Wednesday’s Speech Won’t Hit Reset Button for Obamacare | HughHewitt.com | 09.07.09

Washington is in a state of something approaching suspended animation this Labor Day weekend.

With the president scheduled to address a joint session of Congress on Wednesday, the DC power game is in time out, waiting to hear what Mr. Obama has to say on that brightest stage of American political theater: the joint session of Congress.

You have to give him and his team points for tenacity.  In the face of overwhelming public opposition to their planned overhaul of U.S. health care deliver, they have held their ground.  Reset buttons seem to be their operating metaphor in more areas than relations with Russia.  They will be trying to hit it on Wednesday night, with the president offering, it is said, specifics about a plan he favors rather than the general principals he has served up to date.

Nevertheless, it is almost a sure bet that, having misread the breadth, depth, spontaneity, and informed intelligence of public opposition to their scheme, they are misreading what it will take to truly rest this debate in their favor. They fear the “Waterloo” that Senator Jim DeMint (R., S.C.) predicted would be the fruit of failure to pass any health overhaul legislation.  But as things stand today, one thing would be worse for Mr. Obama than losing on heath upheaval vote – and that would be winning.

If anything became clear from the storm that swept through this summer’s Congressional town hall meetings, it was that the American public is opposed to the social democratic model of health overhaul that the White House has embraced.  They remained opposed after tens of millions of dollars – if not a hundred million and more – were spent on media advertising and other political persuasion.  The Administration’s problem is not that the American people understand so little about what is in store in health overhaul but that they understand so completely and so clearly.  A reset speech that merely reiterates what they don’t like – albeit with less emphasis on programmatic principal and more on policy detail  – is likely to end up a political nothingburger.

For the central failure of the health upheaval proposals the White House and Congressional Democrats have put out to date is not a failure of communications but of imagination.

Social democratic models of policy reform assume we know everything we need to know about how to do things right.  Social democrats believe it just takes a rational government t bring that knowledge to bear.  In contrast, market models assume that knowledge is limited and that progress comes through experiments – often entrepreneurial experiments — in which the determinant of success is the cumulative impact of choices that millions of people make in their own lives with their own money.

In recent weeks I have talked with people on the cutting edge of health delivery.  There is a tremendous amount of experiment going in health care delivery.  At least some of these experiments will transform health delivery and, if public policy allows it, solve the problem that is driving health overhaul: inflation of costs.

One such experiment is with what is called direct primary care.  Think of Minute Clinics, only bigger and broader.  For a modest and fixed monthly fee ($40 to $80/month), these facilities assume responsibility for all of a patient’s routine care.   Appointments can be same day.  Time allotted per patient is extensive.

How?  By taking fees directly from the patent not the insurance company or the government.  These firms estimate that 40 percent of the costs of health providers (not insurers, providers) are incurred in the processing the paperwork that government and private payers demand.  Much of the productivity boost allows higher care for a lower price is derived from cutting out these costs.

Another set of experiments is with a new approach to pharmaceuticals.  I asked a former senior official at the Food and Drug Administration what he thought of Obamacare.  It will send us back to the Middle Ages, he replied.  His reason?  The administration’s embrace of comparative effectiveness standards would cut off the most promising experiments in medical science.

Comparative effectiveness standards are, he explained, based on population averages – greatest good for the greatest number.  But born of the mapping of the genome and other biochemical advances, the changes he saw coming would lead to medicine that is specifically tailored to each patient’s unique makeup.  Comparative effectiveness panels, he said, would effectively end the ongoing research and development in patient specific care.

The widely understood alternative to the president’s government-centered reforms is patient centered reform – including giving the consumer the same tax preferences when buying insurance for themselves as companies now receive and expanding Health Savings Accounts.

HSAs put those receiving care in charge of all normal health choices, cutting out both government and insurance companies.  With HSAs, the usual questions consumers ask – in particular how much value am I receiving for the money – consumers are now asking for the first time in decades in the American health world.

Cumulatively the asking of these questions is creating – as it has in all areas of the economy – an irresistible impulse to do more with less, in other words to improve productivity.  If individuals could buy their health plans independently of their employers – something that current tax law makes prohibitively expensive – those pressures would become vastly stronger.

So the White House’s biggest problem is not bad communications policy.  It is not the opposition of a truly impotent Republican minority that has, in any event, been offered policy options on a take it or leave it basis.  No, it is that the president and his staff remain prisoners to 1930s style economic thinking and to an ideologically driven political base that regards deviation from that antiquated thinking as anathema.

Until the president – as one of his predecessors so famously urged – learns to think anew, learns to disenthrall himself, winning will be losing for him and his party, no matter how well he speaks on Wednesday and how Congress votes on health policy overhaul.