to mention the fact he asked the American people to evaluate his presidency on progress with health care (along with the economy and education), the possibility of seriously damaging his reelection chances is real. 

One thing is clear. The longer he waits to start aggressively pushing for health care reform the greater his chances of failure. And the clock is ticking.

Stephen Parente

Stephen Parente is currently an associate professor in the Carlson School of Management at the University of Minnesota. He is also the Academic Director of the Medical Industry Leadership Institute. He is considered an expert in health economics, health insurance, health informaiton technology and medical technology evaluation. His Ph.D. is in health finance and organization from Johns Hopkins University.

Recently, he helped to craft Sen. John McCain's health care reform plan for the 2008 presidential election.

He also serves as a review for the Journal of the American Medical Association, the Journal of Health Economics, Health Care Finance Review and others.

For more information, his full University profile is here.

Daniel Sullivan

Daniel J. Sullivan is currently the Cowles Chair in Media Management and Economics at the School of Journalism & Mass Communication at the University of Minnesota. He has a Ph.D. in economics from Yale University. One of his current research interests is media coverage of health care finance and reform as well as health care economics.

For more details, see his full profile here.

Sen. David Durenberger

David Durenberger is currently the chairman of the National Institute of Health Policy at the University of St. Thomas where he teaches health care management.

He served as a U.S. Senator from 1978 to 1995 for the state of Minnesota. During that time, he served on the Senate Finance Committee for 16 years, six of which as the Health Subcommittee Chair. He also served eight years on the Health, Education, Labor and Pensions Committee. He is also currently a member of the Medicare Payment Advistory Commision and of the Kaiser Foundation Commission on the Future of Medicaid and the Uninsured.

He is the author of Precription for Change: Health care reform through consumer shoice, a collection of speeches.

Scandal and Timing: Health Care Voodoo

Obama’s major health care policy initiative is the seventh in a line of attempts stretching back to Woodrow Wilson in 1919. 

How could so many presidents fail? 

Except for Lyndon Johnson's Medicare/Medicaid Act of 1965, every president and major policy guru in the last half-century has been chewed up and spit out by a long list of bizarre and frustrating events. One of the biggest challenges for politicians looking to reform health care seems to be avoiding scandal or any unforeseen event that could crush the president’s political capital or the political will of Congress. As with a lot of things in life, it’s all about timing. 

In 1945, President Harry Truman outlined a proposal for comprehensive health insurance. The American Medical Association used the strong and fundamental fear of anything socialist, fueled by the “Red Scare” to scrap the entire initiative. 

The “New Frontier” pushed forward by President John F. Kennedy was one of the most ambitious attempts at domestic reform in United States history, including funding for health care, only to be derailed by a gunman atop the Texas Book Depository. 

While Lyndon Johnson successfully passed Medicare and Medicaid, the $700 billion black hole in Vietnam nixed more comprehensive health care changes. 

Richard Nixon’s half-hearted attempt to thwart rival Senator Ted Kennedy’s health care plan was ruined when the Supreme Court turned over the White House tapes to a special prosecutor, leading to his resignation amid the Watergate scandal. 

In 1969, then-junior Senator Ted Kennedy, widely considered a champion of health care reform in the Senate, drove his car off a bridge in Massachusetts, killing his passenger. The incident derailed his career long enough to stymie several important initiatives. 

Congressman Wilbur Mills ran a presidential campaign in 1972 relying heavily on heath care rhetoric. In 1974 he was arrested for driving while intoxicated—an Argentinean prostitute beside him. Added to his declining health, reform was cast aside. 

In 1979 President Jimmy Carter’s attempts at reform were ultimately torpedoed by the Iranian hostage crisis, an event that consumed the last months of his presidency. 

Public sentiment was strong for reform when Clinton took office, but a combination of special interest campaigns spearheaded by the infamous “Harry and Louise” ads and divided government led by Newt Gingrich’s “scorched earth” policy crushed the movement. 

Obama, only months into his term, has already wrestled with this “Health Care Voodoo.” Former Senator Tom Daschle, pegged to head both a special commission from the White House on heath care and the Department of Heath and Human Services, resigned from both over his failure to pay over $146,000 in taxes. 

