Obama’s Not-So-Secret Deal With The Hospital Industry To Kill The Public Option

By Yashwanth Manjunath

In former Senate Majority Leader Tom Daschle’s new book,  Getting It Done: How Obama and Congress Finally Broke the Stalemate To Make Way for Health Care Reform, he reveals information on Obama’s “secret” deal to kill the Public Option. The deal was made on July 8th and the specific terms were that if the hospital industry agreed to accept $155 billion in payment reductions over ten years, the White House would operate under two “working assumptions.” “One was that the Senate would aim for health coverage of at least 94 percent of Americans,” Daschle writes. “The other was that it would contain no public health plan,” which would have reimbursed hospitals at a lower rate than private insurers. There is no longer any question who killed the Public Option. It was not every liberal’s favorite whipping boy Joe Lieberman, or “Conservadems” like Blanche Lincoln and Ben Nelson; it was Barack Obama. The real question is, why did he do it?

My best guess is that Obama lacked the political courage to take on the people who have real power in Washington, the special interests. Obama’s cabinet is littered with retreads from the Clinton administration who failed disastrously at passing health care reform in the early 90’s. Clinton advisers like Rahm Emanuel watched in horror as the various different special interest groups in Washington: the AMA, the hospital industry, the drug companies, the insurance companies, all joined forces to create the public perception that Clinton’s health care plan was some secret Bolshevik plot.

To make matters worse, Emanuel witnessed voters punish Democrats for their perceived “liberal overreach” by handing 54 seats in the House and the Congressional majority to the Republicans in both houses. It is only natural that Emanuel and his fellow Clinton administration alumni would advise Obama to try a divide-and-conquer approach this time, and placate as many special interests as possible at the beginning of the process. The problem with that approach is that the Obama White House misread the desires of the American people.

In the 90’s, when Bill Clinton tried to pass health care reform, health care was not perceived as an enormous crisis. It was much easier for the special interests to join forces and use scare tactics to deceive the American people. Since Clinton’s failed attempt at health care reform, medical costs have quadrupled. Given those numbers it should come as no surprise that in a recent AP poll, the American people by a 2-1 margin say they wanted health care reform to do more, not less. If Obama had taken a risk and fought for real change in this present climate, unlike Bill Clinton, he probably would have been successful.

When Obama ran for president, the one campaign ad of his that always sticks out in my mind is the one below, where he attacks the deal Bush made with the drug companies to pass Medicare Part D. The ad ends with Obama saying “I don’t want to learn how to play the (Washington) game better, I want to put an end to the game-playing.” Cutting a back-room deal with the hospital industry to save $155 billion six months after taking office is not “ending the game playing,” it’s the definition of “playing the game a little better.” Mr. President, if you had just followed your own advice and delivered the change you promised, you’d be looking at much better poll numbers right now and the American people would have gotten better health care reform.