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.

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.”

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.”