Healthcare, then and now

In the early summer of 1993, leaders of the health insurance industry finally got a short meeting with the White House task force on healthcare reform. The insurers presented their own series of reforms to make healthcare coverage more affordable, more available and portable if a consumer lost or changed jobs. The insurers asked for a seat at the table to help hash out a plan for reform that would have preserved the private insurance industry and achieved many of the goals of the Clinton administration. The insurers were rebuffed. “We need an enemy and you are it,” they were told. That blunt conversation led insurers to conclude they had a fight on their hands, and the “Harry and Louise” campaign was born. Interestingly, few involved with that effort thought the White House healthcare reform proposal would fail. The initial goal of the campaign was to force changes, not kill the plan.

Fifteen years later, both health insurers and the White House took an entirely different approach. Insurers early on endorsed the principle of reform. They began meeting with representatives of Barack Obama when he was a presidential candidate and reached out to legislative leaders in both the Senate and the House to make clear they wanted to be at the table this time around. Early in his administration, President ObamaBarack Hussein ObamaCould the coming 'red wave' election become a 'red tsunami'? Bottom line Barack Obama wishes a happy 58th birthday to 'best friend' Michelle MORE complimented insurers on their participation in the process. “We were all singing ‘Kumbaya,’ ” said one insurer.

Only the liberal grassroots activist group Healthcare Now seemed willing to go on the attack. Last summer it launched a “Magic 8-Ball” TV ad that showed consumers asking out loud if their insurer would cover treatment and offer affordable coverage. The actors portraying consumers then shook an iconic black fortune-telling ball, which turned up messages such as “not likely” or “don’t count on it.” Ad testing showed the TV spot to be very effective because it tapped into consumers’ inherent distrust of insurers and their belief that insurer decisions were arbitrary and capricious. Over a period of several weeks a debate raged among insurers over whether or not to counter the paid media attack. Eventually, the industry decided to stick to the high road.

For their part, insurers focused on a series of public events including a “listening tour” where they invited public input about their practices and promised to work for reforms of the system. Through its trade association, America’s Health Insurance Plans, the industry worked hard to position itself as part of the solution, not the problem. At the White House, in Congress and among many stakeholders in the debate, these actions were welcomed. Many observers, including this writer, commented favorably on the new position. (In the interest of full disclosure — my firm has represented many players in the healthcare debate over the years, including insurers, hospitals, consumer groups and the pharmaceutical industry. My comments in this column, however, are as an observer of public policy debates over several decades and do not represent the positions of any former or current clients.)

Now the summer of love on healthcare reform has come to an abrupt end. Late last week House Speaker Nancy Pelosi (D-Calif.) turned her guns on health insurers, calling them “immoral” and branding them the “villains” in America’s healthcare mess. “They have had a good thing going for a long time at the expense of the American people and the health of our country.” she said. Over the weekend, White House advisers weighed in with only slightly less inflammatory language, suggesting that Democratic members of Congress take the fight to insurers over the August recess.

As the battle over healthcare reform heats up, the ad wars will begin in earnest as members and senators head home for the recess. Left-leaning groups will likely escalate their attacks on insurers, reasoning that they “need an enemy” just as the Clintons did 15 years ago. Insurers say they’re taking the high road and, at most, will employ subtle references to a “bipartisan solution,” hoping that keeping Republicans in the mix will blunt calls for a public plan and more government regulation.

Faced with a harsh attack from pro-reform partisans and what they view as a tepid response from their trade association, some insurers are advocating a frontal assault on the Obama/Democratic leadership plan. One Republican consultant told me recently that insurers were not fighting back. “They’re just negotiating with the cannibals over who gets eaten last,” he said. August may be the decisive month in which we learn if appeasement or combat will mark the closing weeks of healthcare reform 2009.

Goddard is a founding partner of political consultants Goddard Claussen.