Tim­ing, ear­lier set­backs helped Oba­macare pass: Jen­nings

Modern Healthcare - - Q & A -

Chris Jen­nings has fought in the health­care wars since serv­ing as a con­gres­sional li­ai­son for first lady Hil­lary Clin­ton dur­ing the Clin­ton ad­min­is­tra­tion’s ill-fated ef­fort to over­haul the health­care sys­tem in the early 1990s. A top health pol­icy ad­viser through­out Pres­i­dent Bill Clin­ton’s two terms, Jen­nings re­turned to the White House in mid-2013 to help Pres­i­dent Barack Obama im­ple­ment the Pa­tient Pro­tec­tion and Af­ford­able Care Act—just a few months be­fore the rocky roll­out of the federal and state ex­changes. In late Jan­uary, Jen­nings re­signed, cit­ing health and per­sonal rea­sons, and re­turned to leading Jen­nings Pol­icy Strate­gies, his Wash­ing­ton-based con­sult­ing firm. He re­flected on his lat­est govern­ment stint with Mod­ern Health­care re­porter Paul Demko. The fol­low­ing is an edited tran­script.

Mod­ern Health­care: We com­pleted the first open en­roll­ment pe­riod un­der the Af­ford­able Care Act. What did you think about how that went and where we stand right now?

Chris Jen­nings: We ex­pe­ri­enced the lows and the highs in a very short pe­riod of time. What may be the most im­pres­sive achieve­ment was that the work to fix what other­wise would have been a dis­mal fail­ure quickly turned into an un­ex­pect­edly no­table suc­cess, at least in terms of the 7 mil­lion num­ber. In Oc­to­ber and Novem­ber, when there were huge sur­prises and un­ex­pected dis­ap­point­ments, it felt like we might not get any­where close to that orig­i­nal pro­jec­tion. I’m re­lieved, first and fore­most, and then proud of the work that was done to shift that around so quickly. In a pe­riod of six months, the ACA went from the dark­est dark to a lot brighter. While clouds re­main and there will be prob­lems, the law has be­come part of the fab­ric of the na­tion’s health sys­tem and there is no go­ing back.

MH: Why do you think pub­lic per­cep­tion hasn’t changed? You look at some of the polling data and they seem re­mark­ably stag­nant across that time.

Jen­nings: There will al­ways be a core pop­u­la­tion who’s adamantly op­posed to the law. Clearly, this is­sue is about more than health­care. It has be­come a de­bate about the ap­pro­pri­ate roles be­tween pub­lic and pri­vate sec­tors, per­cep­tions about Pres­i­dent Obama and other is­sues. Sec­ondly, there is a base within the Demo­cratic Party who strongly feels that we should move to­ward a sin­gle-payer sys­tem. As such, the polling data are fre­quently mis­read be­cause there are Democrats who are still dis­mayed that, de­spite hav­ing a Demo­cratic White House and Se­nate, there couldn’t have been more of an em­brace of that vi­sion. Hav­ing said that, we are mov­ing from a de­bate of per­cep­tion to one of ac­tual ex­pe­ri­ence. Rarely do people value the ben­e­fits of health re­form un­til they are se­ri­ously threat­ened. Should the threat be­come real, the irony will be that the law will be­come more pop­u­lar.

MH: You were in the mid­dle of the health­care de­bate in 1993. What changed that al­lowed this law to pass in 2010 that kept it from hap­pen­ing back then?

Jen­nings: The his­tory of ev­ery ma­jor law has seeds of lessons learned and ap­plied from set­backs. One be­ing, that if we were go­ing to re­form the health­care sys­tem, we had to be care­ful about ex­ces­sive dis­rup­tion. In 1993-94, we had the same con­cept of ex­changes. We called them co-ops and al­liances, but they were much larger and they would have pooled more people to­gether. They would have been more ef­fi­cient, but the per­cep­tion of dis­rup­tion to the mar­ket­place scared people.

The sec­ond dif­fer­ence was that the Health Se­cu­rity Act had more of a fo­cus on em­ployer re­spon­si­bil­ity than in­di­vid­ual re­spon­si­bil­ity. While that may have polled bet­ter, it did not fare well in the Congress.

Thirdly, in or­der to pass this leg­is­la­tion, there had to be a big­ger in­vest­ment of the Congress in the pol­icy and broader stake­holder sup­port. The de­tails, process and tim­ing of the de­vel­op­ment of the Health Se­cu­rity Act made con­gres­sional buy-in

“If the only way you can pro­vide an af­ford­able op­tion is to have nar­rower net­works, people will gen­er­ally vote with their feet to ac­cept that as an al­ter­na­tive.”

ex­tremely dif­fi­cult. Also, the poli­cies of the leg­is­la­tion on cost con­tain­ment were more threat­en­ing to the phar­ma­ceu­ti­cal and health in­sur­ance sec­tors, re­sult­ing in strong and ef­fec­tive op­po­si­tion.

Fi­nally, there were process and tim­ing dif­fer­ences. When Pres­i­dent Clin­ton came on board, he had to make a de­ci­sion as to whether he was go­ing to in­te­grate health­care into the budget de­bate in a rec­on­cil­i­a­tion ve­hi­cle. He did not have the 60 Se­nate Demo­cratic votes that Pres­i­dent Obama had. Also, he was ad­vised by his eco­nomic team to sep­a­rate the two is­sues be­cause the deficit re­duc­tion poli­cies were go­ing to be dif­fi­cult enough.

And since Pres­i­dent Clin­ton only se­cured that deficit re­duc­tion pack­age pas­sage by one vote in both the House and in the Se­nate, his eco­nomic ad­vi­sors’ anal­y­sis may have been right.

