Representatives from insurance companies, doctor groups, hospital organizations and the pharmaceutical industry had their moment in the presidential sun on May 11th promising to slow down how quickly medical care costs increase. Their promise: $2 trillion in savings over 10 years. That would not only make it more affordable to provide coverage for the uninsured, it would be a huge boost the economy and to the financial condition of state governments.

In a letter signed by, among others, the American Medical Association, the American Hospital Association, the Pharmaceutical Research and Manufacturers of America, America’s Health Insurance Plans and the Service Employees International Union, which, as the Los Angeles Times described it “shepherded the agreement.” The unprecedented agreement among these health care stakeholders is meaningful for two reasons. First, these organizations were among the leading opponents of the Clinton Administration’s failed health care reform effort in the 1990s. Second, if it’s real, we’re talking about serious money.

And there’s the rub: is it real? President Obama is trying to find out. He’s instructed the organizations to come back to White House with specifics on how it will make this pledge real. As the Administration has demonstrated with the business plans demanded of the auto industry, the White House will hold these interest groups to a high standard. Which it should. The political stakes are high. If the cost cutting plans lack credibility President Obama will look, as the Associated Press noted, he “will be seen as naive for entertaining such promises.”  By holding them to a high standard, however, President Obama also has the power to undercut the industries’ opposition to his health care reform plan. Accusing them of insincere promises and inadequate commitment to cost cutting would bolster those who seek a bigger role for government in any new health care system.

The stakeholders have an equally important political task. By coming forward with voluntary, credible proposals for cutting costs, they provide political cover for those opposing the expansion of the government’s involvement in the system. If their proposals pass muster they will have gone a long way toward morphing from being a target of reform to being a part of the solution.  Their specifics for cutting costs will be part of the health care reform legislation Congress will produce this summer, which means they’ll have to live with them. But if that means the forthcoming legislation is a bit friendlier to their interests, that’s a reasonable price to pay.

Fortunately, the target, while a stretch, is eminently doable. Researchers at Dartmouth University have done several studies over the years that demonstrate that high costs for medical care do not correlate with better outcomes. As the Associated Press reports, they found that “as much as 30 cents of the U.S. health care dollar could be going for tests and procedures of little or no value to patients.”

One person who paid attention to this finding is Peter Orszag, Director of the Office of Management and Budget. As I wrote in 2007, when he was Director of the Congressional Budget Office, Mr. Orszag was “pushing for more evidence based assessments of new technologies and the need to expand research on comparative effectiveness. They key, Mr. Orszag indicated, is to provide new incentives in the system aimed at changing provider and consumer behavior.” His goal: to eliminate the $600 billion in “wasteful or low-value services” currently in the system.

If health care reform is going to work, squeezing this $600 billion out of the system is crucial. The associations’ efforts are an important first step. According to the Associated Press article, the groups are focusing on different aspects of the problem. Insurers, for example, are looking at reducing administrative costs by, among other initiatives, establishing a common, shared on-line claim form doctors and patients could use. Doctors are looking at establishing guidelines for medical practice. Improving information on drug interactions and reducing hospital readmissions are also part of the mix.

Most experts agree that the savings are there to be found. Identifying the savings will require political will and a willingness to change “business as usual” in the medical, pharmaceutical and insurance industries. Whether they pass the test will be determined by President Obama. Having shared the stage with him to make the promise, the price of failure will be extremely high.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: AHA, AHIP, AMA, America’s Health Insurance Plans, American Hospital Association, American Medical Association, Clinton health care reform, Peter Orszag, Pharmaceutical Research and Manufacturers of America, SEIU, Service Employees International Union

Facts are facts. Logic is logic. When it comes to health care reform, both are critical, vital elements of informed decision making. At the end of the day, however, facts are only facts and logic is only logic. What moves people are emotions and empathy. And what elicits emotions and empathy are stories. Stories are what enables people to connect data and logic with real, meaningful situations and they are what drives people to take action.

Chip and Dan Heath make this point in their book Made to Stick: Why Some Ideas Survive and Others Die. They point out that “stories have the amazing dual power to simulate and to inspire.”  By simulate they mean to describe reality and, consequently, convey knowledge.

Politicians understand this. So do successful sales people. A white paper is a great way to set forth a policy. A brochure may be just the ticket for describing an item. But it’s the stories that politicians and sales people use that connects those facts to people in a way the moves them to act.  President Ronald Reagan was a master of this. His reputation as the Great Communicator rests in large part on his ability to shape stories that inspired and moved his audiences. President Barack Obama shares this gift.

So it’s not surprising that President Obama is soliciting stories to post on his Organizing for Health Care site (which is a part of his grass roots organization, Organizing for America). It’s part of his effort to build grass roots support for his health care reform initiative. The email went to supporters of his campaign and others who have signed up at Organizing for America. It reads, in part: “As we know, challenging the status quo will not be easy. Its defenders will claim our goals are too big, that we should once again settle for half measures and empty talk. Left unanswered, these voices of doubt might yet again derail the comprehensive reform we so badly need. That’s where you come in.” It then asks his supporters to share “your personal story about the importance of health care reform in your life, and the lives of those you love.”

