Health Care Reform Isn't Dead

My favorite health care reporters have gone into "concerned" mode again about the fate of health care reform legislation. I decided to recanvass the sources who've convinced me that reform is alive and kicking to see whether the fundamentals of the debate have changed over the past two weeks.  The answer is mixed.

Those commentators who believe that Sen. Harry Reid's leaked (therefore public) reproach to Finance Committee chairman Max Baucus was a major milestone are correct, although perhaps not for the reasons that they assume.

In a meeting of Democratic Senators, about a third of those present made it clear that they were unhappy with the direction Baucus was taking. It wasn't so much that they objected to the specific proposal he's floated to end the exclusion on taxing health care benefits, it was that Baucus's approach to crafting the finance particulars of the bill was inherently flawed and stalling the process.

Once again, the key number here is 60. Not 60 Democrats and Republicans, but 60 Democrats. Or 58 Democrats and two Republicans.  There are two ways to write a bill that attracts bipartisan support on the floor.  The Senate HELP Committee's model was to create an ideal bill (a partisan bill), and then work backwards, starting from the "ideal" model and making incremental changes to increase the marginal vote totals.  Sen. Chris Dodd mastered that approach.  Remember that the HELP committee is writing the health care provisions of the bill. The finance committee is tasked with finding the money to pay for it, particularly the money to pay for the inevitable expansions of Medicare and Medicaid that will make up a good percentage of the coverage increases.

Sen. Baucus's bipartisan approach has been the opposite: instead of coming up with a model bill and working backwards, he seems to be allowing Republicans to dictate the particulars and then working to see how many Democrats he can bring aboard. And ironically, his approach is pushing away the type of Republicans who, when the final bill hits the floor, when the ultimate question is health care reform or no health care reform, might be persuaded to vote for the bill. (I'm told that Sen. Olympia Snowe has told the finance committee that she will not support any legislation that includes an end to the health benefits exclusion. Other Republicans on the committee could well support it. But in the end, Snowe is much more likely to vote for reform. That's the problem with Baucus's approach, according to his critics.)

Then there's the matter of whether the White House is getting the tactics of bipartisanship wrong.  Officials point to something would-be health czar Tom Daschle said last week: the administration is going out of its way to cooperate with industry, and industry needs to reciprocate by pressuring a few Republican Senators to soften their opposition, if not on a public plan, than on a tax-raising mechanism to pay for other parts of the proposal.

Still, the industry -- the insurance industry, mainly, but also PhRMA, the AHA and AMA, are not spending lots of time or money fighting the Democrats and the administration, and this, say White House officials, is a key part of the strategy. It's not so much that the
final House and Senate bills get buy-ins from 10 Republicans... it's that these major interest groups are not spending money right now. (It's a classic intersection of policy and policy.) The idea is that if you think Sen. Kent Conrad or Ben Nelson worry about the politics of a
public plan now, imagine how weak-kneed they'd be if these big dogs were barking.

So when the left hears "bipartisanship," they think "Republican votes."  Actually, the White House and key Democratic lawmakers want 60 votes. They can push through chunks of health care reform using budget reconciliation rules, but there is a real worry that such reconciled provisions would have no effect because they'd sunset in five years and
would face bureaucratic dithering (and even a court challenge.) The White House doesn't want to use reconciliation because they'd get impermanent reform, piecemeal reform, and potentially weak reform.

Baucus is under pressure from everyone at this point, and he is still trying to salvage a bipartisan bill. But his staff has told lobbyists that they had better get on board with what the Finance Committee proposes... or else they'll be stuck with a bill that they _really_ don't like.