government intervention. It’s the same logic that led to George W. Bush’s attempt to privatize Social Security: The most dangerous government programs, from a movement conservative’s point of view, are the ones that work the best and thereby legitimize the welfare state.
We don’t have to speculate about whether movement conservatives will be equally implacable in their opposition to future health care reforms—they already are at the time of writing, and their arguments are even more over-the-top than they were in 1993. For example, when British authorities found that a ring of Muslim doctors employed by the National Health Service had been planning terrorist attacks, there was a coordinated effort by media outlets such as Fox News and movement conservative pundits to push the idea that national health care foments terrorism. Honest.[14]
It’s equally certain that the insurance industry will fiercely oppose reform, as it did in 1993. What most people remember about the Clinton debacle is the highly effective “Harry and Louise” ads run by the insurance lobby, which scared people into believing that the plan would deprive them of medical choice. What they probably don’t realize is that the industry’s opposition came as a surprise to the Clintons, whose plan tried to co-opt insurance companies by giving them a major role in running the system. All of the leading health care plans now on the table, as described below, similarly preserve an important role for private insurers—but now, as then, that won’t diminish the industry’s opposition. The fact is that no health care reform can succeed unless it reduces the excess administrative costs now imposed by the insurance industry—and that means forcing the industry to shrink, even if the insurers retain a role in the system. There’s really no way to buy their cooperation.
Again, we don’t have to speculate about this. The political dynamics are already visible in California, where Arnold Schwarzenegger, a modern version of an Eisenhower Republican, has proposed universal health care at the state level. Schwarzenegger’s plan would preserve the role of private insurance companies, but it would regulate them in an attempt to eliminate risk selection. And sure enough, Blue Cross of California, the state’s largest insurer, is running Harry and Louise–type ads warning that “ill-considered reforms” could damage the state’s health care.
The drug industry will also be a source of fierce opposition—and probably more so than in 1993, because drug spending is a much larger share of total medical costs today than it was fifteen years ago. Like the opposition of insurers, drug industry opposition is essentially unavoidable, because drug companies are part of the problem— U.S. health care is costly partly because we pay much more than other countries for prescription drugs, and sooner or later a universal health care system would try to bargain those prices down.
So far so bad: Some of the major sources of opposition to health care reform in the early nineties will put up equally fierce resistance today. There is, however, a fundamental sense in which the current push for reform is more durable, less likely to be undercut by events, than the push fifteen years ago.
As I pointed out in chapter 10, Bill Clinton got elected in large part because the U.S. economy was depressed. The recession of 1990–91 was followed by a long period of slow job growth, the so-called “jobless recovery,” that felt to most people like a continuing recession. And the health care crisis seemed particularly acute because people were losing jobs, and losing the health insurance that went with those jobs. The problem for health care reformers was that once the economy began to improve, so did the health insurance situation. By early 1994 William Kristol had persuaded Republicans to fight Clinton’s plan, not simply on its own merits but by claiming that there was no crisis in American health care. And as Table 9 shows, the health insurance situation was in fact improving rapidly: The percentage of Americans with employment-based insurance rose sharply in 1994, as newly employed Americans got coverage along with their jobs. Republican stalling tactics worked in large part because by the time the first year of Clinton’s presidency had ended, Americans were feeling better about the health care status quo.
That simply isn’t going to happen this time around. The early years of this decade were marked by a recession and jobless recovery similar to that of the early 1990s. The job picture began improving in 2003, however, and by 2006 the unemployment rate had fallen to levels not far above its late-nineties low. Yet the health insurance picture continued to get worse. This time there won’t be a temporary improvement in the picture that will let obstructionists deny that there’s a crisis.
| Table 9. Employment-Based Insurance | |
|---|---|
| Year | Percentage Covered |
| 1987 | 62.1 |
| 1993 | 57.1 |
| 1994 | 60.9 |
| 2000 | 63.6 |
| 2005 | 59.5 |
Source: U.S. Bureau of the Census health insurance tables, http://www.census .gov/hhes/www/hlthins/historic/hihistt1.html.
There was also another factor producing temporary relief just as Clinton was trying to sell his health plan: The mid-1990s were the golden age of HMOs. The original idea behind health maintenance organizations was that traditional fee-for-service insurance, in which insurance companies pay any doctor for an allowed procedure, leads to overspending: Doctors call for any procedure that might yield medical benefits, and patients go along since someone else pays. An HMO was supposed to replace this with “managed care,” in which doctors who were part of the HMO’s network had incentives to take cost into account, leading them to forgo expensive procedures with small expected medical benefits. People would accept these limits, the theory went, because they would lead to much cheaper insurance.
The overall idea of taking cost into account in medical decisions makes a lot of sense. Britain’s National Health Service, the one example of true socialized medicine among major advanced countries, has a limited budget. The medical professionals who run the system try to make the most of this budget by rating medical procedures in terms of the medical gain per pound spent, and limiting low-gain spending. In the United States, the Veterans Health Administration, which is a sort of miniature American version of the NHS, does much the same thing. And both the NHS and the VA system do remarkably well at providing effective health care despite having very limited resources.
HMOs, however, are private organizations run by businessmen, not public agencies run by doctors. At first they seemed to deliver on their promise of cost savings: as HMOs spread in the 1990s, the long-term rise in health