It will be up to history whether Daschle’s leaving severely affects Obama's attempt at effective health care reform. The quick appointment and confirmation of Kansas Governor Kathleen Sebelius as head of the Department of Health and Human Services seems to have quelled any Daschle talk. 

Parente said Daschle’s departure is a blow to reform, and the clock is ticking—the longer Obama waits the less likely the chances anything is going to be done. Without Daschle's presence, Parente felt that the initial push to get reform measures passed has dwindled. 

“The sense of inevitability was pretty acute,” Parente said. 

But just two weeks later, that feeling was significantly reduced. 

However, Durenberger said that the loss of Daschle could be a good thing for Obama's reform efforts. He believes in Obama’s ability to unite the public and build coalitions to pass meaningful legislation. 

“I think it will force him to deal with [the health care issue] himself,” Durenberger said. “He has an instinct...I think the country will be better off.”

Reform after Clinton

In 1996, Sens. Ted Kennedy (D) and Nancy Kassebuam, a Kansas republican proposed a bill to limit when coverage could be denied, especially with pre-existing conditions. The Health Insurance Association of America backed the bill originally, then opposed it. The result was COBRA a deductible extension of group coverage if an employee was no longer part of the group, for fired or laid off employees. ?What is COBRA—better explain?

In 1997, SCHIP, or the State Children’s Health Insurance Program, passed, to insure low-income children, through Medicaid or other programs and the number of uninsured children was greatly reduced. It was the largest expansion of coverage since Medicare and Medicaid was passed in the ’60s. Attempts to expand this coverage where quashed twice by the veto pen of former President George W. Bush. $$$ and how many covered…and who—also pregnant women and immigrants without waiting period under Obama’s reauthorization act

The Medicare Modernization Act of 2003 introduced a prescription drug plan for Medicare and Medicaid users. The plan was proposed to cost ??$700 billion?? dollars over 10 years, but does not allow Medicare to use its considerable market share to negotiate drug prices, as the government is allowed to do for Veteran’s health plans. DOUGH-NUT?

George H. W. Bush's attempt

With an economic downturn in the 1980s, the middle class were suddenly thrust into the place of the uninsured, underinsured and unable to pay mounting health care costs for the first time. Soon, politicians from across the U.S. were demanding some kind of health care reform, and the Republican President George H. Bush succumbed to the pressure.

His plan included tax credits for low-income people to get insured, included more oversight over private insurers though this was not specific and the creation of purchasing pools for small businesses.

The plan was an attempt to expand private coverage and make it more accessible to everyone. However, the plan did little to address the underlying problem—soaring health care costs. The Conservatives claimed it was a move towards socialized medicine and the Liberals said the plan didn’t lower costs and offered an inferior product. These claims by Democrats were only solidified by the democratic candidates for president, who release their plans for health care reform around the same time. Unfortunately it was too little too late, and Busy lost the election before making any significant changes to health care.

Clinton's attempt

When most Americans think of health care reform, they think back to the first term of the Clinton administration—and they remember as a huge failure.

During the election against then-sitting republican president George H. Bush, Bill Clinton tried to define himself as a New Democrat, who favored the principles of the Democratic Party yet was adverse to big government. He promised health care reform, pledging to introduce legislation to Congress within the first 100 days of his presidency.

After entering office, he quickly formed an Interagency Task Force, chaired by his wife, Hilary Clinton. Doing so drew large criticism from Republicans—there was no precedent for such a move. The Task Force was meant to be small, identify key policy and deliberate in secret to provide a unified front when legislation was eventually introduced.

Instead, the Task Force wound up with 630 members, including representatives from all the Democratic Senate and House members as well as representatives from relevant government agencies. With a group that size, leaks were inevitable. The Administration refused to talk officially about plans, giving those with little knowledge or say in the outcome room to talk, and the opposition a head start at organizing.

The Task Force did finish its job, and the Administration used its recommendations to write the bill, evaluate costs and prepare a political strategy. The bill didn’t reach Congress until Sept. 7, 1993.

