The New Health Economy

Ground Rules for Leaders

Gary BisbeeJr., Donald Trigg, Sanjula Jain, Gary Bisbee Jr.

• Publisher: Georgetown University Press
• Year: 2022
• Print ISBN: 9781647122546, 9781647122539
• eBook ISBN: 9781647122553
• Topic: Economics
• Subtopic: Pharmaceutical, Biotechnology & Healthcare Industry
• Index: Economics

The New Health Economy offers leaders a 360-degree look at health care politics, policy, providers, and personalization. Drawing from interviews with industry leaders, this guide brings together the best thinking from across the health care sector, setting the ground rules required to shape a new health care system as we emerge from the pandemic.

PART I

Health Care Politics

1

Health Care Is Fully Political

Background

The late Speaker of the House of Representatives Thomas “Tip” O’Neill is frequently cited as the originator of the phrase “All politics is local.”¹ Notwithstanding the progression of telemedicine and a wide swath of virtual health offerings during the COVID-19 pandemic, health care too is decidedly local. Consumers rely on local caregivers, friends, and neighbors for critical guidance on the best strategies for health and care. Moreover, the local voices of health care providers not only were a fixture of the COVID-19 crisis but also emerged from the pandemic with unprecedented levels of public trust.²

But if health care is local in its personal decision-making and provider orientation, health care financing has never been more fully federal in its sourcing. Medicare and Medicaid benefits now cover nearly 40 percent of the population.³ Health care is the single largest item in the federal budget.⁴ Medicaid benefits, likewise, are one of the largest line items in state budgets nationwide.⁵

As a result, health care participates in the ebbs and flows of the political calendar like never before in the post–World War II era. And unfortunately, the same partisanship that is omnipresent in our elections has also enveloped the national conversation around health and care. As Jarrett Lewis at Public Opinion Strategies framed in a post-2020 reflection with us, “The health care ‘wedge’ issues of politics past have now become chasms.”⁶

There is an oft-cited adage in Washington, D.C.: understand politics, but do not play them. This sage advice nicely captures the inextricable link between health care politics and health care policy. The failure to navigate that tricky intersection has generated some of the greatest health care stumbles in the last quarter century.

We are consistently amazed in our conversations with health care leaders at the failure to look back at past health care events as an essential guide to future-state opportunities and challenges. Successful health care leaders simply can’t understand what lies ahead without reviewing the contours of modern health care politics from Hillarycare to the pandemic-shaped defeat of President Donald J. Trump.

Hillarycare

No single example is more illustrative of the power of the intersection between health care politics and health care policy than the infamous journey of Hillary Rodham Clinton and Bill Clinton to reform US health care. Before there was Obamacare, there was Hillarycare.

In the fall of 1993, first-term president Bill Clinton stood before a joint session of Congress to unveil his plan for comprehensive health care reform. The policy goals of the legislation were threefold: drive universal access, tackle the rate of health care cost growth, and establish a statutory and regulatory framework to drive public and private collaboration.⁷ It is a list that we could imagine featuring in the public policy framing of President Joe Biden (or even his successor) as the decade unfolds.

With great aplomb, President Clinton held up a health security card that was a paean to President Franklin Delano Roosevelt and the Social Security Act signed in 1935. The legislative titling of the bill, the Health Security Act, further reinforced the argument. In typical Clinton fashion, the forty-second president was not content with a “rule of three” rhetorical framing. He instead enumerated six core themes to animate his statutory push: security, simplicity, savings, choice, quality, and responsibility. Once again, one could imagine bipartisan positioning around many if not all of the same attributes today.

Clinton also acknowledged, amid the noise over the Ira Magaziner–led National Task Force for Health Care Reform launched in the first one hundred days and headed by First Lady Hillary Clinton, that the politics of health care can be contentious.⁸ This reform journey, he framed to Democratic House and Senate majorities that autumn, “will have rough spots and honest disagreements about how we should proceed.”⁹

A year later, Senate majority leader George Mitchell (D-ME) delivered the news to the forty-second president that his proposed Health Security Act of 1993, informally known as Hillarycare, was dead after failing to even come to a vote on the Senate floor. It was an amazing turn of events. Health care politics, meet health care policy. You two are sure to be fast friends.

A confluence of political factors contributed to the undoing of the Health Security Act. In business, we often frame the idea of “win the inside, win the outside,” a chance for leaders to cleverly manage the intersectional dynamics between the two. A strong culture inside can build a durable brand outside. Compelling thought leadership on the outside can drive alignment on the inside for key organizational initiatives. These outside and inside dynamics also can be seen in US politics. And in the postmortem on Hillarycare, the Clinton team struggled with both.

