HealthLawProf Blog

Editor: Katharine Van Tassel
Concordia University School of Law

Tuesday, November 18, 2008

Political Temperature may be Just Right for Healthcare Overhaul

The Los Angeles Times reports that experts say the nation's hard times may paradoxically quicken a sweeping reform of the healthcare system.  Noam N. Levey and Lisa Girion write,

Stethescope4When Barack Obama steps into the Oval Office in January, healthcare reform will join a list of priorities crowded with two wars, a ballooning budget deficit and an economy mired in one of the worst slowdowns since the Great Depression.

But the bleak environment may paradoxically spur the kind of costly, sweeping overhaul of the nation's healthcare system that has eluded policymakers in Washington for decades, many political strategists, industry leaders and economists say.
Hospitals and physicians are increasingly worried about the escalating burden of newly unemployed workers being thrown onto the rolls of the uninsured.

Liberal advocacy groups see the Treasury Department's $700-billion commitment to banks and other financial institutions bolstering the case for a similar investment to help sick Americans get medical care.

And businesses see new urgency in addressing the nation's healthcare crisis as they struggle to pay costs for medical benefits while sales plummet and profit margins shrivel.
When Senate Finance Committee Chairman Max Baucus (D-Mont.) last week announced an outline for universal health coverage, he was applauded by dozens of interest groups across the ideological spectrum.

"Healthcare reform is very much linked to the broader economic issues that the country is facing," said Todd Stottlemyer, president of the National Federation of Independent Business. "Our view is that there is the energy now to make this a top priority."

Fifteen years ago, the federation, which represents about 300,000 small businesses, helped fight the Clinton administration's proposed healthcare overhaul. Today, it is one of the leading champions of broad-based reform.

"I have never seen an effort like this," said Ron Pollack, who heads Families USA, a nonprofit consumer group promoting a healthcare overhaul.

Even the most sanguine observers concede it will be immensely difficult to reshape a healthcare sector that makes up 16% of the nation's economy and move tens of millions of uninsured Americans into the system.

Democrats generally agree on an approach that would allow most Americans to keep their current coverage while creating an exchange so people and businesses without coverage could link up with insurers.

Obama proposed such a plan on the campaign trail, and Baucus offered his own version last week.

Still unresolved are important details about the cost of a new system, provisions for increasing quality and a mechanism for compelling businesses and people to participate.

"People are unhappy with today's healthcare system," said Karen Davenport, director of health policy at the Center for American Progress, a liberal think tank with close ties to Obama. "But they are also nervous about letting go of what they have now."

Most observers expect conflicts between interest groups and policymakers as the debate heats up on Capitol Hill. Last week, the powerful Pharmaceutical Research and Manufacturers of America fired an early warning shot: an ad campaign opposing Obama's proposal to allow the federal government to negotiate lower Medicare drug prices.

Republican lawmakers are already expressing concerns about proposals that would drive the federal budget deeper into the red. By some estimates, extending coverage to the nation's uninsured could cost more than $100 billion a year.

"We have a huge financial problem in this country," said Joe Antos, a healthcare scholar at the conservative American Enterprise Institute, who called the idea that bold action would save money on healthcare "completely ludicrous."

"You have everybody gearing up and trying to make noise and saying, 'Don't forget us.' And health is right there with everybody else," he said. "They are trying to create political space next year for their issue, when there is going to be precious little political space to be had."

Obama has not indicated whether he will champion major healthcare legislation right away or if he will pursue a more incremental approach, as some lawmakers and analysts have counseled.

The president-elect and his Democratic allies on Capitol Hill have said immediate federal action to prop up the sagging economy will be their top priority.

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