The resulting plan was a complicated hybrid of sorts that looked promised universal coverage mostly through worker mandate. Costs of plans would be controlled by creating competition between insurance companies, a sort of managed market. Clinton presented the plan to a joint session of Congress on Sept. 22.

At this point the reform proposal was well-received. Even Republicans were jumping on board, asking for coverage of pre-existing conditions and consumer based decision making, including knowledge of efficacy and cost effectiveness.

That’s where the honeymoon ends. The bill was insanely long, 1,342 pages of highly technical policy. The complexity along with the following problems plagued the bill for another year.
Various associations who had a stake in the bill, most notably the National Federation of Independent Business and Health Insurance Association of America, began to voice concerns of price caps and lost business. Small business associations worried the mandate would bankrupt their members. Throughout the attempt to pass reform, opponents spent $147 million in today’s dollars, while supporters only spent roughly $7.4 million in today’s dollars. The most famous example of this is the “Harry and Louise” ads, where a middle-aged, presumably middle-class white couple complains about their lost of choice in insurance providers.



To add to the mess, foreign policy issues distracted the Administration. The Battle of Mogadishu (the Blackhawk incident in Somalia) delayed the introduction of the bill in the first place, giving less time to promote the bill to the public and more time to opponents to craft a counter-strategy. The ratification of the North American Free Trade Agreement (NAFTA) in 1993 angered unions, a key support for the reform.

Bi-partisan support began to erode and some democrats were introducing their own bills, like the single-payer plan in part from Minnesota Sen. Paul Wellstone that garnered lots of union support, a traditional Democratic voting block. Another democrat introduced a purely market/competition plan, with no universal guarantee. When it was clear support was winding down for reform, the GOP even introduced the “scorched-earth policy” in the summer of 1994, telling Republicans to vote down reform of any kind.

The bill officially died on Sept. 26, 1994. Former South Dakota senator Tom Daschle wrote in his book Critical, “the great health-care debate of the early 1990s expired with barely a whimper.”

Nixon's attempt

A firm believer in practical liberalism, President Richard Nixon led the way for the establishment of several integral government agencies, including the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA). Believing intelligent and well-intentioned use of the government could benefit all, he streamlined the government to be an effective provider of services to as many as possible.

This did include some attempts at reforming health care. While nothing comprehensive was ever passed, it very well could have. On February 6th, 1974, he outlined his Comprehensive Health Insurance Act that mandated employers to purchase health insurance for employees. It also would have built a federal health plan very similar to Medicaid that would have allowed any American access on a sliding scale based on income. 

Almost exactly six months later, Nixon resigned the presidency amid the Watergate scandal. Reform never got off the ground. 

Harry Truman's attempt

President Harry Truman was the first president since Woodrow Wilson to bring about a public discussion about the health care system. Unfortunately, that is about as close as he came to passing any kind of reform.

His first term consumed by the war and international politics, he was reelected in 1948 with the personal charge to make a serious impact on domestic policy. Health care was atop this list.

With an approval rating hovering in the mid seventies, his 1948 domestic plan was bold. He outlined his health care policy initiatives in his State of the Union address on January 7th, 1948:

"I have often and strongly urged that this condition demands a national health program. The heart of the program must be a national system of payment for medical care based on well-tried insurance principals. This great Nation cannot afford to allow its citizens to suffer needlessly from the lack of proper medical care."

"Our ultimate aim must be a comprehensive insurance system to protect all our people equally against insecurity and ill health."

The start of the Korean War in late 1949, along with fierce special interest and congressional opposition began the precipitous decline of Truman's approval rating and political power. The eventual government take over of the steel mills in 1951 drained what little capital he had left.

With the lowest approval ratings in the history of the presidential office and a congress united against him, reform was dead before specifics were even on the table. National healthcare was taken off the national docket for almost 15 years. 

Political Will and Divided Government: "Harry and Louise" and the "Scorched-earth" Policy

Red and blue America—an ideologically fractured country—will be one of the biggest obstacles Obama must tackle to pass comprehensive reform. 

