America's Reform of the Century

Will Health Care Be Obama's Legacy or Waterloo?

Part 2: Learning from the Clinton's Mistakes

Under the plan, about 45 million people, who were unable to pay all of their own health insurance, would become members of a national health care system. The Democrats envision raising taxes for the wealthy but the resulting revenues would be far from sufficient to cover the additional cost.

Almost daily, the president assures critics that his reform is "deficit neutral." He declines to explain where the money for the program will come from, but this lack of clarity could be calculated. Because the president and his team have already researched, and drawn their conclusions from, the failure of the Clintons' effort to reform health care.

Back then President Bill Clinton had put his wife, Hillary Clinton, in charge of developing a package of health reforms, including regulation and funding. The health industry meanwhile invested millions in TV ads that criticized the Clinton plan, claiming it would eliminate patients' ability to choose their doctors and make the health care system overly bureaucratic. Harry and Louise, a white, middle-class American couple, appeared in nightly ads on national television to try and turn public sentiment against the "other" couple, Bill and Hillary.

The televisual pair turned out to be more successful than the presidential couple. The public mood changed, the Clintons' health reform failed. And Clinton the bold reformer turned into Clinton the cautious pragmatist.

Leaving the Heavy Lifting for Congress

Obama is approaching the issue more carefully. Although he is pushing for reform, he is leaving the design of the legislature up to Congress. He's the owner of the house, but they will be its architects. And his role is simply to say "yes" or "no" to their suggestions. In effect, Obama is protecting his political capital by ordering Congress to come up with the nuts and bolts of health care reform. As the president cleverly keeps repeating, he won't sign anything that isn't "deficit neutral."

Congress is in no hurry to iron out the details of paying for the plan. The 1,018-page proposed health plan contains no suggestions on how to raise the estimated $1 trillion required to fund it. It also makes no mention of how to put a stop to, or at least reduce, the escalation of costs. And the current bill proposes a government health insurance program that would compete with private insurance plans.

Such a plan might just disturb the balance of power that exists within the current system, and which drives health care costs higher. In addition, the proposed plan requires the establishment of a government commission which would analyze costs and prices in health care. Even if this commission's power was limited and it only made recommendations, it could still make life more difficult for the pharmaceutical industry.

Industry Is Playing Along

Somewhat ironically, the pharmaceutical industry is cooperating with Obama, one of his only rays of hope. The insurance industry, drug companies and a recently established initiative called "Health CEOs for Health Reform" are expressly supporting "quality, affordable coverage for all." Karen Ignagni of the industry trade association America's Health Insurance Plans told the president: "You have our commitment to play, to contribute and to help pass health care reform this year."

The industry would rather be part of the solution than part of the problem. It wants to prevent government price regulation, strict budgeting based on the German model and the ongoing import of low-cost medication. Somewhat surprisingly, Bruce Bodaken, the chairman and CEO of the insurance company Blue Shield of California, said: "We stand ready to change our business model if coverage is made universal. We hope the process the president has kicked off ... inspires others to make similar commitments to achieve the goal of affordable health care for everyone."

And former Republican Congressman, Billy Tauzin, now a powerful lobbyist for the pharmaceutical industry, was particularly accommodating, saying: "We recognize that a medicine which sits on a shelf out of reach of patients financially doesn't do anyone any good." He even promised that the pharmaceutical companies within the trade group he directs would find ways to save the government $80 billion over the next decade.

The president liked what he heard. Sounding mildly triumphant at a student rally at a high school in Ohio last week, Obama said that the pharmaceutical industry has "already put $80 billion on the table."

One of the students in the audience then asked how he could help, to which Obama promptly replied: "Make sure you're persuading your parents if they're not already convinced."

Translated from the German by Christopher Sultan.