Beyond the Capital Beltway, the Clinton team never found its footing. The 1992 campaign and its vaunted War Room led by George Stephanopoulos and James Carville inspired front-page stories and documentary movies. Clinton’s first presidential campaign became the bellwether for modern campaign response.

The early work on Hillarycare showed little evidence of those innovations.¹⁰ The team driving production of a detailed plan provided limited access to the media amid numerous working groups and hundreds of task force meetings. They were seen to be at arm’s length with special interests such as traditional insurers. They also were far less aggressive in their response to rising criticism.

The impact of special interest advertising is illustrative of the failure to “win the outside.” As Darrell M. West, Diane Heith, and Chris Goodwin concluded in the cleverly titled Harry and Louise Go to Washington, “ads directed against the Clinton plan played a crucial role in the public’s attaching negative connotations to some of its key elements.”¹¹ In an era before the internet browser and social media, these ads were widely viewed and influential.

In addition to their “win the outside” breakdown, the Clinton team also struggled to win the inside game. As the Harry and Louise narrative bemoaning the complexity of the mammoth 1,342-page bill filled the airwaves, noise was growing inside the beltway. US House partisans such as Texas congressman Dick Armey were creating glossaries of unknown terms. US Senate voices such as Pennsylvania senator Arlen Specter were creating complex charts decrying a phalanx of new federal bureaucracy.¹²

More troubling, Capitol Hill insiders who should have rallied in support of Hillarycare were slow to do so. Many health care historians and political prognosticators have speculated that one reason may have been the fact that the bill was not generated through the legislative process. Capitol Hill veterans understand that one benefit of our often lumbering, phase-gate legislative process is that it creates an iterative understanding of core provisions. In the case of Hillarycare, it is certainly arguable that few members were willing to defend legislative details they didn’t draft.

In addition to lacking legislative involvement, the bill also suffered from timing, one of the essential ingredients in getting anything done in Washington. In politics as in business, the art is often in the timing. A long, quarrelsome budget process coupled with a separate effort to attain ratification of the North American Free Trade Agreement (NAFTA) pushed the launch of health care reform into the fall of 1993.¹³ The subsequent legislative deliberations occurred in a midterm election year.

As we saw with the Biden first-term agenda, the first one hundred days—and the first year of a first term—is a critical legislative window. It requires the discipline to understand the short-list policy opportunities of the moment and smart political strategies to advance them (as reflected by the passage of a series of multitrillion-dollar COVID-19 relief packages).

The 1994 off-year elections that followed were a political tsunami. The GOP picked up fifty-four seats in the US House and gained eight seats in the US Senate. The party also saw meaningful gains in governorships and state legislators. In an evening punctuated by high-profile, unexpected defeats such as that of House Speaker Tom Foley, Richard Berke at the New York Times characterized it as a Republican tide.¹⁴

The policy promise and ultimately the political perils of Hillarycare made an indelible impact on the Clinton presidency and also shaped the politics (and policy) of health care for years to come. It would take more than a decade and a half for a renewed push for comprehensive health care reform. And like Hillarycare, it would prove no less contentious.

Obamacare

Walmart’s Sam Walton (who, like Bill Clinton, hailed from Arkansas) frequently observed that the best way to find a niche in business is to head in the exact opposite direction.¹⁵ An understanding of the failure of Hillarycare is a necessary predicate for exploring Obamacare, because President Barack Obama did just that.

In 2009, President Obama (and Vice President Joe Biden) inherited a complicated post–financial crisis economy. Obama passed a large stimulus package that notably included funding for the first-time digitization of health care through creation of the Meaningful Use program.¹⁶ Like Clinton, Obama then turned his attention to a set of big swing domestic agenda items to include health care.

At the policy level, there were significant commonalities between Hillarycare and Obamacare, formally known as the Affordable Care Act. Both efforts sought to increase access to health insurance, establish a standard benefits package that included coverage for preexisting conditions, and enact a set of policies (such as the so-called Cadillac Tax, a 40 percent tax on high-end insurance plans) to reduce health care costs.¹⁷

If the policy ambitions were similar, however, the political push was decidedly different. Failure is, it is said, always the best and most important teacher. Obama and a set of Clinton veterans in his White House weren’t interested in repeating the sins of the past. They want...

Table of contents

• Cover
• Praise Page
• Half Title
• Title Page
• Copyright
• Contents
• Foreword
• Preface
• Introduction: The US Health Economy
• Part I: Health Care Politics
• Part II: Health Policy
• Part III: Provider Networks
• Part IV: Data-Driven Personalization
• Conclusion: A Call to Action
• Appendix: COVID-19 Timeline of Key Events
• Bibliography
• Index
• About the Authors