The Republicans’ “scorched-earth” policy, the fierce opposition to any of Clinton endorsed legislation, played an enormous part in stopping major health care reform in the early '90s. Special interest groups and their “Harry and Louise” campaign fueled the public resistance. 

“Gingrich Republicans weren’t going to let anything get passed by Clinton, and the [insurance] lobby pulled every lever they could to prevent this change,” Sen. Durenberger said. “The worry now is what Obama is going to do that is different from all these attempts in the past.” 

Passing the federal stimulus bill proved Obama can push legislation despite strong partisan opposition. But he managed to do so by committing himself fully to the legislation and campaigning aggressively to the public. Despite it being one of his first campaign promises, Obama has not yet shown that kind of dedication to health care reform. 

“He needs to be passionate about this, the way Hillary Clinton was, to convince the American people that we’re on a path that will destroy our national economy and our way of life.” Sullivan said. 

Stephen Parente, PhD, is an Associate Professor in the Department of Finance in the Carlson School of Management at the University of Minnesota. Specializing in health economics, his experience with medical databases, major health insurance structure and understanding of government agencies makes him an expert on any prospective health care reform. 

“Obama is coming in with one of the sexiest lines you can possibly imagine: 'I am here to cover everybody, and I can personally empathize because my mother was toughed up from this stuff,'“ Parente said. “It’s a special card for him, and if you challenge him on it, you’re going to die. It’s a no-brainer.” 

Former Senator David Durenberger now heads the National Institute for Health Policy at the University of St. Thomas. A Senator from Minnesota for 17 years, he served as chairman of the Health Subcommittee of the Senate Finance Committee, giving him a leadership role in shaping U.S. health policy. 

“I think by the end of the year, he will get something passed, but this is not something where you have the grand signing like the Medicare bill of 1965, and then you go back to Vietnam,” Durenberger said. “You have to pass something this year, and next year, and just keep after it.”

In order for the legislation to be successful, all three experts agreed Obama will have to choose initially between pursuing coverage and addressing costs, and change will be both slow and painful.

Costs vs. Coverage: $1.9 trillion vs. 47 million people

47 million. It’s the number constantly tossed around by supporters of health care reform. It's the number of people without any health insurance and numerous more who are underinsured. It's a significant number—15 percent of the entire U.S. population—but is 47 million the whole story? 

Coverage is only one aspect of the two-headed monster we call health care reform. The other? Cost. Health care costs make up 16 percent of the total U.S. economic output, or $1.9 trillion dollars according to the latest numbers available from the Bureau of Economic Analysis. That makes it the fourth largest “economy” in the world behind the United States, Japan and China. 

No other country comes close to spending as much as the United States does on health care.  

Reports on the rising insurance premiums that plague average Americans are commonplace. Prescription drug costs have become the demon and big pharmaceutical companies the villain—greedy corporations gouging consumers to make record profits. While a serious problem, it is only one problem in a completely broken system. What the real problem is depends on whom you ask.  

According to economist Dan Sullivan, it's the fundamental belief of American consumer culture: bigger, newer, more expensive is always better. We are seduced by the shiny, the new—without ever really knowing whether shiny and new is better than the proven and reliable. Those in the health care business abuse this belief. They strive for something else very American—record profits.  

Enter the drug lobby, the device lobby and the medical professional lobby. They have a specific strategy to convince the public to demand newer, bigger and better Sullivan said. One could spend years studying the intricacies of health care costs—from drug pricing to medical device costs, to the attempts by doctors to protect themselves from malpractice suits to cost and efficacy. 

At this point, the details aren’t so important. What’s missing from the discussion is the understanding that simply getting those 47 million fully covered will not solve the problem—it will lead to a cost explosion if costs are not reigned in. The solution for one does not necessarily follow the other.  

“If Obama gets the coverage passed without addressing costs, it might break the system to the point they will have to go in and fix it,” Sullivan said. 

Attempting to do both at the same time helped tank Clinton's plan in the early '90s, Sullivan said. What isn't clear about Obama's plan is who's going to pay for it. His current plan is to expand coverage to shift costs from private insurers—meaning those they insure—to the government—meaning American taxpayers. 