President Obama promises to personally read some of the stories submitted and he clearly intends to make use of them in the coming fight over health care reform. As he notes, “I know personal stories can drive that change, because I know how my mother’s experience continues to drive me. She passed away from ovarian cancer a little over a decade ago. And in the last weeks of her life, when she was coming to grips with her own mortality and showing extraordinary courage just to get through each day, she was spending too much time worrying about whether her health insurance would cover her bills. She deserved better. Every American deserves better. And that’s why I will not rest until the dream of health care reform is finally achieved in the United States of America.”

Facts and logic will play a major role in health care reform. But what ultimately will carry the day are stories like those of the President and his mother. Which is why others are also gathering stories.

As I mentioned in a previous post, the value professional, independent brokers add to the health care system is too often overlooked. The National Association of Health Underwriters, the nation’s largest organization of health insurance brokers and related professionals, is working hard to change that. In addition to attending endless meetings and submitting volumes of testimony and comments to Congress, NAHU is very appropriately gathering stories.

NAHU has created a web site, Brokers Making a Difference, to house the stories it has gathered. And more are coming in from NAHU members and the clients they serve. They tell stories of brokers going the extra mile for their clients when they needed help the most, after a serious illness or accident. They tell of brokers doing the straightforward work of being a counselor and advocate, helping their clients to find affordable health care coverage that meets their unique situation. They tell of brokers going beyond the call of duty and of those fulfilling their responsibilities as professionals.

For brokers these stories are critical. It’s one thing to talk about helping individuals or businesses through the health insurance maze. It’s another, altogether more powerful thing, to describe what that means in action. Stories of coming to the hospital to help a new mother whose baby was undergoing surgery to provide comfort, support, and, as important, assistance in dealing with the paper work have an impact. Stories of bringing together hospital and carrier administrators to get their clients out of the waiting room and into surgery have impact.

Brokers play a critical role in helping people maneuver through the health care system in this country. Health care reform is likely to become a reality this year. The stories President Obama is gathering will help see to that. It is the stories being collected by NAHU that will help assure brokers are able to continue to help their clients in whatever changed system emerges.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Insurance Agents Tagged: Chip Heatlh, Dan Heath, Made to Stick, NAHU, National Association of Health Underwriters, Organizing for Health Care, Organzing for America, Ronald Reagan

The number of mistakes made by the Clinton Administration in pushing for health care reform in 1993 are embarrassingly numerous.  One of the most damning was their heavy handed approach with Congress. Instead of engaging with lawmakers from the beginning, the task force led by then First Lady Hillary Clinton worked behind closed doors. Democratic Congressional Members were pushed out of the loop and expected, I assume, to fall in line with their Democratic President because, well, he was their Democratic President. Oh, and of course because the health care reform package developed by the task force was so obviously wonderful.

Leaving aside the lack of wonderfulness in the plan they developed, this approach was nothing short of political malpractice. The president may propose, but it’s Congress that enacts legislation. Any effort to dramatically change something as expensive and personal as health care will generate opposition. Some of that opposition is based on sincere differences of opinion concerning public policy. Some emerges from economic or political agendas threatened by the changes. In either event, it’s important to have a strong base with a unified message to withstand the inevitable attacks. The Clinton Administration’s approach — imposing their viewpoint on Congress — meant they had few supporters when and where they needed them most. The result was a political rout that helped open the way to a Republican takeover of Congress in 1994.

Whether based on temperament or wisdom earned at the Clinton presidency’s expense, President Barack Obama and his team are approaching health care reform in a far different manner. Their outreach to Congress has been extraordinary. They are not only working with Congressional leaders to design the plan, but are helping to create a unified message as well.

The Associated Press reported on a meeting today between several Democratic Senators and White House political advisor David Axelrod. Their goal, according to Senator Dick Durbin, was to “coordinate our messaging so we present a health care reform effort that the American people trust.”

The meeting was, in part, a response to advice circulated among Republicans by Dr. Frank Luntz outlining ways to attack the Democratic proposal. Dr. Luntz is a highly regarded GOP consultant and an expert on political messaging, the author of Words That Work: It’s Not What You Say, It’s What People Hear. He urged Republicans to be “on the side of reform.” while attacking the Administration’s proposal as leading ”to the government setting standards of care, instead of doctors” and “to the government rationing care.”

The 26-page report has caused quite a stir on Capital Hill. Democrats in Congress wanted to make sure they were prepared to withstand the suggested assault. The meeting today with Senators and with House Leaders yesterday were designed to do just that. It was reinforced by a message to the grass roots following President Obama developed during the campaign that now operates as Organizing for America.

What was agreed to was a three-pronged message: medical costs must be lowered, people must have choice in their health care coverage, and care must be affordable for everyone. How these principles are put into action has yet to be determined. No legislation has yet emerged from the numerous Congressional hearings underway.

It’s the lack of explicit information that makes framing the reform effort so important. Until there’s actual legislation to read, all the public has to go on is the general policy positions pronounced by various parties. Eventually, we’ll see a bill, but how the public reacts to it will be influenced to some degree by the spinning that occurs before its release.

By involving Democrats in Congress early in the process of developing the legislative language and working with them to shape a unified message, the Obama Administration is sidestepping one of the most damaging missteps of the Clinton Administration. Ultimately what will matter is the legislation itself. But the mere fact that President Obama and his team are avoiding the mistakes made 16 years ago, is an indication of how different the battle will be this time.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: 1993 health care reform, Bill Clinton, Clinton health care reform, David Axelrod, Dick Durbin, Frank Luntz, Hillary Clinton, Organizing for America