That pushed off the health­care de­bate into the end of 1993. That was af­ter very tough votes on crime and on trade. By the time we got to health­care, the po­lit­i­cal en­vi­ron­ment had changed for the worse, but the econ­omy hadn’t turned around yet. The people who cast those tough votes for deficit re­duc­tion, crime and trade said, “You’re ask­ing me to vote on an is­sue as hard as health­care? Are you kid­ding me?”

What did Pres­i­dent Obama learn? He learned he had to do this very early in his ten­ure be­fore he lost po­lit­i­cal cap­i­tal. He learned that you had to pur­sue a pol­icy that avoided dis­rup­tion to the fur­thest ex­tent pos­si­ble. He un­der­stood that ex­changes needed to largely tar­get people who ei­ther had no cov­er­age or people who wanted to leave their cov­er­age. And the fo­cal point should not be on the em­ployer con­tri­bu­tion, but rather on the in­sur­ance re­forms and the in­di­vid­ual re­spon­si­bil­ity pro­vi­sion nec­es­sary to se­cure them. Not that op­po­nents care now, but Pres­i­dent Obama’s ap­proach was, of course, the un­der­pin­ning of the Repub­li­can al­ter­na­tive in ’93-’94 and Mitt Rom­ney’s Mas­sachusetts’ ap­proach.

MH: What about the role of in­sur­ers in ’93-‘94 ver­sus 2010?

Jen­nings: The co-ops are a great ex­am­ple. In ’93-’94, the in­sur­ers felt threat­ened by large co-ops and lob­bied ag­gres­sively against them. The other big dif­fer­ence be­tween ’93-’94 and ’09-’10 is that the stake­hold­ers all uni­formly con­cluded (in ’09-’10) that con­strain­ing health­care costs would be a con­gres­sional pri­or­ity. They made a strate­gic de­ci­sion to em­brace the no­tion that those sav­ings should be rein­vested to cover more people as op­posed to go­ing some­place else. The plans con­cluded that com­pet­ing on their abil­ity to avoid sicker pop­u­la­tions (and their un­der­writ­ing prac­tices to do this) was no longer ten­able. Repub­li­cans and Democrats all agreed with that.

And pharma was an­other in­ter­est­ing ex­am­ple. They didn’t want to be the only ones not at the ta­ble and made a strate­gic de­ci­sion that they could get some­thing out of a ne­go­ti­ated agree­ment. They got a cat­a­strophic drug ben­e­fit that will cover their most ex­pen­sive med­i­ca­tions and the elim­i­na­tion of the dough­nut hole con­structed in a way they could sup­port. They also averted some of the most threat­en­ing poli­cies that they were most con­cerned about, in­clud­ing a rel­a­tively fa­vor­able deal on biosim­i­lars.

Those stake­hold­ers made a strate­gic de­ci­sion that it was in their longterm busi­ness in­ter­est to have people cov­ered, to have it largely ad­min­is­tered by pri­vate plans and to limit ex­cess federal reg­u­la­tion. This was not an out­side-in process; it was an in­side-out process. As a re­sult, there was no sig­nif­i­cant stake­holder op­po­si­tion to the Af­ford­able Care Act— and there still isn’t.

MH: There’s been a fair amount of ten­sion around nar­row net­works and the tran­si­tion to them un­der the ex­changes. Do you ex­pect there to be blow­back against that like there was with HMOs? If not, what’s changed?

Jen­nings: Where there are abuses in net­works— they’re too nar­row, people can’t ac­cess real care—you will see push­back. I be­lieve that this will be more the ex­cep­tion than the rule. The pub­lic is more used to nar­row net­works. They’re more used to pri­vate-plan man­age­ment op­tions and choice, par­tic­u­larly younger pop­u­la­tions. Sec­ond, the plans have learned that to best avoid po­lit­i­cal and pub­lic scru­tiny, they need to work with clin­i­cians. Thirdly, re­mem­ber that most of those pop­u­la­tions who are go­ing into the new nar­rower net­works are people who were pre­vi­ously unin­sured. If you’re pre­vi­ously unin­sured, a nar­row net­work is still a lot bet­ter than noth­ing. In the old days, in the HMO days, people who had health­care were feel­ing like they were los­ing some­thing that they had.

The is­sue that drives this de­bate is cost. If the only way you can pro­vide an af­ford­able op­tion is to have nar­rower net­works, people will gen­er­ally vote with their feet to ac­cept that as an al­ter­na­tive.

MH: How do you see the pol­i­tics of Oba­macare play­ing out this year?

Jen­nings: I think the pol­i­tics of the ACA—for good or bad—are pretty much now baked for the fall. The base of the Repub­li­can Party, who feel more strongly against this than the rest of the coun­try, are go­ing to be more mo­ti­vated to vote. But I don’t be­lieve that this will be the driv­ing is­sue of the 2014 elec­tion. Those re­sults will be far more about per­cep­tions of the econ­omy and the pres­i­dent in gen­eral.

As time goes on you’re see­ing Democrats em­brace Pres­i­dent Clin­ton’s guid­ance which is: you own this; you must em­brace it; you must pro­mote and de­fend it. What the op­po­nents are talk­ing about is re­peal­ing and re­plac­ing. Sup­port­ers need to talk about work­ing with oth­ers, on a bi­par­ti­san ba­sis, to im­prove the law. Fun­da­men­tally, that’s where the vast ma­jor­ity of the Amer­i­can pub­lic is, too. With each pass­ing elec­tion, that’s go­ing to be more the case, and people who aren’t will­ing to en­gage at that level are go­ing to be viewed as out of touch.

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