“Their plan is to shift costs from one pocket to a different pocket,” Sullivan said. “It's not clear that's a real good shift.”

Special Interests: The Lobby

Another huge obstacle is the incredibly powerful medical industry and insurance lobbies. If history is any suggestion, Obama will have serious problems navigating this astonishingly influential collection of lobbies.

In the late '40s President Truman prioritized reforming health care. In his State of the Union speech in 1948, he asserted health care in the United States needed “A comprehensive insurance system to protect all our people equally against insecurity and ill health.” Universal health care became a national issue for the first time.

Enter the American Medical Association. Understanding the universal coverage system as a step towards complete government control and a direct threat to doctors’ well being, the AMA launched a comprehensive lobby and ad campaign denouncing Truman’s plan as “communist.” This campaign pioneered the phrase “socialized medicine.”

Over a four-year period, the AMA spent $5 million—roughly $44 million today—on its “national education campaign” aimed at defeating the proposed legislation to reform health care coverage. The Committee for the Nation’s Health, a group supporting the legislation, spent $36,000 during the same timeframe—or about $318,000 today.

“The AMA clearly played an activist role in shutting down health care reform,” said Stephen Parente, an associate professor at the University of Minnesota who specializes in health economics. “They were one of the first to mount a multi-million dollar pack advertising campaign to shut down any attempts at universal coverage—and that legacy is what drives resistance today.”

Almost 60 percent of the U.S. population sided with Truman’s plan as of 1948. By 1950, thanks largely to the AMA’s aggressive advertising campaign only 36 percent supported the plan. The concept of single payer health care legislation was dead for the next 15 years.

Former Senator Durenberger witnessed the power of special interests in during President Clinton’s attempt at reform in the early '90s. Now heading the National Institute for Health Policy at the University of St. Thomas, he sits at a crucial interchange between government and private interest groups that have a great deal invested in any health care reform.

Special interests need to be in the discussion, but as far away from actual decision-making power as possible Durenberger said.

“Bring them in, remind them what’s at stake and ask them what they are going to put on the table. As long as they are aware that things need to change and they need to be willing to change, Obama might have a chance to pass some kind of reform,” Sen. Durenberger said.

“But if Obama allows special interests to have as much influence on the process as in the past, problems are going to arise. He needs to distance them from the process.”

Parente agrees special interest groups pose a serious barrier to comprehensive reform. Both Parente and Durenberger point to President Clinton’s attempt at reform in the early ‘90s as a clear example of the influence and reach these organizations have.

Similar to Truman’s attempt in the late '40s, President Clinton’s attempt to lead health care reform started in September 1993 with an address to a joint session of congress. Rarely do presidents push legislation so aggressively. Clinton explained the problems with the U.S. health care system in explicit detail:

“Millions of Americans are just a pink slip away from losing their health insurance, and one serious illness away from losing all their savings…[On] any given day, over 37 million Americans…have no health insurance at all. And in spite of all this, our medical bills are growing at over twice the rate of inflation, and the United States spends over a third more of its income on health care than any other nation on Earth.”

The Health Insurance Association of America led the charge against Clinton’s plan, which aimed to create an insurance marketplace heavily regulated by the government to keep costs down. Scared this system would drive small insurance companies out of business and slash into profits, the HIAA launched multi-million dollar ad campaigns in 1994, including the infamous “Harry and Louise” commercials.

Depicting a white, middle-class couple arguing over the limited options and high cost of their new mandated health care plan, the “Harry and Louise” ad campaign galvanized resistance to Clinton’s plan and stoked public fears of “Big Government” medicine. Along with fierce partisan resistance from Republicans led by Newt Gingrich, the reform measure suffered a long and painstaking death.

The famous couple reemerged in the 2008 Democratic and Republican National Conventions to push for the return of health care dialogue in campaign agendas. This reemergence was due in large part to five major special interest groups: The American Cancer Society Cancer Action Network (ACS CAN), the American Hospital Association (AHA), the Catholic Health Association (CHA), Families USA, and the National Federation of Independent Business (NFIB).

