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Partisanship Puts Dems In Peril

October 22, 2009

By Douglas Holtz-Eakin

The definition of insanity is doing the exact same thing time and again and expecting a differing outcome. Partisan health care reform efforts by Democratic presidents in 1993-94 and 2009 failed to win the confidence of the American people and sufficient votes in Congress. If we want a different outcome the next time around, we need to try a different tactic: genuine bipartisanship.

Real bipartisan reform should begin immediately. Each party must compromise and swallow a little bitter medicine to save health care. The Democrats want universal coverage through a single-payer system, but the public wants to keep its private insurance. The Republicans have staked their reforms on a consumer-driven system modeled after health savings accounts, but the public doesn’t trust that solution either. Both approaches need to be left behind.

That being said, it is time for the Democrats to reboot. Their current reform effort is riddled with too many internal inconsistencies to get across the finish line. Democrats have committed to a bill that: 1) costs less than $900 billion over the first decade, 2) does not add a dime to the deficit now or in the future, 3) does not cause anyone to get new insurance if they are happy with what they have, 4) provides universal coverage, 5) has a government-run “public option,” 6) does not tax those making less than $250,000, 7) reduces health care costs and 8) (presumably) allows Democrats to get reelected.

The current crop of bills flunks 1 through 7. The current, flawed bill can pass the Senate only if Democrats uniformly vote yes on procedural issues such as motions to proceed and cloture, yielding the magic 60 votes. Evidently their leadership is counting on moderate Democrats to line up, salute and vote yes on procedure, only to turn around and vote no on final passage of the bill. More specifically, they will have to do this on both the Senate bill and any conference agreement. How will the likes of Sens. Blanche Lincoln of Arkansas and Evan Bayh of Indiana defend “voting for it before I voted against it” (actually, it would be an even worse “yes,” “no,” “yes” and “no”) next November? It’s not very palatable and not very likely.

So the current effort is dead, although nobody is admitting it. The last time health reform met an untimely demise, our basic problems went unaddressed for 15 years. Republicans’ joy at the demise of Obamacare should be tempered with the knowledge that the system is still broken, and, in a best-case scenario, they will own the problem in 2012 — when it will be that much harder to fix.

President Barack Obama is the key to success. His personal popularity should allow him to hammer out a true compromise and put pressure on Congress to pass it.

Reform should be passed in two parts: first, entitlement and delivery system reform that includes cost containment measures, and then insurance reform.

The president should invite Republican and Democratic leaders to the White House to agree on the basic principles of each bill. He should also promise that Republican ideas will be protected and not be stripped out in the legislative process. His mistake this year was to let House liberals drive the process. Next time, the White House must lead with a clear, centrist agenda and defend it vociferously.

Why entitlement and delivery system reform first? A “cost-first” rather than “coverage-first” approach will ensure that coverage expansions are fiscally sustainable. These reforms should include revamping the payment schemes for Medicare and Medicaid, paying for quality rather than quantity of services; mandating transparency in pricing in health care markets; improving information and electronic infrastructure; rewarding patients who seek out the most cost-effective care; and medical malpractice reform.

Turning to insurance, Republicans must acknowledge that universal coverage is the goal — but a goal that will be state-based and phased in over time as entitlement reform frees up funding for extending coverage through high-quality private insurance. Individual states should have the freedom to achieve coverage expansions through state-specific mechanisms (like the Massachusetts mandate) but must be held accountable for achieving those expansions. By relying on gradual, state-based experiments, the nation will have an opportunity to see what approaches work best.

Any necessary federal financing should be realistic, without relying on gimmicks like “super committees” or “automatic” cuts in provider and hospital reimbursements that will never survive.

What does each party gain? Democrats will achieve their campaign promise by putting the nation on a path toward universal coverage. The president will finally get the bipartisan legislation that he promised when he took office. Republicans will burnish their credentials as stewards of good, fiscally sustainable government and middle-class concerns.

Obamacare is over, but the health care reform effort doesn’t have to be — provided bipartisan policy and politics leads the way.

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