This is one thing that the Obama administration doesn't get enough praise or criticism for. The only ideas they've introduced into the debate, and the only ideas they've really stood and fought for against serious opposition, are cost-control ideas. Namely, the excise tax, the Medicare Commission, the insistence on deficit neutrality and the $900 billion price tag, none of which have a natural majority on the Hill, and all of which the Obama administration has kept in the game through direct advocacy.I see this focus as an instance of Obama's propensity for "the long game." The Administration probably calculates that Congress will inevitably expand coverage and subsidies as the inadequacies of the initial allotments become obvious -- whereas the architecture for beginning to bend the cost curve has to be in place from the start or the whole package will swiftly become unaffordable. Atul Gawande's vision -- of a potpourri of cost control measures, pilots and demonstration projects out of which at least a few will have a dramatic impact -- is also Obama's. Here is how Obama described the process to Fred Hiatt, focusing on one potential meta-enabler of such methods, the MedPAC commission:
At this point, I am confident that both the House and the Senate bills will contain what we've been calling MedPAC on steroids, the idea that you continually present new ideas to change incentives, change the delivery system, understanding that because this is such a complex system we're not always going to get it exactly right the first time, and that there have to be a series of modifications over the course of a series of years, and we have to take that out of politics and make sure that an independent board of medical experts and health economists are providing packages that are continually improving the system. So I think there's general consensus that that is one of two very powerful levers to bend the cost curve.I can see two strong objections either to Obama's strategy or my understanding of it.
First, the chicken-egg decision could arguably be reversed: provide and fund generous coverage first, let the budget pressure generated by health care inflation force the strong effort to control costs later. That's what may be happening in Massachusetts, where in 2009 -- three years after the universal coverage bill passed -- a Special Commission on the Healthcare Payment System recommended a transition to global payments for treatment and a phase-out of fee-for-service. But Obama emphasized from the start that bending the cost curve was key, not only to successful healthcare reform, but to the long-range fiscal sustainability of the federal budget. That was perceived in large part as a political message -- covering the Democrat-as-tax-and-spender flank. But I think the decision reflects Obama's core priorities. He was not willing to gamble with unleashing runaway new healthcare liabilities.
Second: a strong public option, with payment rates tied to Medicare's, was arguably the strongest single cost-control measure on the table, and Obama essentially threw it under the bus with his expressions of obviously equivocal support as early as last spring. Perhaps he calculated from the start that it would never pass the Senate. What's now forever incalculable: what would have been the effect on Congress of early, frequent, strong insistence on the public option from the Administration? But that is not the way Obama operates. For better or worse, or better and worse, he seems to calculate early what he cannot get and give it up at the outset. So as to get what he deems essential.