All eyes are now on Obama. How he reacts to the lobby will play a huge part in passing any bills through congress. The history is clear—interest groups have the capacity to sink legislation. For Obama, pharmaceutical companies have the greatest chance of being his main adversary.

According to the Center for Public Integrity, the pharmaceutical lobby has spent $189 million on lobbying efforts in 2007, the most recent figures available. A 32 percent increase over 2006, the lobby is the biggest in Washington. It's this lobby that spent $1 billion—over $273,000 a day—the last decade on efforts to forward pharmaceutical interests, in a era of extremely limited health care legislation.

If Obama’s reform attempts to restructure Medicare or Medicaid, influence insurance company structure or create comparative testing agencies, he can expect one of the most powerful lobbies in history to be the knocking on his front door.

But not everyone is so sure Obama’s reform attempts are a lost cause.

Sen. Durenberger is confident Obama has the political capital and environment necessary to make comprehensive changes while neutralizing the special interests.

“He’s sat down with the special interests and told them what needs to be done. When it comes to having an instinct or knowing what the people are thinking or where the people are likely to head, he’s the only one who has it figured out. He has people willing to deal with the politics. He has unique social and economic circumstances wanting this change. He can do it.”

There was once piece of advice for Obama that both Parente and Sen. Durenberger agreed on—this reform needs to come incrementally. “There is no way this passes as one, two or even a collection of bills,” Parente said. “It needs to take time; there are too many players involved.”

Health Care Reform Rhetoric Over Time

The rhetoric presidents have used to talk about health care reform hasn't changed much over time--nor have the reasons why it's needed.

Harry Truman on health care

Excerpt from Truman's address to Congress, November 19th, 1945:

Medicine has made great strides in this generation--especially during the last four years. We owe much to the skill and devotion of the medical profession. In spite of great scientific progress, however, each year we lose many more persons from preventable and premature deaths than we lost in battle or from war injuries during the entire war.

We are proud of past reductions in our death rates. But these reductions have come principally from public health and other community services. We have been less effective in making available to all of our people the benefits of medical progress in the care and treatment of individuals.

In the past, the benefits of modern medical science have not been enjoyed by our citizens with any degree of equality. Nor are they today. Nor will they be in the future--unless government is bold enough to do something about it.

People with low or moderate incomes do not get the same medical attention as those with high incomes. The poor have more sickness, but they get less medical care. People who live in rural areas do not get the same amount or quality of medical attention as those who live in our cities.

Our new Economic Bill of Rights should mean health security for all, regardless of residence, station, or race--everywhere in the United States.

We should resolve now that the health of this Nation is a national concern; that financial barriers in the way of attaining health shall be removed; that the health of all its citizens deserves the help of all the Nation.

Excerpt from Truman's State of the Union address, January 7, 1948:

"I have often and strongly urged that this condition demands a national health program. The heart of the program must be a national system of payment for medical care based on well-tried insurance principles. This great Nation cannot afford to allow its citizens to suffer needlessly from the lack of proper medical care."

"Our ultimate aim must be a comprehensive insurance system to protect all our people equally against insecurity and ill health."

Ronald Reagan on health care before his presidency



Richard Nixon on his health care plan, which fell along with his presidency after the Watergate scandal



An example of the famous "Harry and Louise" ad, paid for by opponents of Bill Clinton's health care reform attempt

President Bill Clinton to a joint session of Congress, September 22, 1993:

"Millions of Americans are just a pink slip away from losing their health insurance, and one serious illness away from losing all their savings. Millions more are locked into the jobs they have now just because they or someone in their family has once been sick and they have what is called the preexisting condition. And on any given day, over 37 million Americans -- most of them working people and their little children -- have no health insurance at all. And in spite of all this, our medical bills are growing at over twice the rate of inflation, and the United States spends over a third more of its income on health care than any other nation on Earth."

Barack Obama on health care

"The very first promise I made on this campaign was that as president, I will sign a universal healthcare plan into law by the end of my first term in office...And the plan begins by covering every American.