Obama Blogger Conference Call On Health Care

I had a chance to participate in a conference call with President Barack Obama and some bloggers today about the health care debate. Clearly the very fact of this conference call's existence shows that the White House is leaving no stone unturned in searching for allies to help sell reform, and that the President is ready to step forward in this debate. That's a good thing. He still has enough political capital to manage the process where he wants it to go, and if he wants certain elements of the policy included in the final bill, provided that there is a final bill, I wouldn't bet against them getting in there. And the result of the conference call was interesting.

The President spoke for a few minutes, then took about 15 minutes of direct questions. In his opening remarks, he said that now was a critical time for the bill, and that we're closer to passage than we've been in the last 50 years. Those who are opposing have offered no credible alternative but the status quo, which he termed "unacceptable". He hoped that the blogs would help him in "debunking myths," for example the notion that this bill, which is entirely paid for as a package, would spread record deficits. He said that the default position in Washington is one of inertia, and that pressure must be kept on members of Congress - not Republicans, but members of Congress - to move the process forward. He made sure to highlight - as did David Axelrod in a short Q&A afterwards - the words of Sen. Jim DeMint, calling health care Obama's "Waterloo." Clearly that will be used by the White Hosue as a badge of honor and a rallying cry in the weeks ahead, because it evokes the same concept as the leader of the GOP Rush Limbaugh saying he hopes Obama fails.

With that, the President took questions, and it was truly unlike most press conferences you'd see by the heavily pancaked White House press corps. Bloggers wanted to know about two things - the tactics for getting a bill through, and the substance of that bill. For example, John Amato from C&L asked if the President would call on Congress to forego the August recess if they didn't reach a floor vote by the deadline, which the President pretty much dodged. He acknowledged that we cannot delay any further and that we've been debating this for 50 years, and that those who are calling for delay are doing so deliberately in order to kill any hope of passage, but he would only commit himself to working as hard as we can to see "serious forward motion" by the recess, and never fully answered what I think could be a good tactic Amato brought up, to ask the Congress to finish their work and keep reform on track. In a similar kind of question about reconciliation, Jonathan Singer from MyDD asked at what point we move to using budget reconciliation if a Senate bill stalls, and the President kept that stick of reconciliation in his back pocket, saying that they expect a bill by mid-October, but failing that, "we'd look at all options including reconciliation." He admitted that reconciliation wasn't the preferred option but that the status quo cannot continue. That speaks very well to the probability that something will pass this year.

What I wanted to ask about was something that Robert Reich wrote about today. The White House and Congress have made all these deals with key stakeholders, which do provide for hospitals, drug companies and doctors to give back some profits, but preserve additional costs that could be wrung from the system. And these "legacy costs" are making it very hard to provide the kind of controls that reformers seek and Blue Dogs pay lip service to.

Big Pharma, for example, is in line to get just what it wants. The Senate health panel’s bill protects biotech companies from generic competition for 12 years after their drugs go to market, which is guaranteed to keep prices sky high. Meanwhile, legislation expected from the Senate Finance committee won't allow cheaper drugs to be imported from Canada and won't give the federal government the right to negotiate Medicare drug prices directly with pharmaceutical companies. Last month Big Pharma agreed to what the White House touted as $80 billion in givebacks to help pay for expanded health insurance, but so far there's been no mechanism to force the industry to keep its promise. No wonder Big Pharma is now running "Harry and Louise" ads -- the same couple who fifteen years ago scared Americans into thinking the Clinton plan would take away their choice of doctor -- now supportive of Obamacare. Private insurers, for their part, have become convinced they'll make more money with a universal mandate accompanied by generous subsidies for families with earnings up to 400 percent of poverty (in excess of $80,000 of income) than they might stand to lose. Although still strongly opposed to a public option, the insurance industry is lining up behind much of the legislation. The biggest surprise is the AMA, which has also now come out in favor -- but only after being assurred that Medicare reimbursements won't be cut nearly as much as doctors first feared.

But all these industry giveaways are obviously causing the healthcare tab to grow. And as these long-term costs rise, the locus of opposition to universal health care is shifting away from industry and toward Blue Dog and moderate Democrats who are increasingly worried about future deficits.

I asked the President about this tension between these buyoffs to stakeholders and his goal to "bend the cost curve" and make health care cheaper and more effective in this country, and here's a paraphrased version of his answer.

I cannot expect the hospital association, for example, to sign up for something they don't think is right for hospitals and exepct them to back reform. So I understand what they're doing to protect their interests. I think we can negotiate and find a good way to go about this. In theory we could cram down additional savings, but to have the American Medical Association, the American Nurses Association, the drugmakers, the insurance companies, all of them on our team, that does help us move the process forward. Theoretically, there should be enormous savings inside the system. We all know that we pay more for health care than we should, and we shouldn't need additional revenue. But that's harder to do in practice, because all these powerful interests block the efforts. What I think is that we can get a framework where reform begins, one with an insurance exchange, and a robust public option, concrete reductions in cost, prevention, health IT, comparative effectiveness research, and it will be possible to achieve greater savings with a more efficient system down the road. And we can revisit the policy 10 years from now and possibly see even more savings than what was scored and anticipated.

I found that to be both a decent and a deeply unsatisfying answer. I understand that you don't want the stakeholders bringing in the Howitzers and seeding massive attacks against any reform, so keeping them on the same side is important. At the same time, with these groups bought off, and indeed knowing that they will get an ultimately good deal from Washington, the transition from the broken system we have to that theoretical one that Obama discussed gets delayed. I agree about getting a framework in place, something to tweak down the road. But we spend so much time in our politics bowing to powerful interests that it's very frustrating to concede that as a political reality. Especially when drugmakers and insurance companies are pretty reviled in the populace (though doctors really are not). Obama seems to know that there's an easy path for real reform, but it's complicated by a real control from special interests of the levers of the political debate. So we keep the dogs at bay, but in the process, we don't reform health care to the extent that we could. That animates the "if you like what you have, you can keep it" mantra (even if what you have is ultimately inefficient), and these deals with stakeholders. Then the fiscal scolds can talk about how the bill costs too much even while resisting those cost control methods because they would hurt these same stakeholders! It's maddening.

There is a bright spot, however. Obama went pretty far in support of a public option, a fairly tangible reform effort, on the call. He doubted the evidence that a co-op plan like that pushed by Kent Conrad would work, citing past experience that showed them having trouble getting off the ground. And he then said that the House and Senate bills would not be identical, that a conference committee would certainly be required. And at that point, the White House would engage in serious negotiations, with the President's fundamental principles and benchmarks in place. The House and Senate bills would not match up exactly, but that would not mean that the final bill wouldn't include certain elements, he essentially said. The President was basically saying: get it to conference, and we'll straighten it out. That probably doesn't mean that the President gets everything he wants, but it means that the big issues will be at his determination and discretion, almost certainly.

I think that's an important reminder. Past White Houses have used the conference committee very effectively to make sure bills matched preferences. Obama signaled his willingness to do that. Which means that, while we can have a role in getting this bill through each chamber, the White House will be able to make their presence felt to a degree at the finish line. In effect, he will take ownership of the policy and ensure it beats the status quo.

(UPDATE: C&L has the audio.)