Threading the Healthcare Needle

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Ezra Klein surveys the political landscape behind healthcare reform and concludes that big business doesn’t really have that much power after all:

This year, the Obama administration succeeded at neutralizing every single industry. Pharma supports the bill. Insurers are incoherent on it, but there’s not a ferocious and united campaign to kill the proposal. The American Medical Association has endorsed the Senate bill. The hospitals have endorsed the bill….[But] it’s been almost meaningless when it’s come to Republican support. For all that liberals think the GOP is owned by insurers and pharmaceutical companies, this battle has been proof positive that they are owned by their base and they represent industry only when convenient. Imagine the concessions Pharma or the hospitals could have gotten by bringing three Republican senators onto the bill. They could’ve written the thing. But no such luck. Partisan incentives proved far stronger than industry interests.

Matt Yglesias takes the opposite lesson from the events of the past year:

What happened in the health care debate is that interest groups were able to get their way on most key points without needing to seriously attempt to deliver votes in exchange. The AMA is supporting the bill, but it’s not running ads against opponents. Pharmaceutical companies and insurers haven’t dropped out of the ferociously anti-reform Chamber of Commerce. No interest group that I’m aware of is cutting off the flow of funds to Chuck Grassley to punish him for his role in sabotaging health reform. Nobody is hitting Olympia Snowe for her bait-and-switch. I haven’t read a single story about a single Republican being “in trouble” with supporters for his or her opposition to reform.

I think I’d interpret this a bit differently. Obama had three basic choices when it came to dealing with the big industry groups:

  1. 1993 Redux: Push for the best possible bill and plan on a knock-down-drag-out fight with every interest group out there.
  2. Total Cave-In: Give the interest groups everything they could dream of in an effort buy their active and enthusiastic support.
  3. Centrist Wankerism: Buy off the big interest groups just enough to ensure that they wouldn’t actively sabotage reform — at least, not sabotage it too hard, anyway — but nothing more.

Option #1 was obviously impossible. Option #2 was probably never in the cards, and in any case would have been so horrific that public revulsion would have killed it. So Obama chose Option #3. But what that means is that industry groups were pretty much indifferent. They didn’t spend a lot of time and energy fighting the bill, but neither did they spend a lot of time and energy trying to persuade their favorite Republican senators to support it. This doesn’t mean that industry groups have lost their influence over Republicans (or Democrats) or that their power is so awesome that they get everything they want with barely an effort.

Obviously you can question whether Obama and Senate Dems made the right deal. Could they have pushed a little harder and still kept the big industry groups neutral? Could they have given in on a few small things and earned enough support to have passed the bill months ago with a few Republican votes? Beats me. But from where I sit three thousand miles away, it looks to me like Obama played the game pretty well. There wasn’t a lot of wiggle room on either side.

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